I
103D CONGRESS
1ST SESSION
H. R. 455
To amend title IV of the Social Security Act to remove the barriers and
disincentives in the program of aid to families with dependent children
that prevent recipients of such aid from moving toward self-sufficiency.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1993
Mr. HALL of Ohio (for himself, Mr. GRANDY, Mrs. COLLINS of Illinois, and
Mr. EMERSON) introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend title IV of the Social Security Act to remove
the barriers and disincentives in the program of aid
to families with dependent children that prevent recipi-
ents of such aid from moving toward self-sufficiency.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Microenterprise and
Asset Development Act’’.
(2) NONRECURRING LUMP SUM EXEMPT FROM
LUMP SUM RULE.—Section 402(a)(17) of such Act
(42 U.S.C. 602(a)(17)) is amended by adding at the
end the following: ‘‘; and that this paragraph shall
not apply to earned or unearned income received in
a month on a nonrecurring basis to the extent that
such income is placed in a qualified asset account
(as defined in section 406(i)) the total amounts in
which, after such placement, does not exceed
$10,000;’’.
(3) 
TREATMENT
AS
INCOME.—Section
402(a)(7) of such Act (42 U.S.C. 602(a)(7)) is
amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B);
(B) by striking the semicolon at the end of
subparagraph (C) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(D) shall treat as income any distribu-
tions from a qualified asset account (as defined
in section 406(i)(1)) which do not meet the def-
inition of a qualified distribution under section
406(i)(2);’’.
(c) QUALIFIED ASSET ACCOUNTS.—Section 406 of
such Act (42 U.S.C. 606) is amended by adding at the
end the following:
‘‘(i)(1) The term ‘qualified asset account’ means a
mechanism approved by the State (such as individual re-
tirement accounts, escrow accounts, or savings bonds) that
allows savings of a family receiving aid to families with
dependent children to be used for qualified distributions.
‘‘(2) The term ‘qualified distributions’ means dis-
tributions for expenses directly related to 1 or more of
the following purposes:
‘‘(A) The attendance of a member of the family
at any education or training program.
‘‘(B) The improvement of the employability (in-
cluding self-employment) of a member of the family
(such as through the purchase of an automobile).
‘‘(C) The purchase of a home for the family.
‘‘(D) A change of the family residence.’’.
(d) STUDY OF USE OF QUALIFIED ASSET ACCOUNTS;
REPORT.—The Secretary of Health and Human Services
shall conduct a study of the use of qualified asset accounts
established pursuant to the amendments made by this sec-
tion, and shall report on such study and any recommenda-
tions for modifications of such amendments to the Com-
mittee on Finance of the Senate and the Committee on
Ways and Means of the House of Representatives not later
than January 1, 1996.
(e) REPORT
ON AFDC ASSET LIMIT
ON AUTO-
MOBILES.—Within 3 months after the date of the enact-
ment of this section, the Secretary of Health and Human
Services shall submit to the Congress a report on—
(1) the need to revise the limitation, established
in regulations pursuant to section 402(a)(7)(B)(i) of
the Social Security Act, on the value of a family
automobile required to be disregarded by a State in
determining the eligibility of the family for aid to
families with dependent children under the State
plan approved under part A of title IV of such Act;
and
(2) the extent to which such a revision would
increase the employability of recipients of such aid.
(f) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 1993.
SEC. 3. DISREGARD OF INCOME AND RESOURCES RELATED
TO SELF-EMPLOYMENT.
(a) STATE PLAN REQUIREMENTS.—Section 402(a)
of the Social Security Act (42 U.S.C. 602(a)) is amend-
ed—
(1) by striking ‘‘and’’ at the end of paragraph
(44);
(2) by striking the period at the end of para-
graph (45) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (45) the fol-
lowing:
‘‘(46) provide that the State agency—
‘‘(A)(i) shall not include as a resource of
the family of which a child referred to in para-
graph (7)(A) is a member, for purposes of
paragraph (7)(B), the first $10,000 of the net
worth (assets reduced by liabilities with respect
thereto) of all microenterprises (as defined in
section 406(j)(1)) owned, in whole or in part,
by the child or by a relative or other individual
referred to in paragraph (7)(A), for a period
not to exceed 2 years; and
‘‘(ii) shall take into consideration as
earned income of the family of which the child
is a member, only the net profits (as defined in
section 406(j)(2)) of such microenterprises, for
a period not to exceed 2 years; and
‘‘(B) shall ensure that caseworkers are
able to properly advise recipients of aid under
the State plan of the option of microenterprise
as a legitimate route towards self-sufficiency,
and that caseworkers encourage recipients of
such aid who are interested in starting a
microenterprise to participate in a program de-
signed to assist them in such effort.’’.
(b) DEFINITIONS.—Section 406 of such Act (42
U.S.C. 606), as amended by section 2(c) of this Act, is
amended by adding at the end the following:
‘‘(j)(1) The term ‘microenterprise’ means a commer-
cial enterprise which has 5 or fewer employees, 1 or more
of whom owns the enterprise.
‘‘(2) The term ‘net profits’ means, with respect to
a microenterprise, the gross receipts of the business,
minus—
‘‘(A) payments of principal or interest on a loan
to the microenterprise;
‘‘(B) transportation expenses;
‘‘(C) inventory costs;
‘‘(D) expenditures to purchase capital equip-
ment;
‘‘(E) cash retained by the microenterprise for
future use by the business;
‘‘(F) taxes paid by reason of the business;
‘‘(G) if the business is covered under a policy
of insurance against loss—
‘‘(i) the premiums paid for such insurance;
and
‘‘(ii) the losses incurred by the business
that are not reimbursed by the insurer solely by
reason of the existence of a deductible with re-
spect to the insurance policy;
‘‘(H) the reasonable costs of obtaining 1 motor
vehicle necessary for the conduct of the business;
and
‘‘(I) the other expenses of the business.’’.
(c) INCLUSION OF MICROENTERPRISE TRAINING AND
ACTIVITIES IN THE JOBS PROGRAM.—
(1) IN GENERAL.—Section 482(d)(1) of such
Act (42 U.S.C. 682(d)(1)) is amended by adding at
the end the following:
‘‘(C) The services and activities referred to in sub-
paragraph (A)—
‘‘(i) in the case that at least 3 percent of the
adult recipients of aid under the State plan approved
under part A (as of the close of the immediately pre-
ceding 
fiscal 
year) 
elect 
to 
participate 
in
microenterprise activities, shall include programs de-
scribed in paragraph (4); or
‘‘(ii) in the case that not more than 3 percent
of the adult recipients of such aid elect to partici-
pate in microenterprise activities, may include pro-
grams described in paragraph (4).’’.