II 116th CONGRESS 1st Session S. 3001 IN THE SENATE OF THE UNITED STATES December 9, 2019 Mr. Toomey (for himself and Mr. Crapo ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide for certain extensions with respect to the Medicare and Medicaid programs under titles XVIII and XIX of the Social Security Act, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Permanent Relief for Seniors and Medicare, Medicaid, Human Services Extension Act of 2019 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I—Miscellaneous Sec. 101. Repeal of medical device excise tax. Sec. 102. Permanent extension of reduction in medical expense deduction floor. Sec. 103. Moratorium on annual fee on health insurance providers. TITLE II—Medicare Extenders Sec. 201. Extension of the work geographic index floor under the Medicare program. Sec. 202. Authorization of additional funding for quality measure endorsement, input, and selection. Sec. 203. Authorization of additional funding for outreach and assistance for low-income programs. Sec. 204. Extension and authorization of additional funding to the Patient-Centered Outcomes Research Trust Fund. TITLE III—Medicaid Extenders Sec. 301. Delay of DSH reductions. Sec. 302. Extension of spousal impoverishment protections. Sec. 303. Extension of Community Mental Health Services demonstration program. TITLE IV—Human Services Extenders Sec. 401. Extension of sexual risk avoidance education program. Sec. 402. Jobs and Opportunity with Benefits and Services for Success Act. I Miscellaneous 101. Repeal of medical device excise tax (a) In general Chapter 32 of the Internal Revenue Code of 1986 is amended by striking subchapter E. (b) Conforming amendments (1) Subsection (a) of section 4221 of the Internal Revenue Code of 1986 is amended by striking the last sentence. (2) Paragraph (2) of section 6416(b) of such Code is amended by striking the last sentence. (c) Clerical amendment The table of subchapters for chapter 32 of the Internal Revenue Code of 1986 is amended by striking the item relating to subchapter E. (d) Effective date The amendments made by this section shall apply to sales after December 31, 2019. 102. Permanent extension of reduction in medical expense deduction floor (a) Reduction (1) In general Section 213(a) of the Internal Revenue Code of 1986 is amended by striking 10 percent and inserting 7.5 percent . (2) Conforming amendment Section 213 of such Code is amended by striking subsection (f). (b) Repeal of minimum tax preference Section 56(b)(1) of the Internal Revenue Code of 1986 is amended by striking subparagraph (B). (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2018. 103. Moratorium on annual fee on health insurance providers Subsection (j) of section 9010 of the Patient Protection and Affordable Care Act ( 26 U.S.C. 4001 note prec.) is amended— (1) by striking and at the end of paragraph (2); (2) by striking the period at the end of paragraph (3) and inserting , and ending before January 1, 2021, and ; and (3) by adding at the end the following new paragraph: (4) beginning after December 31, 2022. . II Medicare Extenders 201. Extension of the work geographic index floor under the Medicare program Section 1848(e)(1)(E) of the Social Security Act ( 42 U.S.C. 1395w–4(e)(1)(E) ) is amended by striking January 1, 2020 and inserting December 21, 2020 . 202. Authorization of additional funding for quality measure endorsement, input, and selection Section 1890(d)(2) of the Social Security Act ( 42 U.S.C. 1395aaa(d)(2) ) is amended— (1) by inserting (A) after (2) ; and (2) by adding at the end the following new subparagraph: (B) (i) For purposes of carrying out this section and section 1890A (other than subsections (e) and (f)), there is hereby authorized to be appropriated for the period beginning on December 21, 2019, and ending on December 20, 2020, $30,000,000. (ii) Amounts appropriated pursuant to clause (i) shall remain available until expended, and shall be in addition to any unobligated funds transferred pursuant to subparagraph (A) for a preceding fiscal year that are available under the third sentence of such subparagraph. . 203. Authorization of additional funding for outreach and assistance for low-income programs (a) Additional funding for State health insurance programs Subsection (a)(1)(B) of section 119 of the Medicare Improvements for Patients and Providers Act of 2008 ( 42 U.S.C. 1395b–3 note), as amended by section 3306 of the Patient Protection and Affordable Care Act ( Public Law 111–148 ), section 610 of the American Taxpayer Relief Act of 2012 ( Public Law 112–240 ), section 1110 of the Pathway for SGR Reform Act of 2013 ( Public Law 113–67 ), section 110 of the Protecting Access to Medicare Act of 2014 ( Public Law 113–93 ), section 208 of the Medicare Access and CHIP Reauthorization Act of 2015 ( Public Law 114–10 ), section 50207 of division E of the Bipartisan Budget Act of 2018 ( Public Law 115–123 ), section 1402 of the Continuing Appropriations Act, 2020, and Health Extenders Act of 2019 ( Public Law 116–59 ), and section 1402 of the Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of 2019 ( Public Law 116–69 ), is amended— (1) by redesignating clauses (i) through (xi) as subclauses (I) through (XI) and moving such subclauses 2 ems to the right; (2) by striking For purposes of making grants under this subsection, the Secretary and inserting “For purposes of making grants under this subsection— (i) the Secretary ; (3) in subclause (XI), as redesignated by paragraph (1), by striking the period at the end and inserting ; and ; and (4) by inserting after such subclause (XI), the following new clause: (ii) there is hereby authorized to be appropriated for the period beginning on December 21, 2019, and ending on December 20, 2020, $13,000,000. . (b) Additional funding for area agencies on aging Subsection (b)(1)(B) of such section 119, as so amended, is amended— (1) by redesignating clauses (i) through (xi) as subclauses (I) through (XI) and moving such subclauses 2 ems to the right; (2) by striking For purposes of making grants under this subsection, the Secretary and inserting “For purposes of making grants under this subsection— (i) the Secretary ; (3) in subclause (XI), as redesignated by paragraph (1), by striking the period at the end and inserting ; and ; and (4) by inserting after such subclause (XI), the following new clause: (ii) there is hereby authorized to be appropriated for the period beginning on December 21, 2019, and ending on December 20, 2020, $7,500,000. . (c) Additional funding for aging and disability resource centers Subsection (c)(1)(B) of such section 119, as so amended, is amended— (1) by redesignating clauses (i) through (xi) as subclauses (I) through (XI) and moving such subclauses 2 ems to the right; (2) by striking For purposes of making grants under this subsection, the Secretary and inserting “For purposes of making grants under this subsection— (i) the Secretary ; (3) in subclause (XI), as redesignated by paragraph (1), by striking the period at the end and inserting ; and ; and (4) by inserting after such subclause (XI), the following new clause: (ii) there is hereby authorized to be appropriated for the period beginning on December 21, 2019, and ending on December 20, 2020, $5,000,000. . (d) Additional funding for contract with the national center for benefits and outreach enrollment Subsection (d)(2) of such section 119, as so amended, is amended— (1) by redesignating clauses (i) through (xi) as subclauses (I) through (XI) and moving such subclauses 2 ems to the right; (2) by striking For purposes of making a grant or entering into a contract under paragraph (1), the Secretary and inserting “For purposes of making a grant or entering into a contract under paragraph (1)— (i) the Secretary ; (3) in subclause (XI), as redesignated by paragraph (1), by striking the period at the end and inserting ; and ; and (4) by inserting after such subclause (XI), the following new clause: (ii) there is hereby authorized to be appropriated for the period beginning on December 21, 2019, and ending on December 20, 2020, $12,000,000. . 204. Extension and authorization of additional funding to the Patient-Centered Outcomes Research Trust Fund Section 9511 of the Internal Revenue Code of 1986 is amended— (1) in subsection (b), by adding at the end the following new paragraph: (4) Authorization (A) In general There is hereby authorized to be appropriated to the Trust Fund, for the period beginning on October 1, 2019, and ending on December 20, 2020, an amount equal to the sum of— (i) an amount equal to $2 multiplied by the average number of individuals entitled to benefits under part A, or enrolled under part B, of title XVIII of the Social Security Act during such period; and (ii) $150,000,000. (B) Availability Amounts appropriated pursuant to subparagraph (A) shall remain available until expended. ; (2) in subsection (d)(2)(A), by inserting , and for the period beginning on October 1, 2019, and ending on December 20, 2020, after 2019 ; and (3) in subsection (f), by striking December 20, 2019 and inserting December 20, 2020 . III Medicaid Extenders 301. Delay of DSH reductions Section 1923(f)(7)(A) of the Social Security Act ( 42 U.S.C. 1396r–4(f)(7)(A) ) is amended— (1) in clause (i), in the matter preceding subclause (I), by striking For the period beginning and all that follows through 2025 and inserting For the period beginning December 21, 2020, and ending September 30, 2021, and for each of fiscal years 2022 through 2028 ; and (2) in clause (ii)— (A) by amending subclause (I) to read as follows: (I) $8,000,000,000 for the period beginning December 21, 2020, and ending September 30, 2021; and ; and (B) in subclause (II), by striking fiscal years 2021 through 2025 and inserting fiscal years 2022 through 2028 . 302. Extension of spousal impoverishment protections (a) In general Section 2404 of Public Law 111–148 ( 42 U.S.C. 1396r–5 note) is amended by striking December 31, 2019 and inserting December 20, 2020 . (b) Rule of construction Nothing in section 2404 of Public Law 111–148 ( 42 U.S.C. 1396r–5 note) or section 1902(a)(17) or 1924 of the Social Security Act ( 42 U.S.C. 1396a(a)(17) , 1396r–5) shall be construed as prohibiting a State from applying an income or resource disregard under a methodology authorized under section 1902(r)(2) of such Act ( 42 U.S.C. 1396a(r)(2) )— (1) to the income or resources of an individual described in section 1902(a)(10)(A)(ii)(VI) of such Act ( 42 U.S.C. 1396a(a)(10)(A)(ii)(VI) ) (including a disregard of the income or resources of such individual’s spouse); or (2) on the basis of an individual’s need for home and community-based services authorized under subsection (c), (d), (i), or (k) of section 1915 of such Act ( 42 U.S.C. 1396n ) or under section 1115 of such Act ( 42 U.S.C. 1315 ). (c) GAO report Not later than September 30, 2020, the Comptroller General of the United States shall submit to Congress a report evaluating the effect of applying section 1924(h) of the Social Security Act ( 42 U.S.C. 1396r–5(h) ) pursuant to section 2404 of Public Law 111–148 ( 42 U.S.C. 1396r–5 note) on the number of individuals who qualify as community spouses (as such term is defined in such section 1924(h)). 303. Extension of Community Mental Health Services demonstration program (a) In general Section 223(d)(3) of the Protecting Access to Medicare Act of 2014 ( 42 U.S.C. 1396a note) is amended by striking December 20, 2019 and inserting March 31, 2021 . (b) Phasedown of enhanced FMAP Subparagraph (B) of section 223(d)(5) of the Protecting Access to Medicare Act of 2014 ( 42 U.S.C. 1396a note) is amended to read as follows: (B) Federal matching percentage (i) In general The Federal matching percentage specified in this subparagraph is with respect to medical assistance described in subparagraph (A) that is furnished— (I) to a newly eligible individual described in paragraph (2) of section 1905(y) of the Social Security Act ( 42 U.S.C. 1396d(y) ), the matching rate applicable under paragraph (1) of that section; and (II) to an individual who is not a newly eligible individual (as so described) but who is eligible for medical assistance under the State Medicaid program, the enhanced FMAP applicable to the State or, for fiscal quarters beginning on or after January 1, 2020, the matching rate determined for the State and quarter under clause (ii). (ii) Phasedown of enhanced FMAP For purposes of clause (i)(II), the matching rate determined for a State and fiscal quarter under this clause shall be— (I) for the fiscal quarter beginning on January 1, 2020, a percentage equal to the enhanced FMAP applicable to the State reduced by a number of percentage points equal to 1/6 of the percentage points difference between the enhanced FMAP applicable to the State and the Federal medical assistance percentage applicable to the State under section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) ); (II) for the fiscal quarter beginning on April 1, 2020, a percentage equal to the enhanced FMAP applicable to the State reduced by a number of percentage points equal to 1/3 of the percentage points difference between the enhanced FMAP applicable to the State and the Federal medical assistance percentage applicable to the State under section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) ); (III) for the fiscal quarter beginning on July 1, 2020, a percentage equal to the enhanced FMAP applicable to the State reduced by a number of percentage points equal to 1/2 of the percentage points difference between the enhanced FMAP applicable to the State and the Federal medical assistance percentage applicable to the State under section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) ); (IV) for the fiscal quarter beginning on October 1, 2020, a percentage equal to the enhanced FMAP applicable to the State reduced by a number of percentage points equal to 2/3 of the percentage points difference between the enhanced FMAP applicable to the State and the Federal medical assistance percentage applicable to the State under section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) ); (V) for the fiscal quarter beginning on January 1, 2021, a percentage equal to the enhanced FMAP applicable to the State reduced by a number of percentage points equal to 5/6 of the percentage points difference between the enhanced FMAP applicable to the State and the Federal medical assistance percentage applicable to the State under section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) ); and (VI) for the fiscal quarter beginning on April 1, 2021, and each subsequent fiscal quarter, a percentage equal to the Federal medical assistance percentage applicable to the State under section 1905(b) of the Social Security Act ( 42 U.S.C. 1396d(b) ). . (c) Clarifying authority To recover overpayments Section 223(d)(5) of the Protecting Access to Medicare Act of 2014 ( 42 U.S.C. 1396a note) is amended by adding at the end the following new subparagraph: (D) Recovery of overpayments The amount of any overpayment made to a State under this paragraph shall be deemed an overpayment to the State under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq.) to be disallowed against the State's regular quarterly draw for all Medicaid spending under section 1903(d)(2) of such Act ( 42 U.S.C. 1396b(d)(2) ). . (d) Report to Congress on certified community behavioral health center performance (1) Study The Comptroller General of the United States shall conduct 1 or more studies on certified community behavioral health clinics participating in the demonstration program established under section 223 of the Protecting Access to Medicare Act of 2014 ( 42 U.S.C. 1396a note) that shall include the following: (A) An evaluation of encounter data submissions and other reporting submitted by certified community behavioral health clinics participating in the demonstration program, including identifying challenges faced in collecting, submitting, and ensuring the quality of the data submitted, as well as— (i) an evaluation of the extent to which the Centers for Medicare & Medicaid Services and States face challenges validating encounter data for completeness and accuracy; (ii) an assessment of requirements imposed on such certified community behavioral health clinics for collecting and submitting encounter data; (iii) an assessment of any challenges such certified community behavioral health clinics face in collecting and submitting encounter data; and (iv) an assessment of the efficacy of automated checks conducted on encounter data submitted by such certified community behavioral health clinics for completeness and accuracy. (B) An evaluation of the payment arrangement for certified community behavioral health clinics participating in the demonstration program and of payment arrangements for all certified community behavioral health clinics, including any challenges related to the accuracy of payments, such as— (i) the extent to which the Secretary of Health and Human Services and States participating in the demonstration program can monitor the accuracy of payments made under the program to certified community behavioral health clinics participating in the program; (ii) any challenges associated with requiring the Secretary of Health and Human Services to accurately assess the comparative impact of the certified community behavioral health clinics participating in such program, as compared to certified community behavioral health clinics that are not participating in such program, on the Federal and State costs for furnishing a full range of mental health services (including inpatient, emergency and ambulatory services); and (iii) any comparisons of payment arrangements by certified community behavioral health clinics and the degree to which there are payment disparities among such clinics for furnishing the same or similar services. (C) An evaluation of the quality of data submissions by States and certified community behavioral health clinics participating in the demonstration program, including the extent to which— (i) the Secretary of Health and Human Services faced challenges validating the quality of data submitted by such States and such certified community behavioral health clinics; (ii) the quality measures used to evaluate certified community behavioral health clinics participating in the demonstration program compare with the measures reported by certified community behavioral health clinics that are not participating in the program; and (iii) the quality measures being reported by certified community behavioral health clinics participating in the demonstration program offer insights on the quality of care provided at, and the health status of individuals treated by, such clinics. (D) An assessment of the extent to which the certified community behavioral health clinics participating in the demonstration program expanded the services they offer, as compared to certified community behavioral health clinics that are not participating in the program, and if so, what factored into the decision to expand. (E) Such recommendations as the Comptroller General determines appropriate for improving— (i) the reporting, accuracy, and validation of encounter data; (ii) accuracy in payments to certified community behavioral health clinics under State programs under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq.) and quality monitoring of such clinics; and (iii) quality measure reporting and replacing process-driven quality measures with outcome-based measures that reflect improvements in patient functional status. (2) Report Not later than December 31, 2020, the Comptroller General of the United States shall submit to Congress a report containing the findings of the study conducted under paragraph (1). IV Human Services Extenders 401. Extension of sexual risk avoidance education program Section 510 of the Social Security Act ( 42 U.S.C. 710 ) is amended— (1) in subsection (a)— (A) in paragraph (1), in the matter preceding subparagraph (A), by striking and 2019 and all that follows through December 20, 2019 and inserting through 2020 and for the period beginning October 1, 2020, and ending December 20, 2020 ; and (B) in paragraph (2)(A), by striking and 2019 and all that follows through December 20, 2019 and inserting through 2020 and for the period beginning October 1, 2020, and ending December 20, 2020 ; and (2) in subsection (f)(1), by striking and 2019 and all that follows through December 20, 2019 and inserting through 2020 and $16,643,836 for the period beginning October 1, 2020, and ending December 20, 2020 . 402. Jobs and Opportunity with Benefits and Services for Success Act (a) References Except as otherwise expressly provided, wherever in this section an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Social Security Act. (b) Re-Naming of program (1) In general The heading for part A of title IV is amended to read as follows: A Jobs and Opportunity with Benefits and Services Program . (2) Conforming amendments (A) The heading for section 403(a)(2)(B) ( 42 U.S.C. 603(a)(2)(B) ) is amended by striking tanf and inserting jobs . (B) The heading for section 413 ( 42 U.S.C. 613 ) is amended by striking Temporary Assistance for Needy Families and inserting Jobs and Opportunity with Benefits and Services . (C) The heading for section 413(a) ( 42 U.S.C. 613(a) ) is amended by striking TANF and inserting JOBS . (D) The heading for section 471(e)(7)(B)(i) ( 42 U.S.C. 671(e)(7)(B)(i) ), as in effect pursuant to the amendment made by section 50711(a)(2) of division E of the Bipartisan Budget Act of 2018 ( Public Law 115–123 ), is amended by striking TANF and inserting JOBS . (c) Helping more Americans enter and remain in the workforce (1) Family assistance grants Section 403(a)(1) ( 42 U.S.C. 603(a)(1) ) is amended in each of subparagraphs (A) and (C) by striking 2017 and 2018 and inserting 2020 through 2024 . (2) Healthy marriage promotion and responsible fatherhood grants Section 403(a)(2)(D) ( 42 U.S.C. 603(a)(2)(D) ) is amended— (A) by striking 2017 and 2018 and inserting 2020 through 2024 ; and (B) by striking for fiscal year 2017 or 2018 . (3) Tribal grants Section 412(a) ( 42 U.S.C. 612(a) ) is amended in each of paragraphs (1)(A) and (2)(A) by striking 2017 and 2018 and inserting 2020 through 2024 . (4) Improving access to child care To support work Section 418(a)(3) ( 42 U.S.C. 618(a)(3) ) is amended to read as follows: (3) Appropriation For grants under this section, there are appropriated— (A) $2,917,000,000 for fiscal year 2020; and (B) $3,525,000,000 for each of fiscal years 2021 through 2024. . (5) Grants to the territories Section 1108(b)(2) ( 42 U.S.C. 1308(b)(2) ) is amended by striking 2017 and 2018 and inserting 2020 through 2024 . (6) Prorating of appropriations for fiscal year 2020 Notwithstanding the amendments made by the paragraphs (1) through (3) and (5) of this subsection, the amount appropriated in each provision of law amended by such paragraphs for fiscal year 2020 shall be— (A) the amount that would be so appropriated in the absence of this subsection; multiplied by (B) the number of days in the period from the date of the enactment of this Act through September 30, 2020, divided by 365. (7) Effective date This subsection and the amendments made by this subsection shall take effect on the date of the enactment of this Act. (d) Expecting universal engagement and case management Section 408(b) ( 42 U.S.C. 608(b) ) is amended to read as follows: (b) Individual opportunity plans (1) Assessment The State agency responsible for administering the State program funded under this part shall make an initial assessment of the following for each work-eligible individual (as defined in the regulations promulgated pursuant to section 407(i)(1)(A)(i)): (A) The education obtained, skills, prior work experience, work readiness, and barriers to work of the individual. (B) The well-being of the children in the family of the individual and, where appropriate, activities or services (such as services offered by a program funded under section 511) to improve the well-being of the children. (2) Contents of plans On the basis of the assessment required by paragraph (1) of this subsection, the State agency, in consultation with the individual, shall develop an individual opportunity plan that— (A) includes a personal responsibility agreement in which the individual acknowledges receipt of publicly funded benefits and responsibility to comply with program requirements in order to receive the benefits; (B) sets forth the obligations of the individual to participate in work activities (as defined in section 407(d)), and the number of hours per month for which the individual will so participate pursuant to section 407; (C) sets forth an employment goal and planned short-, intermediate-, and long-term actions to achieve the goal, and, in the case of an individual who has not attained 24 years of age and is in secondary school or the equivalent, the intermediate action may be completion of secondary school or the equivalent; (D) describes the job counseling and other services the State will provide to the individual to enable the individual to obtain and keep unsubsidized employment; (E) may include referral to appropriate substance abuse or mental health treatment; and (F) is signed by the individual. (3) Timing The State agency shall comply with paragraphs (1) and (2) with respect to a work-eligible individual— (A) within 1 year after the effective date of this subsection, in the case of an individual who, as of such effective date, is a recipient of assistance under the State program funded under this part (as in effect immediately before such effective date); or (B) within 60 days after the individual is determined to be eligible for the assistance, in the case of any other individual. (4) Universal engagement Subject to the exceptions in paragraph (3), each State shall require all work-eligible recipients receiving funds under the State program funded under this part to engage in work in accordance with the provisions of section 407(c), 407(d), and 407(e). (5) Penalty for noncompliance by individual In addition to any other penalties required under the State program funded under this part, the State shall reduce, by such amount as the State considers appropriate, the amount of assistance otherwise payable under the State program to a family that includes an individual who fails without good cause to comply with an individual opportunity plan developed pursuant to this subsection, that is signed by the individual. (6) Periodic review The State shall meet with each work-eligible individual assessed by the State under paragraph (1), not less frequently than every 90 days, to— (A) review the individual opportunity plan developed for the individual, including the eligibility of the individual for benefits; (B) discuss with the individual the progress made by the individual in achieving the goals specified in the plan; and (C) update the plan, as necessary, to reflect any changes in the circumstances of the individual since the plan was last reviewed. . (e) Promoting accountability by measuring work outcomes (1) In general Section 407(a) ( 42 U.S.C. 607(a) ) is amended to read as follows: (a) Performance accountability and work outcomes (1) Work outcomes (A) In general A State to which a grant is made under section 403 shall achieve the requisite minimum level of performance for a fiscal year described in this paragraph with respect to the percentage of employment exits for families receiving assistance under the State program funded under this part, or be subject to penalty as described in section 409(a)(3). (B) Calculation of percentage of employment exits For purposes of this paragraph, the percentage of employment exits with respect to a State equals the ratio of the number of work-eligible individuals who are in unsubsidized employment 6 months after their exit to the average monthly number of families receiving assistance under the State program funded under this part. (C) Agreement on requisite level of performance The Secretary and the State shall negotiate the requisite level of performance for the State with respect to employment exits for each fiscal year beginning with fiscal year 2021. (2) Performance accountability (A) Purpose The purpose of this paragraph is to provide for the establishment of performance accountability measures to assess the effectiveness of States in increasing employment, retention, and advancement among families receiving assistance under the State program funded under this part. (B) In general A State to which a grant is made under section 403 for a fiscal year shall achieve the requisite level of performance on an indicator described in subparagraph (D) of this paragraph for the fiscal year. (C) Measuring state performance Each State, in consultation with the Secretary, shall collect and submit to the Secretary the information necessary to measure the level of performance of the State for each indicator described in subparagraph (D), for fiscal year 2021 and each fiscal year thereafter, and the Secretary shall use the information collected for fiscal year 2021 to establish the baseline level of performance for each State for each such indicator. (D) Indicators of performance The indicators described in this subparagraph, for a fiscal year, are the following: (i) The percentage of individuals who were work-eligible individuals as of the time of exit from the program, who are in unsubsidized employment during the 2nd quarter after the exit. (ii) The percentage of individuals who were work-eligible individuals who were in unsubsidized employment in the 2nd quarter after the exit, who are also in unsubsidized employment during the 4th quarter after the exit. (iii) The median earnings of individuals who were work-eligible individuals as of the time of exit from the program, who are in unsubsidized employment during the 2nd quarter after the exit. (iv) The percentage of individuals who have not attained 24 years of age, are attending high school or enrolled in an equivalency program, and are work-eligible individuals or were work-eligible individuals as of the time of exit from the program, who obtain a high school degree or its recognized equivalent while receiving assistance under the State program funded under this part or within 1 year after the exit. (E) Levels of performance (i) In general For each State submitting a State plan pursuant to section 402(a), there shall be established, in accordance with this subparagraph, levels of performance for each of the indicators described in subparagraph (D). (ii) Weight The weight assigned to such an indicator shall be the following: (I) Forty percent, in the case of the indicator described in subparagraph (D)(i). (II) Twenty-five percent, in the case of the indicator described in subparagraph (D)(ii). (III) Twenty-five percent, in the case of the indicator described in subparagraph (D)(iii). (IV) Ten percent, in the case of the indicator described in subparagraph (D)(iv). (iii) Agreement on requisite performance level for each indicator (I) In general The Secretary and the State shall negotiate the requisite level of performance for the State with respect to each indicator described in clause (ii), for each fiscal year beginning with fiscal year 2021, and shall do so before the beginning of the fiscal year involved. (II) Requirements in establishing performance levels In establishing the requisite levels of performance, the State and the Secretary shall— (aa) take into account how the levels involved compare with the levels established for other States; and (bb) ensure the levels involved are adjusted, using the objective statistical model referred to in clause (v), based on— (AA) the differences among States in economic conditions, including differences in unemployment rates or employment losses or gains in particular industries; (BB) the characteristics of participants on entry into the program, including indicators of prior work history, lack of educational or occupational skills attainment, or other factors that may affect employment and earnings; and (CC) take into account the extent to which the levels involved promote continuous improvement in performance by each State. (iv) Revisions based on economic conditions and individuals receiving assistance during the fiscal year The Secretary shall, in accordance with the objective statistical model referred to in clause (v), revise the requisite levels of performance for a State and a fiscal year to reflect the economic conditions and characteristics of the relevant individuals in the State during the fiscal year. (v) Statistical adjustment model The Secretary shall use an objective statistical model to make adjustments to the requisite levels of performance for the economic conditions and characteristics of the relevant individuals, and shall consult with the Secretary of Labor to develop a model that is the same as or similar to the model described in section 116(b)(3)(A)(viii) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3141(b)(3)(A)(viii) ). (vi) Definition of exit In this paragraph, the term exit means, with respect to a State program funded under this part, ceases to a receive a JOBS benefit under the program. (F) State option to establish common exit measures Notwithstanding subparagraph (E)(vi) of this paragraph, a State that has not provided the notification under section 121(b)(1)(C)(ii) of the Workforce Innovation and Opportunity Act to exclude the State program funded under this part as a mandatory one-stop partner may adopt an alternative definition of exit for the purpose of creating common exit measures to improve alignment with workforce programs operated under title I of such Act. (G) Regulations In order to ensure nationwide comparability of data, the Secretary, after consultation with the Secretary of Labor and with States, shall issue regulations governing the establishment of the performance accountability system under this paragraph and a template for performance reports to be used by all States consistent with subsection (b). . (2) Reports on state performance on HHS online dashboard Section 407(b) ( 42 U.S.C. 607(b) ) is amended to read as follows: (b) Publication of State performance The Secretary shall, directly or through the use of grants or contracts, establish and operate an Internet website that is accessible to the public, with a dashboard that is regularly updated and provides easy-to-understand information on the performance of each State program funded under this part, including a profile for each such program, expressed by use of a template, which shall include— (1) information on the indicators and requisite performance levels established for the State under subsection (a), including, with respect to each such level, whether the State achieves, exceeds, or fails to achieve the level on an ongoing basis, including— (A) information on any adjustments made to the requisite levels using the statistical adjustment model described in subsection (a)(3)(D)(v); and (B) a grade based on the overall performance of the State, as determined by the Secretary and in consultation with the State, and the overall performance shall be graded based on the performance indicators and weights for each such indicator as described in subsection (a); (2) information reported under section 411 on the characteristics and demographics of individuals receiving assistance under the State program, including— (A) the number and percentage of child-only cases and reason why the cases are child-only; and (B) the average weekly number of hours that each work-eligible individual in the State program participates in work activities, including a separate section showing the number and percentage of the work-eligible individuals with zero hours of the participation and the reason for non-participation; (3) information on the results of improper payments reviews; (4) a link to the State plan approved under section 402; and (5) information regarding any penalty imposed, or other corrective action taken, by the Secretary against a State for failing to achieve a requisite performance level or any other requirement imposed by or under this part. . (3) Modification of rules for determining whether an individual is engaged in work Section 407(c) ( 42 U.S.C. 607(c) ) is amended— (A) in paragraph (1)— (i) in subparagraph (A)— (I) by striking For purposes of subsection (b)(1)(B)(i), a and inserting A ; and (II) by striking , not fewer than and all that follows through this subsection ; and (ii) in subparagraph (B)— (I) in the matter preceding clause (i), by striking For purposes of subsection (b)(2)(B), an and inserting An ; (II) in clause (i), by striking , not fewer than and all that follows through this subsection ; and (III) in clause (ii), by striking , not fewer than and all that follows through subsection (d) ; and (B) in paragraph (2)— (i) by striking subparagraphs (A) and (D); (ii) in each of subparagraphs (B) and (C), by striking For purposes of determining monthly participation rates under subsection (b)(1)(B)(i), a and inserting A ; (iii) by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively; and (iv) by adding at the end the following: (C) State option for participation requirement exemptions For any fiscal year, a State may, at its option, not require an individual who is a single custodial parent caring for a child who has not attained 12 months of age to engage in work, for not more than 12 months. . (4) Modifications to allowable work activities Section 407(d) ( 42 U.S.C. 607(d) ) is amended— (A) in paragraph (5), by inserting , including apprenticeship before the semicolon; (B) in paragraph (6), by inserting supervised before job search ; (C) in paragraph (8), by striking (not to exceed 12 months with respect to any individual) and inserting , including career technical education ; (D) in paragraph (11), by striking and at the end; (E) in paragraph (12), by striking the period and inserting ; and ; and (F) by adding at the end the following: (13) participation in an in-home program teaching parenting skills that complies with the requirements of section 407(c). . (5) Penalty against States (A) In general Section 409(a)(3) ( 42 U.S.C. 609(a)(3) ) is amended by striking all that precedes subparagraph (B) and inserting the following: (3) Failure to satisfy work outcomes and work engagement (A) In general If the Secretary determines that a State to which a grant is made under section 403 for a fiscal year has failed to comply with any of section 407(a)(1), section 408(b)(3), or section 408(b)(4) for the fiscal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year by an amount equal to the applicable percentage of the State family assistance grant. . (B) Transition rule The Secretary of Health and Human Services may not impose a penalty under section 409(a)(3) of the Social Security Act by reason of the failure of a State to comply with section 407(a) of such Act for any fiscal year before fiscal year 2021. (6) Pro rata reduction of assistance for individual noncompliance Section 407(e) ( 42 U.S.C. 607(e) ) is amended by adding at the end the following: (3) Pro rata reduction For purposes of paragraph (1)(A), the amount of a pro rata reduction in assistance shall be determined by multiplying the total amount of monthly assistance that would, in the absence of the application of this paragraph, be paid to the entire family, by the ratio of— (A) the number of hours of required work activities as designated in subsection (d) actually performed by the individual during the month; to (B) the number of hours of work activities that the individual was required to perform during the month in accordance with subsection (c). (4) Penalties and engagement (A) In general Subject to the limitation in (B), if in a given month an individual who received assistance under this part was required to engage in work under section 408(b)(4), failed to fulfill those obligations and was subsequently sanctioned in accordance with section 407(e)(2) and (3), that individual shall judged to be engaged in work for that month for purposes of section 408(b)(4). (B) Limitation If an individual receives no benefits for two consecutive months due to sanctioning under section 407(e)(2) and (3), that individual shall not be counted as engaged in work in subsequent months for purposes of section 408(b)(4) unless actual work in accordance with section 407(d) was resumed. . (7) Conforming amendment The heading of section 412(c) ( 42 U.S.C. 612(c) ) is amended by striking Minimum Work Participation Requirements and inserting Requirements for work outcome measures . (f) Targeting funds to truly needy families (1) Prohibition on use of funds for families with income greater than twice the poverty line Section 404(k) ( 42 U.S.C. 604(k) ) is amended to read as follows: (k) Prohibitions (1) Use of funds for persons with income greater than twice the poverty line A State to which a grant is made under this part shall not use the grant to provide any assistance or services to a family whose monthly income exceeds twice the poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981 ( 42 U.S.C. 9902(2) )). . (2) Elimination of limitation on use of funds for case management activities Section 404(b)(2) ( 42 U.S.C. 604(b)(2) ) is amended to read as follows: (2) Exceptions Paragraph (1) of this subsection shall not apply to the use of a grant for— (A) information technology and computerization needed for tracking, monitoring, or data collection required by or under this part; or (B) case management activities to carry out section 408(b). . (3) Prohibition on use of funds for direct spending on child care services or activities Section 404(k) ( 42 U.S.C. 604(k) ), as amended by subsection (a) of this section, is amended by adding at the end the following: (2) Direct spending on child care services or activities A State to which a grant is made under this part shall not use the grant for direct spending on child care and other early childhood education programs, services, or activities. . (4) Limitation on use of funds for child welfare services or activities Section 404(k) ( 42 U.S.C. 604(k) ), as amended by subsections (a) and (c) of this section, is amended— (A) in the subsection heading, by inserting ; limitation after Prohibitions ; and (B) by adding at the end the following: (3) Limitation on use of funds for child welfare services or activities A State may use not more than 10 percent of a grant made to the State under section 403(a)(1) for child welfare services or activities, taking into account any amount transferred under subsection (d)(2) of this section. . (5) Expansion of authority To transfer funds Section 404(d) ( 42 U.S.C. 604(d) ) is amended by striking paragraphs (1) through (3) and inserting the following: (1) In general A State may transfer not more than 50 percent of the grant made to the State under section 403(a)(1) to a State program pursuant to any or all of the following provisions of law: (A) The Child Care and Development Block Grant Act of 1990. (B) Title I of the Workforce Innovation and Opportunity Act. (C) Subpart 1 of part B of this title. (2) Limitation on amount transferable to subpart 1 of part b A State may transfer not more than 10 percent of a grant made to the State under section 403(a)(1) to carry out State programs operated pursuant to the State plan developed under subpart 1 of part B, taking into account any amount used as described in subsection (k)(3) of this section. (3) Applicable rules (A) In general Except as provided in subparagraph (B) of this paragraph, any amount paid to a State under this part that is used to carry out a State program pursuant to a provision of law specified in paragraph (1) shall not be subject to the requirements of this part, but shall be subject to the requirements that apply to Federal funds provided directly under the provision of law to carry out the program, and the expenditure of any amount so used shall not be considered to be an expenditure under this part. (B) Funds transferred to the WIOA In the case of funds transferred under paragraph (1)(B) of this subsection— (i) the State shall provide an assurance that the funds will be used to support individuals eligible for assistance or services under this part pursuant to subsection (k)(1); and (ii) not more than 15 percent of the funds will be reserved for statewide workforce investment activities referred to in section 128(a)(1) of the Workforce Innovation and Opportunity Act. (4) WIOA transfer authority not available to States excluding the State JOBS program as a mandatory one-stop partner under the WIOA The authority provided by paragraph (1)(B) of this subsection may not be exercised by a State that has provided the notification referred to in section 407(a)(2)(F). . (g) Targeting funds to core purposes (1) Requirement that States reserve 25 percent of JOBS grant for spending on core activities Section 408(a) ( 42 U.S.C. 608(a) ) is amended by adding at the end the following: (13) Requirement that States reserve 25 percent of JOBS grant for spending on core activities A State to which a grant is made under section 403(a)(1) for a fiscal year shall expend not less than 25 percent of the grant on assistance, case management, work supports and supportive services, work, wage subsidies, work activities (as defined in section 407(d)), and non-recurring short-term benefits. . (2) Requirement that at least 25 percent of qualified State expenditures be for core activities Section 408(a) ( 42 U.S.C. 608(a) ), as amended by subsection (a) of this section, is amended by adding at the end the following: (14) Requirement that at least 25 percent of qualified State expenditures be for core activities Not less than 25 percent of the qualified State expenditures (as defined in section 409(a)(7)(B)(ii)) of a State during the fiscal year shall be for assistance, case management, work supports and supportive services, work, wage subsidies, work activities (as defined in section 407(d)), and non-recurring short-term benefits. . (3) Phase-Out of counting of third-Party contributions as qualified State expenditures Section 408(a) ( 42 U.S.C. 608(a) ), as amended by subsections (a) and (b) of this section, is amended by adding at the end the following: (15) Phase-out of counting of third-party contributions as qualified State expenditures (A) In general The qualified State expenditures (as defined in section 409(a)(7)(B)(i)) of a State for a fiscal year that are attributable to the value of goods and services provided by a source other than a State or local government shall not exceed the applicable percentage of the expenditures for the fiscal year. (B) Applicable percentage In subparagraph (A), the term applicable percentage means, with respect to a fiscal year— (i) 75 percent, in the case of fiscal year 2020; (ii) 50 percent, in the case of fiscal year 2021; (iii) 25 percent, in the case of fiscal year 2022; and (iv) 0 percent, in the case of fiscal year 2023 or any succeeding fiscal year. . (h) Strengthening program integrity by measuring improper payments Section 404 ( 42 U.S.C. 604 ) is amended by adding at the end the following: (l) Applicability of improper payments laws (1) In general The Improper Payments Information Act of 2002 and the Improper Payments Elimination and Recovery Act of 2010 shall apply to a State in respect of the State program funded under this part in the same manner in which such Acts apply to a Federal agency. (2) Regulations Within 2 years after the date of the enactment of this subsection, the Secretary shall prescribe regulations governing how a State reviews and reports improper payments under the State program funded under this part. . (i) Prohibition on State diversion of Federal funds To replace State spending (1) In general Section 408(a) ( 42 U.S.C. 608(a) ), as amended by section 9 of this Act, is amended by adding at the end the following: (16) Non-supplantation requirement Funds made available to a State under this part shall be used to supplement, not supplant, State general revenue spending on activities described in section 404. . (2) Effective date The amendment made by paragraph (1) shall take effect on October 1, 2020. (j) Inclusion of poverty reduction as a program purpose Section 401(a) ( 42 U.S.C. 601(a) ) is amended— (1) by striking and at the end of paragraph (3); (2) by striking the period at the end of paragraph (4) and inserting ; and ; and (3) by adding at the end the following: (5) reduce child poverty by increasing employment entry, retention, and advancement of needy parents. . (k) Welfare for needs not weed (1) Prohibition Section 408(a)(12)(A) ( 42 U.S.C. 608(a)(12)(A) ) is amended— (A) by striking or at the end of clause (ii); (B) by striking the period at the end of clause (iii) and inserting ; or ; and (C) by adding at the end the following: (iv) any establishment that offers marihuana (as defined in section 102(16) of the Controlled Substances Act) for sale. . (2) Effective date The amendments made by paragraph (1) shall take effect on the date that is 3 years after the date of the enactment of this Act. (l) Strengthening accountability through HHS approval of State plans (1) In general Section 402 ( 42 U.S.C. 602 ) is amended— (A) in subsection (a)— (i) in the matter preceding paragraph (1)— (I) by striking 27-month and inserting 24-month ; and (II) by striking found and inserting approved that ; and (ii) in paragraph (1)— (I) in subparagraph (A)— (aa) by striking clauses (ii) and (iii) and inserting the following: (ii) Require work-eligible individuals (as defined in the regulations promulgated pursuant to section 407(i)(1)(A)(i)) to engage in work activities consistent with section 407(c). The document shall describe any in-home parenting program participation in which will be considered by the State as a work activity pursuant to section 407(d)(13). ; (bb) by redesignating clauses (iv) through (viii) as clauses (iii) through (vii), respectively; and (cc) by adding at the end the following: (viii) Describe the case management practices of the State with respect to the requirements of section 408(b), provide a copy of the form or forms that will be used to assess a work-eligible individual (as so defined) and prepare an individual opportunity plan for the individual, describe how the State will ensure that such a plan is reviewed in accordance with section 408(b)(6), and describe how the State will measure progress under the plan. (ix) Propose the requisite levels of performance for the State for purposes of section 407(a) for each year in the 2-year period referred to in subsection (d) of this section, and provide an explanation with supporting data of why each such level is appropriate. (x) Describe how the State will engage low-income noncustodial parents who owe child support and how such a parent will be provided with access to work support and other services under the program to which the parent is referred to support their employment and advancement. (xi) Describe how the State will comply with improper payments provisions in section 404(l). (xii) Describe coordination with other programs, including whether the State intends to exercise authority provided by section 404(d) of this Act to transfer any funds paid to the State under this part, provide assurance that, in the case of a transfer to carry out a program under title I of the Workforce Innovation and Opportunity Act, the State will comply with section 404(d)(3)(B) of this Act and coordinate with the one-stop delivery system under the Workforce Innovation and Opportunity Act, and describe how the State will coordinate with the programs involved to provide services to families receiving assistance under the program referred to in paragraph (1) of this subsection. (xiii) Describe how the State will promote marriage, such as through temporary disregard of the income of a new spouse when an individual receiving assistance under the State program marries so that the couple doesn’t automatically lose benefits due to marriage. (xiv) Describe how the State will allow for a transitional period of benefits, such as through temporary earned income disregards or a gradual reduction in the monthly benefit amount, for an individual receiving assistance who obtains employment and becomes ineligible due to an increase in income obtained through employment or through an increase in wages. ; and (II) in subparagraph (B), by striking clauses (iv) and (v); (B) by striking subsection (c) and inserting the following: (c) Public availability of State plans The Secretary shall make available to the public a link to any plan or plan amendment submitted by a State under this subsection. ; and (C) by adding at the end the following: (d) 2-Year plan A plan submitted pursuant to this section shall be designed to be implemented during a 2-year period. (e) Combined plan allowed A State may submit to the Secretary and the Secretary of Labor a combined State plan that meets the requirements of subsections (a) and (d) and that is for programs and activities under the Workforce Innovation and Opportunity Act. (f) Approval of plans The Secretary shall approve any plan submitted pursuant to this section that meets the requirements of subsections (a) through (d). . (2) Duties of the Secretary (A) Coordination of activities; dissemination of information Section 416 ( 42 U.S.C. 616 ) is amended— (i) by inserting (a) In general.— before The programs ; and (ii) by adding at the end the following: (b) Coordination of activities The Secretary shall coordinate all activities of the Department of Health and Human Services relating to work activities (as defined in section 407(d)) and requirements and measurement of employment outcomes, and, to the maximum extent practicable, coordinate the activities of the Department in this regard with similar activities of other Federal entities. (c) Dissemination of information The Secretary shall disseminate, for voluntary informational purposes, information on practices that scientifically valid research indicates are most successful in improving the quality of State and tribal programs funded under this part. . (3) Technical assistance (A) In general Section 406 ( 42 U.S.C. 606 ) is amended to read as follows: 406. Technical assistance (a) In general The Secretary shall provide technical assistance to States and Indian tribes (which may include providing technical assistance on a reimbursable basis), which shall be provided by qualified experts on practices grounded in scientifically valid research, where appropriate, to support activities related to publication of State performance under section 407(b) and to carry out State and tribal programs funded under this part. (b) Reservation of funds The Secretary shall reserve not more than 0.25 percent of the amount appropriated by section 403(a)(1)(C) for a fiscal year to carry out subsection (a) of this section. . (B) Conforming amendment Section 403(a)(1)(B) ( 42 U.S.C. 603(a)(1)(B) ) is amended by striking percentage specified in section 413(h)(1) and inserting the sum of the percentages specified in sections 406(b) and 413(h) . (m) Aligning and improving data reporting (1) Requirement that States report full-Population data Section 411(a)(1) ( 42 U.S.C. 611(a)(1) ) is amended— (A) by striking subparagraph (B); (B) by striking (1) General reporting requirement.— ; and (C) by— (i) redesignating— (I) subparagraph (A) as paragraph (1); (II) clauses (i) through (xvii) of subparagraph (A) as subparagraphs (A) through (Q), respectively; (III) subclauses (I) through (V) of clause (ii) as clauses (i) through (v), respectively; (IV) subclauses (I) through (VII) of clause (xi) as clauses (i) through (vii), respectively; and (V) subclauses (I) through (V) of clause (xvi) as clauses (i) through (v), respectively; and (ii) moving each such redesignated provision 2 ems to the left. (2) Report on participation in work activities Section 411(a)(1) ( 42 U.S.C. 611(a)(1) ), as amended by subsection (a)(3) of this section, is amended by striking subparagraphs (K) and (L) and inserting the following: (K) The work eligibility status of each individual in the family, and— (i) in the case of each work-eligible individual (as defined in the regulations promulgated pursuant to section 407(i)(1)(A)(i)) in the family— (I) the number of hours (including zero hours) per month of participation in— (aa) work activities (as defined in section 407(d)); and (bb) any other activity required by the State to remove a barrier to employment; and (ii) in the case of each individual in the family who is not a work-eligible individual (as so defined), the reason for that status. (L) For each work-eligible individual (as so defined) and each adult in the family who did not participate in work activities (as so defined) during a month, the reason for the lack of participation. . (3) Reporting of information on employment and earnings outcomes Section 411(c) ( 42 U.S.C. 611(c) ) is amended to read as follows: (c) Reporting of information on employment and earnings outcomes The Secretary, in consultation with the Secretary of Labor, shall determine the information that is necessary to compute the employment and earnings outcomes and the statistical adjustment model for the employment and earnings outcomes required under section 407, and each eligible State shall collect and report that information to the Secretary. . (n) Technical corrections to data exchange standards To improve program coordination (1) In general Section 411(d) ( 42 U.S.C. 611(d) ) is amended to read as follows: (d) Data exchange standards for improved interoperability (1) Designation The Secretary shall, in consultation with an interagency work group established by the Office of Management and Budget and considering State government perspectives, by rule, designate data exchange standards to govern, under this part— (A) necessary categories of information that State agencies operating programs under State plans approved under this part are required under applicable Federal law to electronically exchange with another State agency; and (B) Federal reporting and data exchange required under applicable Federal law. (2) Requirements The data exchange standards required by paragraph (1) shall, to the extent practicable— (A) incorporate a widely accepted, non-proprietary, searchable, computer-readable format, such as the eXtensible Markup Language; (B) contain interoperable standards developed and maintained by intergovernmental partnerships, such as the National Information Exchange Model; (C) incorporate interoperable standards developed and maintained by Federal entities with authority over contracting and financial assistance; (D) be consistent with and implement applicable accounting principles; (E) be implemented in a manner that is cost-effective and improves program efficiency and effectiveness; and (F) be capable of being continually upgraded as necessary. (3) Rule of construction Nothing in this subsection shall be construed to require a change to existing data exchange standards found to be effective and efficient. . (2) Effective date Not later than the date that is 24 months after the date of the enactment of this subsection, the Secretary of Health and Human Services shall issue a proposed rule that— (A) identifies federally required data exchanges, include specification and timing of exchanges to be standardized, and address the factors used in determining whether and when to standardize data exchanges; and (B) specifies State implementation options and describes future milestones. (o) Set-Aside for economic downturns Section 404(e) ( 42 U.S.C. 604(e) ) is amended to read as follows: (e) Deadlines for obligation and expenditures of funds by States (1) In general Except as provided in paragraph (2), a State to which a grant is made under section 403(a)(1) shall obligate the funds within 2 years after the date the funds are made available, and shall expend the funds within 3 years after such date. (2) Exception for limited amount of funds set aside for future use (A) In general A State to which funds are paid under section 403(a)(1) may reserve not more than 15 percent of the funds for use in the State program funded under this part without fiscal year limitation. (B) Notice of intent to reserve funds A State that intends to reserve funds paid to the State under section 402(a)(1) shall notify the Secretary of the intention not later than the end of the period in which the funds are available for obligation without regard to subparagraph (A) of this paragraph. . (p) Definitions related to use of funds Section 419 ( 42 U.S.C. 619 ) is amended by adding at the end the following: (6) Assistance The term assistance means cash, payments, vouchers, and other forms of benefits designed to meet a family's ongoing basic needs (such as for food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses). (7) Work supports The term work supports means assistance and non-assistance transportation benefits (such as the value of allowances, bus tokens, car payments, auto repair, auto insurance reimbursement, and van services) provided in order to help families obtain, retain, or advance in employment, participate in work activities (as defined in section 407(d)), or as a non-recurrent, short-term benefit, including goods provided to individuals in order to help them obtain or maintain employment (such as tools, uniforms, fees to obtain special licenses, bonuses, incentives, and work support allowances and expenditures for job access). (8) Supportive services The term supportive services means services such as domestic violence services, and mental health, substance abuse and disability services, housing counseling services, and other family supports, except to the extent that the provision of the service would violate section 408(a)(6). (9) JOBS benefit The term JOBS benefit means— (A) assistance; or (B) wage subsidies that are paid, with funds provided under section 403(a) or with qualified State expenditures, with respect to a person who— (i) was a work-eligible individual (as defined in the regulations promulgated pursuant to section 407(i)(1)(A)(i)) at the time of entry into subsidized employment, such as on-the-job training or apprenticeship; and (ii) is not receiving assistance. . (q) Elimination of obsolete provisions (1) Elimination of supplemental grants to States Section 403(a) ( 42 U.S.C. 603(a) ) is amended by striking paragraph (3). (2) Elimination of bonus To reward high performance States (A) In general Section 403(a) ( 42 U.S.C. 603(a) ) is amended by striking paragraph (4). (B) Conforming amendment Section 1108(a)(2) ( 42 U.S.C. 1308(a)(2) ) is amended by striking 403(a)(4), . (3) Elimination of welfare-to-Work grants (A) In general Section 403(a) ( 42 U.S.C. 603(a) ) is amended by striking paragraph (5). (B) Conforming amendments (i) Elimination of exclusion from time limit Section 408(a)(7) ( 42 U.S.C. 608(a)(7) ) is amended by striking subparagraph (G). (ii) Elimination of penalty for misuse of competitive welfare-to-work funds Section 409(a)(1) ( 42 U.S.C. 609(a)(1) ) is amended by striking subparagraph (C). (iii) Elimination of exclusion from qualified State expenditures of State funds used to match welfare-to-work grant funds Section 409(a)(7)(B)(iv) ( 42 U.S.C. 609(a)(7)(B)(iv) ) is amended in the 1st sentence— (I) by adding or at the end of subclause (II); and (II) by striking subclause (III) and redesignating subclause (IV) as subclause (III). (iv) Elimination of penalty for failure of state to maintain historic effort during year in which welfare-to-work grant is received Section 409(a) ( 42 U.S.C. 609(a) ) is amended by striking paragraph (13). (v) Elimination of requirements relating to welfare-to-work grants in quarterly state reports Section 411(a) ( 42 U.S.C. 611(a) ), as amended by section 15(a) of this Act, is amended— (I) in paragraph (1), by striking (except for information relating to activities carried out under section 403(a)(5)) ; and (II) in each of paragraphs (2) through (4), by striking the comma and all that follows and inserting a period. (vi) Indian tribal programs Section 412(a) ( 42 U.S.C. 612(a) ) is amended by striking paragraph (3). (vii) Elimination of requirement to disclose certain information to private industry council receiving welfare-to-work funds Section 454A(f) ( 42 U.S.C. 654a(f) ) is amended by striking paragraph (5). (viii) Grants to territories Section 1108(a)(2) ( 42 U.S.C. 1308(a)(2) ) is amended by striking 403(a)(5), . (4) Elimination of Contingency Fund (A) In general Section 403 ( 42 U.S.C. 603 ) is amended by striking all of subsection (b) except paragraph (5). (B) Conforming amendments (i) Transfer of needy State definition (I) In general Paragraph (5) of section 403(b) ( 42 U.S.C. 603(b)(5) ) is— (aa) amended— (AA) in the matter preceding subparagraph (A), by striking paragraph (4) and inserting subparagraph (C) ; (BB) in each of subparagraphs (A) and (B), by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively; (CC) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; (DD) by redesignating such paragraph as subparagraph (D); and (EE) by moving each provision 2 ems to the right; and (bb) as so amended, hereby transferred into section 409(a)(3) ( 42 U.S.C. 609(a)(3) ) and added to the end of such section. (II) Conforming amendment Section 409(a)(3)(C) ( 42 U.S.C. 609(a)(3)(C) ) is amended by striking (as defined in section 403(b)(5)) . (ii) Elimination of penalty for failure of state receiving amounts from contingency fund to maintain 100 percent of historic effort Section 409(a) ( 42 U.S.C. 609(a) ) is amended by striking paragraph (10). (5) Conforming amendments related to elimination of Federal loans for state welfare programs (A) Elimination of associated penalty provision (i) In general Section 409(a) ( 42 U.S.C. 609(a) ) is amended by striking paragraph (6). (ii) Conforming amendments Section 412(g)(1) ( 42 U.S.C. 612(g)(1) ) is amended by striking (a)(6), . (B) Elimination of provision providing for tribal eligibility Section 412 ( 42 U.S.C. 612 ) is amended by striking subsection (f). (C) Elimination of disregard of loan in applying limit on payments to the territories Section 1108(a)(2) ( 42 U.S.C. 1308(a)(2) ) is amended by striking 406, . (6) Elimination of limitations on other State programs funded with qualified State expenditures (A) The following provisions are each amended by striking or any other State program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) : (i) Paragraphs (1) and (2) of section 407(e) ( 42 U.S.C. 607(e)(1) and (2)). (ii) Section 411(a)(1) ( 42 U.S.C. 611(a)(1) ), as amended by section 15(a)(3)(A)(i) of this Act. (iii) Subsections (d) and (e)(1) of section 413 ( 42 U.S.C. 613(d) and (e)(1)). (B) Section 413(a) ( 42 U.S.C. 613(a) ) is amended by striking and any other State program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) . (7) Conforming amendments related to elimination of report (A) In general Section 409(a)(2) ( 42 U.S.C. 609(a)(2) ) is amended— (i) in the paragraph heading, by inserting quarterly before report ; (ii) in subparagraph (A)(ii), by striking clause (i) and inserting subparagraph (A) ; (iii) by striking (A) Quarterly reports.— ; (iv) by striking subparagraph (B); and (v) by redesignating clauses (i) and (ii) of subparagraph (A) as subparagraphs (A) and (B), respectively (and adjusting the margins accordingly). (B) Conforming amendments (i) Section 409(b)(2) ( 42 U.S.C. 609(b)(2) ) is amended by striking and, and all that follows and inserting a period. (ii) Section 409(c)(4) ( 42 U.S.C. 609(c)(4) ) is amended by striking (2)(B), . (8) Annual reports to Congress Section 411(b)(1)(A) ( 42 U.S.C. 611(b)(1)(A) ) is amended by striking participation rates and inserting outcome measures . (9) Reduction in force provisions Section 416(a) ( 42 U.S.C. 616(a) ), as so designated by section 14(b)(1)(A) of this Act, is amended by striking , and the Secretary and all that follows and inserting a period. (10) Conforming cross-References (A) Section 409 ( 42 U.S.C. 609 ) is amended— (i) in subsection (a)(7)(B)(i)(III), by striking (12) and inserting (10) ; (ii) in subsection (a) (as amended by subsections (c)(2)(D), (d)(2)(B), and (e)(1)(A) of this section), by redesignating paragraphs (7), (8), (9), (11), (12), (14), (15), and (16) as paragraphs (6) through (13), respectively; (iii) in subsection (b)(2), by striking (8), (10), (12), or (13) and inserting or (10) ; and (iv) in subsection (c)(4), by striking (8), (10), (12), (13), or (16) and inserting (10), or (13) . (B) Section 452 ( 42 U.S.C. 652 ) is amended in each of subsections (d)(3)(A)(i) and (g)(1) by striking 409(a)(8) and inserting 409(a)(7) . (11) Modifications to maintenance-of-Effort requirement Section 409(a)(6)(B)(i) ( 42 U.S.C. 609(a)(6)(B)(i) ), as redesignated by subsection (j)(1)(B) of this section, is amended— (A) in subclause (I)— (i) in the matter preceding item (aa), by striking all State programs and inserting the State program funded under this part ; (ii) by redesignating items (dd) and (ee) as items (ee) and (ff), respectively, and inserting after item (cc) the following: (dd) Expenditures for a purpose described in paragraph (3), (4), or (5) of section 401(a). ; and (iii) in item (ee) (as so redesignated), by striking and (ee) and inserting (dd), and (ff) ; (B) by striking subclause (V); and (C) in subclause (IV), by inserting , except any of such families whose monthly income exceeds twice the poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981 ( 42 U.S.C. 9902(2) )) before the period. (r) Effective date Except as provided in subsections (c)(7), (i)(2), and (k)(2), the amendments made by this section shall take effect on October 1, 2020.