S 2052 IS

To amend part A of title IV of the Social Security Act to reauthorize and improve the temporary assistance to needy families program, and for other purposes.

March 21, 2002

Mr. ROCKEFELLER introduced the following bill; which was read twice and referred to the Committee on Finance

To amend part A of title IV of the Social Security Act to reauthorize and improve the temporary assistance to needy families program, 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; TABLE OF CONTENTS; AMENDMENTS TO SOCIAL SECURITY ACT.

(a) SHORT TITLE- This Act may be cited as the `Personal Responsibility and Work Opportunity Reconciliation Act Amendments of 2002'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents; amendments to Social Security Act.

Sec. 2. Findings.

TITLE I--FUNDING

Sec. 101. Reauthorization and annual adjustment of State family assistance grants.

Sec. 102. Contingency fund.

Sec. 103. Bonus for reduction of child poverty.

Sec. 104. Reauthorization of other grants.

Sec. 105. Restoration of funding for the Social Services Block Grant.

Sec. 106. Repeal of Federal loans for State welfare programs.

Sec. 107. GAO reports on TANF funding and expenditures.

TITLE II--SUPPORTING WORK

Sec. 201. Making work pay.

Sec. 202. Increase in guaranteed funding for child care.

Sec. 203. Parents as scholars program.

Sec. 204. Elimination of recipients completing secondary school from limit on number of TANF recipients participating in vocational educational training.

Sec. 205. Vocational training and other preemployment activities.

Sec. 206. State option to credit months engaged in work or parents as scholars program for purposes of 5-year assistance limit.

Sec. 207. Innovative Business Link partnership for employers and nonprofit organizations.

TITLE III--SUPPORTING FAMILIES

Sec. 301. Elimination of separate work participation rate for 2-parent families.

Sec. 302. Ban on imposition of stricter eligibility criteria for 2-parent families.

Sec. 303. Family formation fund.

Sec. 304. Ensuring child well-being.

Sec. 305. Funding for families assisted by a territory program.

TITLE IV--STATE FLEXIBILITY

Sec. 401. Pathway to self-sufficiency grants to improve coordination of assistance for low-income families.

Sec. 402. State option to offer wage subsidies.

Sec. 403. Exclusion of victims of domestic violence from 20 percent limitation on hardship exception.

Sec. 404. Clarification of authority of States to use TANF funds carried over from prior years to provide TANF benefits and services.

Sec. 405. Continuation of prewelfare reform waivers.

Sec. 406. State option to align foster care and adoption assistance eligibility with TANF eligibility.

Sec. 407. Promoting work and responsibility among all families with children.

Sec. 408. Authority to transfer TANF funds to carry out an access to jobs project or a reverse commute project.

TITLE V--HEALTHY CHILDREN

Sec. 501. Revision and simplification of the transitional medical assistance program (TMA).

Sec. 502. Optional coverage of legal immigrants under the medicaid program and title XXI.

Sec. 503. Second chance homes.

TITLE VI--PUBLIC ACCOUNTABILITY

Sec. 601. Public availability of State program and financial data submissions.

Sec. 602. Study and guidelines regarding compliance with nondiscrimination provisions.

Sec. 603. Ensuring TANF funds are not used to displace public employees; application of workplace laws to welfare recipients.

Sec. 604. Research and development.

Sec. 605. GAO study on impact of ban on SSI benefits for legal immigrants.

Sec. 606. Grants to improve States' policies and procedures for assisting individuals with barriers to work.

Sec. 607. Ensuring a professional TANF program staff.

TITLE VII--EFFECTIVE DATE

Sec. 701. Effective date.

(c) AMENDMENTS TO SOCIAL SECURITY ACT- Except as otherwise specifically provided, whenever in this Act an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act (42 U.S.C. 301 et seq.).

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193; 110 Stat. 2105) was a fundamental change to reform the Federal welfare system to shift it from an entitlement program into a transition program to help families move from welfare to work and personal responsibility.

(2) Since enactment of the 1996 welfare reform law, welfare cash assistance caseloads have dropped dramatically, by nearly 50 percent, and approximately 2/3 of welfare recipients who have left the cash assistance rolls have left for work.

(3) Another sign of reform and progress is that funding has shifted from providing monthly cash assistance for parents to stay at home to over 1/2 of the funding targeted to pay for work supports, such as child care, transportation, job placement, limited job training, or other priorities.

(4) More investments in quality child care will allow parents to enter and continue in the workforce knowing that their children have access to safe, meaningful child care, hopefully with emphasis on child development and preparation to ensure that each child gains the skills needed to enter school ready to learn.

(5) While families are moving from welfare to work, and employment rates are up, many families struggle in low-wage jobs and have trouble getting promised supports such as medicaid, child care, food stamps, and other supports available under programs intended to help families.

(6) Child poverty rates are improving, but more must be done to reduce poverty in the 2,000,000 families who are still struggling.

(7) Parents who remain on the welfare caseloads face multiple barriers to employment and therefore need a range of services to address their needs and move from welfare to work.

(8) Children deserve to be raised in supportive homes, preferably with 2 loving parents. It is crucial to end policies that discriminate against serving 2-parent families within the welfare system. It is also important to support innovative programs to encourage full participation in child support and child rearing by noncustodial parents.

(9) Welfare reform has been successful because it has been a flexible partnership between the Federal Government and the States, and retaining the partnership and flexibility will be important for the future.

(10) The State agencies responsible for administering the temporary assistance to needy families program have had to assume many new and more complex responsibilities which necessitates improving and upgrading the skills and ability of the workers at those agencies to ensure high quality service delivery and meet all program goals.

(11) Studies indicate disparate racial treatment in the implementation of the temporary assistance to

needy families program with respect to determining eligibility for assistance under the program, disseminating information, providing referral for services, and imposing sanctions for non-compliance with program requirements.

TITLE I--FUNDING

SEC. 101. REAUTHORIZATION AND ANNUAL ADJUSTMENT OF STATE FAMILY ASSISTANCE GRANTS.

(a) IN GENERAL- Section 403(a)(1) is amended (42 U.S.C. 603(a)(1))--

(1) in subparagraph (A), by striking `1996' and all that follows through `2002' and inserting `2003 through 2007';

(2) by redesignating subparagraph (E) as subparagraph (I);

(3) by redesignating subparagraphs (B) through (D) as subparagraphs (C) through (E), respectively;

(3) in subparagraph (C), as so redesignated--

(A) in the heading, by striking `STATE' and inserting `BASE STATE'; and

(B) by striking `As used in this part, the term `State family assistance grant' means' and inserting `Subject to subparagraph (F), as used in this part, the term `base State family assistance grant' means';

(4) by inserting after subparagraph (A), the following:

`(B) STATE FAMILY ASSISTANCE GRANT DEFINED- As used in this part, the term `State family assistance grant' means the sum of--

`(i) the base State family assistance grant; and

`(ii) the annual adjustment amount.';

(5) by inserting after subparagraph (E), as redesignated by paragraph (3), the following:

`(F) UPDATE OF BASE FOR CERTAIN STATES-

`(i) IN GENERAL- With respect to a base State family assistance grant made for any of fiscal years 2003 through 2007, in the case of a State that meets the criteria described in clause (ii) or (iii), subject to clause (v), the amount of the base State family assistance grant determined under this paragraph for that State for such a fiscal year shall be increased by the applicable amount described in clause (iv) for that fiscal year.

`(ii) RECEIPT OF SUPPLEMENTAL GRANT FOR FISCAL YEAR 2002- For purposes of clause (i), the criteria described in this clause is that a State received a supplemental grant under paragraph (3) for fiscal year 2002 (as in effect with respect to such fiscal year).

`(iii) STATE BASIC TANF GRANT PER POOR PERSON IS BELOW NATIONAL AVERAGE- For purposes of clause (i), the criteria described in this clause is that, with respect to a State and a fiscal year, the State basic TANF grant per poor person for the immediately preceding fiscal year is less than the national average State basic TANF grant per poor person for such preceding fiscal year.

`(iv) APPLICABLE AMOUNT-

`(I) ALL QUALIFYING STATES- For purposes of clause (i), the applicable amount described in this clause is the amount equal to 2.5 percent of the sum of--

`(aa) the amount required to be paid to the State under former section 403 (as in effect during fiscal year 1994); and

`(bb) the amount (if any) paid to the State under paragraph (3) for fiscal year 2002 (as in effect with respect to such fiscal year).

`(II) ORIGINAL QUALIFYING STATES- In the case of a State that meets the criteria described in clause (ii), the amount determined under subclause (I) for a fiscal year shall be further increased by the amount described in item (bb) of that subclause.

`(v) PRESERVATION OF UPDATE- In the case of a State that fails to meet the criteria described in clause (iii) for a fiscal year but that did satisfy such criteria for a prior fiscal year, the amount of the base State family assistance grant determined under this paragraph for that State for such a fiscal year shall be increased by the amount determined for the State under clause (iv)(I) for the most recent fiscal year for which the State satisfied such criteria.

`(vi) DEFINITIONS- In this subparagraph:

`(I) STATE BASIC TANF GRANT PER POOR PERSON- The term `State basic TANF grant per poor person' means, with respect to a State and a preceding fiscal year--

`(aa) the base State family assistance grant for the State (as defined under subparagraph (C) and, if applicable, increased under this subparagraph); divided by

`(bb) the number of individuals, according to the 2000 Census Supplementary Survey, who were residents of the State and whose income does not exceed the poverty line.

`(II) NATIONAL AVERAGE STATE BASIC TANF GRANT PER POOR PERSON- The term `national average State basic TANF grant per poor person' means, with respect to a preceding fiscal year, an amount equal to--

`(aa) the base State family assistance grant (as defined under subparagraph (C) and increased under this subparagraph) for all States for that fiscal year; divided by

`(bb) the number of individuals, according to the 2000 Census Supplementary Survey, who were residents of any State and whose income does not exceed the poverty line.

`(III) STATE- The term `State' means each of the 50 States and the District of Columbia.

`(G) ANNUAL ADJUSTMENT AMOUNT- For purposes of subparagraph (B), the annual adjustment amount with respect to a State is the amount equal to the product of--

`(i) the difference between the amount appropriated under subparagraph

(H) for grants under this paragraph for the fiscal year and the Base family assistance grant for the State; and

`(ii) the number of children in poverty residing in the State divided by the total number of children in poverty residing in all States.

`(H) ADDITIONAL DEFINITIONS- In this paragraph:

`(i) CHILDREN IN POVERTY-

`(I) IN GENERAL- The term `children in poverty' means, with respect to a State and a fiscal year, the number of children residing in the State who have not attained age 18 and whose family income is less than the poverty line.

`(II) DATA- The Secretary shall determine the number of children in poverty in a State using the most recent, accurate data available for the State.

`(III) REGULATIONS- The Secretary shall promulgate for public comment regulations that describe the methodology and data that the Secretary will use to determine the number of children in poverty in each State.

`(ii) POVERTY LINE- The term `poverty line' has the meaning given the term in section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including any revision required by such section applicable to a family of the size involved.

`(iii) FAMILY INCOME- The term `family income' means cash income but does not include cash benefits from means-tested public programs or child support obligations.'; and

(6) in subparagraph (I), as redesignated by paragraph (2), by striking `appropriated for fiscal years' and all that follows through the period and inserting `appropriated for State family assistance grants under this paragraph--

`(i) for fiscal year 2003, $17,011,416,235;

`(ii) for fiscal year 2004, $17,236,416,235;

`(iii) for fiscal year 2005, $17,461,416,235;

`(iv) for fiscal year 2006, $17,686,416,235; and

`(v) for fiscal year 2007, $17,911,416,235.'.

SEC. 102. CONTINGENCY FUND.

(a) CONTINGENCY FUNDING AVAILABLE TO NEEDY STATES- Section 403(b) (42 U.S.C. 603(b)) is amended--

(1) by striking paragraphs (1) through (3) and inserting the following:

`(1) CONTINGENCY FUND GRANTS-

`(A) PAYMENTS- Subject to subparagraph (C), each State shall receive a contingency fund grant for each eligible month in which the State is a needy State under paragraph (3).

`(B) MONTHLY CONTINGENCY FUND GRANT AMOUNT- For each eligible month in which a State is a needy State, the State shall receive a contingency fund grant equal to the higher of $0 and the applicable percentage (as defined in subparagraph (D)(i)) of the product of--

`(i) the estimated cost of an additional recipient family (as defined in subparagraph (D)(ii)); and

`(ii) the increase in the number of families receiving assistance under the State program funded under this part or a program funded with qualified State expenditures (as defined in subparagraph (D)(iv)).

`(C) LIMITATION- The total amount paid to a single State under subparagraph (A) during a fiscal year shall not exceed the amount equal to 15 percent of the State family assistance grant (as defined under subparagraph (B) of subsection (a)(1) and increased under subparagraph (E) of that subsection).

`(D) DEFINITIONS- In this paragraph:

`(i) APPLICABLE PERCENTAGE- The term `applicable percentage' means the higher of--

`(I) 75 percent; and

`(II) the sum of the Federal medical assistance percentage for the State (as defined in section 1905(b)) plus 8 percentage points.

`(ii) ESTIMATED COST OF AN ADDITIONAL RECIPIENT FAMILY- The term `estimated cost of an additional recipient family' means the amount equal to 120 percent of the basic assistance cost (as defined under clause (iii)) for families receiving assistance under the State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)).

`(iii) BASIC ASSISTANCE COST-

`(I) IN GENERAL- The term `basic assistance cost' means the amount equal to the maximum cash assistance grant for a family consisting of 3 individuals under the State program funded under this part.

`(II) RULE FOR STATES WITH MORE THAN 1 MAXIMUM LEVEL- In the case of a State that has more than 1 maximum cash assistance grant level for families consisting of 3 individuals, the basic assistance cost shall be the amount equal to the maximum cash assistance grant level applicable to the largest number of families consisting of 3 individuals receiving assistance under the State program funded under this part or a State program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)).

`(iv) INCREASE IN THE NUMBER OF FAMILIES RECEIVING ASSISTANCE UNDER THE STATE PROGRAM FUNDED UNDER THIS PART OR A PROGRAM FUNDED WITH QUALIFIED STATE EXPENDITURES- The term `increase in the number of families receiving assistance under the State program funded under this part or a program funded with qualified State expenditures' means the increase in--

`(I) the number of families receiving assistance under the State program funded under this part and under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) in the most recent month for which data from the State are available; as compared to

`(II) the lower of the average monthly number of families receiving such assistance in either of the 2 completed fiscal years immediately preceding the fiscal year in which the State qualifies as a needy State.

`(E) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for the period of fiscal years 2003 through 2007, such sums as are necessary for making contingency fund grants under this subsection in a total amount not to exceed $2,000,000,000.';

(2) by redesignating paragraph (4) as paragraph (2); and

(3) in paragraph (2), as so redesignated--

(A) by striking `(3)(A)' and inserting `(1)'; and

(B) by striking `2-month' and inserting `3-month'.

(b) MODIFICATION OF DEFINITION OF NEEDY STATE- Section 403(b) (42 U.S.C. 603(b)) is further amended--

(1) by striking paragraphs (5) through (7);

(2) by redesignating paragraph (8) as paragraph (5); and

(3) by inserting after paragraph (2) (as redesignated by subsection (a)(2)) the following:

`(3) INITIAL DETERMINATION OF WHETHER A STATE QUALIFIES AS A NEEDY STATE-

`(A) IN GENERAL- For purposes of paragraph (1), a State will be initially determined to be a needy State for a month if the State satisfies any of the following:

`(i) The--

`(I) average rate of total unemployment in the State for the period consisting of the most recent 3 months for which data are available has increased by the lesser of 1.5 percentage points or by 50 percent over the corresponding 3-month period in either of the 2 most recent preceding fiscal years; or

`(II) average insured unemployment rate for the most recent 3 months for which data are available has increased by 1 percentage point over the corresponding 3-month period in either of the 2 most recent preceding fiscal years.

`(ii) As determined by the Secretary of Agriculture, the monthly average number of households (as of the last day of each month) that participated in the food stamp program in the State in the then most recently concluded 3-month period for which data are available exceeds by at least 10 percent the monthly average number of households (as of the last day of each month) in the State that participated in the food stamp program in the corresponding 3-month period in either of the 2 most recent preceding fiscal years.

`(iii) As determined by the Secretary, the monthly average number of families that received assistance under the State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) in the most recently concluded 3-month period for which data are available from the State increased by at least 10 percent over the number of such families that received such benefits in the corresponding 3-month period in either of the 2 most recent preceding fiscal years, provided that the Secretary makes a determination that the State's increased caseload was due, in large measure, to economic conditions rather than State policy changes.

`(B) DURATION-

`(i) IN GENERAL- A State that qualifies as a needy State--

`(I) under subparagraph (A)(i), shall be considered a needy State until either the State's (seasonally adjusted) total unemployment rate or (seasonally adjusted) insured unemployment rate, whichever rate was used to meet the definition as a needy State under that subparagraph for the most recently concluded 3-month period for which data are available, falls below the level attained in the 3-month period in which the State first qualified as a needy State under that subparagraph;

`(II) under subparagraph (A)(ii), shall be considered a needy State until the average monthly number of households participating in the food stamp program for the most recently concluded 3-month period for which data are available nationally falls below the food stamp base period level; and

`(III) under subparagraph (A)(iii), shall be considered a needy State until the number of families receiving assistance under the State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) for the most recently concluded 3-month period for which data are available falls below the TANF base period level.

`(ii) SEASONAL VARIATIONS- Notwithstanding subclauses (II) and (III) of clause (i), a State shall be considered a needy State--

`(I) under subparagraph (A)(ii), if with respect to the State, the monthly average number of households participating in the food stamp program for the most recent 3-month period for which data are available nationally falls below the food stamp base period level and the Secretary determines that this is due to expected seasonal variations in food stamp receipt in the State; and

`(II) under subparagraph (A)(iii), if, with respect to a State, the monthly average number of families receiving assistance under the State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) for the most recently concluded 3-month period for which data are available nationally falls below the TANF base period level and the Secretary determines that this is due to expected seasonal variations in assistance receipt in the State.

`(iii) FOOD STAMP BASE PERIOD LEVEL- In this subparagraph, the term `food stamp base period level' means the monthly average number of households participating in the food stamp program that corresponds to the most recent 3-month period for which data are available at the time when the State first was determined to be a needy State under this paragraph.

`(iv) TANF BASE PERIOD LEVEL- In this subparagraph, the term `TANF base period level' means the monthly average number of families receiving assistance under the State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) that corresponds to the most recent 3 months for which data are available at the time when the State first was determined to be a needy State under this paragraph.

`(4) EXCEPTION-

`(A) IN GENERAL- Notwithstanding paragraph (3), a State that has unobligated TANF reserves from prior fiscal years that equal more than 25 percent of the total amount of grants received by the State under subsection (a) (other than welfare-to-work grants made under paragraph (5) of that subsection prior to fiscal year 1999) but not yet obligated as of the end of the preceding fiscal year shall not be a needy State under this subsection.

`(B) DEFINITION OF UNOBLIGATED TANF RESERVES- In subparagraph (A), the term `unobligated TANF reserves' means the lessor of--

`(i) the total amount of grants made to the State (regardless of the fiscal year in which such funds were awarded) under subsection (a) (other than welfare-to-work grants made under paragraph (5) of that subsection prior to fiscal year 1999) but not yet obligated as of the end of the preceding fiscal year; and

`(ii) the total amount of grants made to the State under subsection (a) (other than welfare-to-work grants made under paragraph (5) of that subsection prior to fiscal year 1999) but not yet obligated as of the end of the preceding fiscal year, plus the difference between--

`(I) the pro rata share of the fiscal year grants to be made under subsection (a) to the State (other than such welfare-to-work grants); and

`(II) current year obligations of the total amount of grants made to all States under subsection (a) (regardless of the fiscal year in which such funds were awarded) (other than such welfare-to-work grants) through the end of the most recent calendar quarter.'.

(c) CLARIFICATION OF REPORTING REQUIREMENTS- Paragraph (5) of section 403(b) (42 U.S.C. 603(b)), as redesignated by subsection (b)(2), is amended by striking `on the status of the Fund' and inserting `on the States that qualified for contingency funds and the amount of funding awarded under this subsection'.

SEC. 103. BONUS FOR REDUCTION OF CHILD POVERTY.

(a) CHILD POVERTY REDUCTION BONUS- Section 403(a) (42 U.S.C. 603(a)) is amended by adding at the end the following:

`(6) BONUS TO REWARD STATES THAT REDUCE CHILD POVERTY-

`(A) IN GENERAL- Beginning with fiscal year 2003, the Secretary shall make a grant pursuant to this paragraph to each State for each fiscal year for which the State is a qualified child poverty reduction State.

`(B) AMOUNT OF GRANT-

`(i) IN GENERAL- Subject to this subparagraph, the amount of the grant to be made to a qualified child poverty reduction State for a fiscal year shall be an amount equal to--

`(I) the number of children who had not attained 18 years of age by the end of the then most recently completed calendar year and who resided in the State as of the end of such calendar year, divided by the number of such children who resided in the United States as of the end of such calendar year; multiplied by

`(II) the amount appropriated pursuant to subparagraph (G) for the fiscal year.

`(ii) LIMITATIONS-

`(I) MINIMUM GRANT- The amount of the grant to be made to a qualified child poverty reduction State for a fiscal year shall be not less than $500,000.

`(II) MAXIMUM GRANT- The amount of the grant to be made to a qualified child poverty reduction State for a fiscal year shall not exceed an amount equal to 3 percent of the State family assistance grant (as defined in subparagraph (B) of paragraph (1) and increased under subparagraph (E) of that paragraph) for the fiscal year.

`(iii) PRO RATA INCREASE- If the amount available for grants under this paragraph for a fiscal year is greater than the total amount of payments otherwise required to be made under this paragraph for the fiscal year, then the amount otherwise payable to any State for the fiscal year under this paragraph shall, subject to clause (ii)(II), be increased by such equal percentage as may be necessary to ensure that the total of the amounts payable for the fiscal year under this paragraph equals the amount available for the grants.

`(iv) PRO RATA REDUCTION- If the amount available for grants under this paragraph for a fiscal year is less than the total amount of payments otherwise required to be made under this paragraph for the fiscal year, then the amount otherwise payable to any State for the fiscal year under this paragraph shall, subject to clause (ii)(I), be reduced by such equal percentage as may be necessary to ensure that the total of the amounts payable for the fiscal year under this paragraph equals the amount available for the grants.

`(C) USE OF GRANT- A State to which a grant is made under this paragraph shall use the grant for any purpose for which a grant made under this part may be used.

`(D) DEFINITIONS- In this paragraph:

`(i) QUALIFIED CHILD POVERTY REDUCTION STATE- The term `qualified

child poverty reduction State' means, with respect to a fiscal year, a State if--

`(I) the child poverty rate achieved by the State for the then most recently completed calendar year for which such information is available is less than the lowest child poverty rate achieved by the State during the applicable period; and

`(II) the average depth of child poverty in the State for the then most recently completed calendar year for which such information is available is not greater than the average depth of child poverty in the State for the calendar year that precedes such then most recently completed calendar year.

`(ii) APPLICABLE PERIOD- In clause (i), the term `applicable period' means, with respect to a State and the calendar year referred to in clause (i)(I), the period that--

`(I) begins with the calendar year that, as of October 1, 2002, precedes the then most recently completed calendar year for which such information is available; and

`(II) ends with the calendar year that precedes the calendar year referred to in clause (i)(I).

`(iii) CHILD POVERTY RATE- The term `child poverty rate' means, with respect to a State and a calendar year, the percentage of children residing in the State during the calendar year whose family income for the calendar year is less than the poverty line then applicable to the family.

`(iv) AVERAGE DEPTH OF CHILD POVERTY- The term `average depth of child poverty' means with respect to a State and a calendar year, the average dollar amount by which family income is exceeded by the poverty line, among children in the State whose family income for the calendar year is less than the applicable poverty line.

`(v) POVERTY LINE- The term `poverty line' has the meaning given the term in section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including any revision required by such section applicable to a family of the size involved.

`(vi) FAMILY INCOME- The term `family income' means cash income, child support payments, Federal, State, or local government cash payments, and benefits under the Food Stamp Act of 1977 that are received by any family member, and family income shall be determined after payment of all taxes and receipt of any tax refund or rebate by any family member.

`(E) SECRETARY SHALL DETERMINE APPROPRIATE DATA SOURCE FOR CALCULATIONS-

`(i) IN GENERAL- The Secretary shall determine the most reliable data source to use for the estimates required under this paragraph.

`(ii) DIFFERENT SOURCES PERMITTED- The Secretary may employ different data sources or estimation procedures for different States.

`(iii) REGULATIONS- The Secretary shall issue regulations indicating the data and estimation procedures to be used in this paragraph.

`(F) SECRETARY TO DEVELOP ADDITIONAL EXPERIMENTAL CRITERIA TO BE USED FOR FISCAL YEARS 2006 AND 2007-

`(i) IN GENERAL- The Secretary shall develop experimental child poverty reduction bonus criteria to be used in addition to the criteria specified in subparagraph (D)(i) to determine which States are qualified child poverty reduction States for fiscal year 2006 or 2007. The Secretary--

`(I) shall develop such criteria so that States that show improvement in such criteria are eligible for a bonus under this subparagraph for fiscal year 2006 or 2007; and

`(II) may develop such criteria so that States that meet 1 or more of the criteria, regardless of past performance, qualify for a bonus under this paragraph for such a fiscal year.

`(ii) NO REQUIREMENT TO SATISFY CRITERIA FOR PRECEDING FISCAL YEARS- A State does not have to satisfy the criteria specified in subparagraph (D)(i) in order to be a qualified child poverty reduction State for fiscal year 2006 or 2007 so long as the State satisfies 1 or more of the experimental criteria developed under this subparagraph for such a fiscal year.

`(iii) REQUIREMENTS-

`(I) IN GENERAL- The Secretary shall design the experimental criteria to be used under this subparagraph to measure the extent to which efforts conducted with Federal funds provided under this part or with non-Federal funds counting toward the State's qualified State expenditures under section 409(a)(7) are reducing the extent and severity of poverty among families with children or increasing the ability of families with children whose income is less than the poverty line meet the basic needs of such families such as food and housing.

`(II) CONSIDERATION OF SPECIFIC CRITERIA- In designing such criteria the Secretary shall consider criteria with respect to a specific State that measure--

`(aa) the extent to which child care subsidies are available to families with children whose income is below the poverty line and the impact of such subsidies on the ability of such families to meet other basic needs such as food and housing;

`(bb) State efforts in ensuring that other federally funded programs designed to assist low-income families are accessible and available to such families; and

`(cc) the effectiveness of the State's child support enforcement system and the affect of such system on the extent and depth of child poverty in the State.

`(III) CONSULTATION- The Secretary shall develop such criteria in consultation with the Secretary of Housing and Urban Development, the Secretary of Agriculture, States, and researchers in the area of child well-being and poverty.

`(IV) REPORTS- The Secretary shall submit to Congress the following reports:

`(aa) INTERIM REPORT- Not later than December 31, 2004, an interim report on the Secretary's progress in developing the experimental criteria required under this subparagraph, including a description of the criteria under consideration and research initiated to test and develop such criteria.

`(bb) PROPOSED MEASURE REPORT- Not later than December 31, 2005, a final report that describes the experimental criteria developed under this subparagraph that the Secretary proposes to use to award the fiscal years 2006 and 2007 child poverty reduction bonuses under this subparagraph.

`(V) REGULATIONS- Not later than January 31, 2005, the Secretary shall promulgate regulations for public comment on the experimental criteria proposed to be used to award the fiscal years 2006 and 2007 child poverty reduction bonuses under this subparagraph.

`(G) APPROPRIATIONS-

`(i) IN GENERAL- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for grants under this paragraph--

`(I) for fiscal year 2003, $25,000,000;

`(II) for each of fiscal years 2004 and 2005, $50,000,000;

`(III) for fiscal year 2006, $75,000,000; and

`(IV) for fiscal year 2007, $100,000,000.

`(ii) DEVELOPMENT OF EXPERIMENTAL CRITERIA- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for the purpose of developing the experimental criteria required under subparagraph (F), $5,000,000 for each of fiscal years 2003 and 2004.

`(iii) ALLOCATION OF FUNDS FOR FISCAL YEARS 2006 AND 2007- With respect to each of fiscal years 2006 and 2007, not less than $25,000,000 of the amount appropriated under subclauses (III) and (IV) of clause (i) for each such fiscal year shall be used to award bonuses under this paragraph on the basis of the experimental criteria developed under subparagraph (F).

`(iv) AVAILABILITY- Amounts made available under clause (i) shall remain available until expended.'.

(b) INCLUSION OF MEASURABLE MILESTONES IN CORRECTIVE ACTION PLAN- Section 413(i)(3) (42 U.S.C. 613(i)(3)) is amended in the second sentence by inserting `and identify the measurable milestones for assessing the effectiveness of the plan' before the period.

SEC. 104. REAUTHORIZATION OF OTHER GRANTS.

(a) REAUTHORIZATION OF BONUS TO REWARD HIGH PERFORMANCE STATES- Section 403(a)(4) (42 U.S.C. 603(a)(4)) is amended--

(1) in subparagraph (E)(i), by striking `1999' and all that follows through `2003' and inserting `2004, 2005, 2006, 2007, or 2008'; and

(2) in subparagraph (F) by striking `1999 through 2003' and inserting `2004 through 2008'.

(b) REAUTHORIZATION OF GRANTS FOR INDIAN TRIBES- Paragraphs (1)(A) and (2)(A) of section 412(a) (42 U.S.C. 612(a)) are each amended by striking `1997' and all that follows through `2002' and inserting `2003 through 2007'.

(c) CONTINUATION OF PENALTIES FOR FAILURE OF ANY STATE TO MAINTAIN CERTAIN LEVEL OF HISTORIC EFFORT- Section 409(a)(7) (42 U.S.C. 608(a)(7)) is amended--

(1) in subparagraph (A), by striking `1998' and all that follows through `2003' and inserting `2003, 2004, 2005, 2006, or 2007'; and

(2) in subparagraph (B)(ii), by striking `1997 through 2002' and inserting `2003 through 2007'.

SEC 105. RESTORATION OF FUNDING FOR THE SOCIAL SERVICES BLOCK GRANT.

(a) RESTORATION OF FUNDS FOR THE SOCIAL SERVICES BLOCK GRANT- Section 2003(c) (42 U.S.C. 1379b(c)) is amended--

(1) in paragraph (10), by striking `and';

(2) in paragraph (11), by striking `and each fiscal year thereafter.' and inserting `; and'; and

(3) by adding at the end the following:

`(12) $2,800,000,000 for fiscal year 2003 and each fiscal year thereafter.'.

(b) RESTORATION OF AUTHORITY TO TRANSFER UP TO 10 PERCENT OF TANF FUNDS- Section 404(d)(2) (42 U.S.C. 604(d)(2)) is amended to read as follows:

`(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX PROGRAMS- A State may use not more than 10 percent of the amount of any grant made to the State under section 403(a) for a fiscal year to carry out State programs pursuant to title XX.'.

(c) REQUIREMENT TO SUBMIT ANNUAL REPORT ON STATE ACTIVITIES- Section 2006(c) (42 U.S.C. 1397e(c)) is amended by adding at the end the following new sentence: `Beginning with the reports prepared and transmitted by a State under subsection (a) for fiscal year 2002, the Secretary shall compile the information contained in the reports transmitted by the States under that subsection and shall submit the compilation to Congress on an annual basis.'.

SEC. 106. REPEAL OF FEDERAL LOANS FOR STATE WELFARE PROGRAMS.

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

(b) APPLICATION TO OUTSTANDING LOANS- With respect to any loan made under section 406 of the Social Security Act (42 U.S.C. 606) prior to the effective date of the repeal of that section under subsection (a), notwithstanding such repeal, the terms and conditions for such loan shall continue until the date on which the loan would, in the absence of such repeal, mature.

SEC. 107. GAO REPORTS ON TANF FUNDING AND EXPENDITURES.

(a) REPORTS- The Comptroller General of the United States shall submit to the Chairman and Ranking Member of the Committee on Ways and Means of the House of Representatives and to the Chairman and Ranking Member of the Committee on Finance of the Senate

a report on the matters described in subsection (b) on each of the dates described in subsection (c).

(b) MATTERS DESCRIBED- The matters described in this subsection are the following:

(1) The amount of expenditures per State from funds received under a grant made under section 403 of the Social Security Act (42 U.S.C. 603).

(2) The activities funded by the States with such funds.

(3) The State-by-State variation on the matters described in paragraphs (1) and (2).

(4) The Federal resources available to each State for funding welfare-to-work activities, including through funds made available under a grant made under section 403 of the Social Security Act (42 U.S.C. 603), funds considered to be qualified State expenditures under section 409(a)(7) of such Act (42 U.S.C. 609(a)(7)), funds made available to the State under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), and funds made available to the State under the Social Services Block Grant established under title XX of the Social Security Act (42 U.S.C. 1397 et seq.).

(5) A comparison of the Federal resources available to the State to measure the effectiveness of the State's temporary assistance to needy families program, such as the bonus to reward high performance States established under section 403(a)(4) of the Social Security Act (42 U.S.C. 603(a)(4)), the child poverty reduction bonus established under section 403(a)(6) of such Act (as amended by section 103), and studies conducted by the State or other entities regarding the economic self-sufficiency and well-being of individuals who have ceased to receive assistance under the State temporary assistance to needy families program (commonly referred to as `leaver studies').

(c) DATES DESCRIBED- The dates described in this subsection are the following:

(1) March 30, 2004.

(2) March 30, 2006.

TITLE II--SUPPORTING WORK

SEC. 201. MAKING WORK PAY.

(a) REPLACEMENT OF CASELOAD REDUCTION CREDIT WITH EMPLOYMENT CREDIT-

(1) EMPLOYMENT CREDIT TO REWARD STATES IN WHICH FAMILIES LEAVE WELFARE FOR WORK; ADDITIONAL CREDIT FOR FAMILIES WITH HIGHER EARNINGS-

(A) IN GENERAL- Section 407(a) (42 U.S.C. 607(a)) is amended by adding at the end the following:

`(3) EMPLOYMENT CREDIT-

`(A) IN GENERAL- The minimum participation rate otherwise applicable to a State under this subsection for a fiscal year shall be reduced by the number of percentage points in the employment credit for the State for the fiscal year, as determined by the Secretary--

`(i) using information in the National Directory of New Hires, or

`(ii) with respect to a recipient of assistance under the State program funded under this part who is placed with an employer whose hiring information is not reported to the National Directory of New Hires, using quarterly wage information submitted by the State to the Secretary not later than such date as the Secretary shall prescribe in regulations.

`(B) CALCULATION OF CREDIT-

`(i) IN GENERAL- The employment credit for a State for a fiscal year is an amount equal to--

`(I) twice the average quarterly number of families that ceased to receive cash payments under the State program funded under this part during the preceding fiscal year and that were employed during the calendar quarter immediately succeeding the quarter in which the payments ceased, plus, at State option, twice the number of families that received a non-recurring short-term benefit under the State program funded under this part during the preceding fiscal year and that were employed in during the calendar quarter immediately succeeding the quarter in which the non-recurring short-term benefit was so received; divided by

`(II) the average monthly number of families that include an adult who received cash payments under the State program funded under this part during the preceding fiscal year, plus, if the State elected the option under subclause (I), twice the number of families that received a non-recurring short-term benefit under the State program funded under this part during the preceding fiscal year.

`(ii) SPECIAL RULE FOR FORMER RECIPIENTS WITH HIGHER EARNINGS- In calculating the employment credit for a State for a fiscal year, a family that, during the preceding fiscal year, earned at least 33 percent of the average wage in the State (determined on the basis of State unemployment data) shall be considered to be 1.5 families.

`(C) PUBLICATION OF AMOUNT OF CREDIT- Not later than August 30 of each fiscal year, the Secretary shall cause to be published in the Federal Register the amount of the employment credit that will be used in determining the minimum participation rate applicable to a State under this subsection for the immediately succeeding fiscal year.'.

(B) AUTHORITY OF SECRETARY TO USE INFORMATION IN NATIONAL DIRECTORY OF NEW HIRES- Section 453(i) (42 U.S.C. 653(i)) is amended by adding at the end the following:

`(5) CALCULATION OF EMPLOYMENT CREDIT FOR PURPOSES OF DETERMINING STATE WORK PARTICIPATION RATES UNDER TANF- The Secretary may use the information in the National Directory of New Hires for purposes of calculating State employment credits pursuant to section 407(a)(2).'.

(2) ELIMINATION OF CASELOAD REDUCTION CREDIT- Section 407(b) (42 U.S.C. 607(b)) is amended by striking paragraph (3) and redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.

(b) STATES TO RECEIVE PARTIAL CREDIT TOWARD WORK PARTICIPATION RATE FOR RECIPIENTS ENGAGED IN PART-TIME WORK- Section 407(c)(1) (42 U.S.C. 607(c)(1)) (as amended by section 301(a)(3)(A)) is amended by adding at the end the following: `For purposes of subsection (b)(1)(B)(i), a family that does not include a recipient who is participating in work activities for an average of 30 hours per week during a month but includes a recipient who is participating in such activities during the month for an average of at least 50 percent of the minimum average number of hours per week specified for the month in the table set forth in this subparagraph shall be counted as a percentage of a family that includes an adult or minor child head of household who

is engaged in work for the month, which percentage shall be the number of hours for which the recipient participated in such activities during the month divided by the number of hours of such participation required of the recipient under this section for the month.'.

(c) TANF RECIPIENTS WHO QUALIFY FOR SUPPLEMENTAL SECURITY INCOME BENEFITS REMOVED FROM WORK PARTICIPATION RATE CALCULATION FOR ENTIRE YEAR- Section 407(b)(1)(B)(ii) (42 U.S.C. 607(b)(1)(B)(ii)) is amended--

(1) in subclause (I), by inserting `who has not become eligible for supplemental security income benefits under title XVI during the fiscal year' before the semicolon; and

(2) in subclause (II), by inserting `, and that do not include an adult or minor child head of household who has become eligible for supplemental security income benefits under title XVI during the fiscal year' before the period.

(d) STATE OPTION TO INCLUDE RECIPIENTS OF SUBSTANTIAL CHILD CARE OR TRANSPORTATION ASSISTANCE IN WORK PARTICIPATION RATE-

(1) IN GENERAL- Section 407(a)(1) (42 U.S.C. 607(a)(1)) is amended by inserting `(including, at the option of the State, a family that includes an adult who is receiving substantial child care or transportation assistance, as defined by the Secretary, in consultation with directors of State programs funded under this part, which definition shall specify for each type of assistance a threshold which is a dollar value or a length of time over which the assistance is received, and take account of large one-time transition payments, except any family taken into account under paragraph (2)(B)(i)(I))' before the colon.

(2) DATA COLLECTION AND REPORTING- Section 411(a)(1)(A) (42 U.S.C. 611(a)(1)(A)) is amended in the matter preceding clause (i) by inserting `(including any family with respect to whom the State has exercised its option under section 407(a)(1))' after `assistance'.

(e) EFFECTIVE DATE-

(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this Act shall take effect on October 1, 2003.

(2) STATE OPTION TO PHASE-IN REPLACEMENT OF CASELOAD REDUCTION CREDIT WITH EMPLOYMENT CREDIT AND DELAY APPLICABILITY OF OTHER PROVISIONS- A State may elect to have the amendments made by subsections (a)(2) and (b), (c), and (d) not apply to the State program funded under part A of title IV of the Social Security Act until October 1, 2004, and if the State makes the election, then, in determining the participation rate of the State for purposes of sections 407 and 409(a)(3) of the Social Security Act for fiscal year 2004, the State shall be credited with 1/2 of the reduction in the rate that would otherwise result from applying section 407(a)(2) of the Social Security Act (as added by subsection (a)(1), and as so redesignated by section 301(a)(1)(B)) to the State for fiscal year 2004 and 1/2 of the reduction in the rate that would otherwise result from applying section 407(b)(3) of the Social Security Act to the State for fiscal year 2004.

SEC. 202. INCREASE IN GUARANTEED FUNDING FOR CHILD CARE.

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) $3,717,000,000 for each of fiscal years 2003 through 2007.'.

SEC. 203. PARENTS AS SCHOLARS PROGRAM.

(a) STATE OPTION TO ESTABLISH PARENTS AS SCHOLARS PROGRAM- Section 404 (42 U.S.C. 604) is amended by adding at the end the following new subsection:

`(l) AUTHORITY TO ESTABLISH A PARENTS AS SCHOLARS PROGRAM-

`(1)

`(A) IN GENERAL- A State to which a grant is made under section 403 may use the grant to establish a parents as scholars program under which an eligible participant may be provided support services described in paragraph (4) based on the participant's need in order to complete the program, and the State may elect--

`(i) in accordance with section 407(c)(2)(E), to include the participant in the determination of the monthly work participation rates under paragraph (1)(B)(i) of section 407(b); and

`(ii) in accordance with section 408(a)(7)(H), to credit the participant for any month in which the participant is engaged in the program for purposes of determining the number of months for which an adult has received assistance under a State or tribal program funded under this part.

`(B) LIMITATION ON NUMBER OF ELIGIBLE PARTICIPANTS- The number of eligible participants that may participate in a parents as scholars program established under this subsection may not exceed the amount equal to 5 percent of the total number of recipients of assistance under the State program funded under this part.

`(2) DEFINITION OF ELIGIBLE PARTICIPANT-

`(A) IN GENERAL- In this subsection, the term `eligible participant' means an individual who receives assistance under the State program funded under this part and satisfies the following requirements:

`(i) The individual is enrolled as a full-time student in a postsecondary 2- or 4-year degree program.

`(ii) The individual does not have a marketable bachelor's degree.

`(iii) The individual does not have the skills necessary to earn at least 85 percent of the median wage for the State or locality in which the individual resides.

`(iv) The individual is--

`(I) pursuing a degree that will improve the individual's ability to support the individual's family, considering the local labor market and employment opportunities; and

`(II) demonstrating an ability to succeed in the educational program that has been chosen.

`(v) The individual participates in a combination of education, training, study or worksite experience for an average of not less than 20 hours per week (including time spent studying at 150 percent of time spent in class).

`(vi) After the first 24 months of participation in the program, the individual--

`(I) works not less than 15 hours per week (in addition to school and study time); or

`(II) engages in a combination of class hours, study hours (including time spent studying at 150 percent of time spent in class) and work for a total of not less than 40 hours per week.

`(vii) During the period the individual participates in the program, the individual--

`(I) maintains not less than a 2.0 grade point average;

`(II) attends classes as scheduled;

`(III) reports to the individual's caseworker for the program any changes that might affect the individual's participation;

`(IV) provides the individual's caseworker with a copy of any financial aid award letters; and

`(V) provides the individual's caseworker with the individual's semester grades as requested.

`(B) DEFINITION OF FULL-TIME STUDENT-

`(i) IN GENERAL- In subparagraph (A)(i), the term `full-time student' means an individual is taking courses having the number of hours needed under the requirements of the educational institution in which the individual is enrolled, to complete the requirements of a degree within the usual timeframe of 2 or 4 years, as applicable.

`(ii) EXCEPTION- The State may, for good cause, modify the number of hours required under clause (i) to allow additional time, not to exceed 150 percent of the usual timeframe required for completion of a 2- or 4-year degree, for an individual to complete a degree and be considered a full-time student under the program established under this subsection.

`(3) MODIFICATION OF ELIGIBLE PARTICIPANT REQUIREMENTS- A State may, for good cause, modify the requirements for an eligible participant set forth in paragraph (2)(A).

`(4) SUPPORT SERVICES DESCRIBED- For purposes of paragraph (1), the support services described in this paragraph include any or all of the following during the period the eligible participant is in the program established under this subsection:

`(A) Child care for children under age 13, or children who are physically or mentally incapable of caring for themselves.

`(B) Transportation services including--

`(i) mileage at a set rate per mile or reimbursement for public or private transportation;

`(ii) payment for automotive repairs, not to exceed $500 per year on a vehicle registered to the eligible participant; and

`(iii) reimbursement for vehicle liability insurance, not to exceed $300, for the eligible participant's vehicle.

`(C) Payment for books and supplies to the extent that such items are not covered by grants and loans, not to exceed $750 per academic year.

`(D) Such other expenses, not to exceed $500, that the State determines are necessary for the eligible participant to complete the program established under this subsection and that are not covered by any other available support services program.'.

(b) STATE OPTION TO INCLUDE PARENTS AS SCHOLARS PARTICIPANTS IN DETERMINATION OF WORK PARTICIPATION REQUIREMENTS- Section 407(c)(2) (42 U.S.C. 607(c)(2)) is amended by adding at the end the following new subparagraph:

`(E) STATE OPTION TO INCLUDE PARENTS AS SCHOLARS PARTICIPANTS AS ENGAGED IN WORK- In the case of a State that elects to establish a parents as scholars program under section 404(l), the State may consider individuals participating in that program as being engaged in work for the month for purposes of determining monthly participation rates under subsection (b)(1)(B)(i).'.

(c) INCLUSION IN DEFINITION OF WORK ACTIVITY- Section 407 of the Social Security Act (42 U.S.C. 607) is amended--

(1) in subparagraphs (A) and (B) of subsection (c)(1), by striking `or (12)' each place it appears and inserting `(12), or (13)'; and

(2) in subsection (d)--

(A) in paragraph (11), by striking `and' at the end;

(B) in paragraph (12), by striking the period and inserting `; and'; and

(C) by adding at the end the following:

`(13) postsecondary education, but only in the case of an individual participating in a parents as scholars program that meets the requirements of section 404(l).'.

SEC. 204. ELIMINATION OF RECIPIENTS COMPLETING SECONDARY SCHOOL FROM LIMIT ON NUMBER OF TANF RECIPIENTS PARTICIPATING IN VOCATIONAL EDUCATIONAL TRAINING.

(a) IN GENERAL- Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is amended by striking `, or (if the month is in fiscal year 2000 or thereafter) deemed to be engaged in work for the month by reason of subparagraph (C) of this paragraph' and inserting `(determined without regard to any individual described in subparagraph (C)'.

(b) CONFORMING AMENDMENTS-

(1) Section 407(c)(2)(C)(ii) (42 U.S.C. 607(c)(2)(C)(ii) is amended by inserting `including vocational educational training' after `employment'.

(2) Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is amended in the heading, by striking `EDUCATIONAL ACTIVITIES' and inserting `VOCATIONAL EDUCATIONAL ACTIVITIES'.

SEC. 205. VOCATIONAL TRAINING AND OTHER PREEMPLOYMENT ACTIVITIES.

(a) COUNTING OF UP TO 24 MONTHS OF VOCATIONAL TRAINING AS WORK ACTIVITY- Section 407(d)(8) (42 U.S.C. 607(d)(8)) is amended by striking `12' and inserting `24'.

(b) PARTICIPATION IN ENGLISH-AS-A-SECOND-LANGUAGE PROGRAM ALLOWABLE AS A PREEMPLOYMENT ACTIVITY- Section 407 (42 U.S.C. 607), as amended by section 203(c) and section 301(a), is amended--

(1) in subsection (c)(1), by striking `or (13)' and inserting `(13), or (14)'; and

(2) in subsection (d)--

(A) by striking `and' at the end of paragraph (12);

(B) by striking the period at the end of paragraph (13) and inserting `; and'; and

(C) by adding at the end the following:

`(14) participation in an English-as-a-second-language program.'.

SEC. 206. STATE OPTION TO CREDIT MONTHS ENGAGED IN WORK OR PARENTS AS SCHOLARS PROGRAM FOR PURPOSES OF 5-YEAR ASSISTANCE LIMIT.

Section 408(a)(7) (42 U.S.C. 608(a)(7)) is amended by adding at the end the following new subparagraph:

`(H) STATE OPTION TO CREDIT MONTHS ENGAGED IN WORK OR PARENTS AS SCHOLARS PROGRAM- In determining the number of months for which an adult has received assistance under a State or tribal program funded under this part, the State or tribe may disregard any month during which the adult is--

`(i) engaged in a work activity defined in paragraph (1), (2), (3), (4), or (7) of section 407(d) in accordance with the requirements of section 407(c); or

`(ii) a participant in the parents as scholars program established under section 404(l).'.

SEC. 207. INNOVATIVE BUSINESS LINK PARTNERSHIP FOR EMPLOYERS AND NONPROFIT ORGANIZATIONS.

(a) AUTHORITY TO AWARD GRANTS- The Secretary of Health and Human Services and the Secretary of Labor (in this section referred to as the `Secretaries') jointly shall award grants in accordance with this section for projects proposed by eligible applicants based on the following:

(1) The potential effectiveness of the proposed project in carrying out the activities described in subsection (e).

(2) Evidence of the ability of the eligible applicant to leverage private, State, and local resources.

(3) Evidence of the ability of the eligible applicant to coordinate with other organizations at the State and local level.

(b) DEFINITION OF ELIGIBLE APPLICANT- In this section, the term `eligible applicant' means a nonprofit organization, a local workforce investment board established under section 117 of the Workforce Investment Act of 1998 (29 U.S.C. 2832), or a political subdivision of a State. In addition, in order to qualify as an eligible applicant for purposes of subsection (e)(1), the applicant must provide evidence that the application has been developed by and will be implemented by a local or regional consortium that includes, at minimum, employers or employer associations, education and training providers, and social service providers.

(c) REQUIREMENTS- In awarding grants under this section, the Secretaries shall--

(1) consider the needs of rural areas and cities with large concentrations of residents with an income that is less than the 150 percent of the poverty line; and

(2) ensure that--

(A) all of the funds made available under this section (other than funds reserved for use by the Secretaries under subsection (j)) shall be used for activities described in subsection (e);

(B) not less than 30 percent of the funds made available under this section (other than funds so reserved) shall be used for activities described in subsection (e)(1); and

(C) not less than 30 percent of the funds made available under this section (other than funds so reserved) shall be used for the activities described in subsection (e)(2).

(d) DETERMINATION OF GRANT AMOUNT-

(1) IN GENERAL- Subject to paragraph (2), in determining the amount of a grant to be awarded under this section for a project proposed by an eligible applicant, the Secretaries shall provide the eligible applicant with an amount sufficient to ensure that the project has a reasonable opportunity to be successful, taking into account--

(A) the number and characteristics of the individuals to be served by the project;

(B) the level of unemployment in such area;

(C) the job opportunities and job growth in such area;

(D) the poverty rate for such area; and

(E) such other factors as the Secretary deems appropriate in the area to be served by the project.

(2) AWARD CEILING- A grant awarded to an eligible applicant under this section may not exceed $10,000,000.

(e) ALLOWABLE ACTIVITIES- An eligible applicant awarded a grant under this section shall use funds provided under the grant to do the following:

(1) PROMOTE BUSINESS LINKAGES-

(A) IN GENERAL- To promote business linkages in which funds shall be used to fund new or expanded programs that are designed to--

(i) substantially increase the wages of low-income parents, noncustodial parents, and other low-income individuals, whether employed or unemployed, who have limited English proficiency or other barriers to employment by upgrading job and related skills in partnership with employers, especially by providing services at or near work sites; and

(ii) identify and strengthen career pathways by expanding and linking work and training opportunities for low-earning workers in collaboration with employers.

(B) CONSIDERATION OF IN-KIND, IN-CASH RESOURCES- In determining which programs to fund under this paragraph, an eligible applicant awarded a grant under this section shall consider the ability of a consortium to provide funds in-kind or in-cash (including employer-provided, paid release time) to help support the programs for which funding is sought.

(C) PRIORITY- In determining which programs to fund under this paragraph, an eligible applicant awarded a grant under this section shall give priority given to programs that include education or training for which participants receive credit toward a recognized credential.

(D) USE OF FUNDS-

(i) IN GENERAL- Funds provided to a program under this paragraph may be used for a comprehensive set of employment and training benefits and services, including job development, job matching, curricula development, wage subsidies, retention services, and such others as the program deems necessary to achieve the overall objectives of this paragraph.

(ii) PROVISION OF SERVICES- So long as a program is principally designed to assist eligible individuals, funds may be provided to a program under this paragraph that is designed to provide services to categories of low-earning employees for 1 or more employers and such a program may provide services to individuals who do not meet the definition of low-income established for the program.

(2) PROVIDE FOR TRANSITIONAL JOBS PROGRAMS-

(A) IN GENERAL- To provide for transitional jobs programs which combine time-limited employment in the public or nonprofit sector that is subsidized with public funds with skill development and barriers to employment removal activities, pursuant to an individualized

plan. Such programs also shall 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.

(B) DEFINITION OF TRANSITIONAL JOBS PROGRAM- In this paragraph, the term `transitional jobs program' means a program that is intended to serve current and former recipients of assistance under a State or tribal program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) 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.

(f) DEFINITION OF ELIGIBLE INDIVIDUAL- In this section, the term `eligible individual' means--

(A) an individual who is a parent who is a recipient of assistance under a State or tribal program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);

(B) an individual who is a parent who has ceased to receive assistance under such a State or tribal program; or

(C) a noncustodial parent who is unemployed, or having difficulty in paying child support obligations.

(g) APPLICATION- Each eligible applicant desiring a grant under this section shall submit an application to the Secretaries at such time, in such manner, and accompanied by such information as the Secretaries may require.

(h) ASSESSMENTS AND REPORTS BY GRANTEES-

(1) IN GENERAL- An eligible applicant that receives a grant under this section shall assess and report on the outcomes of programs funded under the grant, including outcomes related to job placement, 1-year employment retention, wage at placement, and earnings progression, as specified by the Secretaries.

(2) ASSISTANCE- The Secretaries shall--

(A) assist grantees in conducting the assessment required under paragraph (1) by making available where practicable low-cost means of tracking the labor market outcomes of participants; and

(B) encourage States to also provide such assistance.

(i) APPLICATION TO REQUIREMENTS OF THE STATE TANF PROGRAM-

(1) WORK PARTICIPATION REQUIREMENTS- With respect to any month in which a recipient of assistance under a State or tribal program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) who satisfactorily participates in a business linkage or transitional jobs program described in subsection (e) that is paid for with funds made available under a grant made under this section, such participation shall be considered to satisfy the work participation requirements of section 407 of the Social Security Act (42 U.S.C. 607)) and included for purposes of determining monthly participation rates under subsection (b)(1)(B)(i) of such section.

(2) PARTICIPATION NOT CONSIDERED ASSISTANCE- A benefit or service provided with funds made available under a grant made under this section shall not be considered assistance for any purpose under a State or tribal program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.).

(j) ASSESSMENTS BY THE SECRETARIES-

(1) RESERVATION OF FUNDS- Of the amount appropriated under subsection (k), $3,000,000 is reserved for use by the Secretaries to prepare an interim and final report summarizing and synthesizing outcomes and lessons learned from the programs funded through grants awarded under this section.

(2) INTERIM AND FINAL ASSESSMENTS- With respect to the reports prepared under paragraph (1), the Secretaries shall submit--

(A) the interim report not later than 4 years after the date of enactment of this Act; and

(B) the final report not later than 6 years after such date of enactment.

(k) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for grants under this section, $200,000,000 for the period of fiscal years 2003 through 2007.

TITLE III--SUPPORTING FAMILIES

SEC. 301. ELIMINATION OF SEPARATE WORK PARTICIPATION RATE FOR 2-PARENT FAMILIES.

(a) IN GENERAL- Section 407 (42 U.S.C. 607) is amended--

(1) in subsection (a)--

(A) in paragraph (1), by striking `ALL FAMILIES' and inserting `IN GENERAL'; and

(B) by striking paragraph (2) and redesignating paragraph (3) (as added by section 201(a)(1)) as paragraph (2);

(2) in subsection (b)--

(A) by striking paragraph (2);

(B) in paragraph (3) (as redesignated by section 201(a)(2)), by striking `paragraphs (1)(B) and (2)(B)' and inserting `paragraph (1)(B)';

(C) in paragraph (4) (as so redesignated), by striking `rates' and inserting `rate'; and

(D) by redesignating such paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and

(3) in subsection (c)--

(A) in paragraph (1)--

(i) by striking `GENERAL RULES- ' and all that follows through `For purposes' in subparagraph (A) and inserting `GENERAL RULE- For purposes'; and

(ii) by striking subparagraph (B); and

(B) in paragraph (2)(D)--

(i) by striking `paragraphs (1)(B)(i) and (2)(B) of subsection (b)' and inserting `subsection (b)(1)(B)(i)'; and

(ii) by striking `and in 2-parent families, respectively,'.

(b) CONFORMING AMENDMENT REMOVING DISINCENTIVE TO ASSIST 2-PARENT FAMILIES- Section 409(a)(3)(A) (42 U.S.C. 609(a)(3)(A)) is amended by inserting `(determined, in the case of a fiscal year prior to fiscal year 2003, without regard to the minimum participation rate required for that fiscal year under section 407(a)(2) (as in effect with respect to such fiscal year)' after `section 407(a) for the fiscal year'.

SEC. 302. BAN ON IMPOSITION OF STRICTER ELIGIBILITY CRITERIA FOR 2-PARENT FAMILIES.

(a) PROHIBITION- Section 408(a) (42 U.S.C. 608(a)) is amended by adding at the end the following:

`(12) BAN ON IMPOSITION OF STRICTER ELIGIBILITY CRITERIA FOR 2-PARENT FAMILIES- In determining the eligibility of a 2-parent family for any benefit or service funded under this part or funded with non-Federal funds counting toward the State's qualified State expenditures under section 409(a)(7), the State shall not impose a requirement that does not apply in determining the eligibility of a 1-parent family for such assistance.'.

(b) PENALTY- Section 409(a) (42 U.S.C. 609(a)) is amended by adding at the end the following:

`(15) PENALTY FOR IMPOSITION OF STRICTER ELIGIBILITY CRITERIA FOR 2-PARENT FAMILIES-

`(A) IN GENERAL- If the Secretary determines that a State to which a grant is made under section 403 for a fiscal year has violated section 408(a)(12) during the fiscal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year by an amount up to 5 percent of the State family assistance grant.

`(B) PENALTY BASED ON SEVERITY OF FAILURE- The Secretary shall impose reductions under subparagraph (A) with respect to a fiscal year based on the degree of noncompliance.'.

(c) ASSURANCE OF EQUAL TREATMENT- Section 402(a) (42 U.S.C. 602(a)) is amended by adding at the end the following:

`(8) ASSURANCE OF EQUAL TREATMENT OF 2-PARENT FAMILIES- Not later than 180 days after the completion of the examination required under section 302(b)(1) of the Personal Responsibility and Work Opportunity Reconciliation Act Amendments of 2002, the chief executive officer of the State shall submit to the Secretary an assurance that in conducting the State program funded under this part, the State does not have rules or procedures that discriminate against 2-parent families.'.

SEC. 303. FAMILY FORMATION FUND.

Section 403(a)(2) (42 U.S.C. 603(a)(2)) is amended to read as follows:

`(2) FAMILY FORMATION FUND-

`(A) IN GENERAL- The Secretary shall provide grants to States and localities for research, technical assistance, replication, and adaptation of rigorously evaluated programs, and to conduct demonstration projects which are evaluated by independent entities in accordance with evaluation criteria established by the Secretary, in the following areas:

`(i) Encouraging the formation and maintenance of 2-parent families and healthy marriages and reducing nonmarital births.

`(ii) Reducing first and subsequent teenage pregnancies.

`(iii) Increasing the ability of noncustodial parents to financially support and be involved with their children.

`(B) ALLOCATION OF FUNDS-

`(i) IN GENERAL- In making grants under this paragraph, the Secretary shall ensure that not less than 30 percent of the funds made available pursuant to this paragraph for a fiscal year are used in each of the areas described in a clause of subparagraph (A).

`(ii) RESERVATION- The Secretary may reserve up to 5 percent of the funds made available pursuant to this paragraph for a fiscal year to provide technical assistance and to conduct research through the Office of the Secretary.

`(C) GRANTEE REQUIREMENTS- A recipient of a grant under this paragraph shall--

`(i) consult with domestic violence experts and child advocates to ensure that programs funded under grants made under this paragraph do not result in an increase in family violence; and

`(ii) offer marriage-related services only to individuals who voluntarily elect to receive such services.

`(D) GRANTS CRITERIA-

`(i) IN GENERAL- The Secretary shall promulgate for public comment criteria for selecting proposals for grants under this paragraph. Such criteria shall include, at a minimum, that the Secretary shall select proposals that satisfy the requirements of subparagraph (C) and identify the potential harm a demonstration project might have on subject families such as loss of income.

`(ii) PRIORITY FOR CERTAIN PROPOSALS- Within the allocation made available to carry out subparagraph (A)(ii), the Secretary shall give priority to proposals that seek to replicate or adapt teen pregnancy prevention programs that have been rigorously evaluated and shown to be successful.

`(E) 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.'.

SEC. 304. ENSURING CHILD WELL-BEING.

(a) STATE CHILD WELL-BEING ASSESSMENT AS PART OF INDIVIDUAL RESPONSIBILITY PLAN- Section 408(b)(2)(A) (42 U.S.C. 608(b)(2)(A)) is amended--

(1) by redesignating clauses (iv) and (v) as clauses (v) and (vi), respectively;

(2) by inserting after clause (iii), the following:

`(iv) sets forth a child well-being plan for each child in the family as part of the individual's responsibility as well as work, and offers, at a minimum, information concerning programs designed to promote each child's well-being, including health benefits coverage under titles XIX and XXI, benefits under the food stamp program and other nutrition programs, child care, child support enforcement, and other

assistance or benefits that may be available for the child;'; and

(3) in clause (v) (as redesignated by paragraph (1))--

(A) by striking `and describe' and inserting `describes'; and

(B) by inserting `, and provides information concerning ways to access services identified as important to the well-being of each child in the family' before the semicolon.

(b) PROMULGATION OF BEST PRACTICE STANDARDS- Not later than December 31, 2003, the Secretary of Health and Human Services shall promulgate best practice standards regarding the most appropriate procedures for imposing sanctions against a family receiving assistance under the temporary assistance to needy families program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) for the family's (or any family member's) failure to comply with a requirement imposed under that program.

(c) REQUIREMENT TO DEVELOP PLAN; TECHNICAL AMENDMENTS-

(1) DEVELOPMENT OF PLAN- Each State conducting a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) shall develop a child well-being assessment for use in completing the child well-being plans required under section 408(b)(2)(A)(iv) of the Social Security Act (42 U.S.C. 608(b)(2)(A)(vi)) (as added by subsection (a)).

(2) TECHNICAL AMENDMENTS- Section 408(b)(2) (42 U.S.C. 608(b)(2)) is amended--

(A) in subparagraph (A), in the matter preceding clause (i)--

(i) by striking `subsection (a)' and inserting `paragraph (1)'; and

(ii) by striking `may develop' and inserting `shall develop'; and

(B) in subparagraph (B), in the matter preceding clause (i), by striking `paragraph (1)' and inserting `subparagraph (A)'.

(d) DEADLINE FOR IMPLEMENTATION- A State shall not be regarded as failing to comply with the requirement of section 408(b)(2)(A)(iv) of the Social Security Act (42 U.S.C. 608(b)(2)(A)(iv)) (as added by subsection (a)) before the date that is 1 year after the effective date of this Act with respect to the State, as determined under section 701.

SEC. 305. FUNDING FOR FAMILIES ASSISTED BY A TERRITORY PROGRAM.

(a) INCREASE IN MANDATORY CEILING AMOUNT- Section 1108(c)(4) (42 U.S.C. 1308(c)(4)) is amended--

(1) in subparagraph (A), by striking `$107,255,000' and inserting `$109,936,375';

(2) in subparagraph (B), by striking `$4,686,000' and inserting `$4,803,150';

(3) in subparagraph (C), by striking `$3,554,000' and inserting `$3,642,850'; and

(4) in subparagraph (D), by striking `$1,000,000' and inserting `$1,250,000'.

(b) APPROPRIATION- Section 1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by striking `fiscal years 1997 through 2002' and inserting `each of fiscal years 2003 through 2007'.

TITLE IV--STATE FLEXIBILITY

SEC. 401. PATHWAY TO SELF-SUFFICIENCY GRANTS TO IMPROVE COORDINATION OF ASSISTANCE FOR LOW-INCOME FAMILIES.

(a) DEFINITIONS- In this section:

(1) ELIGIBLE APPLICANT- The term `eligible applicant' means a State or local government agency or a nonprofit entity.

(2) SECRETARY- The term `Secretary' means the Secretary of Health and Human Services.

(3) STATE- The term `State' means each of the 50 States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, and the United States Virgin Islands.

(4) SUPPORT PROGRAM FOR LOW-INCOME FAMILIES- The term `support program for low-income families' means a program designed to provide low-income families and noncustodial parents who need help with obtaining employment and fulfilling child support obligations to children receiving assistance under the temporary assistance to needy families program established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) with assistance or benefits to enable the family or noncustodial parent to become self-sufficient and includes--

(A) the temporary assistance to needy families program established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);

(B) the food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);

(C) the medicaid program funded under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.);

(D) the State children's health insurance program (SCHIP) funded under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.);

(E) the child care program funded under the Child Care Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.);

(F) the child support program funded under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.);

(G) the earned income tax credit under section 32 of the Internal Revenue Code of 1986;

(H) the low-income home energy assistance program (LIHEAP) established under the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.);

(I) the special supplemental nutrition program for women, infants, and children (WIC) established under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786);

(J) programs under the Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.);

(K) programs supporting low-income housing assistance programs; and

(L) any other Federal, State, or locally funded program designed to provide family and work support to low-income families.

(b) AUTHORITY TO AWARD GRANTS-

(1) IN GENERAL- The Secretary may award grants to eligible applicants to--

(A) improve the coordination of support programs for low-income families and noncustodial parents described in subsection (a)(4); and

(B) conduct outreach to such families and noncustodial parents to promote enrollment in such programs.

(2) PREFERENCE- In awarding grants under this section, the Secretary shall give preference to eligible applicants that include in the application submitted under subsection (c) documentation demonstrating that the eligible applicant will collaborate with other Federal, State, or local agencies or nonprofit entities in carrying out activities under the grant.

(c) APPLICATION- Each eligible applicant desiring a grant under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require.

(d) ANNUAL REPORTS-

(1) IN GENERAL- The Secretary shall submit an interim and final report to Congress describing the uses of grant funds awarded under this section.

(2) DATES FOR SUBMISSION- With respect to the reports required under paragraph (1), the Secretary shall submit--

(A) the interim report, not later than December 31, 2005; and

(B) the final report, not later than December 31, 2008.

(e) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $150,000,000 for the period of fiscal years 2003 through 2007.

SEC. 402. STATE OPTION TO OFFER WAGE SUBSIDIES.

(a) CLARIFICATION OF AUTHORITY TO USE GRANT FUNDS- Section 404 (42 U.S.C. 604), as amended by section 203, is further amended by adding at the end the following:

`(m) AUTHORITY TO PROVIDE WAGE SUBSIDIES- A State to which a grant is made under section 403 may use the grant to provide wage subsidies or other benefits or services to a family that includes an individual who has--

`(1) participated in a work activity described in paragraph (1), (2), (3), (4), or (5) of section 407(d) for at least 30 hours per week;

`(2) received at least such amount of income from the work activity as the State may establish; and

`(3) complied with all work requirements applicable to the individual under the State program funded under this part.'.

(b) EFFECT OF WAGE SUBSIDIES ON 5-YEAR LIMIT- Section 408(a)(7) (42 U.S.C. 608(a)(7)), as amended by section 206, is amended by adding at the end the following:

`(I) LIMITATION ON MEANING OF `ASSISTANCE' FOR FAMILIES WITH INCOME FROM EMPLOYMENT- For purposes of this paragraph, at State option, a wage subsidy or other benefit or service provided to a family under section 404(m) during a month under the State program funded under this part shall not be considered assistance under the State program.'.

SEC. 403. EXCLUSION OF VICTIMS OF DOMESTIC VIOLENCE FROM 20 PERCENT LIMITATION ON HARDSHIP EXCEPTION.

Section 408(a)(7)(C) (42 U.S.C. 608(a)(7)(C)) is amended--

(1) in clause (i), by striking `by reason of' and all that follows through the period and inserting `by reason of--

`(I) hardship; or

`(II) if the family includes an individual who has been battered or subjected to extreme cruelty.';

(2) in clause (ii), by striking `clause (i)' and inserting `clause (i)(I)'; and

(3) in clause (iii), by striking `clause (i)' and inserting `clause (i)(II)'.

SEC. 404. 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--

(1) in the subsection heading, by striking `ASSISTANCE' and inserting `BENEFITS OR SERVICES'; and

(2) by striking `assistance' and inserting `any benefit or service that may be provided'.

SEC. 405. CONTINUATION OF PREWELFARE REFORM WAIVERS.

Section 415 (42 U.S.C. 615) is amended by adding at the end the following new subsection:

`(e) CONTINUATION OF WAIVERS APPROVED BEFORE DATE OF ENACTMENT OF WELFARE REFORM- Notwithstanding paragraphs (1)(A) and (2)(A) of subsection (a), with respect to any State that is operating under a waiver described in that subsection which would otherwise expire on a date that occurs during the period that begins on October 1, 2002, and ends on September 30, 2006, the State may elect to continue to operate under that waiver, on the same terms and conditions as applied to the waiver on the day before such date, through September 30, 2006.'.

SEC. 406. STATE OPTION TO ALIGN FOSTER CARE AND ADOPTION ASSISTANCE ELIGIBILITY WITH TANF ELIGIBILITY.

(a) FOSTER CARE- Section 472 (42 U.S.C. 672) is amended by adding at the end the following:

`(i)(1) Notwithstanding any other provision of this part, subject to paragraph (2), for purposes of determining whether a child is eligible for foster care maintenance payments under this part, a child shall be treated as a child who would have received aid under the State plan approved under section 402 (as in effect on July 16, 1996) only if the child meets the income and resource standards and

methodologies for determining eligibility in effect under such plan (as so in effect).

`(2) For purposes of applying this subsection, a State may increase the income and resource standards and methodologies referred to in paragraph (1) up to the level of the income and resource standards and methodologies under the State plan under part A (as in effect as of the date of determining such eligibility).'.

(b) ADOPTION ASSISTANCE- Section 473 (42 U.S.C. 673) is amended by adding at the end the following:

`(d)(1) Notwithstanding any other provision of this part, subject to paragraph (2), for purposes of determining whether a child is eligible for adoption assistance under this part, a child shall be treated as a child who would have received aid under the State plan approved under section 402 (as in effect on July 16, 1996) only if the child meets the income and resource standards and methodologies for determining eligibility in effect under such plan (as so in effect).

`(2) For purposes of applying this subsection, a State may increase the income and resource standards and methodologies referred to in paragraph (1) up to the level of the income and resource standards and methodologies under the State plan under part A (as in effect as of the date of determining such eligibility).'.

SEC. 407. PROMOTING WORK AND RESPONSIBILITY AMONG ALL FAMILIES WITH CHILDREN.

(a) ELIGIBILITY FOR TANF FOR LEGAL IMMIGRANTS-

(1) EXCEPTION TO 5-YEAR BAR- Section 403(c)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1613(c)(2)) is amended by adding at the end the following:

`(L) Assistance or benefits under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.).'.

(2) CONFORMING AMENDMENTS-

(A) Section 402(b) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(b)) is amended--

(i) in paragraph (2)--

(I) in subparagraph (A)(i), by striking `(3)(C)' and inserting `(3)(B)';

(II) in subparagraph (A)(ii), by striking `subparagraph (C)' and inserting `subparagraph (B)'; and

(III) in subparagraph (E), by striking `MEDICAID EXCEPTION' and all that follows through `program), section' and inserting `EXCEPTION FOR CERTAIN INDIANS- Section'; and

(ii) in paragraph (3), by striking subparagraph (A) and redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively.

(B) Section 408(e) (42 U.S.C. 608(e)) is amended to read as follows:

`(e) APPLICATION TO QUALIFIED ALIENS- Except as provided in subsection (f), a qualified alien (as defined in subsections (b) and (c) of section 431 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641) shall be eligible for any benefit or service under the State program funded under this part or with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) in the same manner as a citizen is eligible for such benefit or service under such program.'.

(b) FEDERAL ATTRIBUTION OF SPONSOR'S INCOME AND RESOURCES TO ALIENS-

(1) IN GENERAL- Section 408(f) (42 U.S.C. 608(f)) is amended--

(A) in the heading, by striking `NON-213A' and inserting `SPONSORED';

(B) by striking the first sentence and inserting `The following rules shall apply in determining whether an alien sponsored under section 213A of the Immigration and Nationality Act (and, at the option of the State, a non-213A alien) is eligible for cash assistance under the State program funded under this part, or in determining the amount of such assistance to be provided to a sponsored alien.';

(C) in paragraph (1)--

(i) in the first sentence, by striking `non-213A' and inserting `sponsored';

(ii) in subparagraph (B), by inserting `(or, a greater amount as determined by the State)' before the period; and

(iii) in subparagraph (C), by striking `NON-213A' and inserting `SPONSORED';

(D) by striking paragraph (5) and inserting the following:

`(5) EXCEPTIONS- This subsection shall not apply to an alien who is--

`(A) a minor child if the sponsor of the alien or any spouse of the sponsor is a parent of the alien; or

`(B) described in subsection (e) or (f) of section 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631).'; and

(E) by adding at the end the following:

`(7) INAPPLICABILITY TO FAMILY MEMBERS WHO ARE NOT SPONSORED ALIENS- Income and resources of a sponsor which are deemed under this subsection to be the income and resources of any alien individual in a family shall not be considered in determining the need of other family members except to the extent such income or resources are actually available to such other family members.

`(8) RULE OF CONSTRUCTION- For purposes of section 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631), the State program funded under this part is not a Federal means-tested public benefits program.'.

(2) CONFORMING AMENDMENTS- Section 423(d) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1183a note) is amended by adding at the end the following:

`(12) Assistance or benefits under part A of title IV of the Social Security Act except for cash assistance provided to a sponsored alien who is subject to deeming pursuant to section 408(f) of that Act.'.

(c) STATE AUTHORITY TO PROVIDE STATE AND LOCAL PUBLIC BENEFITS FOR CERTAIN ALIENS- Section 411(d) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1621(d)) is amended--

(1) in the heading, by inserting `AND OTHER' before `ALIENS'; and

(2) by inserting `or who otherwise is not a qualified alien (as defined in section 431(b))' after `United States'.

SEC. 408. AUTHORITY TO TRANSFER TANF FUNDS TO CARRY OUT AN ACCESS TO JOBS PROJECT OR A REVERSE COMMUTE PROJECT.

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

`(C) An access to jobs project or a reverse commute project under a grant made under section 3037 of the Transportation Equity Act for the 21st Century (49 U.S.C. 5309 note).'.

TITLE V--HEALTHY CHILDREN

SEC. 501. REVISION AND SIMPLIFICATION OF THE TRANSITIONAL MEDICAL ASSISTANCE PROGRAM (TMA).

(a) OPTION OF CONTINUOUS ELIGIBILITY FOR 12 MONTHS; OPTION OF CONTINUING COVERAGE FOR UP TO AN ADDITIONAL YEAR-

(1) OPTION OF CONTINUOUS ELIGIBILITY FOR 12 MONTHS BY MAKING REPORTING REQUIREMENTS OPTIONAL- Section 1925(b) (42 U.S.C. 1396r-6(b)) is amended--

(A) in paragraph (1), by inserting `, at the option of a State,' after `and which';

(B) in paragraph (2)(A), by inserting `Subject to subparagraph (C)--' after `(A) NOTICES- ';

(C) in paragraph (2)(B), by inserting `Subject to subparagraph (C)--' after `(B) REPORTING REQUIREMENTS- ';

(D) by adding at the end the following new subparagraph:

`(C) STATE OPTION TO WAIVE NOTICE AND REPORTING REQUIREMENTS- A State may waive some or all of the reporting requirements under clauses (i) and (ii) of subparagraph (B). Insofar as it waives such a reporting requirement, the State need not provide for a notice under subparagraph (A) relating to such requirement.'; and

(E) in paragraph (3)(A)(iii), by inserting `the State has not waived under paragraph (2)(C) the reporting requirement with respect to such month under paragraph (2)(B) and if' after `6-month period if'.

(2) STATE OPTION TO EXTEND ELIGIBILITY FOR LOW-INCOME INDIVIDUALS FOR UP TO 12 ADDITIONAL MONTHS- Section 1925 (42 U.S.C. 1396r-6) is further amended--

(A) by redesignating subsections (c) through (f) as subsections (d) through (g), respectively; and

(B) by inserting after subsection (b) the following new subsection:

`(c) STATE OPTION OF UP TO 12 MONTHS OF ADDITIONAL ELIGIBILITY-

`(1) IN GENERAL- Notwithstanding any other provision of this title, each State plan approved under this title may provide, at the option of the State, that the State shall offer to each family which received assistance during the entire 6-month period under subsection (b) and which meets the applicable requirement of paragraph (2), in the last month of the period the option of extending coverage under this subsection for the succeeding period not to exceed 12 months.

`(2) INCOME RESTRICTION- The option under paragraph (1) shall not be made available to a family for a succeeding period unless the State determines that the family's average gross monthly earnings (less such costs for such child care as is necessary for the employment of the caretaker relative) as of the end of the 6-month period under subsection (b) does not exceed 185 percent of the official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved.

`(3) APPLICATION OF EXTENSION RULES- The provisions of paragraphs (2), (3), (4), and (5) of subsection (b) shall apply to the extension provided under this subsection in the same manner as they apply to the extension provided under subsection (b)(1), except that for purposes of this subsection--

`(A) any reference to a 6-month period under subsection (b)(1) is deemed a reference to the extension period provided under paragraph (1) and any deadlines for any notices or reporting and the premium payment periods shall be modified to correspond to the appropriate calendar quarters of coverage provided under this subsection; and

`(B) any reference to a provision of subsection (a) or (b) is deemed a reference to the corresponding provision of subsection (b) or of this subsection, respectively.'.

(b) STATE OPTION TO WAIVE RECEIPT OF MEDICAID FOR 3 OF PREVIOUS 6 MONTHS TO QUALIFY FOR TMA- Section 1925(a)(1) (42 U.S.C. 1396r-6(a)(1)) is amended by adding at the end the following: `A State may, at its option, also apply the previous sentence in the case of a family that was receiving such aid for fewer than 3 months, or that had applied for and was eligible for such aid for fewer than 3 months, during the 6 immediately preceding months described in such sentence.'.

(c) 5-YEAR EXTENSION OF SUNSET FOR TMA-

(1) IN GENERAL- Subsection (g) of section 1925 (42 U.S.C. 1396r-6), as redesignated under subsection (a)(2)(A), is further redesignated as subsection (i) and is amended by striking `2002' and inserting `2007'.

(2) CONFORMING AMENDMENT- Section 1902(e)(1)(B) (42 U.S.C. 1396a(e)(1)(B)) is amended by striking `2002' and inserting `2007'.

(d) CMS REPORT ON ENROLLMENT AND PARTICIPATION RATES UNDER TMA- Section 1925 (42 U.S.C. 1396r-6), as amended by subsections (a)(2)(A) and (c), is amended by inserting after subsection (f) the following:

`(g) ADDITIONAL PROVISIONS-

`(1) COLLECTION AND REPORTING OF PARTICIPATION INFORMATION- Each State shall--

`(A) collect and submit to the Secretary, in a format specified by the Secretary, information on average monthly enrollment and average

monthly participation rates for adults and children under this section; and

`(B) make such information publicly available.

Such information shall be submitted under subparagraph (A) at the same time and frequency in which other enrollment information under this title is submitted to the Secretary. Using such information, the Secretary shall submit to Congress annual reports concerning such rates.'.

(e) COORDINATION OF WORK- Section 1925(g) (42 U.S.C. 1396r-6(g)), as added by subsection (d), is amended by adding at the end the following new paragraph:

`(2) COORDINATION WITH ADMINISTRATION FOR CHILDREN AND FAMILIES- The Administrator of the Centers for Medicare & Medicaid Services, in carrying out this section, shall work with the Assistant Secretary for the Administration for Children and Families to develop guidance or other technical assistance for States regarding best practices in guaranteeing access to transitional medical assistance under this section.'.

(f) ELIMINATION OF TMA REQUIREMENT FOR STATES THAT EXTEND COVERAGE TO CHILDREN AND PARENTS THROUGH 185 PERCENT OF POVERTY-

(1) IN GENERAL- Section 1925 (42 U.S.C. 1396r-6) is further amended by inserting after subsection (g), as added by subsection (d), the following:

`(h) PROVISIONS OPTIONAL FOR STATES THAT EXTEND COVERAGE TO CHILDREN AND PARENTS THROUGH 185 PERCENT OF POVERTY- A State may (but is not required to) meet the requirements of subsections (a) and (b) if it provides for medical assistance under this title (whether under section 1931, through a waiver under section 1115, or otherwise) to families (including both children and caretaker relatives) the average gross monthly earning of which (less such costs for such child care as is necessary for the employment of a caretaker relative) is at or below a level that is at least 185 percent of the official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved.'.

(2) CONFORMING AMENDMENTS- Section 1925 (42 U.S.C. 1396r-6) is further amended, in subsections (a)(1) and (b)(1), by inserting `, but subject to subsection (h),' after `Notwithstanding any other provision of this title,' each place it appears.

(g) REQUIREMENT OF NOTICE FOR ALL FAMILIES LOSING TANF- Subsection (a)(2) of section 1925 (42 U.S.C. 1396r-6) is amended by adding after and below subparagraph (B), the following:

`Each State shall provide, to families whose aid under part A or E of title IV has terminated but whose eligibility for medical assistance under this title continues, written notice of their ongoing eligibility for such medical assistance. If a State makes a determination that any member of a family whose aid under part A or E of title IV is being terminated is also no longer eligible for medical assistance under this title, the notice of such determination shall be supplemented by a one-page notification form describing the different ways in which individuals and families may qualify for such medical assistance and explaining that individuals and families do not have to be receiving aid under part A or E of title IV in order to qualify for such medical assistance. Such notice shall further be supplemented by information on how to apply for child health assistance under the State children's health insurance program under title XXI and how to apply for medical assistance under this title.'.

(h) EXTENDING USE OF OUTSTATIONED WORKERS TO ACCEPT APPLICATIONS FOR TRANSITIONAL MEDICAL ASSISTANCE- Section 1902(a)(55) (42 U.S.C. 1396a(a)(55)) is amended by inserting `and under section 1931' after `(a)(10)(A)(ii)(IX)'.

(i) EFFECTIVE DATES-

(1) IN GENERAL- Except as provided in this subsection, the amendments made by this section shall apply to calendar quarters beginning on or after October 1, 2002, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.

(2) NOTICE- The amendment made by subsection (g) shall take effect 6 months after the date of enactment of this Act.

(3) DELAY PERMITTED FOR STATE PLAN AMENDMENT- In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirements imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet these additional requirements before 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 enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

SEC. 502. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID PROGRAM AND TITLE XXI.

(a) MEDICAID PROGRAM- Section 1903(v) (42 U.S.C. 1396b(v)) is amended--

(1) in paragraph (1), by striking `paragraph (2)' and inserting `paragraphs (2) and (4)'; and

(2) by adding at the end the following:

`(4)(A) A State may elect (in a plan amendment under this title) to provide medical assistance under this title (including under a waiver authorized by the Secretary), notwithstanding sections 401(a), 402(b), 403, and 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, for aliens who are lawfully residing in the United States (including battered aliens described in section 431(c) of such Act) and who are otherwise eligible for such assistance, within any of the following eligibility categories:

`(i) PREGNANT WOMEN- Women during pregnancy (and during the 60-day period beginning on the last day of the pregnancy).

`(ii) CHILDREN- Children (as defined under such plan), including optional targeted low-income children described in section 1905(u)(2)(B).

`(B) Notwithstanding section 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, in the case of a State that has elected to provide medical assistance to a category of aliens under subparagraph (A), no debt shall accrue under an affidavit of support against any sponsor of such an alien on the basis of provision of assistance to such category and the cost of such assistance shall not be considered as an unreimbursed cost.'.

(b) TITLE XXI- Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end the following:

`(E) Section 1903(v)(4) (relating to optional coverage of categories of lawful resident alien pregnant women and children), but only with respect to an eligibility category under this title, if the same eligibility category has been

elected under such section for purposes of title XIX.'.

(c) EFFECTIVE DATE- The amendments made by this section take effect on October 1, 2002, and apply to medical assistance and child health assistance furnished on or after such date, whether or not regulations implementing such amendments have been issued.

SEC. 503. SECOND CHANCE HOMES.

(a) AUTHORITY TO AWARD GRANTS-

(1) IN GENERAL- The Secretary of Health and Human Services (referred to in this section as the `Secretary') is authorized to award grants to eligible entities to enable such eligible entities to carry out the activities described in subsection (d).

(2) PROCESS- The Secretary shall award grants under this section on a competitive basis, after reviewing all applications submitted under subsection (c).

(b) ELIGIBLE ENTITIES-

(1) IN GENERAL- To be eligible to receive a grant under this section an entity shall be--

(A) a State;

(B) a unit of local government;

(C) an Indian tribe; or

(D) a public or private nonprofit agency, organization, or institution, or other nonprofit entity, including a nonprofit urban Indian organization or an Indian group or community that is not an Indian tribe.

(2) DEFINITIONS- In this section--

(A) INDIAN TRIBE- The term `Indian tribe' has the meaning given such term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

(B) STATE- The term `State' means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.

(c) APPLICATION-

(1) IN GENERAL- An eligible entity that desires a grant under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary shall reasonably require.

(2) PRIORITY- In awarding grants under this section, the Secretary shall give priority to an eligible entity that submits an application--

(A) proposing to establish a new second chance home, especially in a rural area or tribal community;

(B) proposing to collaborate with a non-profit entity in establishing, expanding, or enhancing a second chance home; or

(C) demonstrating that the eligible entity will use funds under a State temporary assistance for needy families program under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) to support a portion of the operating costs of the applicable second chance home.

(d) USE OF FUNDS-

(1) IN GENERAL- An eligible entity that receives a grant under this section shall use such grant funds to establish, expand, or enhance a second chance home.

(2) SECOND CHANCE HOME- In this section, the term `second chance home' means a community-based, adult-supervised group home that provides young mothers and their children with a supportive and supervised living arrangement in which such mothers are required to learn parenting skills, including child development, family budgeting, health and nutrition, and other skills to promote their long-term economic independence and the well-being of their children.

(3) REQUIREMENT- A second chance home that receives grant funds under this section shall provide services to mothers who are not more than 23 years of age and their children.

(e) MATCHING FUNDS- The Secretary shall not award a grant to an eligible entity under this section unless the eligible entity agrees that, with respect to the costs to be incurred in carrying out the activities for which the grant was awarded, the eligible entity will make available non-Federal contributions in an amount equal to not less than 20 percent of the Federal funds provided under the grant. Such contributions may be provided in cash or in kind, fairly valued, including plant, equipment, or services.

(f) DURATION- Grants under this section shall be awarded for a period of 5 years.

(g) CONTRACT FOR EVALUATION-

(1) IN GENERAL- The Secretary shall enter into a contract with a public or private entity for the evaluation of the second chance homes that are supported by grant funds under this section.

(2) INFORMATION- The evaluation shall include the collection of information about the relevant characteristics of individuals who benefit from second chance homes such as those that are supported by grant funds under this section and what services provided by such second chance homes are most beneficial to such individuals.

(3) REPORT-

(A) IN GENERAL- The entity conducting the evaluation under this subsection shall submit to Congress an interim report and a final report in accordance with subparagraph (B) containing the results of the evaluation.

(B) DATE-

(i) INTERIM REPORT- The interim report shall be submitted not later than 2 years after the date on which the entity enters into a contract.

(ii) FINAL REPORT- The final report shall be submitted not later than 5 years after the date on which the entity enters into a contract.

(h) TECHNICAL ASSISTANCE-

(1) IN GENERAL- From amounts appropriated under subsection (i)(1), the Secretary may use an amount not to exceed $500,000 to enter into a contract, with a public or private entity, for the provision of technical assistance to eligible entities receiving grant funds under this section.

(2) CONFERENCES- The technical assistance provided under this section may include conferences for the purpose of disseminating information concerning best practices for second chance homes.

(i) AUTHORIZATION OF APPROPRIATIONS-

(1) IN GENERAL- There is authorized to be appropriated to carry out this Act, other than subsection (g), $32,000,000 for fiscal year 2003.

(2) EVALUATION- There is authorized to be appropriated to carry out subsection (g), $1,000,000 for fiscal year 2003.

(3) AVAILABILITY- Any amounts authorized under the authority of paragraphs (1) and (2) shall remain available until expended.

TITLE VI--PUBLIC ACCOUNTABILITY

SEC. 601. PUBLIC AVAILABILITY OF STATE PROGRAM AND FINANCIAL DATA SUBMISSIONS.

Section 411(a) (42 U.S.C. 611(a)) is amended by adding at the end the following new paragraph:

`(8) PUBLIC AVAILABILITY OF REPORT- The State shall make publicly available at the time of submission of each report required under paragraph

(1) for a fiscal quarter a copy of the report for that fiscal quarter, including by posting of the copy on the Internet website for the State agency administering the State program funded under this part.'.

SEC. 602. STUDY AND GUIDELINES REGARDING COMPLIANCE WITH NONDISCRIMINATION PROVISIONS.

(a) GAO STUDY-

(1) IN GENERAL- The Comptroller General of the United States shall conduct a study to determine--

(A) the extent to which States have complied with the requirement of section 408(d) of the Social Security Act (42 U.S.C. 608(d)) that the provisions of law referred to in that section apply to any program or activity which receives funds provided under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.); and

(B) recommendations for improving such compliance.

(2) REPORT- Not later than 1 year after the date of enactment of this Act, the Comptroller General shall submit a report to Congress on the study conducted under paragraph (1).

(b) BEST PRACTICES GUIDELINES- Not later than 1 year after the date of enactment of this Act, the Secretary of Health and Human Services shall issue a best practices guide to States that contains methods and procedures for ensuring compliance with section 408(d) of such Act (42 U.S.C. 608(d)).

SEC. 603. ENSURING TANF FUNDS ARE NOT USED TO DISPLACE PUBLIC EMPLOYEES; APPLICATION OF WORKPLACE LAWS TO WELFARE RECIPIENTS.

(a) WELFARE-TO-WORK WORKER PROTECTIONS-

(1) IN GENERAL- Section 403(a)(5)(I) (42 U.S.C. 603(a)(5)(I)) is amended--

(A) by striking clauses (i) and (iv);

(B) by redesignating clauses (v) and (vi) as clauses (iv) and (v), respectively; and

(C) by inserting before clause (ii), the following:

`(i) NONDISPLACEMENT-

`(I) IN GENERAL- An adult in a family receiving assistance under a State program funded under this part, in order to engage in a work activity, shall not displace any employee or position (including partial displacement, such as a reduction in the hours of nonovertime work, wages, or employment benefits) or fill any unfilled vacancy.

`(II) PROHIBITIONS- A work activity engaged in under a program operated with funds provided under this paragraph shall not impair any existing contract for services, be inconsistent with any existing law, regulation, or collective bargaining agreement, or infringe upon the recall rights or promotional opportunities of any worker.

`(III) NO SUPPLANTING OF OTHER HIRES- A work activity engaged in under a program operated with funds provided under this paragraph shall be in addition to any activity that otherwise would be available and shall not supplant the hiring of an employed worker not funded under such program.

`(IV) ENFORCING ANTIDISPLACEMENT PROTECTIONS-

`(aa) IN GENERAL- The State shall establish and maintain an impartial grievance procedure to resolve any complaints alleging violations of the requirements of subclause (I), (II), or (III) within 60 days of receipt of the complaint and, if a decision is adverse to the party who filed such grievance or no decision has been reached, provide for the completion of an arbitration procedure within 75 days of receipt of the complaint or the adverse decision or conclusion of the 60-day period, whichever is earlier.

`(bb) APPEALS- Appeals may be made to the Secretary who shall make a decision within 75 days.

`(cc) REMEDIES- Remedies for a violation of the requirements of subclause (I), (II), or (III) shall include termination or suspension of payments, prohibition of the placement of the participant, reinstatement of an employee, and other relief to make an aggrieved employee whole.

`(dd) LIMITATION ON PLACEMENT- If a grievance is filed regarding a proposed placement of a participant, such placement shall not be made unless such placement is consistent with the resolution of the grievance pursuant to this subclause.'.

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

`(vii) In the case of a State that receives a welfare-to-work grant under section 403(a)(5), ensure compliance with the nondisplacement requirements of subparagraph (I)(i) of that section.'.

(b) APPLICATION OF WORKPLACE LAWS TO WELFARE RECIPIENTS- Notwithstanding any other provision of law, workplace laws, including the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.), title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), and the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.), shall apply to an individual who is a recipient of assistance under the temporary assistance to needy families program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) in the same manner as such laws apply to other workers. The fact that an individual who is a recipient of assistance under the temporary assistance to needy families program is participating in, or seeking to participate in work activities under that program in satisfaction of the work activity requirements of the program, shall not deprive the individual of the protection of any Federal, State, or local workplace law.

SEC. 604. RESEARCH AND DEVELOPMENT.

(a) LONGITUDINAL STUDIES OF TANF RECIPIENTS- Section 413 (42 U.S.C. 613) is amended by striking subsections (d) and (e) and inserting the following:

`(d) LONGITUDINAL STUDIES OF TANF APPLICANTS AND RECIPIENTS TO DETERMINE THE FACTORS THAT CONTRIBUTE TO POSITIVE EMPLOYMENT AND FAMILY OUTCOMES-

`(1) IN GENERAL- The Secretary, directly or through grants, contracts, or interagency agreements, shall conduct longitudinal studies in 10

States of a representative sample of families that receive, and applicants for, assistance in a State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)).

`(2) REQUIREMENTS- The studies conducted under this subsection shall follow families that leave assistance, those that receive assistance throughout the study period, and those diverted from assistance programs. The studies shall gather information on--

`(A) family and adult demographics (including race, ethnicity, primary language, barriers to employment, educational status of adults, prior work history, and prior history of welfare receipt);

`(B) family income (including earnings, unemployment compensation, and child support);

`(C) benefit receipt (including benefits under the food stamp program, the medicaid program, the State children's health insurance program, earned income tax credits, and housing assistance);

`(D) reasons for leaving or returning to assistance programs;

`(E) work participation status and activities, including the scope and duration of work activities;

`(F) sanction status (including reasons for sanction);

`(G) time limit status (including months remaining on Federal and State time limits);

`(H) recipient views on program participation; and

`(I) other measures of family well-being over a 5-year period.

`(3) COMPARABILITY- The Secretary shall to the extent possible ensure that the studies produce comparable results and information.

`(4) REPORTS- The Secretary shall publish--

`(A) not later than December 31, 2005, interim findings from at least 12 months of longitudinal data; and

`(B) not later than December 31, 2007, findings from at least 36 months of longitudinal data.

`(e) LONGITUDINAL STUDIES OF EMPLOYMENT AND EARNINGS OF TANF LEAVERS-

`(1) IN GENERAL- The Secretary, directly or through grants, contracts, or interagency agreements shall conduct a study in each eligible State of a statistically relevant cohort of individuals who leave the State program funded under this part during fiscal year 2003 and individuals who leave the program during fiscal year 2005, which uses State unemployment insurance data to track the employment and earnings status of the individuals during the 3-year period beginning at the time the individuals leave the program.

`(2) REPORTS- The Secretary shall annually publish the findings of the studies conducted pursuant to paragraph (1) and shall annually publish the earnings data used in making determinations under section 407(b).'.

(b) EXTENSION OF FUNDING OF STUDIES AND DEMONSTRATIONS- Section 413(h) (42 U.S.C. 613(h)) is amended to read as follows:

`(h) FUNDING OF STUDIES AND DEMONSTRATIONS- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated $15,000,000 for each fiscal year beginning with 1997 for the purpose of paying--

`(1) the cost of conducting the research described in subsection (a);

`(2) the cost of developing and evaluating innovative approaches for reducing welfare dependency and increasing the well-being of minor children under subsection (b);

`(3) the cost of conducting studies described in subsections (d) and (e);

`(4) the Federal share of any State-initiated study approved under subsection (f); and

`(5) an amount determined by the Secretary to be necessary to operate and evaluate demonstration projects, relating to this part, that are in effect or approved under section 1115 as of August 22, 1996, and are continued after such date.'.

(c) INCLUSION OF DISABILITY STATUS IN INFORMATION STATES REPORT ABOUT TANF FAMILIES- Section 411(a)(1)(A) (42 U.S.C. 611(a)(1)(A)) is amended by adding at the end the following:

`(xviii) Whether the head of the family has a physical or mental impairment.'.

(d) ANNUAL REPORT TO CONGRESS TO INCLUDE GREATER DETAIL ABOUT STATE PROGRAMS FUNDED UNDER TANF- Section 411(b)(3) (42 U.S.C. 611(b)(3)) is amended to read as follows:

`(3) the characteristics of each State program funded under this part, including, with respect to each program funded with amounts provided under this part or with amounts the expenditure of which is counted as a qualified State expenditure for purposes of section 409(a)(7)--

`(A) the name of the program;

`(B) whether the program is authorized at a sub-State level (such as at the county level);

`(C) the purpose of the program;

`(D) the main activities of the program;

`(E) the total amount received by the program from amounts provided under this part;

`(F) the total of the amounts received by the program that are amounts the expenditure of which are counted as qualified State expenditures for purposes of section 409(a)(7);

`(G) the total funding level of the program;

`(H) the total number of individuals served by the program, and the number of such individuals served specifically with funds provided under this part or with amounts the expenditure of which are counted as qualified State expenditures for purposes of section 409(a)(7); and

`(I) the eligibility criteria for participation in the program;'.

(e) ENHANCEMENT OF UNDERSTANDING OF THE REASONS INDIVIDUALS LEAVE STATE TANF PROGRAMS-

(1) CASE CLOSURE REASONS-

(A) IN GENERAL- Section 411(a)(1) (42 U.S.C. 611(a)(1)) is amended by adding at the end the following:

`(C) DEVELOPMENT OF COMPREHENSIVE LIST OF CASE CLOSURE REASONS- The Secretary shall develop, in consultation with States and policy experts, a comprehensive list of reasons why individuals leave State programs funded under this part. The list shall be aimed at substantially reducing the number of case closures under the programs for which a reason is not known.'.

(B) PUBLIC COMMENT- Not later than December 31, 2004, the Secretary of Health and Human Services shall publish for public comment regulations that list the new case closure reasons to be used in accordance with section 411(a)(1)(A)(xvi)(VI) of the Social Security Act (42 U.S.C. 611(a)(1)(A)(xvi)(VI) (as amended by paragraph (2)).

(2) INCLUSION IN QUARTERLY STATE REPORTS- Section 411(a)(1)(A)(xvi) (42 U.S.C. 611(a)(1)(A)(xvi)) is amended--

(A) in subclause (IV), by striking `or' at the end;

(B) in subclause (V), by striking the period at the end and inserting `; or'; and

(C) by adding at the end the following:

`(VI) a reason specified in the list developed under subparagraph (C).'.

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

`(d) STANDARDIZED FORMAT- Not later than February 1, 2003, the Secretary, after consulting with the States, shall promulgate regulations for public comment that establish a standardized format which States shall use to submit plans under subsection (a) for fiscal year 2004 and thereafter.'.

(g) ANNUAL STUDY AND REPORT ON TERRITORY PROGRAMS EXPENDITURES AND ECONOMIC CONDITIONS-

(1) ANNUAL EXPENDITURE REPORTS- Beginning with fiscal year 2003, the Secretary of Health and Human Services annually shall collect and report to Congress expenditure data with respect to a fiscal year for Puerto Rico, the Virgin Islands, Guam, and American Samoa concerning temporary assistance to needy programs funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) that are conducted by such territories and any related programs conducted by such territories that are designed to provide assistance to needy families.

(2) ANNUAL REPORT ON ECONOMIC CONDITIONS- Beginning with fiscal year 2003, the Director of the Bureau of the Census shall submit to Congress annual reports on the economic conditions in Puerto Rico, the Virgin Islands, Guam, and American Samoa. Each report shall include information concerning the impact of the economic conditions described in the report on recipients and former recipients of assistance under temporary assistance to needy programs funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) that are conducted by such territories.

SEC. 605. GAO STUDY ON IMPACT OF BAN ON SSI BENEFITS FOR LEGAL IMMIGRANTS.

(a) STUDY- The Comptroller General of the United States shall conduct a study to determine the impact of the prohibition under section 402 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612) with respect to the eligibility of qualified aliens (as defined in section 431 of such Act (8 U.S.C. 1641)) for benefits under the supplemental security income program under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.), including supplementary payments pursuant to an agreement for Federal administration under section 1616(a) of such Act (42 U.S.C. 1382e) and payments pursuant to an agreement entered into under section 212(b) of Public Law 93-66.

(b) REPORT- Not later than 1 year after the date of enactment of this Act, the Comptroller General shall submit a report to Congress on the study conducted under subsection (a) that includes such recommendations for legislative action as the Comptroller General determines appropriate.

SEC. 606. GRANTS TO IMPROVE STATES' POLICIES AND PROCEDURES FOR ASSISTING INDIVIDUALS WITH BARRIERS TO WORK.

Section 403(a) (42 U.S.C. 603(a)), as amended by section 103, is amended by adding at the end the following:

`(7) GRANTS TO IMPROVE STATES' POLICIES AND PROCEDURE FOR ASSISTING INDIVIDUALS WITH BARRIERS TO WORK-

`(A) AUTHORITY TO MAKE GRANTS-

`(i) IN GENERAL- The Secretary shall make grants to each State for the period of fiscal years 2003 through 2006 and to be used in accordance with the requirements of this paragraph.

`(ii) AMOUNT OF GRANT-

`(I) IN GENERAL- Subject to subclause (II) and clauses (iii) and (iv), the Secretary shall have discretion to set the amount of each State's grant under this paragraph.

`(II) MINIMUM AND MAXIMUM GRANTS- No grant made under this paragraph shall be less than $750,000 or more than $3,000,000.

`(iii) LIMITATION- The total amount of grants provided to States under this paragraph for the period of fiscal years 2003 through 2006 shall not exceed $75,000,000.

`(iv) CRITERIA FOR DETERMINING AMOUNT OF GRANT- In determining the amount of a State's grant under this paragraph, the Secretary shall take into account the size of the population of the State and the extent to which the advisory review panel established with funds made available under the grant will need to review diverse policies among counties or other sub-State entities within the State that have authority to design and implement programs under the State TANF program.

`(B) ESTABLISHMENT OF ADVISORY REVIEW PANEL- Each State shall use the funds provided under a grant made under subparagraph (A) to establish an advisory review panel to improve the State's policies and procedures for assisting individuals under the State TANF program who have barriers to work.

`(C) MEMBERSHIP-

`(i) IN GENERAL- A advisory review panel established under this paragraph shall consist of the following:

`(I) Representatives of the State agency responsible for administering the State TANF program.

`(II) Representatives from other States agencies with expertise in providing services to individuals with disabilities or other barriers to work, such as vocational rehabilitation services.

`(III) Parents with barriers to work who are recipients of cash assistance or support services under the State TANF program.

`(IV) Individuals or representatives of entities with expertise in designing and implementing policies and programs to successfully serve individuals with barriers to work.

`(ii) CHAIR-

`(I) IN GENERAL- Subject to subclause (II), the Chair of the panel shall be appointed by the chief executive officer of the State.

`(II) LIMITATION- The Chair shall not be a State employee.

`(iii) COORDINATION WITH EXISTING PANELS- A State should coordinate the establishment of an advisory review panel under this paragraph with other advisory panels established as of October 1, 2002, that serve recipients of assistance under the State TANF program.

`(D) DUTIES-

`(i) IN GENERAL- In seeking to improve a State's policies and procedures for assisting individuals with barriers to work, an advisory review panel established under this paragraph shall hold meetings, hire support staff, enter into contracts for independent evaluations, and submit the reports required under subparagraph (E).

`(ii) SITE VISITS; PUBLIC HEARINGS- To the extent it determines appropriate, an advisory review panel established under this paragraph may--

`(I) conduct site visits to State or local agencies responsible for administering the State TANF program; and

`(II) hold public hearings.

`(iii) RULE OF CONSTRUCTION- Nothing in this paragraph shall be construed as authorizing an advisory review panel established under this paragraph to resolve complaints filed by individuals or entities related to possible violations of laws protecting civil rights.

`(E) REPORTS- An advisory review panel established under this paragraph shall submit to the Secretary on the dates described below the following reports:

`(i) On December 31, 2003, a report identifying areas in the State where improvement is needed with respect to assisting individuals with barriers to work and steps the State is taking or plans to take to make those improvements.

`(ii) On December 31, 2004, a progress report on how the improvements identified in the report described in clause (i) are being made and regarding whether additional improvements are needed, and if so, the plans to make those improvements.

`(iii) On December 31, 2005, a final report describing how the State's programs funded with funds made available under the State TANF program have been improved to assist individuals with barriers to work and identifying ongoing efforts that will be needed to maintain the improvements made.

`(F) DEFINITIONS- In this paragraph:

`(i) BARRIERS TO WORK- The term `barriers to work' includes physical and mental impairments (including learning disabilities), domestic and sexual violence, substance abuse, limited English proficiency, or low literacy levels. Such term may include transportation, child care and caring for a family member with a severe disability if those issues create a functional barrier to work for a recipient of assistance under the State TANF program.

`(ii) STATE TANF PROGRAM- The term `State TANF program' means the State program funded under this part and a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)).

`(G) APPROPRIATIONS-

`(i) IN GENERAL- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated to carry out this paragraph, $75,000,000 for the period of fiscal years 2003 through 2006.

`(ii) TECHNICAL ASSISTANCE- Of the amount appropriated under clause (i), $7,000,000 shall be used by the Secretary to provide technical assistance on barriers to work and related issues.'.

SEC. 607. ENSURING A PROFESSIONAL TANF PROGRAM STAFF.

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

`(v) The document shall outline how the State intends to ensure a professional workforce with the resources, skills, and expertise necessary to successfully carry

out the program, including an outline of the State's plans to provide program staff with training on program information and services and information on referral of recipients to appropriate programs and services for which recipients are eligible.'.

(b) GAO SURVEY, EVALUATION, AND REPORT-

(1) IN GENERAL- The Comptroller General of the United States shall conduct a thorough survey and evaluation of State activities on workforce development for professional staff delivering benefits or services under the temporary assistance to needy families program under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) or services or benefits related to that program.

(2) REQUIREMENTS- The survey and evaluation conducted under paragraph (1) shall be designed to include the following information:

(A) Information on the qualifications, education, and training for the staff described in paragraph (1), and the amount of turnover among such staff.

(B) An assessment of the range of caseloads such staff is responsible for and the effects of caseloads on family outcomes and satisfaction with the temporary assistance to needy families program.

(2) REPORT- Not later than 1 year after the date of enactment of this Act, the Comptroller General shall submit a report to Congress on the survey and evaluation conducted under paragraph (1).

TITLE VII--EFFECTIVE DATE

SEC. 701. EFFECTIVE DATE.

(a) IN GENERAL- Except as otherwise provided in this Act, the amendments made by this Act shall take effect on October 1, 2002, and shall apply to payments under part A of title IV of the Social Security Act for calendar quarters beginning on or after such date, without regard to whether regulations to implement the amendments are promulgated by such date.

(b) DELAY PERMITTED IF STATE LEGISLATION REQUIRED- In the case of a State plan under section 402(a) of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirements imposed by the amendments made by this Act, the State plan shall not be regarded as failing to comply with the requirements of such section 402(a) solely on the basis of the failure of the plan to meet such additional requirements before the 1st day of the 1st calendar quarter beginning after the close of the 1st regular session of the State legislature that begins after the date of enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

END