HR 4700 IH

To reauthorize and improve the program of block grants to States for temporary assistance for needy families, improve access to quality child care, and for other purposes.

MAY 9, 2002

Ms. PRYCE of Ohio (for herself, Mr. THOMAS, Mr. BOEHNER, Mr. TAUZIN, Mr. OXLEY, Mr. COMBEST, Mr. HERGER, Mr. MCKEON, Mr. UPTON, Mr. BILIRAKIS, Mrs. ROUKEMA, Mr. GOODLATTE, and Mr. SHAW) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, Education and the Workforce, Agriculture, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To reauthorize and improve the program of block grants to States for temporary assistance for needy families, improve access to quality child care, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Personal Responsibility, Work, and Family Promotion Act of 2002'.

SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. References.

Sec. 4. Findings.

TITLE I--TANF

Sec. 101. Purposes.

Sec. 102. Family assistance grants.

Sec. 103. Promotion of family formation and healthy marriage.

Sec. 104. Supplemental grant for population increases in certain States.

Sec. 105. Bonus to reward employment achievement.

Sec. 106. Contingency fund.

Sec. 107. Use of funds.

Sec. 108. Repeal of Federal loan for State welfare programs.

Sec. 109. Universal engagement and family self-sufficiency plan requirements.

Sec. 110. Work participation requirements.

Sec. 111. Maintenance of effort.

Sec. 112. Performance improvement.

Sec. 113. Data collection and reporting.

Sec. 114. Direct funding and administration by Indian tribes.

Sec. 115. Research, evaluations, and national studies.

Sec. 116. Studies by the Census Bureau and the General Accounting Office.

Sec. 117. Definition of assistance.

Sec. 118. Technical corrections.

Sec. 119. Fatherhood program.

Sec. 120. State option to make TANF programs mandatory partners with one-stop employment training centers.

Sec. 121. Sense of the Congress.

TITLE II--CHILD CARE

Sec. 201. Short title.

Sec. 202. Goals.

Sec. 203. Authorization of appropriations.

Sec. 204. Application and plan.

Sec. 205. Activities to improve the quality of child care.

Sec. 206. Report by Secretary.

Sec. 207. Definitions.

Sec. 208. Entitlement funding.

TITLE III--TAXPAYER PROTECTIONS

Sec. 301. Exclusion from gross income for interest on overpayments of income tax by individuals.

Sec. 302. Deposits made to suspend running of interest on potential underpayments.

Sec. 303. Partial payment of tax liability in installment agreements.

TITLE IV--CHILD SUPPORT

Sec. 401. Federal matching funds for limited pass through of child support payments to families receiving TANF.

Sec. 402. State option to pass through all child support payments to families that formerly received TANF.

Sec. 403. Mandatory review and adjustment of child support orders for families receiving TANF.

Sec. 404. Mandatory fee for successful child support collection for family that has never received TANF.

Sec. 405. Report on undistributed child support payments.

Sec. 406. Use of new hire information to assist in administration of unemployment compensation programs.

Sec. 407. Decrease in amount of child support arrearage triggering passport denial.

Sec. 408. Use of tax refund intercept program to collect past-due child support on behalf of children who are not minors.

Sec. 409. Garnishment of compensation paid to veterans for service-connected disabilities in order to enforce child support obligations.

Sec. 410. Improving Federal debt collection practices.

Sec. 411. Maintenance of technical assistance funding.

Sec. 412. Maintenance of Federal Parent Locator Service funding.

TITLE V--CHILD WELFARE

Sec. 501. Extension of authority to approve demonstration projects.

Sec. 502. Elimination of limitation on number of waivers.

Sec. 503. Elimination of limitation on number of States that may be granted waivers to conduct demonstration projects on same topic.

Sec. 504. Elimination of limitation on number of waivers that may be granted to a single State for demonstration projects.

Sec. 505. Streamlined process for consideration of amendments to and extensions of demonstration projects requiring waivers.

Sec. 506. Availability of reports.

Sec. 507. Technical correction.

TITLE VI--SUPPLEMENTAL SECURITY INCOME

Sec. 601. Review of State agency blindness and disability determinations.

TITLE VII--STATE AND LOCAL FLEXIBILITY

Sec. 701. Program coordination demonstration projects.

Sec. 702. State food assistance block grant demonstration project.

TITLE VIII--ABSTINENCE EDUCATION

Sec. 801. Extension of abstinence education funding under maternal and child health program.

TITLE IX--TRANSITIONAL MEDICAL ASSISTANCE

Sec. 901. One-year reauthorization of transitional medical assistance.

Sec. 902. Adjustment to payments for medicaid administrative costs to prevent duplicative payments and to fund a 1-year extension of transitional medical assistance.

TITLE X--EFFECTIVE DATE

Sec. 1001. Effective date.

SEC. 3. REFERENCES.

Except as otherwise expressly provided, wherever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the amendment or repeal shall be considered to be made to a section or other provision of the Social Security Act.

SEC. 4. FINDINGS.

The Congress makes the following findings:

(1) The Temporary Assistance for Needy Families (TANF) Program established by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193) has succeeded in moving families from welfare to work and reducing child poverty.

(A) There has been a dramatic increase in the employment of current and former welfare recipients. The percentage of working recipients reached an all-time high in fiscal years 1999 and 2000. In fiscal year 1999, 33 percent of adult recipients were working, compared to less than 7 percent in fiscal year 1992, and 11 percent in fiscal year 1996. All States met the overall participation rate standard in fiscal year 2000, as did the District of Columbia and Puerto Rico.

(B) Earnings for welfare recipients remaining on the rolls have also increased significantly, as have earnings for female-headed households. The increases have been particularly large for the bottom 2 income quintiles, that is, those women who are most likely to be former or present welfare recipients.

(C) Welfare dependency has plummeted. As of September 2001, 2,103,000 families and 5,333,000 individuals were receiving assistance. Accordingly, the number of families in the welfare caseload and the number of individuals receiving cash assistance declined 52 percent and 56 percent, respectively, since the enactment of TANF. These declines have persisted even as unemployment rates have increased: unemployment rates nationwide rose 25 percent, from 3.9 percent in September 2000 to 4.9 percent in September 2001, while welfare caseloads continued to drop by 7 percent.

(D) The child poverty rate continued to decline between 1996 and 2000, falling 21 percent from 20.5 to 16.2 percent. The 2000 child poverty rate is the lowest since 1979. Child poverty rates for African-American and Hispanic children have also fallen dramatically during the past 6 years. African-American child poverty is at the lowest rate on record and Hispanic child poverty has had the largest 4-year decrease on record.

(E) Despite these gains, States have had mixed success in fully engaging welfare recipients in work activities. While all States have met the overall work participation rates required by law, in 2000, in an average month, only about 1/3 of all families with an adult participated in work activities that were countable toward the State's participation rate. Eight jurisdictions failed to meet the more rigorous 2-parent work requirements, and about 20 States are not subject to the 2-parent requirements, most because they moved their 2-parent cases to separate State programs where they are not subject to a penalty for failing the 2-parent rates.

(2) As a Nation, we have made substantial progress in reducing teen pregnancies and births, slowing increases in nonmarital childbearing, and improving child support collections and paternity establishment.

(A) The teen birth rate has fallen continuously since 1991, down a dramatic 22 percent by 2000. During the period of 1991-2000, teenage birth rates fell in all States and the District of Columbia, Puerto Rico, and the Virgin Islands. Declines also have spanned age, racial, and ethnic groups. There has been success in lowering the birth rate for both younger and older teens. The birth rate for those 15-17 years of age is down 29 percent since 1991, and the rate for those 18 and 19 is down 16 percent. Between 1991 and 2000, teen birth rates declined for all women ages 15-19--white, African American, American Indian, Asian or Pacific Islander, and Hispanic women ages 15-19. The rate for African American teens--until recently the highest--experienced the largest decline, down 31 percent from 1991 to 2000, to reach the lowest rate ever reported for this group. Most births to teens are nonmarital; in 2000, about 73 percent of the births to teens aged 15-19 occurred outside of marriage.

(B) Nonmarital childbearing continued to increase slightly in 2000, however not at the sharp rates of increase seen in recent decades. The birth rate among unmarried women in 2000 was 3.5 percent lower than its peak reached in 1994, while the proportion of births occurring outside of marriage has remained at approximately 33 percent since 1998.

(C) The negative consequences of out-of-wedlock birth on the mother, the child, the family, and society are well documented. These include increased likelihood of welfare dependency, increased risks of low birth weight, poor cognitive development, child abuse and neglect, and teen parenthood, and decreased likelihood of having an intact marriage during adulthood.

(D) An estimated 23,900,000 children do not live with their biological father. 16,000,000 children live with their mother only. These facts are attributable largely to declining marriage rates, increasing divorce rates, and increasing rates of nonmarital births during the latter part of the 20th century.

(E) There has been a dramatic rise in cohabitation as marriages have declined. Only 40 percent of children of cohabiting couples will see their parents marry. Those who do marry experience a 50 percent higher divorce rate. Children in single-parent households and cohabiting households are at much higher risk of child abuse than children in intact married and stepparent families.

(F) Children who live apart from their biological fathers, on average, are more likely to be poor, experience educational, health, emotional, and psychological problems, be victims of child abuse, engage in criminal behavior, and become involved with the juvenile justice system than their peers who live with their married, biological mother and father. A child living in a single-parent family is nearly 5 times as likely to be poor as a child living in a married-couple family. In married-couple families, the child poverty rate is 8.1 percent, in households headed by a single mother, the poverty rate is 39.7 percent.

(G) Since the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, child support collections within the child support enforcement system have grown every year, increasing from $12,000,000,000 in fiscal year 1996 to nearly $19,000,000,000 in fiscal year 2001. The number of paternities established or acknowledged in fiscal year 2002 reached an historic high of over 1,500,000--which includes a nearly 100 percent increase through in-hospital acknowledgement programs to 688,510 in 2000 from 349,356 in 1996. Child support collections were made in over 7,000,000 cases in fiscal year 2000, significantly more than the almost 4,000,000 cases having a collection in 1996.

(3) The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 gave States great flexibility in the use of Federal funds to develop innovative programs to help families leave welfare and begin employment and to encourage the formation of 2-parent families.

(A) Total Federal and State TANF expenditures in fiscal year 2000 were $24,000,000,000, up from $22,600,000,000 for the previous year. This increased spending is attributable to significant new investments in

supportive services in the TANF program, such as child care and activities to support work.

(B) Since the welfare reform effort began there has been a dramatic increase in work participation (including employment, community service, and work experience) among welfare recipients, as well as an unprecedented reduction in the caseload because recipients have left welfare for work.

(C) States are making policy choices and investment decisions best suited to the needs of their citizens.

(i) To expand aid to working families, all States disregard a portion of a family's earned income when determining benefit levels.

(ii) Most States increased the limits on countable assets above the former Aid to Families with Dependent Children (AFDC) program. Every State has increased the vehicle asset level above the prior AFDC limit for a family's primary automobile.

(iii) States are experimenting with programs to promote marriage and father involvement. Over half the States have eliminated restrictions on 2-parent families. Many States use TANF, child support, or State funds to support community-based activities to help fathers become more involved in their children's lives or strengthen relationships between mothers and fathers.

(4) Therefore, it is the sense of the Congress that increasing success in moving families from welfare to work, as well as in promoting healthy marriage and other means of improving child well-being, are very important Government interests and the policy contained in part A of title IV of the Social Security Act (as amended by this Act) is intended to serve these ends.

TITLE I--TANF

SEC. 101. PURPOSES.

Section 401(a) (42 U.S.C. 601(a)) is amended--

(1) in the matter preceding paragraph (1), by striking `increase' and inserting `improve child well-being by increasing';

(2) in paragraph (1), by inserting `and services' after `assistance';

(3) in paragraph (2), by striking `parents on government benefits' and inserting `families on government benefits and reduce poverty'; and

(4) in paragraph (4), by striking `two-parent families' and inserting `healthy, 2-parent married families, and encourage responsible fatherhood'.

SEC. 102. FAMILY ASSISTANCE GRANTS.

(a) EXTENSION OF AUTHORITY- Section 403(a)(1)(A) (42 U.S.C. 603(a)(1)(A)) is amended--

(1) by striking `1996, 1997, 1998, 1999, 2000, 2001, and 2002' and inserting `2003 through 2007'; and

(2) by inserting `payable to the State for the fiscal year' before the period.

(b) STATE FAMILY ASSISTANCE GRANT- Section 403(a)(1) (42 U.S.C. 603(a)(1)) is amended by striking subparagraphs (B) through (E) and inserting the following:

`(B) STATE FAMILY ASSISTANCE GRANT- The State family assistance grant payable to a State for a fiscal year shall be the amount that bears the same ratio to the amount specified in subparagraph (C) of this paragraph as the amount required to be paid to the State under this paragraph for fiscal year 2002 (determined without regard to any reduction pursuant to section 412(a)(1)) bears to the total amount required to be paid under this paragraph for fiscal year 2002.

`(C) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for each of fiscal years 2003 through 2007 $16,566,542,000 for grants under this paragraph.'.

(c) MATCHING GRANTS FOR THE TERRITORIES- Section 1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by striking `1997 through 2002' and inserting `2003 through 2007'.

SEC. 103. PROMOTION OF FAMILY FORMATION AND HEALTHY MARRIAGE.

(a) STATE PLANS- Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by adding at the end the following:

`(vii) Encourage equitable treatment of married, 2-parent families under the program referred to in clause (i).'.

(b) HEALTHY MARRIAGE PROMOTION GRANTS; REPEAL OF BONUS FOR REDUCTION OF ILLEGITIMACY RATIO- Section 403(a)(2) (42 U.S.C. 603(a)(2)) is amended to read as follows:

`(2) HEALTHY MARRIAGE PROMOTION GRANTS-

`(A) AUTHORITY- The Secretary shall award competitive grants to States, territories, and tribal organizations for not more than 50 percent of the cost of developing and implementing innovative programs to promote and support healthy, married, 2-parent families.

`(B) HEALTHY MARRIAGE PROMOTION ACTIVITIES- Funds provided under subparagraph (A) shall be used to support any of the following programs or activities:

`(i) Public advertising campaigns on the value of marriage and the skills needed to increase marital stability and health.

`(ii) Education in high schools on the value of marriage, relationship skills, and budgeting.

`(iii) Marriage education, marriage skills, and relationship skills programs, that may include parenting skills, financial management, conflict resolution, and job and career advancement, for non-married

pregnant women and non-married expectant fathers.

`(iv) Pre-marital education and marriage skills training for engaged couples and for couples interested in marriage.

`(v) Marriage enhancement and marriage skills training programs for married couples.

`(vi) Divorce reduction programs that teach relationship skills.

`(vii) Marriage mentoring programs which use married couples as role models and mentors in at-risk communities.

`(viii) Programs to reduce the disincentives to marriage in means-tested aid programs, if offered in conjunction with any activity described in this subparagraph.

`(C) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for each of fiscal years 2003 through 2007 $100,000,000 for grants under this paragraph.'.

(c) COUNTING OF SPENDING ON NON-ELIGIBLE FAMILIES TO PREVENT AND REDUCE INCIDENCE OF OUT-OF-WEDLOCK BIRTHS, ENCOURAGE FORMATION AND MAINTENANCE OF HEALTHY, 2-PARENT MARRIED FAMILIES, OR ENCOURAGE RESPONSIBLE FATHERHOOD- Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)) is amended by adding at the end the following:

`(V) COUNTING OF SPENDING ON NON-ELIGIBLE FAMILIES TO PREVENT AND REDUCE INCIDENCE OF OUT-OF-WEDLOCK BIRTHS, ENCOURAGE FORMATION AND MAINTENANCE OF HEALTHY, 2-PARENT MARRIED FAMILIES, OR ENCOURAGE RESPONSIBLE FATHERHOOD- The term `qualified State expenditures' includes the total expenditures by the State during the fiscal year under all State programs for a purpose described in paragraph (3) or (4) of section 401(a).'.

SEC. 104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN CERTAIN STATES.

Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)) is amended--

(1) in the subparagraph heading, by striking `OF GRANTS FOR FISCAL YEAR 2002';

(2) in clause (i), by striking `fiscal year 2002' and inserting `each of fiscal years 2002 through 2006';

(3) in clause (ii), by striking `2002' and inserting `2006'; and

(4) in clause (iii), by striking `fiscal year 2002' and inserting `each of fiscal years 2002 through 2006'.

SEC. 105. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

(a) REALLOCATION OF FUNDING- Section 403(a)(4) (42 U.S.C. 603(a)(4)) is amended--

(1) in the paragraph heading, by striking `HIGH PERFORMANCE STATES' and inserting `EMPLOYMENT ACHIEVEMENT';

(2) in subparagraph (D)(ii)--

(A) in subclause (I), by striking `equals $200,000,000' and inserting `(other than 2003) equals $200,000,000, and for bonus year 2003 equals $100,000,000'; and

(B) in subclause (II), by striking `$1,000,000,000' and inserting `$900,000,000'; and

(3) in subparagraph (F), by striking `$1,000,000,000' and inserting `$900,000,000'.

(b) BONUS TO REWARD EMPLOYMENT ACHIEVEMENT-

(1) IN GENERAL- Section 403(a)(4) (42 U.S.C. 603(a)(4)) is amended by striking subparagraphs (A) through (F) and inserting the following:

`(A) IN GENERAL- The Secretary shall make a grant pursuant to this paragraph to each State for each bonus year for which the State is an employment achievement State.

`(B) AMOUNT OF GRANT-

`(i) IN GENERAL- Subject to clause (ii) of this subparagraph, the Secretary shall determine the amount of the grant payable under this paragraph to an employment achievement State for a bonus year, which shall be based on the performance of the State as determined under subparagraph (D)(i) for the fiscal year that immediately precedes the bonus year.

`(ii) LIMITATION- The amount payable to a State under this paragraph for a bonus year shall not exceed 5 percent of the State family assistance grant.

`(C) FORMULA FOR MEASURING STATE PERFORMANCE-

`(i) IN GENERAL- Subject to clause (ii), not later than October 1, 2003, the Secretary, in consultation with the States, shall develop a formula for measuring State performance in operating the State program funded under this part so as to achieve the goals of employment entry, job retention, and increased earnings from employment for families receiving assistance under the program, as measured on an absolute basis and on the basis of improvement in State performance.

`(ii) SPECIAL RULE FOR BONUS YEAR 2004- For the purposes of awarding a bonus under this paragraph for bonus year 2004, the Secretary may measure the performance of a State in fiscal year 2003 using the job entry rate, job retention rate, and earnings gain rate components of the

formula developed under section 403(a)(4)(C) as in effect immediately before the effective date of this paragraph.

`(D) DETERMINATION OF STATE PERFORMANCE- For each bonus year, the Secretary shall--

`(i) use the formula developed under subparagraph (C) to determine the performance of each eligible State for the fiscal year that precedes the bonus year; and

`(ii) prescribe performance standards in such a manner so as to ensure that--

`(I) the average annual total amount of grants to be made under this paragraph for each bonus year equals $100,000,000; and

`(II) the total amount of grants to be made under this paragraph for all bonus years equals $500,000,000.

`(E) DEFINITIONS- In this paragraph:

`(i) BONUS YEAR- The term `bonus year' means each of fiscal years 2004 through 2008.

`(ii) EMPLOYMENT ACHIEVEMENT STATE- The term `employment achievement State' means, with respect to a bonus year, an eligible State whose performance determined pursuant to subparagraph (D)(i) for the fiscal year preceding the bonus year equals or exceeds the performance standards prescribed under subparagraph (D)(ii) for such preceding fiscal year.

`(F) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for fiscal years 2004 through 2008 $500,000,000 for grants under this paragraph.

`(G) GRANTS FOR TRIBAL ORGANIZATIONS- This paragraph shall apply with respect to tribal organizations in the same manner in which this paragraph applies with respect to States. In determining the criteria under which to make grants to tribal organizations under this paragraph, the Secretary shall consult with tribal organizations.'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take effect on October 1, 2003.

SEC. 106. CONTINGENCY FUND.

(a) DEPOSITS INTO FUND- Section 403(b)(2) (42 U.S.C. 603(b)(2)) is amended--

(1) by striking `1997, 1998, 1999, 2000, 2001, and 2002' and inserting `2003 through 2007'; and

(2) by striking all that follows `$2,000,000,000' and inserting a period.

(b) GRANTS- Section 403(b)(3)(C)(ii) (42 U.S.C. 603(b)(3)(C)(ii)) is amended by striking `fiscal years 1997 through 2002' and inserting `fiscal years 2003 through 2007'.

(c) DEFINITION OF NEEDY STATE- Clauses (i) and (ii) of section 403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by inserting after `1996' the following: `, and the Food Stamp Act of 1977 as in effect during the corresponding 3-month period in the fiscal year preceding such most recently concluded 3-month period,'.

(d) ANNUAL RECONCILIATION: FEDERAL MATCHING OF STATE EXPENDITURES ABOVE `MAINTENANCE OF EFFORT' LEVEL- Section 403(b)(6) (42 U.S.C. 603(b)(6)) is amended--

(1) in subparagraph (A)(ii)--

(A) by adding `and' at the end of subclause (I);

(B) by striking `; and' at the end of subclause (II) and inserting a period; and

(C) by striking subclause (III);

(2) in subparagraph (B)(i)(II), by striking all that follows `section 409(a)(7)(B)(iii))' and inserting a period;

(3) by amending subparagraph (B)(ii)(I) to read as follows:

`(I) the qualified State expenditures (as defined in section 409(a)(7)(B)(i)) for the fiscal year; plus'; and

(4) by striking subparagraph (C).

(e) CONSIDERATION OF CERTAIN CHILD CARE EXPENDITURES IN DETERMINING STATE COMPLIANCE WITH CONTINGENCY FUND MAINTENANCE OF EFFORT REQUIREMENT- Section 409(a)(10) (42 U.S.C. 609(a)(10)) is amended--

(1) by striking `(other than the expenditures described in subclause (I)(bb) of that paragraph)) under the State program funded under this part' and inserting a close parenthesis; and

(2) by striking `excluding any amount expended by the State for child care under subsection (g) or (i) of section 402 (as in effect during fiscal year 1994) for fiscal year 1994,'.

SEC. 107. USE OF FUNDS.

(a) GENERAL RULES- Section 404(a)(2) (42 U.S.C. 604(a)(2)) is amended by striking `in any manner that' and inserting `for any purposes or activities for which'.

(b) TREATMENT OF INTERSTATE IMMIGRANTS-

(1) STATE PLAN PROVISION- Section 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)) is amended by striking clause (i) and redesignating clauses (ii) through (iv) as clauses (i) through (iii), respectively.

(2) USE OF FUNDS- Section 404 (42 U.S.C. 604) is amended by striking subsection (c).

(c) INCREASE IN AMOUNT TRANSFERABLE TO CHILD CARE- Section 404(d)(1) (42 U.S.C. 604(d)(1)) is amended by striking `30' and inserting `50'.

(d) INCREASE IN AMOUNT TRANSFERABLE TO TITLE XX PROGRAMS- Section 404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is amended to read as follows:

`(B) APPLICABLE PERCENT- For purposes of subparagraph (A), the applicable percent is 10 percent for fiscal year 2003 and each succeeding fiscal year.'.

(e) CLARIFICATION OF AUTHORITY OF STATES TO USE TANF FUNDS CARRIED OVER FROM PRIOR YEARS TO PROVIDE TANF BENEFITS AND SERVICES- Section 404(e) (42 U.S.C. 604(e)) is amended to read as follows:

`(e) AUTHORITY TO CARRYOVER OR RESERVE CERTAIN AMOUNTS FOR BENEFITS OR SERVICES OR FOR FUTURE CONTINGENCIES-

`(1) CARRYOVER- A State or tribe may use a grant made to the State or tribe under this part for any fiscal year to provide, without fiscal year limitation, any benefit or service that may be provided under the State or tribal program funded under this part.

`(2) CONTINGENCY RESERVE- A State or tribe may designate any portion of a grant made to the State or tribe under this part as a contingency reserve for future needs, and may use any amount so designated to provide, without fiscal year limitation, any benefit or service that may be provided under the State or tribal program funded under this part. If a State or tribe so designates a portion of such a grant, the State shall, on an annual basis, include in its report under section 411(a) the amount so designated.'.

SEC. 108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.

(a) REPEAL- Section 406 (42 U.S.C. 606) is repealed.

(b) CONFORMING AMENDMENTS-

(1) Section 409(a) (42 U.S.C. 609(a)) is amended by striking paragraph (6).

(2) Section 412 (42 U.S.C. 612) is amended by striking subsection (f) and redesignating subsections (g) through (i) as subsections (f) through (h), respectively.

(3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by striking `406,'.

SEC. 109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY PLAN REQUIREMENTS.

(a) MODIFICATION OF STATE PLAN REQUIREMENTS- Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by striking clauses (ii) and (iii) and inserting the following:

`(ii) Require a parent or caretaker receiving assistance under the program to engage in work or alternative self-sufficiency activities (as defined by the State), consistent with section 407(e)(2).

`(iii) Require families receiving assistance under the program to engage in activities in accordance with family self-sufficiency plans developed pursuant to section 408(b).'.

(b) ESTABLISHMENT OF FAMILY SELF-SUFFICIENCY PLANS-

(1) IN GENERAL- Section 408(b) (42 U.S.C. 608(b)) is amended to read as follows:

`(b) FAMILY SELF-SUFFICIENCY PLANS-

`(1) IN GENERAL- A State to which a grant is made under section 403 shall--

`(A) assess, in the manner deemed appropriate by the State, of the skills, prior work experience, and employability of each work-eligible individual (as defined in section 407(b)(2)(C)) receiving assistance under the State program funded under this part;

`(B) establish for each family that includes such an individual, in consultation as the State deems appropriate with the individual, a self-sufficiency plan that specifies appropriate activities described in the State plan submitted pursuant to section 402, including direct work activities as appropriate designed to assist the family in achieving their maximum degree of self-sufficiency, and that provides for the ongoing participation of the individual in the activities;

`(C) require, at a minimum, each such individual to participate in activities in accordance with the self-sufficiency plan;

`(D) monitor the participation of each such individual in the activities specified in the self sufficiency plan, and regularly review the progress of the family toward self-sufficiency;

`(E) upon such a review, revise the self-sufficiency plan and activities as the State deems appropriate.

`(2) TIMING- The State shall comply with paragraph (1) with respect to a family--

`(A) in the case of a family that, as of October 1, 2002, is not receiving assistance from the State program funded under this part, not later than 60 days after the family first receives assistance on the basis of the most recent application for the assistance; or

`(B) in the case of a family that, as of such date, is receiving the assistance, not later than 12 months after the date of enactment of this subsection.

`(3) STATE DISCRETION- A State shall have sole discretion, consistent with section 407, to define and design activities for families for purposes of this subsection, to develop methods for monitoring and reviewing progress pursuant to this subsection, and to make modifications to the plan as the State deems appropriate to assist the individual in increasing their degree of self-sufficiency.

`(4) RULE OF INTERPRETATION- Nothing in this part shall preclude a State from requiring participation in work and any other activities the State deems appropriate for helping families achieve self-sufficiency and improving child well-being.'.

(2) PENALTY FOR FAILURE TO ESTABLISH FAMILY SELF-SUFFICIENCY PLAN- Section 409(a)(3) (42 U.S.C. 609(a)(3)) is amended--

(A) in the paragraph heading, by inserting `OR ESTABLISH FAMILY SELF-SUFFICIENCY PLAN' after `RATES'; and

(B) in subparagraph (A), by inserting `or 408(b)' after `407(a)'.

SEC. 110. WORK PARTICIPATION REQUIREMENTS.

(a) IN GENERAL- Section 407 (42 U.S.C. 607) is amended by striking all that precedes subsection (b)(3) and inserting the following:

`SEC. 407. WORK PARTICIPATION REQUIREMENTS.

`(a) PARTICIPATION RATE REQUIREMENTS- A State to which a grant is made under section 403 for a fiscal year shall achieve a minimum participation rate equal to not less than--

`(1) 50 percent for fiscal year 2003;

`(2) 55 percent for fiscal year 2004;

`(3) 60 percent for fiscal year 2005;

`(4) 65 percent for fiscal year 2006; and

`(5) 70 percent for fiscal year 2007 and each succeeding fiscal year.

`(b) CALCULATION OF PARTICIPATION RATES-

`(1) AVERAGE MONTHLY RATE- For purposes of subsection (a), the participation rate of a State for a fiscal year is the average of the participation rates of the State for each month in the fiscal year.

`(2) MONTHLY PARTICIPATION RATES; INCORPORATION OF 40-HOUR WORK WEEK STANDARD-

`(A) IN GENERAL- For purposes of paragraph (1), the participation rate of a State for a month is--

`(i) the total number of countable hours (as defined in subsection (c)) with respect to the counted families for the State for the month; divided by

`(ii) 160 multiplied by the number of counted families for the State for the month.

`(B) COUNTED FAMILIES DEFINED-

`(i) IN GENERAL- In subparagraph (A), the term `counted family' means, with respect to a State and a month, a family that includes a work-eligible individual and that receives assistance in the month under the State program funded under this part, subject to clause (ii).

`(ii) STATE OPTION TO EXCLUDE CERTAIN FAMILIES- At the option of a State, the term `counted family' shall not include--

`(I) a family in the first month for which the family receives assistance from a State program funded under this part on the basis of the most recent application for such assistance; or

`(II) on a case-by-case basis, a family in which the youngest child has not attained 12 months of age.

`(iii) STATE OPTION TO INCLUDE INDIVIDUALS RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY ASSISTANCE PLAN OR TRIBAL WORK PROGRAM- At the option of a State, the term `counted family' may include families in the State that are receiving assistance under a tribal family assistance plan approved under section 412 or under a tribal work program to which funds are provided under this part.

`(C) WORK-ELIGIBLE INDIVIDUAL DEFINED- In this section, the term `work-eligible individual' means an individual--

`(i) who is married or a single head of household; and

`(ii) whose needs are (or, but for sanctions under this part that have been in effect for more than 3 months (whether or not consecutive) in the preceding 12 months or under part D, would be) included in determining the amount of cash assistance to be provided to the family under the State program funded under this part.'.

(b) RECALIBRATION OF CASELOAD REDUCTION CREDIT- Section 407(b)(3)(A)(ii) (42 U.S.C. 607(b)(3)(A)(ii)) is amended to read as follows:

`(ii) the average monthly number of families that received assistance under the State program funded under this part during--

`(I) if the fiscal year is fiscal year 2003, fiscal year 1996;

`(II) if the fiscal year is fiscal year 2004, fiscal year 1998;

`(III) if the fiscal year is fiscal year 2005, fiscal year 2001; or

`(IV) if the fiscal year is fiscal year 2006 or any succeeding fiscal year, the then 4th preceding fiscal year.'.

(c) SUPERACHIEVER CREDIT- Section 407(b) (42 U.S.C. 607(b)) is amended by striking paragraphs (4) and (5) and inserting the following:

`(4) SUPERACHIEVER CREDIT-

`(A) IN GENERAL- The participation rate, determined under paragraphs (1) and (2) of this subsection, of a superachiever State for a fiscal year shall be increased by the lesser of--

`(i) the amount (if any) of the superachiever credit applicable to the State; or

`(ii) the number of percentage points (if any) by which the minimum participation rate required by subsection (a) for the fiscal year exceeds 50 percent.

`(B) SUPERACHIEVER STATE- For purposes of subparagraph (A), a State is a superachiever State if the State caseload for fiscal year 2001 has declined by at least 60 percent from the State caseload for fiscal year 1995.

`(C) AMOUNT OF CREDIT- The superachiever credit applicable to a State is the number of percentage points (if any) by which the decline referred to in subparagraph (B) exceeds 60 percent.

`(D) DEFINITIONS- In this paragraph:

`(i) STATE CASELOAD FOR FISCAL YEAR 2001- The term `State caseload for fiscal year 2001' means the average monthly number of families that received assistance during fiscal year 2001 under the State program funded under this part.

`(ii) STATE CASELOAD FOR FISCAL YEAR 1995- The term `State caseload for fiscal year 1995' means the average monthly number of families that received aid under the State plan approved under part A (as in effect on September 30, 1995) during fiscal year 1995.'.

(d) COUNTABLE HOURS- Section 407 of such Act (42 U.S.C. 607) is amended by striking subsections (c) and (d) and inserting the following:

`(c) COUNTABLE HOURS-

`(1) DEFINITION- In subsection (b)(2), the term `countable hours' means, with respect to a family for a month, the total number of hours in the month in which any member of the family who is a work-eligible individual is engaged in a direct work activity or other activities specified by the State (excluding an activity that does not address a purpose specified in section 401(a)), subject to the other provisions of this subsection.

`(2) LIMITATIONS- Subject to such regulations as the Secretary may prescribe:

`(A) MINIMUM WEEKLY AVERAGE OF 24 HOURS OF DIRECT WORK ACTIVITIES REQUIRED- If the work-eligible individuals in a family are engaged in a direct work activity for an average total of fewer than 24 hours per week in a month, then the number of countable hours with respect to the family for the month shall be zero.

`(B) MAXIMUM WEEKLY AVERAGE OF 16 HOURS OF OTHER ACTIVITIES- An average of not more than 16 hours per week of activities specified by the State (subject to the exclusion described in paragraph (1)) may be considered countable hours in a month with respect to a family.

`(3) SPECIAL RULES- For purposes of paragraph (1):

`(A) PARTICIPATION IN QUALIFIED ACTIVITIES-

`(i) IN GENERAL- If, with the approval of the State, the work-eligible individuals in a family are engaged in 1 or more qualified activities for an average total of at least 24 hours per week in a month, then all such engagement in the month shall be considered engagement in a direct work activity, subject to clause (iii).

`(ii) QUALIFIED ACTIVITY DEFINED- The term `qualified activity' means an activity specified by the State (subject to the exclusion described in paragraph (1)) that meets such standards and

criteria as the State may specify, including--

`(I) substance abuse counseling or treatment;

`(II) rehabilitation treatment and services;

`(III) work-related education or training directed at enabling the family member to work;

`(IV) job search or job readiness assistance; and

`(V) any other activity that addresses a purpose specified in section 401(a).

`(iii) LIMITATION-

`(I) IN GENERAL- Except as provided in subclause (II), clause (i) shall not apply to a family for more than 3 months in any period of 24 consecutive months.

`(II) SPECIAL RULE APPLICABLE TO EDUCATION AND TRAINING- A State may, on a case-by-case basis, apply clause (i) to a work-eligible individual so that participation by the individual in education or training, if needed to permit the individual to complete a certificate program or other work-related education or training directed at enabling the individual to fill a known job need in a local area, may be considered countable hours with respect to the family of the individual for not more than 4 months in any period of 24 consecutive months.

`(B) SCHOOL ATTENDANCE BY TEEN HEAD OF HOUSEHOLD- The work-eligible members of a family shall be considered to be engaged in a direct work activity for an average of 40 hours per week in a month if the family includes an individual who is married, or is a single head of household, who has not attained 20 years of age, and the individual--

`(i) maintains satisfactory attendance at secondary school or the equivalent in the month; or

`(ii) participates in education directly related to employment for an average of at least 20 hours per week in the month.

`(d) DIRECT WORK ACTIVITY- In this section, the term `direct work activity' means--

`(1) unsubsidized employment;

`(2) subsidized private sector employment;

`(3) subsidized public sector employment;

`(4) on-the-job training;

`(5) supervised work experience; or

`(6) supervised community service.'.

(e) PENALTIES AGAINST INDIVIDUALS- Section 407(e)(1) (42 U.S.C. 607(e)(1)) is amended to read as follows:

`(1) REDUCTION OR TERMINATION OF ASSISTANCE-

`(A) IN GENERAL- Except as provided in paragraph (2), if an individual in a family receiving assistance under a State program funded under this part fails to engage in activities required in accordance with this section, or other activities required by the State under the program, and the family does not otherwise engage in activities in accordance with the self-sufficiency plan established for the family pursuant to section 408(b), the State shall--

`(i) if the failure is partial or persists for not more than 1 month--

`(I) reduce the amount of assistance otherwise payable to the family pro rata (or more, at the option of the State) with respect to any period during a month in which the failure occurs; or

`(II) terminate all assistance to the family, subject to such good cause exceptions as the State may establish; or

`(ii) if the failure is total and persists for at least 2 consecutive months, terminate all cash payments to the family including qualified State expenditures (as defined in section 409(a)(7)(B)(i)) for at least 1 month and thereafter until the State determines that the individual has resumed full participation in the activities, subject to such good cause exceptions as the State may establish.

`(B) SPECIAL RULE- In the event of a conflict between a requirement of clause (i)(II) or (ii) of subparagraph (A) and a requirement of a State constitution, or of a State statute that, before 1966, obligated local government to provide assistance to needy parents and children, the State constitutional or statutory requirement shall control.'.

(f) CONFORMING AMENDMENTS-

(1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of paragraphs (1) and (2) by striking `work activity described in subsection (d)' and inserting `direct work activity'.

(2) The heading of section 409(a)(14) (42 U.S.C. 609(a)(14)) is amended by inserting `OR REFUSING TO ENGAGE IN ACTIVITIES UNDER A FAMILY SELF-SUFFICIENCY PLAN' after `WORK'.

SEC. 111. MAINTENANCE OF EFFORT.

(a) IN GENERAL- Section 409(a)(7) (42 U.S.C. 609(a)(7)) is amended--

(1) in subparagraph (A) by striking `fiscal year 1998, 1999, 2000, 2001, 2002, or 2003' and inserting `fiscal year 2003, 2004, 2005, 2006, 2007 or 2008'; and

(2) in subparagraph (B)(ii)--

(A) by inserting `preceding' before `fiscal year'; and

(B) by striking `for fiscal years 1997 through 2002,'.

(b) STATE SPENDING ON PROMOTING HEALTHY MARRIAGE-

(1) IN GENERAL- Section 404 (42 U.S.C. 604) is amended by adding at the end the following:

`(l) MARRIAGE PROMOTION- A State, territory, or tribal organization to which a grant is made under section 403(a)(2) may use a grant made to the State, territory, or tribal organization under any other provision of section 403 for marriage promotion activities, and the amount of any such grant so used shall be considered State funds for purposes of section 403(a)(2).'.

(2) FEDERAL TANF FUNDS USED FOR MARRIAGE PROMOTION DISREGARDED FOR PURPOSES OF MAINTENANCE OF EFFORT REQUIREMENT- Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)), as amended by section 103(c) of this Act, is amended by adding at the end the following:

`(VI) EXCLUSION OF FEDERAL TANF FUNDS USED FOR MARRIAGE PROMOTION ACTIVITIES- Such term does not include the amount of any grant made to the State under section 403 that is expended for a marriage promotion activity.'.

SEC. 112. PERFORMANCE IMPROVEMENT.

(a) STATE PLANS- Section 402(a) (42 U.S.C. 602(a)) is amended--

(1) in paragraph (1)--

(A) in subparagraph (A)--

(i) by redesignating clause (vi) and clause (vii) (as added by section 103(a) of this Act) as clauses (vii) and (viii), respectively; and

(ii) by striking clause (v) and inserting the following:

`(v) The document shall--

`(I) describe how the State will pursue ending dependence of needy families on government benefits and reducing poverty by promoting job preparation and work;

`(II) describe how the State will encourage the formation and maintenance of healthy 2-parent married families, encourage responsible fatherhood, and prevent and reduce the incidence of out-of-wedlock pregnancies;

`(III) include specific, numerical, and measurable performance objectives for accomplishing subclauses (I) and (II), and with respect to subclause (I), include objectives consistent with the criteria used by the Secretary in establishing performance targets under section 403(a)(4)(B) if available; and

`(IV) describe the methodology that the State will use to measure State performance in relation to each such objective.

`(vi) Describe any strategies and programs the State may be undertaking to address--

`(I) employment retention and advancement for recipients of assistance under the program, including placement into high-demand jobs, and whether the jobs are identified using labor market information;

`(II) efforts to reduce teen pregnancy;

`(III) services for struggling and noncompliant families, and for clients with special problems; and

`(IV) program integration, including the extent to which employment and training services under the program are provided through the One-Stop delivery system created under the Workforce Investment Act of 1998, and the extent to which former recipients of such assistance have access to additional core, intensive, or training services funded through such Act.'; and

(B) in subparagraph (B), by striking clause (iii) (as so redesignated by section 107(b)(1) of this Act) and inserting the following:

`(iii) The document shall describe strategies and programs the State is undertaking to engage religious organizations in the provision of services funded under this part and efforts related to section 104 of the Personal Responsibility and Work Opportunity Reconcilation Act of 1996.

`(iv) The document shall describe strategies to improve program management and performance.'; and

(2) in paragraph (4), by inserting `and tribal' after `that local'.

(b) CONSULTATION WITH STATE REGARDING PLAN AND DESIGN OF TRIBAL PROGRAMS- Section 412(b)(1) (42 U.S.C. 612(b)(1)) is amended--

(1) by striking `and' at the end of subparagraph (E);

(2) by striking the period at the end of subparagraph (F) and inserting `; and'; and

(3) by adding at the end the following:

`(G) provides an assurance that the State in which the tribe is located has been consulted regarding the plan and its design.'.

(c) PERFORMANCE MEASURES- Section 413 (42 U.S.C. 613) is amended by adding at the end the following:

`(k) PERFORMANCE IMPROVEMENT- The Secretary, in consultation with the States, shall develop uniform performance measures designed to assess the degree of effectiveness, and the degree of improvement, of State programs funded under this part in accomplishing the purposes of this part.'.

(d) ANNUAL RANKING OF STATES- Section 413(d)(1) (42 U.S.C. 613(d)(1)) is amended by striking `long-term private sector jobs' and inserting `private sector jobs, the success of the recipients in retaining employment, the ability of the recipients to increase their wages'.

SEC. 113. DATA COLLECTION AND REPORTING.

(a) CONTENTS OF REPORT- Section 411(a)(1)(A) (42 U.S.C. 611(a)(1)(A)) is amended--

(1) in clause (vii), by inserting `and minor parent' after `of each adult';

(2) in clause (viii), by striking `and educational level';

(3) in clause (ix), by striking `, and if the latter 2, the amount received';

(4) in clause (x)--

(A) by striking `each type of'; and

(B) by inserting before the period `and, if applicable, the reason for receipt of the assistance for a total of more than 60 months';

(5) in clause (xi), by striking the subclauses and inserting the following:

`(I) Subsidized private sector employment.

`(II) Unsubsidized employment.

`(III) Public sector employment, supervised work experience, or supervised community service.

`(IV) On-the-job training.

`(V) Job search and placement.

`(VI) Training.

`(VII) Education.

`(VIII) Other activities directed at the purposes of this part, as specified in the State plan submitted pursuant to section 402.';

(6) in clause (xii), by inserting `and progress toward universal engagement' after `participation rates';

(7) in clause (xiii), by striking `type and' before `amount of assistance';

(8) in clause (xvi), by striking subclause (II) and redesignating subclauses (III) through (V) as subclauses (II) through (IV), respectively; and

(9) by adding at the end the following:

`(xviii) The date the family first received assistance from the State program on the basis of the most recent application for such assistance.

`(xix) Whether a self-sufficiency plan is established for the family in accordance with section 408(b).

`(xx) With respect to any child in the family, the marital status of the parents at

the birth of the child, and if the parents were not then married, whether the paternity of the child has been established.'.

(b) USE OF SAMPLES- Section 411(a)(1)(B) (42 U.S.C. 611(a)(1)(B)) is amended--

(1) in clause (i)--

(A) by striking `a sample' and inserting `samples'; and

(B) by inserting before the period `, except that the Secretary may designate core data elements that must be reported on all families'; and

(2) in clause (ii), by striking `funded under this part' and inserting `described in subparagraph (A)'.

(c) REPORT ON FAMILIES THAT BECOME INELIGIBLE TO RECEIVE ASSISTANCE- Section 411(a) (42 U.S.C. 611(a)) is amended--

(1) by striking paragraph (5);

(2) by redesignating paragraph (6) as paragraph (5); and

(3) by inserting after paragraph (5) (as so redesignated) the following:

`(6) REPORT ON FAMILIES THAT BECOME INELIGIBLE TO RECEIVE ASSISTANCE- The report required by paragraph (1) for a fiscal quarter shall include for each month in the quarter the number of families and total number of individuals that, during the month, became ineligible to receive assistance under the State program funded under this part (broken down by the number of families that become so ineligible due to earnings, changes in family composition that result in increased earnings, sanctions, time limits, or other specified reasons).'.

(d) REGULATIONS- Section 411(a)(7) (42 U.S.C. 611(a)(7)) is amended--

(1) by inserting `and to collect the necessary data' before `with respect to which reports';

(2) by striking `subsection' and inserting `section'; and

(3) by striking `in defining the data elements' and all that follows and inserting `, the National Governors' Association, the American Public Human Services Association, the National Conference of State Legislatures, and others in defining the data elements.'.

(e) ADDITIONAL REPORTS BY STATES- Section 411 (42 U.S.C. 611) is amended--

(1) by redesignating subsection (b) as subsection (e); and

(2) by inserting after subsection (a) the following:

`(b) ANNUAL REPORTS ON PROGRAM CHARACTERISTICS- Not later than 90 days after the end of fiscal year 2004 and each succeeding fiscal year, each eligible State shall submit to the Secretary a report on the characteristics of the State program funded under this part and other State programs funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)). The report shall include, with respect to each such program, the program name, a description of program activities, the program purpose, the program eligibility criteria, the sources of program funding, the number of program beneficiaries, sanction policies, and any program work requirements.

`(c) MONTHLY REPORTS ON CASELOAD- Not later than 3 months after the end of a calendar month that begins 1 year or more after the enactment of this subsection, each eligible State shall submit to the Secretary report on the number of families and total number of individuals receiving assistance in the calendar month under the State program funded under this part.

`(d) ANNUAL REPORT ON PERFORMANCE IMPROVEMENT- Beginning with fiscal year 2004, not later than January 1 of each fiscal year, each eligible State shall submit to the Secretary a report on achievement and improvement during the preceding fiscal year under the numerical performance goals and measures under the State program funded under this part with respect to each of the matters described in section 402(a)(1)(A)(v).'.

(f) ANNUAL REPORTS TO CONGRESS BY THE SECRETARY- Section 411(e), as so redesignated by subsection (e) of this section, is amended--

(1) in the matter preceding paragraph (1), by striking `and each fiscal year thereafter' and inserting `and by July 1 of each fiscal year thereafter';

(2) in paragraph (2), by striking `families applying for assistance,' and by striking the last comma; and

(3) in paragraph (3), by inserting `and other programs funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i))' before the semicolon.

(g) INCREASED ANALYSIS OF STATE SINGLE AUDIT REPORTS- Section 411 (42 U.S.C. 611) is amended by adding at the end the following:

`(f) INCREASED ANALYSIS OF STATE SINGLE AUDIT REPORTS-

`(1) IN GENERAL- Within 3 months after a State submits to the Secretary a report pursuant to section 7502(a)(1)(A) of title 31, United States Code, the Secretary shall analyze the report for the purpose of identifying the extent and nature of problems related to the oversight by the State of nongovernmental entities with respect to contracts entered into by such entities with the State program funded under this part, and determining what additional actions may be appropriate to help prevent and correct the problems.

`(2) INCLUSION OF PROGRAM OVERSIGHT SECTION IN ANNUAL REPORT TO THE CONGRESS- The Secretary shall include in each report under subsection (a) a section on oversight of State programs funded under this part, including findings on the extent and nature of the problems referred to in paragraph (1), actions taken to resolve the problems, and to the extent the Secretary deems appropriate make recommendations on changes needed to resolve the problems.'.

SEC. 114. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

(a) TRIBAL FAMILY ASSISTANCE GRANT- Section 412(a)(1)(A) (42 U.S.C. 612(a)(1)(A)) is amended by striking `1997, 1998, 1999, 2000, 2001, and 2002' and inserting `2003 through 2007'.

(b) GRANTS FOR INDIAN TRIBES THAT RECEIVED JOBS FUNDS- Section 412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by striking `1997, 1998, 1999, 2000, 2001, and 2002' and inserting `2003 through 2007'.

SEC. 115. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

(a) SECRETARY'S FUND FOR RESEARCH, DEMONSTRATIONS, AND TECHNICAL ASSISTANCE- Section 413 (42 U.S.C. 613), as amended by section 112(c) of this Act, is further amended by adding at the end the following:

`(l) FUNDING FOR RESEARCH, DEMONSTRATIONS, AND TECHNICAL ASSISTANCE-

`(1) IN GENERAL- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated $102,000,000 for each of fiscal years 2003 through 2007, which shall be available to the Secretary for the purpose of conducting and supporting research and demonstration projects by public or private entities, and providing technical assistance to States, Indian tribal organizations, and such other entities as the Secretary may specify that are receiving a grant under this part, which shall be expended primarily on activities described in section 403(a)(2)(B), and which shall be in addition to any other funds made available under this part.

`(2) SET ASIDE FOR DEMONSTRATION PROJECTS FOR COORDINATION OF PROVISION OF CHILD WELFARE AND TANF SERVICES TO TRIBAL FAMILIES AT RISK OF CHILD ABUSE OR NEGLECT-

`(A) IN GENERAL- Of the amounts made available under paragraph (1) for a fiscal year, $2,000,000 shall be awarded on a competitive basis to fund demonstration projects designed to test the effectiveness of tribal governments or tribal consortia in coordinating the provision to tribal families at risk of child abuse or neglect of child welfare services and services under tribal programs funded under this part.

`(B) USE OF FUNDS- A grant made to such a project shall be used--

`(i) to improve case management for families eligible for assistance from such a tribal program;

`(ii) for supportive services and assistance to tribal children in out-of-home placements and the tribal families caring for such children, including families who adopt such children; and

`(iii) for prevention services and assistance to tribal families at risk of child abuse and neglect.

`(C) REPORTS- The Secretary may require a recipient of funds awarded under this paragraph to provide the Secretary with such information as the Secretary deems relevant to enable the Secretary to facilitate and oversee the administration of any project for which funds are provided under this paragraph.'.

(b) FUNDING OF STUDIES AND DEMONSTRATIONS- Section 413(h)(1) (42 U.S.C. 613(h)(1)) is amended in the matter preceding subparagraph (A) by striking `1997 through 2002' and inserting `2003 through 2007'.

(c) REPORT ON ENFORCEMENT OF CERTAIN AFFIDAVITS OF SUPPORT AND SPONSOR DEEMING- Not later than March 31, 2004, the Secretary of Health and Human Services, in consultation with the Attorney General, shall submit to the Congress a report on the enforcement of affidavits of support and sponsor deeming as required by section 421, 422, and 432 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

(d) REPORT ON COORDINATION- Not later than 6 months after the date of the enactment of this Act, the Secretary of Health and Human Services and the Secretary of Labor shall jointly submit a report to the Congress describing common or conflicting data elements, definitions, performance measures, and reporting requirements in the Workforce Investment Act of 1998 and part A of title IV of the Social Security Act, and, to the degree each Secretary deems appropriate, at the discretion of either Secretary, any other program administered by the respective Secretary, to allow greater coordination between the welfare and workforce development systems.

SEC. 116. STUDIES BY THE CENSUS BUREAU AND THE GENERAL ACCOUNTING OFFICE.

(a) CENSUS BUREAU STUDY-

(1) IN GENERAL- Section 414(a) (42 U.S.C. 614(a)) is amended to read as follows:

`(a) IN GENERAL- The Bureau of the Census shall implement a new longitudinal survey of program dynamics, developed in consultation with the Secretary and made available to interested parties, to allow for the assessment of the outcomes of continued welfare reform on the economic and child well-being of low-income families with children, including those who received assistance or services from a State program funded under this part, and, to the extent possible, shall provide State representative samples. The content of the survey should include such information as may be necessary to examine the issues of out-of-wedlock childbearing, marriage, welfare dependency and compliance with work requirements, the beginning and ending of spells of assistance, work, earnings and employment stability, and the well-being of children.'.

(2) APPROPRIATION- Section 414(b) (42 U.S.C. 614(b)) is amended by striking `1996,' and all that follows through `2002' and inserting `2003 through 2007'.

(b) GAO STUDY-

(1) IN GENERAL- The Comptroller General of the United States shall conduct a study to determine the combined effect of the phase-out rates for Federal programs and policies which provide support to low-income families and individuals as they move from welfare to work, at all earning levels up to $35,000 per year, for at least 5 States including Wisconsin and California, and any potential disincentives the combined phase-out rates create for families to achieve independence or to marry.

(2) REPORT- Not later than 1 year after the date of the enactment of this subsection, the Comptroller General shall submit a report to Congress containing the results of the study conducted under this section and, as appropriate, any recommendations consistent with the results.

SEC. 117. DEFINITION OF ASSISTANCE.

(a) IN GENERAL- Section 419 (42 U.S.C. 619) is amended by adding at the end the following:

`(6) ASSISTANCE-

`(A) IN GENERAL- The term `assistance' means payment, by cash, voucher, or other means, to or for an individual or family for the purpose of meeting a subsistence need of the individual or family (including food, clothing, shelter, and related items, but not including costs of transportation or child care).

`(B) EXCEPTION- The term `assistance' does not include a payment described in subparagraph (A) to or for an individual or family on a short-term, nonrecurring basis (as defined by the State in accordance with regulations prescribed by the Secretary).'.

(b) CONFORMING AMENDMENTS-

(1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by striking `assistance' and inserting `aid'.

(2) Section 404(f) (42 U.S.C. 604(f)) is amended by striking `assistance' and inserting `benefits or services'.

(3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is amended in the heading by striking `ASSISTANCE' and inserting `AID'.

(4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by striking `assistance' and inserting `aid'.

SEC. 118. TECHNICAL CORRECTIONS.

(a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by inserting a comma after `appropriate'.

(b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 611(a)(1)(A)(ii)(III)) is amended by striking the last close parenthesis.

(c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is amended by striking `section' and inserting `sections'.

(d)(1) Section 413 (42 U.S.C. 613) is amended by striking subsection (g) and redesignating subsections (h) through (j) and subsections (k) and (l) (as added by sections 112(c) and 115(a) of this Act, respectively) as subsections (g) through (k), respectively.

(2) Each of the following provisions is amended by striking `413(j)' and inserting `413(i)':

(A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 603(a)(5)(A)(ii)(III)).

(B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).

(C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).

(D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

SEC. 119. FATHERHOOD PROGRAM.

(a) SHORT TITLE- This section may be cited as the `Promotion and Support of Responsible Fatherhood and Healthy Marriage Act of 2002'.

(b) FATHERHOOD PROGRAM-

(1) IN GENERAL- Title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193) is amended by adding at the end the following:

`SEC. 117. FATHERHOOD PROGRAM.

`(a) IN GENERAL- Title IV (42 U.S.C. 601-679b) is amended by inserting after part B the following:

`PART C--FATHERHOOD PROGRAM

`SEC. 441. FINDINGS AND PURPOSES.

`(a) FINDINGS- The Congress finds that there is substantial evidence strongly indicating the urgent need to promote and support involved, committed, and responsible fatherhood, and to encourage and support healthy marriages between parents raising children, including data demonstrating the following:

`(1) In approximately 90 percent of cases where a parent is absent, that parent is the father.

`(2) By some estimates, 60 percent of children born in the 1990's will spend a significant portion of their childhood in a home without a father.

`(3) Nearly 75 percent of children in single-parent homes will experience poverty before they are 11 years old, compared with only 20 percent of children in 2-parent families.

`(4) Low income is positively correlated with children's difficulties with education, social adjustment, and delinquency, and single-parent households constitute a disproportionate share of low-income households.

`(5) Where families (whether intact or with a parent absent) are living in poverty, a significant factor is the father's lack of job skills.

`(6) Children raised in 2-parent married families, on average, fare better as a group in key areas, including better school performance, reduced rates of substance abuse, crime, and delinquency, fewer health, emotional, and behavioral problems, lower rates of teenage sexual activity, less risk of abuse or neglect, and lower risk of teen suicide.

`(7) Committed and responsible fathering during infancy and early childhood contributes to the development of emotional security, curiosity, and math and verbal skills.

`(8) An estimated 24,000,000 children (33.5 percent) live apart from their biological father.

`(9) A recent national survey indicates that of all children under age 18 not living with their biological father, 29 percent had not seen their father even once in the last 12 months.

`(b) PURPOSES- The purposes of this part are:

`(1) To provide for projects and activities by public entities and by nonprofit community entities, including religious organizations, designed to test promising approaches to accomplishing the following objectives:

`(A) Promoting responsible, caring, and effective parenting through counseling, mentoring, and parenting education, dissemination of educational materials and information on parenting skills, encouragement of positive father involvement, including the positive involvement of nonresident fathers, and other methods.

`(B) Enhancing the abilities and commitment of unemployed or low-income fathers to provide material support for their families and to avoid or leave welfare programs by assisting them to take full advantage of education, job training, and job search programs, to improve work habits and work skills, to secure career advancement by activities such as outreach and information dissemination, coordination, as appropriate, with employment services and job training programs, including the One-Stop delivery system established under title I of the Workforce Investment Act of 1998, encouragement and support of timely payment of current child support and regular payment toward past due child support obligations in appropriate cases, and other methods.

`(C) Improving fathers' ability to effectively manage family business affairs by means such as education, counseling, and mentoring in matters including household management, budgeting, banking, and handling of financial transactions, time management, and home maintenance.

`(D) Encouraging and supporting healthy marriages and married fatherhood through such activities as premarital education, including the use of premarital inventories, marriage preparation programs, skills-based marriage education programs, marital therapy, couples counseling, divorce education and reduction programs, divorce mediation and counseling, relationship skills enhancement programs, including those designed to reduce child abuse and domestic violence, and dissemination of information about the benefits of marriage for both parents and children.

`(2) Through the projects and activities described in paragraph (1), to improve outcomes for children with respect to measures such as increased family income and economic security, improved school performance, better health, improved emotional and behavioral stability and social adjustment, and reduced risk of delinquency, crime, substance abuse, child abuse and neglect, teen sexual activity, and teen suicide.

`(3) To evaluate the effectiveness of various approaches and to disseminate findings concerning outcomes and other information in order to encourage and facilitate the replication of effective approaches to accomplishing these objectives.

`SEC. 442. DEFINITIONS.

`In this part, the terms `Indian tribe' and `tribal organization' have the meanings given them in subsections (e) and (l), respectively, of section 4 of the Indian Self-Determination and Education Assistance Act.

`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

`(a) IN GENERAL- The Secretary may make grants for fiscal years 2003 through 2007 to public and nonprofit community entities, including religious organizations, and to Indian tribes and tribal organizations, for demonstration service projects and activities designed to test the effectiveness of various approaches to accomplish the objectives specified in section 441(b)(1).

`(b) ELIGIBILITY CRITERIA FOR FULL SERVICE GRANTS- In order to be eligible for a grant under this section, except as specified in subsection (c), an entity shall submit an application to the Secretary containing the following:

`(1) PROJECT DESCRIPTION- A statement including--

`(A) a description of the project and how it will be carried out, including the geographical area to be covered and the number and characteristics of clients to be served, and how it will address each of the 4 objectives specified in section 441(b)(1); and

`(B) a description of the methods to be used by the entity or its contractor to assess the extent to which the project was successful in accomplishing its specific objectives and the general objectives specified in section 441(b)(1).

`(2) EXPERIENCE AND QUALIFICATIONS- A demonstration of ability to carry out the project, by means such as demonstration of experience in successfully carrying out projects of similar design and scope, and such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.

`(3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.

`(4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.

`(5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs under parts A, B, and D of this title, including programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.

`(6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits as the Secretary may find necessary for purposes of oversight of project activities and expenditures.

`(7) SELF-INITIATED EVALUATION- If the entity elects to contract for independent evaluation of the project (part or all of the cost of which may be paid for using grant funds), a commitment to submit to the Secretary a copy of the evaluation report within 30 days after completion of the report and not more than 1 year after completion of the project.

`(8) COOPERATION WITH SECRETARY'S OVERSIGHT AND EVALUATION- An agreement to cooperate with the Secretary's evaluation of projects assisted under this section, by means including random assignment of clients to service recipient and control groups, if determined by the Secretary to be appropriate, and affording the Secretary access to the project and to project-related records and documents, staff, and clients.

`(c) ELIGIBILITY CRITERIA FOR LIMITED PURPOSE GRANTS- In order to be eligible for a grant under this section in an amount under $25,000 per fiscal year, an entity shall submit an application to the Secretary containing the following:

`(1) PROJECT DESCRIPTION- A description of the project and how it will be carried out, including the number and characteristics of clients to be served, the proposed duration of the project, and how it will address at least 1 of the 4 objectives specified in section 441(b)(1).

`(2) QUALIFICATIONS- Such information as the Secretary may require as to the capacity of the entity to carry out the project, including any previous experience with similar activities.

`(3) COORDINATION WITH RELATED PROGRAMS- As required by the Secretary in appropriate cases, an undertaking to coordinate and cooperate with State and local entities responsible for specific programs relating to the objectives of the project including, as appropriate, jobs programs and programs serving children and families.

`(4) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits as the Secretary may find necessary for purposes of oversight of project activities and expenditures.

`(5) COOPERATION WITH SECRETARY'S OVERSIGHT AND EVALUATION- An agreement to cooperate with the Secretary's evaluation of projects assisted under this section, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.

`(d) CONSIDERATIONS IN AWARDING GRANTS-

`(1) DIVERSITY OF PROJECTS- In awarding grants under this section, the Secretary shall seek to achieve a balance among entities of differing sizes, entities in differing geographic areas, entities in urban and in rural areas, and entities employing differing methods of achieving the purposes of this section, including working with the State agency responsible for the administration of part D to help fathers satisfy child support arrearage obligations.

`(2) PREFERENCE FOR PROJECTS SERVING LOW-INCOME FATHERS- In awarding grants under this section, the Secretary may give preference to applications for projects in which a majority of the clients to be served are low-income fathers.

`(e) FEDERAL SHARE-

`(1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for a share of the cost of such project in such fiscal year equal to--

`(A) up to 80 percent (or up to 90 percent, if the entity demonstrates to the Secretary's satisfaction circumstances limiting the entity's ability to secure non-Federal resources) in the case of a project under subsection (b); and

`(B) up to 100 percent, in the case of a project under subsection (c).

`(2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.

`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

`(a) IN GENERAL- The Secretary may make grants under this section for fiscal years 2003 through 2007 to eligible entities (as specified in subsection (b)) for 2 multicity, multistate projects demonstrating approaches to achieving the objectives specified in section 441(b)(1). One of the projects shall test the use of married couples to deliver program services.

`(b) ELIGIBLE ENTITIES- An entity eligible for a grant under this section must be a national nonprofit fatherhood promotion organization that meets the following requirements:

`(1) EXPERIENCE WITH FATHERHOOD PROGRAMS- The organization must have substantial experience in designing and successfully conducting programs that meet the purposes described in section 441.

`(2) EXPERIENCE WITH MULTICITY, MULTISTATE PROGRAMS AND GOVERNMENT COORDINATION- The organization must have experience in simultaneously conducting such programs in more than 1 major metropolitan area in more than 1 State and in coordinating such programs, where appropriate, with State and local government agencies and private, nonprofit agencies (including community-based and religious organizations), including State or local agencies responsible for child support enforcement and workforce development.

`(c) APPLICATION REQUIREMENTS- In order to be eligible for a grant under this section, an entity must submit to the Secretary an application that includes the following:

`(1) QUALIFICATIONS-

`(A) ELIGIBLE ENTITY- A demonstration that the entity meets the requirements of subsection (b).

`(B) OTHER- Such other information as the Secretary may find necessary to demonstrate the entity's capacity to carry out the project, including the entity's ability to provide the non-Federal share of project resources.

`(2) PROJECT DESCRIPTION- A description of and commitments concerning the project design, including the following:

`(A) IN GENERAL- A detailed description of the proposed project design and how it will be carried out, which shall--

`(i) provide for the project to be conducted in at least 3 major metropolitan areas;

`(ii) state how it will address each of the 4 objectives specified in section 441(b)(1);

`(iii) demonstrate that there is a sufficient number of potential clients to allow for the random selection of individuals to participate in the project and for comparisons with appropriate control groups composed of individuals who have not participated in such projects; and

`(iv) demonstrate that the project is designed to direct a majority of project resources to activities serving low-income fathers (but the project need not make services available on a means-tested basis).

`(B) OVERSIGHT, EVALUATION, AND ADJUSTMENT COMPONENT- An agreement that the entity--

`(i) in consultation with the evaluator selected pursuant to section 445, and as required by the Secretary, will modify the project design, initially and (if necessary) subsequently throughout the duration of the project, in order to facilitate ongoing and final oversight and evaluation of project operation and outcomes (by means including, to the maximum extent feasible, random assignment of clients to service recipient and control groups), and to provide for mid-course adjustments in project design indicated by interim evaluations;

`(ii) will submit to the Secretary revised descriptions of the project design as modified in accordance with clause (i); and

`(iii) will cooperate fully with the Secretary's ongoing oversight and ongoing and final evaluation of the project, by means including affording the Secretary access to the project and to project-related records and documents, staff, and clients.

`(3) ADDRESSING CHILD ABUSE AND NEGLECT AND DOMESTIC VIOLENCE- A description of how the entity will assess for the presence of, and intervene to resolve, domestic violence and child abuse and neglect, including how the entity will coordinate with State and local child protective service and domestic violence programs.

`(4) ADDRESSING CONCERNS RELATING TO SUBSTANCE ABUSE AND SEXUAL ACTIVITY- A commitment to make available to each individual participating in the project education about alcohol, tobacco, and other drugs, and about the health risks associated with abusing such substances, and information about diseases and conditions transmitted through substance abuse and sexual contact, including HIV/AIDS, and to coordinate with providers of services addressing such problems, as appropriate.

`(5) COORDINATION WITH SPECIFIED PROGRAMS- An undertaking to coordinate, as appropriate, with State and local entities responsible for the programs funded under parts A, B, and D of this title, programs under title I of the Workforce Investment Act of 1998 (including the One-Stop delivery system), and such other programs as the Secretary may require.

`(6) RECORDS, REPORTS, AND AUDITS- An agreement to maintain such records, make such reports, and cooperate with such reviews or audits (in addition to those required under the preceding provisions of paragraph (2)) as the Secretary may find necessary for purposes of oversight of project activities and expenditures.

`(d) FEDERAL SHARE-

`(1) IN GENERAL- Grants for a project under this section for a fiscal year shall be available for up to 80 percent of the cost of such project in such fiscal year.

`(2) NON-FEDERAL SHARE- The non-Federal share may be in cash or in kind. In determining the amount of the non-Federal share, the Secretary may attribute fair market value to goods, services, and facilities contributed from non-Federal sources.

`SEC. 445. EVALUATION.

`(a) IN GENERAL- The Secretary, directly or by contract or cooperative agreement, shall evaluate the effectiveness of service projects funded under sections 443 and 444 from the standpoint of the purposes specified in section 441(b)(1).

`(b) EVALUATION METHODOLOGY- Evaluations under this section shall--

`(1) include, to the maximum extent feasible, random assignment of clients to service delivery and control groups and other appropriate comparisons of groups of individuals receiving and not receiving services;

`(2) describe and measure the effectiveness of the projects in achieving their specific project goals; and

`(3) describe and assess, as appropriate, the impact of such projects on marriage, parenting, domestic violence, child abuse and neglect, money management, employment and earnings, payment of child support, and child well-being, health, and education.

`(c) EVALUATION REPORTS- The Secretary shall publish the following reports on the results of the evaluation:

`(1) An implementation evaluation report covering the first 24 months of the activities under this part to be completed by 36 months after initiation of such activities.

`(2) A final report on the evaluation to be completed by September 30, 2010.

`SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

`The Secretary is authorized, by grant, contract, or cooperative agreement, to carry out projects and activities of national significance relating to fatherhood promotion, including--

`(1) COLLECTION AND DISSEMINATION OF INFORMATION- Assisting States, communities, and private entities, including religious organizations, in efforts to promote and support marriage and responsible fatherhood by collecting, evaluating, developing, and making available (through the Internet and by other means) to all interested parties information regarding approaches to accomplishing the objectives specified in section 441(b)(1).

`(2) MEDIA CAMPAIGN- Developing, promoting, and distributing to interested States, local governments, public agencies, and private nonprofit organizations, including charitable and religious organizations, a media campaign that promotes and encourages involved, committed, and responsible fatherhood and married fatherhood.

`(3) TECHNICAL ASSISTANCE- Providing technical assistance, including consultation and training, to public and private entities, including community organizations and faith-based organizations, in the implementation of local fatherhood promotion programs.

`(4) RESEARCH- Conducting research related to the purposes of this part.

`SEC. 447. NONDISCRIMINATION.

`The projects and activities assisted under this part shall be available on the same basis to all fathers and expectant fathers able to benefit from such projects and activities, including married and unmarried fathers and custodial and noncustodial fathers, with particular attention to low-income fathers, and to mothers and expectant mothers on the same basis as to fathers.

`SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN PURPOSE.

`(a) AUTHORIZATION- There are authorized to be appropriated $20,000,000 for each of fiscal years 2003 through 2007 to carry out the provisions of this part.

`(b) RESERVATION- Of the amount appropriated under this section for each fiscal year, not more than 15 percent shall be available for the costs of the multicity, multicounty, multistate demonstration projects under section 444, evaluations under section 445, and projects of national significance under section 446.'.

`(b) INAPPLICABILITY OF EFFECTIVE DATE PROVISIONS- Section 116 shall not apply to the amendment made by subsection (a) of this section.'.

(2) CLERICAL AMENDMENT- Section 2 of such Act is amended in the table of contents by inserting after the item relating to section 116 the following new item:

`Sec. 117. Fatherhood program.'.

SEC. 120. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY PARTNERS WITH ONE-STOP EMPLOYMENT TRAINING CENTERS.

Section 408 of the Social Security Act (42 U.S.C. 608) is amended by adding at the end the following:

`(h) STATE OPTION TO MAKE TANF PROGRAMS MANDATORY PARTNERS WITH ONE-STOP EMPLOYMENT TRAINING CENTERS- For purposes of section 121(b) of the Workforce Investment Act of 1998, a State program funded under part A of title IV of the Social Security Act shall be considered a program referred to in paragraph (1)(B) of such section, unless, after the date of the enactment of this subsection, the Governor of the State notifies the Secretaries of Health and Human Services and Labor in writing of the decision of the Governor not to make the State program a mandatory partner.'.

SEC. 121. SENSE OF THE CONGRESS.

It is the sense of the Congress that a State welfare-to-work program should include a mentoring program.

TITLE II--CHILD CARE

SEC. 201. SHORT TITLE.

This title may be cited as the `Caring for Children Act of 2002'.

SEC. 202. GOALS.

(a) GOALS- Section 658A(b) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9801 note) is amended--

(1) in paragraph (3) by striking `encourage' and inserting `assist',

(2) by amending paragraph (4) to read as follows:

`(4) to assist State to provide child care to low-income parents;',

(3) by redesignating paragraph (5) as paragraph (7), and

(4) by inserting after paragraph (4) the following:

`(5) to encourage States to improve the quality of child care available to families;

`(6) to promote school readiness by encouraging the exposure of young children in child care to nurturing environments and developmentally-appropriate activities, including activities to foster early cognitive and literacy development; and'.

(b) CONFORMING AMENDMENT- Section 658E(c)(3)(B) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(3)(B)) is amended by striking `through (5)' and inserting `through (7)'.

SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

Section 658B of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858) is amended--

(1) by striking `is' and inserting `are', and

(2) by striking `$1,000,000,000 for each of the fiscal years 1996 through 2002' and inserting `$2,300,000,000 for fiscal year 2003, $2,500,000,000 for fiscal year 2004, $2,700,000,000 for fiscal year 2005, $2,900,000,000 for fiscal year 2006, and $3,100,000,000 for fiscal year 2007'.

SEC. 204. APPLICATION AND PLAN.

Section 658E(c)(2) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--

(1) by amending subparagraph (D) to read as follows:

`(D) CONSUMER AND CHILD CARE PROVIDER EDUCATION INFORMATION- Certify that the State will collect and disseminate, through resource and referral services and other means as determined by the State, to parents of eligible children, child care providers, and the general public, information regarding--

`(i) the promotion of informed child care choices, including information about the quality and availability of child care services;

`(ii) research and best practices on children's development, including early cognitive development;

`(iii) the availability of assistance to obtain child care services; and

`(iv) other programs for which families that receive child care services for which financial assistance is provided under this subchapter may be eligible, including the food stamp program, the WIC program under section 17 of the Child Nutrition Act of 1966, the child and adult care food program under section 17 of the Richard B. Russell National School Lunch Act, and the medicaid and CHIP programs under titles XIX and XXI of the Social Security Act.', and

(2) by inserting after subparagraph (H) the following:

`(I) COORDINATION WITH OTHER EARLY CHILD CARE SERVICES AND EARLY CHILDHOOD EDUCATION PROGRAMS- Demonstrate how the State is coordinating child care services provided under this subchapter with Head Start, Early Reading First, Even Start, Ready-To-Learn Television, State pre-kindergarten programs, and other early childhood education programs to expand accessibility to and continuity of care and early education without displacing services provided by the current early care and education delivery system.

`(J) PUBLIC-PRIVATE PARTNERSHIPS- Demonstrate how the State encourages partnerships with private and other public entities to leverage existing service delivery systems of early childhood education and increase the supply and quality of child care services.

`(K) CHILD CARE SERVICE QUALITY-

`(i) CERTIFICATION- For each fiscal year after fiscal year 2003, certify that during the then preceding fiscal year the State was in compliance with section 658G and describe how funds were used to comply with such section during such preceding fiscal year.

`(ii) STRATEGY- For each fiscal year after fiscal year 2003, contain an outline of the strategy the State will implement during such fiscal year for which the State plan is submitted, to address the quality of child care services in child care settings that provide services for which assistance is made available under this subchapter, and include in such strategy--

`(I) a statement specifying how the State will address the activities described in paragraphs (1), (2), and (3) of section 658G;

`(II) a description of quantifiable, objective measures for evaluating the quality of child care services separately with respect to the activities listed in each of such paragraphs that the State will use to evaluate its progress in improving the quality of such child care services;

`(III) a list of State-developed child care service quality targets for such fiscal year quantified on the basis of such measures; and

`(IV) for each fiscal year after fiscal year 2003, a report on the progress made to achieve such targets during the then preceding fiscal year.

`(iii) RULE OF CONSTRUCTION- Nothing in this subparagraph shall be construed to require that the State apply measures for evaluating quality to specific types of child care providers.

`(L) ACCESS TO CARE FOR CERTAIN POPULATIONS- Demonstrate how the State is addressing the child care needs of parents eligible for child care services for which financial assistance is provided under this subchapter who have children with special needs, work nontraditional hours, or require child care services for infants or toddlers.'.

SEC. 205. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

Section 658G of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858e) is amended to read as follows:

`SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE SERVICES.

`A State that receives funds to carry out this subchapter for a fiscal year, shall use not less than 6 percent of the amount of such funds for activities provided through resource and referral services or other means, that are designed to improve the quality of child care services for which financial assistance is made available under this subchapter. Such activities include--

`(1) programs that provide training, education, and other professional development activities to enhance the skills of the child care workforce, including training opportunities for caregivers in informal care settings;

`(2) activities within child care settings to enhance early learning for young children, to promote early literacy, and to foster school readiness;

`(3) initiatives to increase the retention and compensation of child care providers, including tiered reimbursement rates for providers that meet quality standards as defined by the State; or

`(4) other activities deemed by the State to improve the quality of child care services provided in such State.'.

SEC. 206. REPORT BY SECRETARY.

Section 658L of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858j) is amended to read as follows:

`SEC. 658L. REPORT BY SECRETARY.

`(a) REPORT REQUIRED- Not later than October 1, 2004, and biennially thereafter, the Secretary shall prepare and submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor and Pensions of the Senate a report that contains the following:

`(1) A summary and analysis of the data and information provided to the Secretary in the State reports submitted under section 658K.

`(2) Aggregated statistics on the supply of, demand for, and quality of child care, early education, and non-school-hours programs.

`(3) An assessment, and where appropriate, recommendations for the Congress concerning efforts that should be undertaken to improve the access of the public to quality and affordable child care in the United States.

`(b) COLLECTION OF INFORMATION- The Secretary may utilize the national child care data system available through resource and referral organizations at the local, State, and national level to collect the information required by subsection (a)(2).

SEC. 207. DEFINITIONS.

Section 658P(4)(B) of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858N(4)(B)) is amended by striking `85 percent of the State median income' and inserting `income levels as established by the State, prioritized by need,'.

SEC. 208. ENTITLEMENT FUNDING.

Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--

(1) by striking `and' at the end of subparagraph (E);

(2) by striking the period at the end of subparagraph (F) and inserting `; and'; and

(3) by adding at the end the following:

`(G) $2,917,000,000 for each of fiscal years 2003 through 2007.'.

TITLE III--TAXPAYER PROTECTIONS

SEC. 301. EXCLUSION FROM GROSS INCOME FOR INTEREST ON OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS.

(a) IN GENERAL- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139 the following new section:

`SEC. 139A. EXCLUSION FROM GROSS INCOME FOR INTEREST ON OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS.

`(a) IN GENERAL- In the case of an individual, gross income shall not include interest paid under section 6611 on any overpayment of tax imposed by this subtitle.

`(b) EXCEPTION- Subsection (a) shall not apply in the case of a failure to claim items resulting in the overpayment on the original return if the Secretary determines that the principal purpose of such failure is to take advantage of subsection (a).

`(c) SPECIAL RULE FOR DETERMINING MODIFIED ADJUSTED GROSS INCOME- For purposes of this title, interest not included in gross income under subsection (a) shall not be treated as interest which is exempt from tax for purposes of sections 32(i)(2)(B) and 6012(d) or any

computation in which interest exempt from tax under this title is added to adjusted gross income.'.

(b) CLERICAL AMENDMENT- The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139 the following new item:

`Sec. 139A. Exclusion from gross income for interest on overpayments of income tax by individuals.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to interest received after December 31, 2006.

SEC. 302. DEPOSITS MADE TO SUSPEND RUNNING OF INTEREST ON POTENTIAL UNDERPAYMENTS.

(a) IN GENERAL- Subchapter A of chapter 67 of the Internal Revenue Code of 1986 (relating to interest on underpayments) is amended by adding at the end the following new section:

`SEC. 6603. DEPOSITS MADE TO SUSPEND RUNNING OF INTEREST ON POTENTIAL UNDERPAYMENTS, ETC.

`(a) AUTHORITY TO MAKE DEPOSITS OTHER THAN AS PAYMENT OF TAX- A taxpayer may make a cash deposit with the Secretary which may be used by the Secretary to pay any tax imposed under subtitle A or B or chapter 41, 42, 43, or 44 which has not been assessed at the time of the deposit. Such a deposit shall be made in such manner as the Secretary shall prescribe.

`(b) NO INTEREST IMPOSED- To the extent that such deposit is used by the Secretary to pay tax, for purposes of section 6601 (relating to interest on underpayments), the tax shall be treated as paid when the deposit is made.

`(c) RETURN OF DEPOSIT- Except in a case where the Secretary determines that collection of tax is in jeopardy, the Secretary shall return to the taxpayer any amount of the deposit (to the extent not used for a payment of tax) which the taxpayer requests in writing.

`(d) PAYMENT OF INTEREST-

`(1) IN GENERAL- For purposes of section 6611 (relating to interest on overpayments), a deposit which is returned to a taxpayer shall be treated as a payment of tax for any period to the extent (and only to the extent) attributable to a disputable tax for such period. Under regulations prescribed by the Secretary, rules similar to the rules of section 6611(b)(2) shall apply.

`(2) DISPUTABLE TAX-

`(A) IN GENERAL- For purposes of this section, the term `disputable tax' means the amount of tax specified at the time of the deposit as the taxpayer's reasonable estimate of the maximum amount of any tax attributable to disputable items.

`(B) SAFE HARBOR BASED ON 30-DAY LETTER- In the case of a taxpayer who has been issued a 30-day letter, the maximum amount of tax under subparagraph (A) shall not be less than the amount of the proposed deficiency specified in such letter.

`(3) OTHER DEFINITIONS- For purposes of paragraph (2)--

`(A) DISPUTABLE ITEM- The term `disputable item' means any item of income, gain, loss, deduction, or credit if the taxpayer--

`(i) has a reasonable basis for its treatment of such item, and

`(ii) reasonably believes that the Secretary also has a reasonable basis for disallowing the taxpayer's treatment of such item.

`(B) 30-DAY LETTER- The term `30-day letter' means the first letter of proposed deficiency which allows the taxpayer an opportunity for administrative review in the Internal Revenue Service Office of Appeals.

`(4) RATE OF INTEREST- The rate of interest allowable under this subsection shall be the Federal short-term rate determined under section 6621(b), compounded daily.

`(e) USE OF DEPOSITS-

`(1) PAYMENT OF TAX- Except as otherwise provided by the taxpayer, deposits shall be treated as used for the payment of tax in the order deposited.

`(2) RETURNS OF DEPOSITS- Deposits shall be treated as returned to the taxpayer on a last-in, first-out basis.'.

(b) CLERICAL AMENDMENT- The table of sections for subchapter A of chapter 67 of such Code is amended by adding at the end the following new item:

`Sec. 6603. Deposits made to suspend running of interest on potential underpayments, etc.'.

(c) EFFECTIVE DATE-

(1) IN GENERAL- The amendments made by this section shall apply to deposits made after the date of the enactment of this Act.

(2) COORDINATION WITH DEPOSITS MADE UNDER REVENUE PROCEDURE 84-58- In the case of an amount held by the Secretary of the Treasury or his delegate on the date of the enactment of this Act as a deposit in the nature of a cash bond deposit pursuant to Revenue Procedure 84-58, the date that the taxpayer identifies such amount as a deposit made pursuant to section 6603 of the Internal Revenue Code (as added by this Act) shall be treated as the date such amount is deposited for purposes of such section 6603.

SEC. 303. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALLMENT AGREEMENTS.

(a) IN GENERAL-

(1) Section 6159(a) of the Internal Revenue Code of 1986 (relating to authorization of agreements) is amended--

(A) by striking `satisfy liability for payment of' and inserting `make payment on', and

(B) by inserting `full or partial' after `facilitate'.

(2) Section 6159(c) of such Code (relating to Secretary required to enter into installment agreements in certain cases) is amended in the matter preceding paragraph (1) by inserting `full' before `payment'.

(b) REQUIREMENT TO REVIEW PARTIAL PAYMENT AGREEMENTS EVERY TWO YEARS- Section 6159 of such Code is amended by redesignating subsections (d) and (e)

as subsections (e) and (f), respectively, and inserting after subsection (c) the following new subsection:

`(d) SECRETARY REQUIRED TO REVIEW INSTALLMENT AGREEMENTS FOR PARTIAL COLLECTION EVERY TWO YEARS- In the case of an agreement entered into by the Secretary under subsection (a) for partial collection of a tax liability, the Secretary shall review the agreement at least once every 2 years.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to agreements entered into on or after the date of the enactment of this Act.

TITLE IV--CHILD SUPPORT

SEC. 401. FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF CHILD SUPPORT PAYMENTS TO FAMILIES RECEIVING TANF.

(a) IN GENERAL- Section 457(a) (42 U.S.C. 657(a)) is amended--

(1) in paragraph (1)(A), by inserting `subject to paragraph (7)' before the semicolon; and

(2) by adding at the end the following:

`(7) FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF CHILD SUPPORT PAYMENTS TO FAMILIES RECEIVING TANF- Notwithstanding paragraph (1), a State shall not be required to pay to the Federal Government the Federal share of an amount collected during a month on behalf of a family that is a recipient of assistance under the State program funded under part A, to the extent that--

`(A) the State distributes the amount to the family;

`(B) the total of the amounts so distributed to the family during the month--

`(i) exceeds the amount (if any) that, as of December 31, 2001, was required under State law to be distributed to a family under paragraph (1)(B); and

`(ii) does not exceed the greater of--

`(I) $100; or

`(II) $50 plus the amount described in clause (i); and

`(C) the amount is disregarded in determining the amount and type of assistance provided to the family under the State program funded under part A.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to amounts distributed on or after October 1, 2004.

SEC. 402. STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT PAYMENTS TO FAMILIES THAT FORMERLY RECEIVED TANF.

(a) IN GENERAL- Section 457(a) (42 U.S.C. 657(a)), as amended by section 401(a) of this Act, is amended--

(1) in paragraph (2)(B), in the matter preceding clause (i), by inserting `, except as provided in paragraph (8),' after `shall'; and

(2) by adding at the end the following:

`(8) STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT PAYMENTS TO FAMILIES THAT FORMERLY RECEIVED TANF- In lieu of applying paragraph (2) to any family described in paragraph (2), a State may distribute to the family any amount collected during a month on behalf of the family.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to amounts distributed on or after October 1, 2004.

SEC. 403. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS FOR FAMILIES RECEIVING TANF.

(a) IN GENERAL- Section 466(a)(10)(A)(i) (42 U.S.C. 666(a)(10)(A)(i)) is amended--

(1) by striking `parent, or,' and inserting `parent or'; and

(2) by striking `upon the request of the State agency under the State plan or of either parent,'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on October 1, 2004.

SEC. 404. MANDATORY FEE FOR SUCCESSFUL CHILD SUPPORT COLLECTION FOR FAMILY THAT HAS NEVER RECEIVED TANF.

(a) IN GENERAL- Section 454(6)(B) (42 U.S.C. 654(6)(B)) is amended--

(1) by inserting `(i)' after `(B)';

(2) by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively;

(3) by adding `and' after the semicolon; and

(4) by adding after and below the end the following new clause:

`(ii) in the case of an individual who has never received assistance under a State program funded under part A and for whom the State has collected at least $500 of support, the State shall impose an annual fee of $25 for each case in which services are furnished, which shall be retained by the State from support collected on behalf of the individual (but not from the 1st $500 so collected), paid by the individual applying for the services, recovered from the absent parent, or paid by the State out of its own funds (the payment of which from State funds shall not be considered as an administrative cost of the State for the operation of the plan, and shall be considered income to the program);'.

(b) CONFORMING AMENDMENT- Section 457(a)(3) (42 U.S.C. 657(a)(3)) is amended to read as follows:

`(3) FAMILIES THAT NEVER RECEIVED ASSISTANCE- In the case of any other family, the State shall distribute to the family the portion of the amount so collected that remains after withholding any fee pursuant to section 454(6)(B)(ii).'.

(c) EFFECTIVE DATE- The amendments made by this section shall take effect on October 1, 2003.

SEC. 405. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

Not later than 6 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the procedures that the States use generally to locate custodial parents for whom child support has been collected but not yet distributed. The report shall include an estimate of the total

amount of such undistributed child support and the average length of time it takes for such child support to be distributed. To the extent the Secretary deems appropriate, the Secretary shall include in the report recommendations as to whether additional procedures should be established at the State or Federal level to expedite the payment of undistributed child support.

SEC. 406. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRATION OF UNEMPLOYMENT COMPENSATION PROGRAMS.

(a) IN GENERAL- Section 453(j) (42 U.S.C. 653(j)) is amended by adding at the end the following:

`(7) INFORMATION COMPARISONS AND DISCLOSURE TO ASSIST IN ADMINISTRATION OF UNEMPLOYMENT COMPENSATION PROGRAMS-

`(A) IN GENERAL- If a State agency responsible for the administration of an unemployment compensation program under Federal or State law transmits to the Secretary the name and social security account number of an individual, the Secretary shall, if the information in the National Directory of New Hires indicates that the individual may be employed, disclose to the State agency the name, address, and employer identification number of any putative employer of the individual, subject to this paragraph.

`(B) CONDITION ON DISCLOSURE- The Secretary shall make a disclosure under subparagraph (A) only to the extent that the Secretary determines that the disclosure would not interfere with the effective operation of the program under this part.

`(C) USE OF INFORMATION- A State agency may use information provided under this paragraph only for purposes of administering a program referred to in subparagraph (A).'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on October 1, 2003.

SEC. 407. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING PASSPORT DENIAL.

(a) IN GENERAL- Section 452(k)(1) (42 U.S.C. 652(k)(1)) is amended by striking `$5,000' and inserting `$2,500'.

(b) CONFORMING AMENDMENT- Section 454(31) (42 U.S.C. 654(31)) is amended by striking `$5,000' and inserting `$2,500'.

(c) EFFECTIVE DATE- The amendments made by this section shall take effect on October 1, 2003.

SEC. 408. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE CHILD SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

(a) IN GENERAL- Section 464 (42 U.S.C. 664) is amended--

(1) in subsection (a)(2)(A), by striking `(as that term is defined for purposes of this paragraph under subsection (c))'; and

(2) in subsection (c)--

(A) in paragraph (1)--

(i) by striking `(1) Except as provided in paragraph (2), as used in' and inserting `In'; and

(ii) by inserting `(whether or not a minor)' after `a child' each place it appears; and

(B) by striking paragraphs (2) and (3).

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect on October 1, 2004.

SEC. 409. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD SUPPORT OBLIGATIONS.

(a) IN GENERAL- Section 459(h) (42 U.S.C. 659(h)) is amended--

(1) in paragraph (1)(A)(ii)(V), by striking all that follows `Armed Forces' and inserting a semicolon; and

(2) by adding at the end the following:

`(3) LIMITATIONS WITH RESPECT TO COMPENSATION PAID TO VETERANS FOR SERVICE-CONNECTED DISABILITIES- Notwithstanding any other provision of this section:

`(A) Compensation described in paragraph (1)(A)(ii)(V) shall not be subject to withholding pursuant to this section--

`(i) for payment of alimony; or

`(ii) for payment of child support if the individual is fewer than 60 days in arrears in payment of the support.

`(B) Not more than 50 percent of any payment of compensation described in paragraph (1)(A)(ii)(V) may be withheld pursuant to this section.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect on October 1, 2004.

SEC. 410. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

Section 3716(h)(3) of title 31, United States Code, is amended to read as follows:

`(3) In applying this subsection with respect to any debt owed to a State, other than past due support being enforced by the State, subsection (c)(3)(A) shall not apply. Subsection (c)(3)(A) shall apply with respect to past due support being enforced by the State notwithstanding any other provision of law, including sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of Public law 91-173 (30 U.S.C. 923(b)), and section 14 of the Act of August 29, 1935 (45 U.S.C. 231m).'.

SEC. 411. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

Section 452(j) (42 U.S.C. 652(j)) is amended by inserting `or the amount appropriated under this paragraph for fiscal year 2002, whichever is greater,' before `which shall be available'.

SEC. 412. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE FUNDING.

Section 453(o) (42 U.S.C. 653(o)) is amended--

(1) in the 1st sentence, by inserting `or the amount appropriated under this paragraph for fiscal year 2002, whichever is greater,' before `which shall be available'; and

(2) in the 2nd sentence, by striking `for each of fiscal years 1997 through 2001'.

TITLE V--CHILD WELFARE

SEC. 501. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION PROJECTS.

Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking `2002' and inserting `2007'.

SEC. 502. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS.

Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking `not more than 10'.

SEC. 503. ELIMINATION OF LIMITATION ON NUMBER OF STATES THAT MAY BE GRANTED WAIVERS TO CONDUCT DEMONSTRATION PROJECTS ON SAME TOPIC.

Section 1130 (42 U.S.C. 1320a-9) is amended by adding at the end the following:

`(h) NO LIMIT ON NUMBER OF STATES THAT MAY BE GRANTED WAIVERS TO CONDUCT SAME OR SIMILAR DEMONSTRATION PROJECTS- The Secretary shall not refuse to grant a waiver to a State under this section on the grounds that a purpose of the waiver or of the demonstration project for which the waiver is necessary would be the same as or similar to a purpose of another waiver or project that is or may be conducted under this section.'.

SEC. 504. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS THAT MAY BE GRANTED TO A SINGLE STATE FOR DEMONSTRATION PROJECTS.

Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at the end the following:

`(i) NO LIMIT ON NUMBER OF WAIVERS GRANTED TO, OR DEMONSTRATION PROJECTS THAT MAY BE CONDUCTED BY, A SINGLE STATE- The Secretary shall not impose any limit on the number of waivers that may be granted to a State, or the number of demonstration projects that a State may be authorized to conduct, under this section.'.

SEC. 505. STREAMLINED PROCESS FOR CONSIDERATION OF AMENDMENTS TO AND EXTENSIONS OF DEMONSTRATION PROJECTS REQUIRING WAIVERS.

Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at the end the following:

`(j) STREAMLINED PROCESS FOR CONSIDERATION OF AMENDMENTS AND EXTENSIONS- The Secretary shall develop a streamlined process for consideration of amendments and extensions proposed by States to demonstration projects conducted under this section.'.

SEC. 506. AVAILABILITY OF REPORTS.

Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at the end the following:

`(k) AVAILABILITY OF REPORTS- The Secretary shall make available to any State or other interested party any report provided to the Secretary under subsection (f)(2), and any evaluation or report made by the Secretary with respect to a demonstration project conducted under this section, with a focus on information that may promote best practices and program improvements.'.

SEC. 507. TECHNICAL CORRECTION.

Section 1130(b)(1) (42 U.S.C. 1320a-9(b)(1)) is amended by striking `422(b)(9)' and inserting `422(b)(10)'.

TITLE VI--SUPPLEMENTAL SECURITY INCOME

SEC. 601. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY DETERMINATIONS.

Section 1633 (42 U.S.C. 1383b) is amended by adding at the end the following:

`(e)(1) The Commissioner of Social Security shall review determinations, made by State agencies pursuant to subsection (a) in connection with applications for benefits under this title on the basis of blindness or disability, that individuals who have attained 18 years of age are blind or disabled as of a specified onset date. The Commissioner of Social Security shall review such a determination before any action is taken to implement the determination.

`(2)(A) In carrying out paragraph (1), the Commissioner of Social Security shall review--

`(i) at least 20 percent of all determinations referred to in paragraph (1) that are made in fiscal year 2003;

`(ii) at least 40 percent of all such determinations that are made in fiscal year 2004; and

`(iii) at least 50 percent of all such determinations that are made in fiscal year 2005 or thereafter.

`(B) In carrying out subparagraph (A), the Commissioner of Social Security shall, to the extent feasible, select for review the determinations which the Commissioner of Social Security identifies as being the most likely to be incorrect.'.

TITLE VII--STATE AND LOCAL FLEXIBILITY

SEC. 701. PROGRAM COORDINATION DEMONSTRATION PROJECTS.

(a) PURPOSE- The purpose of this section is to establish a program of demonstration projects in a State or portion of a State to coordinate multiple public assistance, workforce development, and other programs, for the purpose of supporting working individuals and families, helping families escape welfare dependency, promoting child well-being, or helping build stronger families, using innovative approaches to strengthen service systems and provide more coordinated and effective service delivery.

(b) DEFINITIONS- In this section:

(1) ADMINISTERING SECRETARY- The term `administering Secretary' means, with respect to a qualified program, the head of the Federal agency responsible for administering the program.

(2) QUALIFIED PROGRAM- The term `qualified program' means--

(A) a program under part A of title IV of the Social Security Act;

(B) the program under title XX of such Act;

(C) activities funded under title I of the Workforce Investment Act of 1998, except subtitle C of such title;

(D) a demonstration project authorized under section 505 of the Family Support Act of 1988;

(E) activities funded under the Wagner-Peyser Act;

(F) activities funded under the Adult Education and Family Literacy Act;

(G) activities funded under the Child Care and Development Block Grant Act of 1990;

(H) activities funded under the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.), except that such term shall not include--

(i) any program for rental assistance under section 8 of such Act (42 U.S.C. 1437f); and

(ii) the program under section 7 of such Act (42 U.S.C. 1437e) for designating public housing for occupancy by certain populations;

(I) activities funded under title I, II, III, or IV of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11301 et seq.); or

(J) the food stamp program as defined in section 3(h) of the Food Stamp Act of 1977 (7 U.S.C. 2012(h)).

(c) APPLICATION REQUIREMENTS- The head of a State entity or of a sub-State entity administering 2 or more qualified programs proposed to be included in a demonstration project under this section shall (or, if the project is proposed to include qualified programs administered by 2 or more such entities, the heads of the administering entities (each of whom shall be considered an applicant for purposes of this section) shall jointly) submit to the administering Secretary of each such program an application that contains the following:

(1) PROGRAMS INCLUDED- A statement identifying each qualified program to be included in the project, and describing how the purposes of each such program will be achieved by the project.

(2) POPULATION SERVED- A statement identifying the population to be served by the project and specifying the eligibility criteria to be used.

(3) DESCRIPTION AND JUSTIFICATION- A detailed description of the project, including--

(A) a description of how the project is expected to improve or enhance achievement of the purposes of the programs to be included in the project, from the standpoint of quality, of cost-effectiveness, or of both; and

(B) a description of the performance objectives for the project, including any proposed modifications to the performance measures and reporting requirements used in the programs.

(4) WAIVERS REQUESTED- A description of the statutory and regulatory requirements with respect to which a waiver is requested in order to carry out the project, and a justification of the need for each such waiver.

(5) COST NEUTRALITY- Such information and assurances as necessary to establish to the satisfaction of the administering Secretary, in consultation with the Director of the Office of Management and Budget, that the proposed project is reasonably expected to meet the applicable cost neutrality requirements of subsection (d)(4).

(6) EVALUATION AND REPORTS- An assurance that the applicant will conduct ongoing and final evaluations of the project, and make interim and final reports to the administering Secretary, at such times and in such manner as the administering Secretary may require.

(7) PUBLIC HOUSING AGENCY PLAN- In the case of an application proposing a demonstration project that includes activities referred to in subsection (b)(2)(H) of this section--

(A) a certification that the applicable annual public housing agency plan of any agency affected by the project that is approved under section 5A of the United States Housing Act of 1937 (42 U.S.C. 1437c-1) by the Secretary includes the information specified in paragraphs (1) through (4) of this subsection; and

(B) any resident advisory board recommendations, and other information, relating to the project that, pursuant to section 5A(e)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437c-1(e)(2), is required to be included in the public housing agency plan of any public housing agency affected by the project.

(8) OTHER INFORMATION AND ASSURANCES- Such other information and assurances as the administering Secretary may require.

(d) APPROVAL OF APPLICATIONS-

(1) IN GENERAL- The administering Secretary with respect to a qualified program that is identified in an application submitted pursuant to subsection (c) may approve the application and, except as provided in paragraph (2), waive any requirement applicable to the program, to the extent consistent with this section and necessary and appropriate for the conduct of the demonstration project proposed in the application, if the administering Secretary determines that the project--

(A) has a reasonable likelihood of achieving the objectives of the programs to be included in the project;

(B) may reasonably be expected to meet the applicable cost neutrality requirements of paragraph (4), as determined by the Director of the Office of Management and Budget; and

(C) includes the coordination of 2 or more qualified programs.

(2) PROVISIONS EXCLUDED FROM WAIVER AUTHORITY- A waiver shall not be granted under paragraph (1) with respect to--

(A) any provision of law relating to--

(i) civil rights or prohibition of discrimination;

(ii) purposes or goals of any program;

(iii) maintenance of effort requirements;

(iv) health or safety;

(v) labor standards under the Fair Labor Standards Act of 1938; or

(vi) environmental protection;

(B) section 241(a) of the Adult Education and Family Literacy Act;

(C) in the case of a program under the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.), any requirement under section 5A of such Act (42 U.S.C. 1437c-1; relating to

public housing agency plans and resident advisory boards);

(D) in the case of a program under the Workforce Investment Act, any requirement the waiver of which would violate section 189(i)(4)(A)(i) of such Act;

(E) in the case of the food stamp program (as defined in section 3(h) of the Food Stamp Act of 1977 (7 U.S.C. 2012(h)), any requirement under--

(i) section 6 (if waiving a requirement under such section would have the effect of expanding eligibility for the program), 7(b) or 16(c) of the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.); or

(ii) title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1601 et seq.); or

(F) any requirement that a State pass through to a sub-State entity part or all of an amount paid to the State.

(3) AGREEMENT OF EACH ADMINISTERING SECRETARY REQUIRED-

(A) IN GENERAL- An applicant may not conduct a demonstration project under this section unless each administering Secretary with respect to any program proposed to be included in the project has approved the application to conduct the project.

(B) AGREEMENT WITH RESPECT TO FUNDING AND IMPLEMENTATION- Before approving an application to conduct a demonstration project under this section, an administering Secretary shall have in place an agreement with the applicant with respect to the payment of funds and responsibilities required of the administering Secretary with respect to the project.

(4) COST-NEUTRALITY REQUIREMENT-

(A) GENERAL RULE- Notwithstanding any other provision of law (except subparagraph (B)), the total of the amounts that may be paid by the Federal Government for a fiscal year with respect to the programs in the State in which an entity conducting a demonstration project under this section is located that are affected by the project 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 project had not been conducted, as determined by the Director of the Office of Management and Budget.

(B) SPECIAL RULE- If an applicant submits to the Director of the Office of Management and Budget a request to apply the rules of this subparagraph to the programs in the State in which the applicant is located that are affected by a demonstration project proposed in an application submitted by the applicant pursuant to this section, during such period of not more than 5 consecutive fiscal years in which the project 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 project had not been conducted.

(5) 90-DAY APPROVAL DEADLINE-

(A) IN GENERAL- If an administering Secretary receives an application to conduct a demonstration project under this section and does not disapprove the application within 90 days after the receipt, then--

(i) the administering Secretary is deemed to have approved the application for such period as is requested in the application, except to the extent inconsistent with subsection (e); and

(ii) any waiver requested in the application which applies to a qualified program that is identified in the application and is administered by the administering Secretary is deemed to be granted, except to the extent inconsistent with paragraph (2) or (4) of this subsection.

(B) DEADLINE EXTENDED IF ADDITIONAL INFORMATION IS SOUGHT- The 90-day period referred to in subparagraph (A) shall not include any period that begins with the date the Secretary requests the applicant to provide additional information with respect to the application and ends with the date the additional information is provided.

(e) DURATION OF PROJECTS- A demonstration project under this section may be approved for a term of not more than 5 years.

(f) REPORTS TO CONGRESS-

(1) REPORT ON DISPOSITION OF APPLICATIONS- Within 90 days after an administering Secretary receives an application submitted pursuant to this section, the administering Secretary shall submit to each Committee of the Congress which has jurisdiction over a qualified program identified in the application notice of the receipt, a description of the decision of the administering Secretary with respect to the application, and the reasons for approving or disapproving the application.

(2) REPORTS ON PROJECTS- Each administering Secretary shall provide annually to the Congress a report concerning demonstration projects approved under this section, including--

(A) the projects approved for each applicant;

(B) the number of waivers granted under this section, and the specific statutory provisions waived;

(C) how well each project for which a waiver is granted is improving or enhancing program achievement from the standpoint of quality, cost-effectiveness, or both;

(D) how well each project for which a waiver is granted is meeting the performance objectives specified in subsection (c)(3)(B);

(E) how each project for which a waiver is granted is conforming with the cost-neutrality requirements of subsection (d)(4); and

(F) to the extent the administering Secretary deems appropriate, recommendations for modification of programs based on outcomes of the projects.

(g) AMENDMENT TO UNITED STATES HOUSING ACT OF 1937- Section 5A(d) of the United States Housing Act of 1937 (42 U.S.C. 1437c-1(d)) is amended--

(1) by redesignating paragraph (18) as paragraph (19); and

(2) by inserting after paragraph (17) the following new paragraph:

`(18) PROGRAM COORDINATION DEMONSTRATION PROJECTS- In the case of an agency that administers an activity referred to in section 701(b)(2)(H) of the Personal Responsibility, Work, and Family Promotion Act of 2002 that, during such fiscal year, will be included in a demonstration

project under section 701 of such Act, the information that is required to be included in the application for the project pursuant to paragraphs (1) through (4) of section 701(b) of such Act.'.

SEC. 702. STATE FOOD ASSISTANCE BLOCK GRANT DEMONSTRATION PROJECT.

The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is amended by adding at the end the following:

`SEC. 28. STATE FOOD ASSISTANCE BLOCK GRANT DEMONSTRATION PROJECT.

`(a) ESTABLISHMENT- The Secretary shall establish a program to make grants to States in accordance with this section to provide--

`(1) food assistance to needy individuals and families residing in the State;

`(2) funds to operate an employment and training program under subsection (g) for needy individuals under the program; and

`(3) funds for administrative costs incurred in providing the assistance.

`(b) ELECTION-

`(1) IN GENERAL- A State may elect to participate in the program established under subsection (a).

`(2) ELECTION REVOCABLE- A State that elects to participate in the program established under subsection (a) may subsequently reverse the election of the State only once thereafter. Following the reversal, the State shall only be eligible to participate in the food stamp program in accordance with the other sections of this Act and shall not receive a block grant under this section.

`(3) PROGRAM EXCLUSIVE- A State that is participating in the program established under subsection (a) shall not be subject to, or receive any benefit under, this Act except as provided in this section.

`(c) LEAD AGENCY-

`(1) DESIGNATION- A State desiring to participate in the program established under subsection (a) shall designate, in an application submitted to the Secretary under subsection (d)(1), an appropriate State agency that complies with paragraph (2) to act as the lead agency for the State.

`(2) DUTIES- The lead agency shall--

`(A) administer, either directly, through other State agencies, or through local agencies, the assistance received under this section by the State;

`(B) develop the State plan to be submitted to the Secretary under subsection (d)(1); and

`(C) coordinate the provision of food assistance under this section with other Federal, State, and local programs.

`(d) APPLICATION AND PLAN-

`(1) APPLICATION- To be eligible to receive assistance under this section, a State shall prepare and submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary shall by regulation require, including--

`(A) an assurance that the State will comply with the requirements of this section;

`(B) a State plan that meets the requirements of paragraph (2); and

`(C) an assurance that the State will comply with the requirements of the State plan under paragraph (2).

`(2) REQUIREMENTS OF PLAN-

`(A) LEAD AGENCY- The State plan shall identify the lead agency.

`(B) USE OF BLOCK GRANT FUNDS- The State plan shall provide that the State shall use the amounts provided to the State for each fiscal year under this section--

`(i) to provide food assistance to needy individuals and families residing in the State, other than residents of institutions who are ineligible for food stamps under section 3(i);

`(ii) to administer an employment and training program under subsection (g) for needy individuals under the program and to provide reimbursements to needy individuals and families as would be allowed under section 16(h)(3); and

`(iii) to pay administrative costs incurred in providing the assistance.

`(C) ASSISTANCE FOR ENTIRE STATE- The State plan shall provide that benefits under this section shall be available throughout the entire State.

`(D) NOTICE AND HEARINGS- The State plan shall provide that an individual or family who applies for, or receives, assistance under this section shall be provided with notice of, and an opportunity for a hearing on, any action under this section that adversely affects the individual or family.

`(E) OTHER ASSISTANCE-

`(i) COORDINATION- The State plan may coordinate assistance received under this section with assistance provided under the State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.).

`(ii) PENALTIES- If an individual or family is penalized for violating part A of title IV of the Act, the State plan may reduce the amount of assistance provided under this section or otherwise penalize the individual or family.

`(F) ELIGIBILITY LIMITATIONS- The State plan shall describe the income and resource eligibility limitations that are established for the receipt of assistance under this section.

`(G) RECEIVING BENEFITS IN MORE THAN 1 JURISDICTION- The State plan shall establish a system to verify and otherwise ensure that no individual or family shall receive benefits under this section in more than 1 jurisdiction within the State.

`(H) PRIVACY- The State plan shall provide for safeguarding and restricting the use and disclosure of information about any individual or family receiving assistance under this section.

`(I) OTHER INFORMATION- The State plan shall contain such other information as may be required by the Secretary.

`(3) APPROVAL OF APPLICATION AND PLAN- During fiscal years 2003 through 2007, the Secretary may approve the applications and State plans that satisfy the requirements of this section of not more than 5 States for a term of not more than 5 years.

`(e) CONSTRUCTION OF FACILITIES- No funds made available under this section shall be expended for the purchase or improvement of land, or for the purchase, construction, or permanent improvement of any building or facility.

`(f) BENEFITS FOR ALIENS- No individual shall be eligible to receive benefits under a State plan approved under subsection (d)(3) if the individual is not eligible to participate in the food stamp program under title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1601 et seq.).

`(g) EMPLOYMENT AND TRAINING- Each State shall implement an employment and training program for needy individuals under the program.

`(h) ENFORCEMENT-

`(1) REVIEW OF COMPLIANCE WITH STATE PLAN- The Secretary shall review and monitor State compliance with this section and the State plan approved under subsection (d)(3).

`(2) NONCOMPLIANCE-

`(A) IN GENERAL- If the Secretary, after reasonable notice to a State and opportunity for a hearing, finds that--

`(i) there has been a failure by the State to comply substantially with any provision or requirement set forth in the State plan approved under subsection (d)(3); or

`(ii) in the operation of any program or activity for which assistance is provided under this section, there is a failure by the State to comply substantially with any provision of this section, the Secretary shall notify the State of the finding and that no further payments will be made to the State under this section (or, in the case of noncompliance in the operation of a program or activity, that no further payments to the State will be made with respect to the program or activity) until the Secretary is satisfied that there is no longer any failure to comply or that the noncompliance will be promptly corrected.

`(B) OTHER SANCTIONS- In the case of a finding of noncompliance made pursuant to subparagraph (A), the Secretary may, in addition to, or in lieu of, imposing the sanctions described in subparagraph (A), impose other appropriate sanctions, including recoupment of money improperly expended for purposes prohibited or not authorized by this section and disqualification from the receipt of financial assistance under this section.

`(C) NOTICE- The notice required under subparagraph (A) shall include a specific identification of any additional sanction being imposed under subparagraph (B).

`(3) ISSUANCE OF REGULATIONS- The Secretary shall establish by regulation procedures for--

`(A) receiving, processing, and determining the validity of complaints concerning any failure of a State to comply with the State plan or any requirement of this section; and

`(B) imposing sanctions under this section.

`(i) PAYMENTS-

`(1) IN GENERAL- For each fiscal year, the Secretary shall pay to a State that has an application approved by the Secretary under subsection (d)(3) an amount that is equal to the allotment of the State under subsection (l)(2) for the fiscal year.

`(2) METHOD OF PAYMENT- The Secretary shall make payments to a State for a fiscal year under this section by issuing 1 or more letters of credit for the fiscal year, with necessary adjustments on account of overpayments or underpayments, as determined by the Secretary.

`(3) SPENDING OF FUNDS BY STATE-

`(A) IN GENERAL- Except as provided in subparagraph (B), payments to a State from an allotment under subsection (l)(2) for a fiscal year may be expended by the State only in the fiscal year.

`(B) CARRYOVER- The State may reserve up to 10 percent of an allotment under subsection (l)(2) for a fiscal year to provide assistance under this section in subsequent fiscal years, except that the reserved funds may not exceed 30 percent of the total allotment received under this section for a fiscal year.

`(4) PROVISION OF FOOD ASSISTANCE- A State may provide food assistance under this section in any manner determined appropriate by the State to provide food assistance to needy individuals and families in the State, such as electronic benefits transfer limited to food purchases, coupons limited to food purchases, or direct provision of commodities.

`(5) DEFINITION OF FOOD ASSISTANCE- In this section, the term `food assistance' means assistance that may be used only to obtain food, as defined in section 3(g).

`(j) AUDITS-

`(1) REQUIREMENT- After the close of each fiscal year, a State shall arrange for an audit of the expenditures of the State during the program period from amounts received under this section.

`(2) INDEPENDENT AUDITOR- An audit under this section shall be conducted by an entity that is independent of any agency administering activities that receive assistance under this section and be in accordance with generally accepted auditing principles.

`(3) PAYMENT ACCURACY- Each annual audit under this section shall include an audit of payment accuracy under this section that shall be based on a statistically valid sample of the caseload in the State.

`(4) SUBMISSION- Not later than 30 days after the completion of an audit under this section, the State shall submit a copy of the audit to the legislature of the State and to the Secretary.

`(5) REPAYMENT OF AMOUNTS- Each State shall repay to the United States any amounts determined through an audit under this section to have not been expended in accordance with this section or to have not been expended in accordance with the State plan, or the Secretary may offset the amounts against any other amount paid to the State under this section.

`(k) NONDISCRIMINATION-

`(1) IN GENERAL- The Secretary shall not provide financial assistance for any program, project, or activity under this section if any person with responsibilities for the operation of the program, project, or activity discriminates with respect

to the program, project, or activity because of race, religion, color, national origin, sex, or disability.

`(2) ENFORCEMENT- The powers, remedies, and procedures set forth in title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) may be used by the Secretary to enforce paragraph (1).

`(l) ALLOTMENTS-

`(1) DEFINITION OF STATE- In this section, the term `State' means each of the 50 States, the District of Columbia, Guam, and the Virgin Islands of the United States.

`(2) STATE ALLOTMENT-

`(A) IN GENERAL- Except as provided in subparagraph (B), from the amounts made available under section 18 of this Act for each fiscal year, the Secretary shall allot to each State participating in the program established under subsection (a) an amount that is equal to the sum of--

`(i) the greater of, as determined by the Secretary--

`(I) the total dollar value of all benefits issued under the food stamp program established under this Act by the State during fiscal year 2002; or

`(II) the average per fiscal year of the total dollar value of all benefits issued under the food stamp program by the State during each of fiscal years 2000 through 2002; and

`(ii) the greater of, as determined by the Secretary--

`(I) the total amount received by the State for administrative costs and the employment and training program under subsections (a) and (h), respectively, of section 16 of this Act for fiscal year 2002; or

`(II) the average per fiscal year of the total amount received by the State for administrative costs and the employment and training program under subsections (a) and (h), respectively, of section 16 of this Act for each of fiscal years 2000 through 2002.

`(B) INSUFFICIENT FUNDS- If the Secretary finds that the total amount of allotments to which States would otherwise be entitled for a fiscal year under subparagraph (A) will exceed the amount of funds that will be made available to provide the allotments for the fiscal year, the Secretary shall reduce the allotments made to States under this subsection, on a pro rata basis, to the extent necessary to allot under this subsection a total amount that is equal to the funds that will be made available.'.

TITLE VIII--ABSTINENCE EDUCATION

SEC. 801. EXTENSION OF ABSTINENCE EDUCATION FUNDING UNDER MATERNAL AND CHILD HEALTH PROGRAM.

Section 510(d) (42 U.S.C. 710(d)) is amended by striking `2002' and inserting `2007'.

TITLE IX--TRANSITIONAL MEDICAL ASSISTANCE

SEC. 901. ONE-YEAR REAUTHORIZATION OF TRANSITIONAL MEDICAL ASSISTANCE.

(a) IN GENERAL- Section 1925(f) (42 U.S.C. 1396r-6(f)) is amended by striking `2002' and inserting `2003'.

(b) CONFORMING AMENDMENT- Section 1902(e)(1)(B) (42 U.S.C. 1396a(e)(1)(B)) is amended by striking `2002' and inserting `2003'.

SEC. 902. ADJUSTMENT TO PAYMENTS FOR MEDICAID ADMINISTRATIVE COSTS TO PREVENT DUPLICATIVE PAYMENTS AND TO FUND A 1-YEAR EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE.

Section 1903 (42 U.S.C. 1396b) is amended--

(1) in subsection (a)(7), by striking `section 1919(g)(3)(B)' and inserting `subsection (x) and section 1919(g)(3)(C)'; and

(2) by adding at the end the following:

`(x) ADJUSTMENTS TO PAYMENTS FOR ADMINISTRATIVE COSTS TO FUND 1-YEAR EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE-

`(1) REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS- Effective for each calendar quarter in fiscal year 2003 and fiscal year 2004, the Secretary shall reduce the amount paid under subsection (a)(7) to each State by an amount equal to 50 percent for fiscal year 2003, and 75 percent for fiscal year 2004, of one-quarter of the annualized amount determined for the medicaid program under section 16(k)(2)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(2)(B)).

`(2) ALLOCATION OF ADMINISTRATIVE COSTS- None of the funds or expenditures described in section 16(k)(5)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(5)(B)) may be used to pay for costs--

`(A) eligible for reimbursement under subsection (a)(7) (or costs that would have been eligible for reimbursement but for this subsection); and

`(B) allocated for reimbursement to the program under this title under a plan submitted by a State to the Secretary to allocate administrative costs for public assistance programs;

except that, for purposes of subparagraph (A), the reference in clause (iii) of that section to `subsection (a)' is deemed a reference to subsection (a)(7) and clause (iv)(II) of that section shall be applied as if `medicaid program' were substituted for `food stamp program'.'.

TITLE X--EFFECTIVE DATE

SEC. 1001. EFFECTIVE DATE.

(a) IN GENERAL- Except as otherwise provided, the amendments made by this Act shall take effect on October 1, 2002.

(b) EXCEPTION- In the case of a State plan under part A or D of title IV of the Social Security Act which the Secretary determines requires State legislation in order for the plan to meet the additional requirements imposed by the amendments made by this Act, the effective date of the amendments imposing the additional requirements shall be 3 months after the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the preceding sentence, in the case of a State that has a 2-year legislative session, each year of the session shall be considered to be a separate regular session of the State legislature.

END