To amend part A of title IV of the Social Security Act to provide a State option to extend current waivers and create additional waiver authority under the temporary assistance for needy families program.

SECTION 1. STATE OPTION TO EXTEND CURRENT TANF WAIVERS AND CREATION OF 
              NEW WAIVER AUTHORITY.

    Section 415 of the Social Security Act (42 U.S.C. 615) is amended 
by adding at the end the following:
    ``(e) State Option to Continue Waivers.--
            ``(1) In general.--Notwithstanding paragraphs (1)(A) and 
        (2)(A) of subsection (a), or any other provision of law, but 
        subject to subsection (g), with respect to any State that is 
        operating under a waiver described in paragraph (2) which would 
        otherwise expire on a date that occurs during the period that 
        begins on January 1, 2002, and ends on September 30, 2010, the 
        State may elect to continue to operate under that waiver, on 
        the same terms and conditions as applied to the waiver the day 
        before the date the waiver would otherwise expire, through the 
        earlier of such date as the State may select or September 30, 
        2010.
            ``(2) Waiver described.--For purposes of paragraph (1), a 
        waiver described in this paragraph is--
                    ``(A) a waiver described in subsection (a); or
                    ``(B) a waiver that was granted to a State under 
                section 1115 or otherwise and that relates only to the 
                provision of assistance under a State program under 
                this part.
    ``(f) Waiver Authority for All States.--
            ``(1) In general.--Except as provided in paragraph (3) and 
        subsection (g), the Secretary may waive any statutory or 
        regulatory requirement of this part at the request of a State 
        or Indian tribe operating a State or tribal program funded 
        under this part.
            ``(2) Request for waiver.--
                    ``(A) In general.--A State or Indian tribe that 
                wishes to seek a waiver with respect to a State or 
                tribal program funded under this part shall submit a 
                waiver request to the Secretary that--
                            ``(i) describes the Federal statutory or 
                        regulatory requirements proposed to be waived;
                            ``(ii) describes how the waiving of such 
                        requirements will improve or enhance 
                        achievement of 1 or more of the purposes of 
                        this part;
                            ``(iii) describes the State's proposal for 
                        an independent evaluation of the program under 
                        the waiver; and
                            ``(iv) in the case of a State, includes a 
                        copy and description of relevant State statutes 
                        and, if applicable, State regulations that 
                        would allow the State to implement the waiver 
                        if it were approved by the Secretary.
                    ``(B) Notice and comment.--The Secretary shall 
                provide through the Federal Register for a 30-day 
                period for notice and comment on the waiver request, 
                and otherwise consult with members of the public, to 
                solicit comment on the waiver request prior to acting 
                on the request.
            ``(3) Restrictions.--
                    ``(A) In general.--The Secretary shall not waive 
                the following statutory sections or any regulatory 
                requirements related to such sections:
                            ``(i) Section 401(a).
                            ``(ii) Paragraphs (1) through (4) of 
                        section 403(a).
                            ``(iii) Section 407(e)(2).
                            ``(iv) Section 407(f).
                            ``(v) Section 408(d).
                            ``(vi) Section 409(a)(7).
            ``(4) Duration and extension of waiver.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a waiver approved by the Secretary 
                under this subsection may be for a period not to exceed 
                5 years.
                    ``(B) Extension.--The Secretary may extend the 
                period described in subparagraph (A) if the Secretary 
                determines that the waiver has been effective in 
                enabling the State or Indian tribe to carry out the 
                activities for which the waiver was requested and the 
                waiver has improved or enhanced performance related to 
                1 or more of the purposes of this part.
            ``(5) Approval procedure.--
                    ``(A) In general.--Not later than 60 days after the 
                date of receiving a request for a waiver under this 
                subsection, the Secretary shall provide a response 
                that--
                            ``(i) approves the waiver request;
                            ``(ii) provides a description of 
                        modifications that would be necessary in order 
                        to secure approval for the waiver;
                            ``(iii) denies the request and describes 
                        the grounds for the denial; or
                            ``(iv) requests clarification of the waiver 
                        request.
                    ``(B) Approval decisions.--The Secretary shall not 
                approve any waiver request that does not include all 
                the information required in subparagraph (2)(A) and 
                shall take into account how the waiver is likely to 
                further the purposes of section 401(a) and comments 
                received regarding the waiver request.
                    ``(C) Waiver approvals and denials.--All waiver 
                approvals and denials shall be made publicly available 
                by the Secretary.
            ``(6) Reports on projects.--The Secretary shall provide 
        annually to Congress a report concerning waivers approved under 
        this subsection, including--
                    ``(A) the projects approved and denied for each 
                applicant;
                    ``(B) the number of waivers granted under this 
                subsection;
                    ``(C) the specific statutory provisions waived; and
                    ``(D) descriptive information about the nature and 
                status of approved waivers, including findings from 
                interim and final evaluation reports.
    ``(g) Cost-Neutrality Requirement.--
            ``(1) General rule.--Notwithstanding any other provision of 
        law (except as provided in paragraph (2)), the total of the 
        amounts that may be paid by the Federal Government for a fiscal 
        year with respect to the programs in a State for which a waiver 
        has been granted under subsection (e) or (f) shall not exceed 
        the estimated total amount that the Federal Government would 
        have paid for the fiscal year with respect to the programs if 
        the waiver had not been granted, as determined by the Director 
        of the Office of Management and Budget.
            ``(2) Special rule.--If an applicant submits to the 
        Director of the Office of Management and Budget a request to 
        apply the rules of this paragraph to the programs in the State 
        with respect to which a waiver under subsection (e) or (f) has 
        been provided, during such period of not more than 5 
        consecutive fiscal years in which the waiver is in effect, and 
        the Director determines, on the basis of supporting information 
        provided by the applicant, to grant the request, then, 
        notwithstanding any other provision of law, the total of the 
        amounts that may be paid by the Federal Government for the 
        period with respect to the programs shall not exceed the 
        estimated total amount that the Federal Government would have 
        paid for the period with respect to the programs if the waiver 
        had not been granted.''.

Summary: Amends part A (Temporary Assistance for Needy Families) (TANF) of title IV of the Social Security Act to provide a state option to extend current waivers through FY2010, and create additional waiver authority under the TANF program.