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[Page: S5699] GPO's PDF---
By Mr. BINGAMAN (for himself and Mrs. MURRAY):
S. 2631. A bill to amend the temporary assistance to needy families program under part A of title IV of the Social Security Act to provide grants for transitional jobs programs, and for other purposes; to the Committee on Finance.
Mr. BINGAMAN. Madam President, I rise today to introduce the STEP Act on behalf of myself and Senator MURRAY.
This bill is a companion to the Education Works Act, which I introduced a couple of weeks ago. Both bills address the same issue, the need to support state efforts to use welfare to work strategies that combine work with a flexibility mix of education, training , and other supports. Study after study has demonstrated that states that use a combination of activities to help families move from welfare to work are more successful. For many welfare recipients, vocational training and postsecondary education led to work and, through substantial increases in earnings and job quality, long-term financial independence. This is important because although many have left welfare for work during the past several years, many have returned or live in poverty dependent on other government supports because they are working at low wages with limited benefits. In addition, many with multiple barriers remain on the rolls. As we move forward with the reauthorization process, we must do more to support state efforts to help these people find work and to ensure that all individuals leaving welfare are moving to employment that will provide long-term financial independence. The STEP Act and the Education Works Act will do just that.
The Education Works Act deals with increasing state flexibility to determine the right mix of work with education and training . The STEP Act provides resources to States seeking to implement effective programs that combine work with education and training . One of the most effective types of these programs, particularly for the most difficult to serve TANF recipients, are transitional job programs. Transitional job programs provide subsidized, temporary, wage-paying jobs for 20 to 35 hours per week, along with access to job readiness, basic education, vocational skills, and other barrier-removal services based on individualized plans. The STEP Act would provide states with funding to implementing these programs and other training and support programs.
Existing transitional job programs are achieving great outcomes. A Mathematical study released last month demonstrated that between 81 to 94 percent of those who had completed transitional job programs move on to unsubsidized jobs with wages. Most of these participants moved into full-time employment, median hours worked was 40 hours. Another survey revealed that transitional jobs program completers reported average wages at placement into unsubsidized employment between $7 and $10 per hour.
Transitional jobs programs can be particularly effective with the hardest to serve welfare recipients. Transitional jobs program often focus primarily on welfare recipients who have participated in welfare employment and training programs without successfully finding steady employment. The reasons for their inability to find and sustain meaningful employment are complex and varied. For people who face barriers, or who lack the skills or experience to compete successfully in the labor market, paid work in a supportive environment, together with access to needed services provides a real chance to move forward. While more expensive than other work first strategies, transitional jobs programs are able to do what their cheaper and less intensive counterparts have not, help the most difficult to serve TANF participants find stable, permanent employment.
Additional support for transitional jobs programs is needed. The TANF and Welfare-to-Work block grants have been the principal sources of funding for Transitional Jobs programs. Welfare-to-Work funds have been exhausted in many parts of the country and must be spend completely during the next year or two. In addition, with an ever growing competition for TANF funds in a period of rising caseloads and declining State revenues, it will be increasingly difficult to fund transitional jobs programs solely with TANF funds.
I believe that transitional job programs are good investments because they serve as stepping stones to permanent employment and decrease government expenditures on health care, food stamps, and cash assistance. Transitional jobs programs can be particularly important in economically depressed and rural areas because they increase work opportunities for hard-to-employ individuals, they reduce pressure on local emergency systems and, they provide income that stimulates local economies.
Our legislation also supports ``business link'' programs that provide individuals with fewer barriers or individuals who have only been able to access very low wage employment with intensive training and skill development activities designed to lead to long-term, higher paid employment. These programs are based on partnerships with the private sector.
In my home State, just such a program is producing great results, the Teamworks program. Teamworks provides training in life skills, as well as employment skills, during a 12 week course. The program also provides necessary supports to participants such as childcare and transportation. Teamworks assists participants in their job search and provides ongoing support for 18 months after job placement. The results are impressive. The average wage of those completing the program is $1.50 per hour higher than other programs and job retention rates are 20 percent higher. This experience is not unique. Welfare programs that combine work with education and training with support services are more likely to result in work leads to self-sufficiency.
The legislation that I am introducing today will give States the tools to implement what works. I urge my colleagues to join me in supporting both the STEP Act and the Education Works Act. I as unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
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 ``Support, Training , Employment Programs Act of 2002'' or the ``STEP Act of 2002''.
[Page: S5700] GPO's PDF
SEC. 2. TRANSITIONAL JOBS GRANTS.
Section 403(a) of the Social Security Act (42 U.S.C. 603(a)) is amended by adding at the end the following:
``(6) TRANSITIONAL JOBS GRANTS.--
``(A) PURPOSE.--The purpose of this paragraph is to provide funding so that States and localities can create and expand transitional jobs programs that--
``(i) combine time-limited employment that is subsidized with public funds, with skill development and barrier removal activities, pursuant to an individualized plan;
``(ii) provide job development and placement assistance to individual participants to help them move from subsidized employment in transitional jobs into unsubsidized employment, as well as retention services after the transition to unsubsidized employment; and
``(iii) serve recipients of assistance under the State program funded under this part and other low-income individuals who have been unable to secure employment through job search or other employment-related services because of limited skills, experience, or other barriers to employment.
``(B) AUTHORITY TO MAKE GRANTS.--Each transitional jobs State (as determined under subparagraph (C)) shall receive a grant under this paragraph for each fiscal year specified in subparagraph (K) for which the State is a transitional jobs State, in an amount equal to the allotment for the State as specified under subparagraph (D) for the fiscal year.
``(C) TRANSITIONAL JOBS STATE.--A State shall be considered a transitional jobs State for a fiscal year for purposes of this paragraph if the Secretary of Labor determines that the State meets the following requirements:
``(i) The State has submitted to the Secretary of Labor and the Secretary of Health and Human Services (in the form of an addendum to the State plan submitted under section 402) a plan which is approved by the Secretary of Labor based on the plan's compliance with the following requirements:
``(I) The plan describes how, consistent with this paragraph, the State will use any funds provided under this paragraph during the fiscal year.
``(II) The plan contains evidence that the plan was developed in consultation and coordination with appropriate entities including employers, labor organizations, and community-based organizations that work with low-income families, and includes a certification as required under section 402(a)(4) with regard to the transitional jobs services that the State proposes to provide.
``(III) The plan specifies the criteria that will be used to select entities who will receive funding to operate transitional jobs programs.
``(IV) The plan describes specifically how the State will address the needs of rural areas, Indian tribes, and cities with large concentrations of residents with an income that is less than the poverty line, or who are unemployed.
``(V) The plan describes how the State will ensure that a grantee to which information is disclosed pursuant to this paragraph or section 454A(f)(5) has procedures for safeguarding the information and for ensuring that the information is used solely for the purpose described in this paragraph or that section.
``(VI) The plan describes categories of jobs that are in demand in various areas of the State and which offer the opportunity for advancement to better jobs. The plan also shall provide assurances that the ability of organizations seeking to operate transitional jobs programs to best prepare participants for those jobs will be given weight in the selection of program operators.
``(ii) The State has agreed to negotiate in good faith with the Secretary of Health and Human Services with respect to the substance and funding of any evaluations and to cooperate with the conduct of any such evaluations.
``(D) ALLOTMENTS TO STATES.--
``(i) IN GENERAL.--Subject to clauses (ii) and (iii), the amount of the allotment for a transitional jobs State for a fiscal year shall be the available amount for the fiscal year multiplied by the State percentage for the fiscal year.
``(ii) MINIMUM ALLOTMENT.--The amount of the allotment for a transitional jobs State (other than Guam, the Virgin Islands, or American Samoa) for a fiscal year shall not be less than 0.4 percent of the available amount for the fiscal year.
``(iii) PRO RATA REDUCTION.--Subject to clause (ii), the Secretary of Labor shall make pro rata reductions in the allotments to States under this subparagraph for a fiscal year as necessary to ensure that the total amount of the allotments does not exceed the available amount for the fiscal year.
``(iv) AVAILABLE AMOUNT.--As used in this subparagraph, the term `available amount' means, for a fiscal year, 80 percent of the sum of--
``(I) the amount specified in subparagraph (K) for the fiscal year;
``(II) any funds available under this subparagraph that have not been allotted due to a determination by the Secretary that any State has not met the requirements of subparagraph (C); and
``(III) any available amount for the immediately preceding fiscal year that has not been obligated by the State.
``(v) STATE PERCENTAGE.--As used in this subparagraph, the term `State percentage' means, with respect to a fiscal year and a State, 1/2 of the sum of--
``(I) the percentage represented by the number of individuals in the State whose income is less than the poverty line divided by the number of such individuals in the United States; and
``(II) the percentage represented by the number of adults who are recipients of assistance under the State program funded under this part divided by the number of adults in the United States who are recipients of assistance under any State program funded under this part.
``(vi) ADMINISTRATION OF FUNDS.--
``(I) IN GENERAL.--Subject to subclause (II), funds made available to a State under this paragraph shall be administered by an agency or agencies, as determined by the chief executive officer of the State, which may include the agency that administers the State program funded under this part, the State board designated to administer the Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.) in the State, or any other appropriate agency.
``(II) COORDINATION WITH TANF AGENCY.--If an agency other than the State agency that administers the State program funded under this part administers funds made available to a State under this paragraph, that agency shall coordinate the planning and administration of such funds with the State agency that administers the State program funded under this part.
``(vii) DISTRIBUTION OF FUNDS WITHIN STATES.--
``(I) IN GENERAL.--A State to which a grant is made under this paragraph shall allocate not less than 90 percent of the amount of the grant to eligible applicants for the operation of transitional jobs programs consistent with subparagraph (E). Any funds not used for such operation may be used to provide technical assistance to program operators and worksite employers, administration, or for other purposes consistent with this paragraph.
``(II) ELIGIBLE APPLICANTS.--As used in subclause (I), the term `eligible applicant' means a political subdivision of a State, a local workforce investment board established under section 117 of the Workforce Investment Act of 1998 (29 U.S.C. 2832), an Indian tribe, or a private entity.
``(E) LIMITATIONS ON USE OF FUNDS.--
``(i) ALLOWABLE ACTIVITIES.--An entity to which funds are provided under subparagraph (D)(vii) shall use the funds to operate transitional jobs programs consistent with the following:
``(I) An entity which secures a grant to operate a transitional jobs program (in this subparagraph referred to as a `program operator'), under this paragraph shall place eligible individuals in temporary, publicly subsidized jobs. Individuals placed in such positions shall perform work directly for the program operator, or at other public and nonprofit organizations (in this subparagraph referred to as `worksite employers') within the community. Funds provided under subparagraph (D) shall be used to subsidize 100 percent of the wages paid to participants as well as employer-paid payroll costs for such participants, except as provided in clause (v) regarding placements in the private, for-profit sector.
``(II) Transitional jobs programs shall provide paid employment for not less than 30, nor more than 40 hours per week, except that a parent with a child under the age of 6, a child who is disabled, or a child with other special needs, or an individual who for other reasons cannot successfully participate for 30 to 40 hours per week, may, at State discretion, be allowed to participate for more limited hours, but not less than 20 hours per week.
``(III) Program operators shall--
``(aa) develop an individual plan for each participant, the goal of which shall focus on preparation for unsubsidized jobs in demand in the local economy which offer the potential for advancement and growth;
``(bb) develop transitional work placements for participants that will best prepare them for jobs in demand in the local economy that offer the potential for wage growth and advancement; and
``(cc) provide case management services and ensure that appropriate education, training , and other services are available to participants consistent with each participant's individual plan.
``(IV) Program operators shall provide job placement assistance to help participants obtain unsubsidized employment, and shall provide retention services for 12 months after entry into unsubsidized employment.
``(V) In any work week in which a participant is employed at least 30 hours, a minimum of 20 percent of scheduled hours and a maximum of 50 percent of scheduled hours, shall involve participation in education or training activities designed to improve the participant's employability and potential earnings, or other services designed to reduce or eliminate any barriers that may impede the participant's ability to secure unsubsidized employment.
``(VI) The maximum duration of any placement in a transitional jobs program shall not be less than 6 months, nor more than 24 months. Nothing in this subclause shall be construed to bar a participant from moving into unsubsidized employment at a point prior to the maximum duration of the program. States may approve programs of varying durations consistent with this subclause.
``(VII) Participants shall be paid at the rate paid to unsubsidized employees of the worksite employer, (or program operator
[Page: S5701] GPO's PDF
``(VIII) Participants shall receive supervision from the worksite employer or program operator consistent with the goal of addressing the limited work experience and skills of program participants.
``(ii) CONSULTATION.--An application submitted by an entity seeking to become a program operator shall include an assurance by the applicant that the transitional jobs program carried out by the applicant shall--
``(I) provide in the design, recruitment, and operation of the program for broad-based input from the community served and potential participants in the program and community-based agencies with a demonstrated record of experience in providing services, prospective worksite employers, local labor organizations representing employees of prospective worksite employers, if these entities exist in the area to be served by the program, and employers, and membership-based groups that represent low-income individuals; and
``(II) prior to the placement of participants, consult with the appropriate local labor organization, if any, representing employees in the area who are engaged in the same or similar as that proposed to be carried out by such program to ensure compliance with the nondisplacement requirements specified in subparagraph (L).
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