SECTION 1. ENCOURAGING THE PREPARATION OF TANF RECIPIENTS FOR HIGH-
              SKILL, HIGH-DEMAND JOBS.

    (a) In General.--Section 407(c)(2)(D) of the Social Security Act 
(42 U.S.C. 607(c)(2)(D)) is amended to read as follows:
                    ``(D) Limitation on number of persons who may be 
                treated as engaged in work by reason of participation 
                in educational activities.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), for purposes of paragraphs 
                        (1)(B)(i) and (2)(B) of subsection (b), not 
                        more than 30 percent of the number of 
                        individuals in all families in a State who are 
                        treated as engaged in work for a month may 
                        consist of individuals who are--
                                    ``(I) determined to be engaged in 
                                work for the month by reason of 
                                participation in vocational educational 
                                training (but only with respect to such 
                                training that does not exceed 12 months 
                                with respect to any individual); or
                                    ``(II) deemed to be engaged in work 
                                for the month by reason of subparagraph 
                                (C) of this paragraph.
                            ``(ii) Exception for education in 
                        preparation for sector-specific, high-skill 
                        occupations to meet employer demand.--
                                    ``(I) In general.--Notwithstanding 
                                clause (i) and subsection (d)(8), for 
                                purposes of determining monthly 
                                participation rates under paragraphs 
                                (1)(B)(i) and (2)(B) of subsection (b) 
                                with respect to an individual who is 
                                enrolled, in preparation for a sector-
                                specific, high-skill occupation to meet 
                                employer demand (as defined in 
                                subclause (II)), in a postsecondary 2- 
                                or 4-year degree program or in 
                                vocational educational training--
                                            ``(aa) the State may count 
                                        the number of hours per week 
                                        that the individual attends 
                                        such program or training for 
                                        purposes of determining the 
                                        number of hours for which a 
                                        family is engaged in work for 
                                        the month without regard to the 
                                        30 percent limitation under 
                                        clause (i); and
                                            ``(bb) the individual shall 
                                        be permitted to complete the 
                                        requirements of the degree 
                                        program or vocational 
                                        educational training within the 
                                        normal time frame for full-time 
                                        students seeking the particular 
                                        degree or completing such 
                                        vocational educational 
                                        training.
                                    ``(II) Sector-specific, high-skill 
                                occupation to meet employer demand 
                                defined.--In subclause (I), the term 
                                `sector-specific, high-demand, high-
                                skill occupation to meet employer 
                                demand' means an occupation--
                                            ``(aa) that has been 
                                        identified by the State 
                                        workforce investment board 
                                        established under section 111 
                                        of the Workforce Investment Act 
                                        of 1998 (29 U.S.C. 2821) as 
                                        within the needs of the State 
                                        with regard to current and 
                                        projected employment 
                                        opportunities in specific 
                                        industry sectors or that has 
                                        been defined by the State 
                                        agency administering the State 
                                        program funded under this part 
                                        as within the needs of the 
                                        State with regard to current 
                                        and projected employment 
                                        opportunities in specific 
                                        industry sectors and is 
                                        consistent with high demand 
                                        jobs identified in the State 
                                        plan in accordance with section 
                                        402(a)(1)(A)(vii);
                                            ``(bb) that requires 
                                        occupational training; and
                                            ``(cc) that provides a wage 
                                        of at least 75 percent of the 
                                        State median hourly wage, as 
                                        calculated by the Bureau of 
                                        Labor Statistics on the basis 
                                        of the most recent Occupational 
                                        Employment and Wage Survey.''.
    (b) Conforming State Plan Amendment.--Section 402(a)(1)(B) of the 
Social Security Act (42 U.S.C. 602(a)(1)(B)) is amended by adding at 
the end the following:
                            ``(vii) The document shall describe any 
                        strategies and programs the State plans to use 
                        to address employment placement, retention, and 
                        advancement for recipients of assistance under 
                        the program, including placement into high-
                        demand jobs and whether such jobs are 
                        identified using labor market information.''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2005.
Output: Revises the mandatory work requirements of part A (Temporary Assistance for Needy Families) (TANF) of title IV of the Social Security Act with respect to the limitation on the number of persons in a state who may be treated as engaged in work by reason of participation in educational activities. Removes two-parent families from the formula for such limitation. Creates an exception to the limitation for education in preparation for sector-specific, high-skill occupations to meet employer demand.

Defines sector-specific, high-demand, high-skill occupation to meet employer demand as an occupation that: (1) has been identified by the state workforce investment board or by the state agency administering the state TANF program as within state needs with regard to current and projected employment opportunities in specific industry sectors; (2) requires occupational training; and (3) provides a wage of at least 75 percent of the state median hourly wage.