[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 663 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 663

To amend the Internal Revenue Code of 1986 to provide for a refundable 
 child credit and to increase the earned income tax credit for larger 
 families, to provide for a demonstration program for payments in lieu 
of child support payments owed by absent spouses, to encourage creation 
       of jobs for low-income unemployed, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 26 (legislative day, March 3), 1993

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

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide for a refundable 
 child credit and to increase the earned income tax credit for larger 
 families, to provide for a demonstration program for payments in lieu 
of child support payments owed by absent spouses, to encourage creation 
       of jobs for low-income unemployed, 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.

    (a) Short Title.--This Act may be cited as the ``Family Income 
Security Act of 1993''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
                TITLE I--REFUNDABLE CREDIT FOR CHILDREN

Sec. 101. Refundable credit for children.
   TITLE II--EARNED INCOME TAX CREDIT INCREASED FOR LARGER FAMILIES.

Sec. 201. Earned income tax credit increased for larger families.
       TITLE III--CHILD SUPPORT INSURANCE DEMONSTRATION PROJECTS

Sec. 301. Establishment of child support insurance demonstration 
                            projects.
   TITLE IV--COMMUNITY EMPLOYMENT OPPORTUNITY DEMONSTRATION PROJECTS

Sec. 401. Establishment.
Sec. 402. Eligible economically depressed communities.
Sec. 403. Waivers.
Sec. 404. Use of amounts.
Sec. 405. Regulations.
Sec. 406. Plan of implementation and effect of title.
Sec. 407. Evaluation and report.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) it is in the best interest of all Americans to ensure 
        that children in the United States grow up in families that are 
        financially able to meet the basic material needs of such 
        children;
            (2) poverty, hunger, and ill-health jeopardize the national 
        productivity and security of the United States;
            (3) the United States is the only advanced industrial 
        democracy that lacks a universal system of income support for 
        families raising children;
            (4) children are the poorest Americans and are, therefore, 
        among the most vulnerable citizens;
            (5) families raising children have been disproportionately 
        harmed by economic instability over the past decade;
            (6) families raising children pay more than their fair 
        share of the Federal tax burden;
            (7) parents, regardless if such parents live together, have 
        a responsibility to support their children financially, 
        although many absent parents fail to meet this obligation;
            (8) single-parent families are most vulnerable to poverty 
        and financial hardship, especially if the absent parent does 
        not contribute child support;
            (9) the majority of poor families have at least one 
        employed adult, and many families are unable to support their 
        children adequately unless such families have more than one 
        earner; and
            (10) an adequate income can help foster family stability.
    (b) Purpose.--To strengthen American families, encourage parental 
responsibility, meet the basic material needs of all children, and 
secure the Nation's future, it is the purpose of this Act to provide 
tax relief for families raising children, initiate demonstration 
programs to strengthen child support enforcement and guarantee a 
minimum level of support to all children of absent parents, and 
initiate demonstration programs to enable communities to create 
employment opportunities for low-income parents who are willing and 
able to work but experience difficulty entering the job market without 
aid.

                TITLE I--REFUNDABLE CREDIT FOR CHILDREN

SEC. 101. REFUNDABLE CREDIT FOR CHILDREN.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. CHILDREN UNDER AGE 19.

    ``(a) General Rule.--In the case of an eligible individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for the taxable year an amount equal to $1,000 multiplied by the number 
of qualifying children of the taxpayer for such taxable year.
    ``(b) Inflation Adjustment.--In the case of any taxable year 
beginning in a calendar year after 1994, the dollar amount contained in 
subsection (a) shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, by substituting `calendar year 1993' for `calendar year 
        1989' in subparagraph (B) thereof.
If any increase determined under the preceding sentence is not a 
multiple of $10, such increase shall be rounded to the nearest multiple 
of $10 (or if such increase is a multiple of $5, such increase shall be 
rounded to the next highest multiple of $10).
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Eligible individual.--The term `eligible individual' 
        has the meaning given to such term by section 32(c)(1) 
        (determined without regard to subparagraphs (B) and (D) 
        thereof).
            ``(2) Qualifying child.--The term `qualifying child' has 
        the meaning given to such term by section 32(c)(3) (determined 
        without regard to subparagraphs (C)(ii), (C)(iii), and (E) 
        thereof).
            ``(3) Certain other rules apply.--Subsections (d) and (e) 
        of section 32 shall apply.
    ``(d) Coordination With Means-Tested Programs.--Any refund made by 
reason of this section, and any payment made under section 3507A or 
7524, shall be treated in the same manner as refunds made by reason of 
section 32 and payments made under 3507 for purposes of--
            ``(1) sections 402, 1612, and 1613 of the Social Security 
        Act and title XIX of such Act, and
            ``(2) the laws referred to in paragraphs (1) through (5) of 
        section 32(j).
    ``(e) Coordination with Advance Payments of Credit.--
            ``(1) Recapture of excess advance payments.--If any payment 
        in excess of the amount of the credit allowable under this 
        section is made to the individual by an employer under section 
        3507A or to the individual under 7524 during any calendar year, 
        then the tax imposed by this chapter for the individual's last 
        taxable year beginning in such calendar year shall be increased 
        by the aggregate amount of such payments.
            ``(2) Reconciliation of payments advanced and credit 
        allowed.--Any increase in tax under paragraph (1) shall not be 
        treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit (other than the credit 
        allowed by subsection (a)) allowable under this subpart.
    ``(f) Reduction of Credit to Taxpayers Subject to Alternative 
Minimum Tax.--The credit allowed under this section for the taxable 
year shall be reduced by the amount of tax imposed by section 55 
(relating to alternative minimum tax) with respect to such taxpayer for 
such taxable year.''.
    (b) Advance Payment of Credit.--
            (1) In general.--Chapter 77 of such Code is amended by 
        inserting after section 7523 the following new section:

``SEC. 7524. ADVANCE PAYMENT OF CREDIT FOR CHILDREN UNDER AGE 19.

    ``(a) General Rule.--The Secretary of the Treasury shall make 
advance payments of refunds to which eligible taxpayers are entitled by 
reason of section 35.
    ``(b) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means, with respect to any taxable year, any 
taxpayer if the taxpayer furnishes, at such time and in such manner as 
the Secretary may prescribe, to the Secretary such information as the 
Secretary may require in order to--
            ``(1) determine whether the taxpayer will be entitled to a 
        refund by reason of section 35 for the taxable year,
            ``(2) verify the taxpayer's intention not to receive 
        payments under section 3507A for the taxable year, and
            ``(3) estimate the amount of such refund.
    ``(c) Quarterly Payments.--The Secretary shall make the payments 
under this section on a quarterly basis in approximately equal 
amounts.''.
            (2) Reductions in wage withholdings.--
                    (A) In general.--Chapter 25 of such Code is amended 
                by inserting after section 3507 the following new 
                section:

``SEC. 3507A. ADVANCE PAYMENT OF CREDIT FOR CHILDREN UNDER AGE 19.

    ``(a) General Rule.--Except as otherwise provided in this section, 
every employer making payment of wages to an employee with respect to 
whom a child tax credit eligibility certificate is in effect shall, at 
the time of paying such wages, make an additional payment to such 
employee equal to such employee's child tax credit advance amount.
    ``(b) Child Tax Credit Eligibility Certificate.--For purposes of 
this title, a child tax credit eligibility certificate is a statement 
furnished by an employee to the employer which--
            ``(1) certifies that the employee will be eligible to 
        receive the credit provided by section 35 for the taxable year 
        and declares the employee's intention not to receive payments 
        under section 7524 for the taxable year,
            ``(2) certifies that the employee does not have a child tax 
        credit eligibility certificate in effect for the calendar year 
        with respect to the payment of wages by another employer, and
            ``(3) states whether or not the employee's spouse has a 
        child tax credit eligibility certificate in effect.
For purposes of this section, a certificate shall be treated as being 
in effect with respect to a spouse if such a certificate will be in 
effect on the first status determination date following the date on 
which the employee furnished the statement in question.
    ``(c) Child Tax Credit Advance Amount.--For purposes of this title, 
the term `child tax credit advance amount' means, with respect to any 
payroll period, the amount determined--
            ``(1) on the basis of the number of the employee's 
        qualifying children (as defined in section 35(c)(2), and
            ``(2) if a child tax credit eligibility certificate is in 
        effect with respect to the spouse of the employee, as if the 
        credit provided by section 35 were a credit of not more than 
        \1/2\ of the amount otherwise determined under such section.
    ``(d) Certain Rules To Apply.--Rules similar to the rules of 
subsections (d) and (e) of section 3507 shall apply for purposes of 
this section. Proper adjustments shall be made in the application of 
such rules under this section to take into account payments under 
section 3507.''.
                    (B) Information shown on w-2.--Subsection (a) of 
                section 6051 of such Code (relating to receipts to 
                employees) is amended by striking ``and'' at the end of 
                paragraph (8), by striking the period at the end of 
                paragraph (9) and inserting ``, and'' and by inserting 
                after paragraph (9) the following new paragraph:
            ``(10) the total amount paid to the employee under section 
        3507A (relating to advance payment of child tax credit).''.
                    (C) Requirement of return.--Subsection (a) of 
                section 6012 of such Code (relating to persons required 
                to make returns of income) is amended by inserting 
                after paragraph (9) the following new paragraph:
            ``(10) Every individual who receives payments during the 
        calendar year in which the taxable year begins under section 
        3507A (relating to advance payment of child tax credit).''.
                    (D) Cross reference.--Subsection (e) of section 
                6302 of such Code (relating to mode or time of 
                collection) is amended by adding at the end thereof the 
                following new paragraph:
            ``(3) For treatment of child tax credit advance amount as 
        payment of withholding and FICA taxes, see section 3507A(d).''.
    (c) Denial of Deduction for Personal Exemptions For Which Credit 
Allowed.--Section 151(d) of such Code is amended by redesignating 
paragraph (4) as paragraph (5) and by inserting after paragraph (3) the 
following new paragraph:
            ``(4) Denial of deduction for personal exemptions for which 
        credit allowed.--The exemption amount for any qualifying child 
        (as defined in section 35(c)(2)) shall be zero.''.
    (d) Technical Amendment.--Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting before the period ``or 
from section 35 of such Code''.
    (e) Clerical Amendments.--
            (1) The table sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 35 and inserting the following:

                              ``Sec. 35. Children under age 19.
                              ``Sec. 36. Overpayments of tax.''.
            (2) The table sections for chapter 77 of such Code is 
        amended by inserting after the item relating to section 7523 
        the following new item:

                              ``Sec. 7524. Advance payment of credit 
                                        for children under age 19.''.
            (3) The table sections for chapter 25 of such Code is 
        amended by inserting after the item relating to section 3507 
        the following new item:

                              ``Sec. 3507A. Advance payment of credit 
                                        for children under age 19.''.
    (f) Program To Increase Public Awareness.--Not later than the first 
calendar year following the date of the enactment of this Act, the 
Secretary of the Treasury and the Commissioner of the Internal Revenue 
Service, in consultation with the Secretary of Health and Human 
Services, the Commissioner of Social Security, and the heads of other 
appropriate Federal agencies, shall establish a taxpayer awareness 
program to inform the public of the availability of the credit for 
children allowed under section 35 of the Internal Revenue Code of 1986, 
as added by this section. Such program shall be designed to assure that 
individuals who may be eligible are informed of the availability of 
such credit and filing procedures. Such program shall also be 
coordinated with the program to increase public awareness of the 
availability of the earned income credit allowed under section 32 of 
such Code. The Secretary shall use appropriate means of communication 
to aggressively disseminate the necessary information to carry out the 
provisions of this subsection.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

    TITLE II--EARNED INCOME TAX CREDIT INCREASED FOR LARGER FAMILIES

SEC. 201. EARNED INCOME TAX CREDIT INCREASED FOR LARGER FAMILIES.

    (a) In General.--Subparagraph (C) of section 32(b)(1) of the 
Internal Revenue Code of 1986 (relating to basic earned income credit) 
is amended to read as follows:
                    ``(C) Percentages.--For purposes of this 
                paragraph--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the percentages shall be 
                        determined as follows:

      

                                                                        
                                                                 The    
       ``In the case of an eligible individual   The credit    phaseout 
                        with:                    percentage   percentage
                                                    is:          is:    
                                                                        
      1 qualifying child......................       23          16.43
      2 qualifying children...................       25          17.86
      3 or more qualifying children...........       29          20.71
                                                                        

                            ``(ii) Transition percentages.--
                                    ``(I) For taxable years beginning 
                                in 1994, the percentages are:

      

                                                                        
                                                                 The    
       ``In the case of an eligible individual   The credit    phaseout 
                        with:                    percentage   percentage
                                                    is:          is:    
                                                                        
      1 qualifying child......................      17.6         12.57
      2 qualifying children...................      18.4         13.14
      3 or more qualifying children...........      21.0         15.00
                                                                        

                            ``(II) For taxable years beginning in 1995:

      

                                                                        
                                                                 The    
       ``In the case of an eligible individual   The credit    phaseout 
                        with:                    percentage   percentage
                                                    is:          is:    
                                                                        
      1 qualifying child......................      18.5        13.21
      2 qualifying children...................      19.5        13.93
      3 or more qualifying children...........      23.0       16.43.''.
                                                                        

    (b) Repeal of Interaction With Medical Expense Deduction.--Section 
213 of the Internal Revenue Code of 1986 (relating to medical, dental, 
etc., expenses) is amended by striking subsection (f).
    (c) Repeal of Interaction With Deduction for Health Insurance Costs 
of Self-Employed.--Paragraph (3) of section 162(l) of such Code is 
amended to read as follows:
            ``(3) Coordination with medical deduction.--Any amount paid 
        by a taxpayer for insurance to which paragraph (1) applies 
        shall not be taken into account in computing the amount 
        allowable to the taxpayer as a deduction under section 
        213(a).''.
    (d) Repeal of Interaction With Dependent Care Credit.--Subparagraph 
(D) of section 32(b)(1) of such Code is amended by striking the last 
sentence.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

       TITLE III--CHILD SUPPORT INSURANCE DEMONSTRATION PROJECTS

SEC. 301. ESTABLISHMENT OF CHILD SUPPORT INSURANCE DEMONSTRATION 
              PROJECTS.

    (a) In General.--In order to encourage States to guarantee a 
minimum level of child support for every eligible child not receiving 
such support from a noncustodial parent, the Secretary of Health and 
Human Services (hereafter in this section referred to as the 
``Secretary'') shall make grants to not less than 4 States but not more 
than 6 States to conduct demonstration projects for purposes of 
establishing or improving a system of insured minimum child support 
payments in accordance with this section.
    (b) Contents of Application.--An application submitted by the 
Governor of a State shall--
            (1) contain a description of the proposed child support 
        insurance project to be established, implemented, or improved 
        using amounts provided under this section, including the 
        specific activities to be undertaken and the agencies to be 
        involved;
            (2) specify whether the project will be carried out 
        throughout the State or in limited areas of the State;
            (3) estimate the number of children who will be eligible 
        for insured minimum child support payments under the project, 
        and the amounts to which they will be entitled, on average as 
        individuals and in the aggregate;
            (4) describe the child support guidelines and review 
        procedures which are in use in the State and any expected 
        modifications;
            (5) contain a commitment by the State to carry out the 
        project during a period of 3 consecutive years beginning with 
        fiscal year 1994;
            (6) contain assurances that the State is currently at or 
        above the national median in--
                    (A) the percentage of cases in which paternity is 
                established when required;
                    (B) the percentage of cases in which child support 
                orders are obtained; and
                    (C) the percentage of cases with child support 
                orders in which collections are made;
            (7) contain assurances that, to the maximum extent possible 
        under current law, the State will use Federal, State, and local 
        job training assistance to assist individuals who have been 
        determined to be unable to meet such individuals' child support 
        obligations;
            (8) describe the extent to which multiple agencies, 
        including those responsible for administering the Aid to 
        Families With Dependent Children Program under part A of title 
        IV of the Social Security Act and child support collection, 
        enforcement, and payment under part D of such title, will be 
        involved in the design and operation of the child support 
        insurance project; and
            (9) contain such other information as the Secretary may 
        require by regulation.
    (c) Use of Funds.--A State shall use amounts provided under a grant 
awarded under this section to carry out a child support insurance 
project designed to provide a minimum monthly child support benefit for 
each eligible child in the State to the extent that such minimum child 
support is not paid in a month by the noncustodial parent.
    (d) Requirements.--
            (1) In general.--A child support insurance demonstration 
        project funded under this section shall provide that--
                    (A) any child (as defined in paragraph (2)) with a 
                living noncustodial parent for whom a child support 
                order has been obtained or any child (as so defined) 
                whose custodial parent meets ``good cause'' criteria 
                (as determined by the Secretary under section 
                402(a)(26)(B) of the Social Security Act) for not 
                seeking or enforcing a support order is eligible for 
                the insured child support benefit;
                    (B) the insured child support benefit shall be paid 
                promptly to the custodial parent at least once a month 
                and shall be--
                            (i) $1,500 per year minimum for the first 
                        child, $1,000 per year minimum for the second 
                        child, and $500 per year minimum for each 
                        subsequent child;
                            (ii) offset and reduced to the extent that 
                        the custodial parent receives child support in 
                        a month from the noncustodial parent;
                            (iii) indexed and adjusted for inflation; 
                        and
                            (iv) in the case of a family of children 
                        with multiple noncustodial parents, calculated 
                        in the same manner as if all such children were 
                        full siblings, but any child support payment 
                        from a particular noncustodial parent shall 
                        only be applied against the child support 
                        insured benefit for the child or children of 
                        that particular noncustodial parent;
                    (C) except in a State described in section 
                402(a)(28) of the Social Security Act, the monthly 
                amount of Aid to Families With Dependent Children 
                benefit received under part A of title IV of the Social 
                Security Act otherwise determined under such part shall 
                be reduced by the applicable percentage (as determined 
                in paragraph (3)) of the amount received as a child 
                support insurance benefit for such month;
                    (D) for purposes of determining the need of a child 
                or relative and the level of assistance under title IV 
                of the Social Security Act or for purposes of 
                determining the eligibility of such a child or relative 
                under title XIX of such Act any amount received as a 
                child support insurance benefit shall be disregarded 
                from income of such child or relative;
                    (E) in the event that the family as a whole becomes 
                ineligible for Aid to Families With Dependent Children 
                under part A of the Social Security Act due wholly or 
                partly to consideration of child support insurance 
                benefits, the continuing eligibility of the caretaker 
                for Aid to Families With Dependent Children under such 
                title shall be calculated without consideration of the 
                child support insured benefit; and
                    (F) in order to participate in the child support 
                insurance project, the child's caretaker shall apply 
                for services of the State's child support enforcement 
                program under part D of title IV of the Social Security 
                Act.
            (2) Child defined.--For purposes of this section, the term 
        ``child'' means an individual who is of such an age, 
        disability, or educational status as to be eligible for child 
        support as provided for by the law of the State in which such 
        individual resides.
            (3) Determination of applicable percentage.--For purposes 
        of this section, the applicable percentage shall be determined 
        by the Secretary, except that in demonstration projects in at 
        least 3 States, the applicable percentage shall be 0, 50, and 
        100, respectively.
    (e) Consideration and Priority of Applications.--
            (1) In general.--The Secretary shall consider all 
        applications received from States desiring to conduct 
        demonstration projects under this section and shall approve not 
        more than 6 applications which appear likely to contribute 
        significantly to the achievement of the purpose of this 
        section. In selecting States to conduct demonstration projects 
        under this section, the Secretary shall--
                    (A) consider the geographic dispersion and 
                variation in population of the applicants;
                    (B) give priority to States the applications of 
                which demonstrate that efforts will be made to link 
                child support systems with other service delivery 
                systems; and
                    (C) ensure that, if feasible, the States selected 
                use a variety of administrative arrangements for 
                implementing child support guidelines and a system of 
                insured child support payments.
            (2) Specific considerations.--Of the States selected to 
        participate in the demonstration projects conducted under this 
        section, the Secretary shall endeavor to ensure that--
                    (A) at least 2 States provide intensive integrated 
                social services for low-income participants in the 
                child support insurance project, for the purpose of 
                assisting such participants in improving their 
                employment, housing, health, and educational status;
                    (B) at least 2 States plan to cooperate and to 
                integrate interstate establishment and enforcement of 
                child support awards;
                    (C) at least 2 States containing large urban areas 
                conduct such projects, in whole or in part, in such 
                areas; and
                    (D) at least 1 State containing large rural areas 
                conduct such a project, in whole or in part, in such 
                areas.
    (f) Evaluation and Reports.--
            (1) In general.--Each State that conducts a demonstration 
        project under this section shall, as a part of such 
        demonstration project, conduct an interim and a final 
        evaluation of the effectiveness of the demonstration project 
        and shall submit an interim and final report to the Secretary 
        concerning the results of the evaluation and any improvements 
        in child support enforcement. The interim report shall be 
        submitted within 15 months of the commencement of the project.
            (2) Contents.--The evaluation and report submitted by a 
        State to the Secretary shall analyze and describe (in such a 
        manner as prescribed by the Secretary)--
                    (A) the impact of the child support insurance 
                project on the economic and noneconomic well-being of 
                children and adults in both custodial and noncustodial 
                households;
                    (B) the work force participation rates of both 
                custodial and noncustodial parents as a result of 
                participation in the child support insurance project;
                    (C) the impact of the child support insurance 
                project on Aid to Families With Dependent Children 
                participation rates, grants, and funding levels;
                    (D) a comparison of enforcement effectiveness in 
                intrastate and interstate cases;
                    (E) the impact on custodial and noncustodial 
                families of access to intensive integrated services for 
                custodial families and to job training services for 
                noncustodial parents;
                    (F) the impact of child support guidelines on the 
                effectiveness of the child support insurance project 
                and the economic well-being of children and adults in 
                both custodial and noncustodial families;
                    (G) administrative policies and laws of the Federal 
                Government and the State or a political subdivision of 
                the State, identified by the State as impediments to 
                the collection of adequate child support payments from 
                noncustodial parents;
                    (H) the measures that the State has taken or 
                intends to take to eliminate or reduce impediments 
                described in subparagraph (G) that are attributable to 
                administrative policies and laws of the State or a 
                political subdivision of the State;
                    (I) the impact of the child support insurance 
                projects on the number of child support awards and 
                custody arrangements;
                    (J) the net costs and benefits of providing child 
                support insurance benefits to the Federal and State 
                governments and to recipient families; and
                    (K) any other relevant items as the Secretary may 
                require.
    (g) Duration.--A demonstration project conducted under this section 
shall be commenced not later than fiscal year 1994 and shall be 
conducted for a period of 3 consecutive years, except that the 
Secretary may terminate a project before the end of such period if the 
Secretary determines that the State conducting the project is not in 
substantial compliance with the terms of the application approved by 
the Secretary under this section.
    (h) Cost Savings Recovery.--The Secretary shall develop a 
methodology to identify any State cost savings realized in connection 
with the implementation of a child support insurance demonstration 
project conducted under this Act. Any such savings realized as a result 
of the implementation of a child support insurance demonstration 
project shall be utilized for child support enforcement improvements or 
expansions and improvements in the Aid to Families With Dependent 
Children Program conducted under part A of title IV of the Social 
Security Act within the participating State, and Federal expenditures 
for such project within the State shall be reduced in proportion to any 
such savings.
    (i) Evaluation and Report to Congress.--The Secretary shall conduct 
an interim and a final evaluation of each State child support insurance 
demonstration project and submit an interim and final report to the 
Committee on Finance of the Senate and the Committee on Ways and Means 
of the House of Representatives concerning the effectiveness of the 
child support insurance demonstration projects funded under this 
section. The interim report shall be submitted within 18 months of the 
commencement of the first State child support insurance demonstration 
project. The interim and final reports shall analyze the reports 
received by the Secretary under subsection (f) from each participating 
State and shall compare the effects of different types of child support 
guidelines.
    (j) Restrictions on Matching and Use of Funds.--
            (1) In general.--A State conducting a demonstration project 
        under this section shall be required--
                    (A) except as provided in paragraph (2), to provide 
                not less than 20 percent of the total amounts expended 
                in each calendar year of the project to pay the costs 
                associated with the project funded under this section; 
                and
                    (B) to maintain its level of expenditures for child 
                support collection, enforcement, and payment at the 
                same level, or at a higher level, than such 
                expenditures were prior to such State's participation 
                in a demonstration project provided by this section.
            (2) Exception.--A State participating in a demonstration 
        project under this section may provide not less than 10 percent 
        of the total amounts expended to pay the costs associated with 
        the project funded under this section in years after the first 
        year such project is conducted in such State if the State 
        continues to meet the standard specified in subsection (b)(6).
    (k) Coordination With Certain Means-Tested Programs.--For purposes 
of--
            (1) the United States Housing Act of 1937;
            (2) title V of the Housing Act of 1949;
            (3) section 101 of the Housing and Urban Development Act of 
        1965;
            (4) sections 221(d)(3), 235, and 236 of the National 
        Housing Act;
            (5) the Food Stamp Act of 1977;
            (6) titles XVI and XIX of the Social Security Act; and
            (7) child care assistance provided through part D of title 
        IV of the Social Security Act, the Child Care and Development 
        Block Grant, or title XX of the Social Security Act,
any payment made to an individual for child support up to the amount 
which a child support insurance benefit would provide shall not be 
treated as income and shall not be taken into account in determining 
resources for the month of its receipt and the following month.
    (l) Treatment as Child Support Benefit.--Any insured child support 
benefit received by an individual under this title shall be considered 
child support for purposes of the Internal Revenue Code of 1986.
    (m) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary in each of the fiscal years 
1994, 1995, and 1996 to carry out the purposes of this section.

   TITLE IV--COMMUNITY EMPLOYMENT OPPORTUNITY DEMONSTRATION PROJECTS

SEC. 401. ESTABLISHMENT.

    The Secretary of Health and Human Services and the Secretary of 
Labor (hereafter referred to in this title as the ``Secretaries''), in 
consultation with the Secretary of Agriculture, shall establish a 
program to implement community employment demonstration projects under 
which waivers may be granted under section 403 to eligible economically 
depressed communities to enable such communities to use amounts 
received under certain Federal programs to carry out certain community 
employment activities to provide opportunities for parents receiving 
welfare assistance to obtain employment.

SEC. 402. ELIGIBLE ECONOMICALLY DEPRESSED COMMUNITIES.

    (a) In General.--The Secretaries shall determine whether a 
community is an eligible economically depressed community solely on the 
basis of the eligibility criteria described in this section.
    (b) Eligibility Criteria.--To be classified as an economically 
depressed community and be eligible for a waiver under this title, a 
community shall meet the following criteria:
            (1) Application.--The community shall prepare and submit to 
        the Secretaries an application at such time, in such manner and 
        containing such information as such Secretaries may require, 
        including a plan for use of the amounts to which a waiver 
        applies under this title.
            (2) Distress.--The community must be one of pervasive 
        poverty, unemployment, and general distress.
            (3) Location.--The community must be located entirely 
        within one State.
            (4) Unemployment rate.--The unemployment rate (as 
        determined by the appropriate available data) of the community 
        must not be less than 1.5 times the national unemployment rate.
            (5) Poverty rate.--The poverty rate (as determined by the 
        most recent census data available) for not less than 90 percent 
        of the population census tracts (or where not tracted, the 
        equivalent county divisions as defined by the Bureau of the 
        Census for the purposes of defining poverty areas) within the 
        community must not be less than 20 percent.

SEC. 403. WAIVERS.

    (a) Authority.--The Secretaries may grant a waiver to an eligible 
economically depressed community under this title that shall provide 
that, instead of any payments made under the programs specified in 
subsection (b) with respect to such community for the uses required 
under such program, such payments shall be made to such community to be 
used as provided under section 404. Such payments shall be made on such 
a periodic basis as approximates the periodic payments made under such 
programs.
    (b) Programs Incorporated.--The programs described in subsection 
(a) are as follows:
            (1) Programs designed solely for adult participation under 
        the Job Training Partnership Act.
            (2) Employment and training programs under section 6(d) of 
        the Food Stamp Act of 1977.
            (3) Programs under part F of title IV of the Social 
        Security Act.
    (c) Determination.--
            (1) In general.--The Secretaries, in consultation with the 
        Secretary of Agriculture, shall promulgate regulations for 
        determining the amount of payments to which a waiver granted 
        under this section applies.
            (2) Deduction from payments made to states.--Regulations 
        promulgated under paragraph (1) shall prescribe procedures 
        under which, with respect to the programs described in 
        subsection (b), the respective Secretaries that administer such 
        programs shall--
                    (A) determine the amount of payments under such 
                programs that are generally made available by a State 
                to an eligible economically depressed community; and
                    (B) ensure that such amounts are provided by the 
                State to such community for use as provided for in 
                section 404.
    (d) Number.--The Secretaries shall grant not less than 15 nor more 
than 25 waivers under this section.

SEC. 404. USE OF AMOUNTS.

    (a) In General.--Subject to subsection (b), an economically 
depressed community that receives a waiver under this title shall use 
the amounts to which such waiver applies to carry out activities to 
provide public employment and community work opportunities to assist 
parents residing in such community to make the transition from 
receiving assistance under part A of title IV of the Social Security 
Act or the Food Stamp Act of 1977 to being a member of the workforce.
    (b) Limitations.--
            (1) Useful public purpose.--Employment and work 
        opportunities provided under subsection (a) shall be limited to 
        those that serve a useful public purpose, as determined by the 
        Secretaries, with respect to the areas of health, social 
        services, environmental protection, education, urban and rural 
        development and redevelopment, welfare, recreation, public 
        facilities, public safety, and child care.
            (2) Displacement of workers.--No amounts to which a waiver 
        under this title applies shall be used in a manner that results 
        in--
                    (A) the displacement of any currently employed 
                worker or position (including partial displacement such 
                as a reduction in the hours of nonovertime work, wages, 
                or employment benefits) or result in the impairment of 
                existing contracts for services or collective 
                bargaining agreements;
                    (B) the employment or assignment of any individual 
                or the filling of a position when--
                            (i) any other individual is on layoff from 
                        the same or any equivalent position; or
                            (ii) the employer has terminated the 
                        employment of any regular employee or otherwise 
                        reduced its workforce with the effect of 
                        filling the vacancy so created with an 
                        individual subsidized with amounts to which the 
                        waiver applies;
                    (C) any infringement of the promotional 
                opportunities of any currently employed individual; or
                    (D) the promotion or deterrence of labor union 
                organization.
            (3) Local wage rates.--Wages shall be provided to 
        individuals engaged in activities funded with amounts to which 
        a waiver provided under this title applies in amounts that are 
        comparable to wages provided to other individuals in the 
        community who are engaged in similar employment activities. No 
        individual shall be required to engage in activities funded 
        with amounts to which a waiver provided under this title 
        applies if wages for such activities are less than the level of 
        assistance under part A of title IV of the Social Security Act 
        to which such individual is eligible.
            (4) Family support services.--Each community that is 
        granted a waiver under this title shall guarantee that 
        appropriate child or other care is provided for each family 
        with a dependent child or adult requiring such care, to the 
        extent such care is necessary for an adult in the family to 
        accept employment or remain employed with respect to the 
        activities funded with amounts to which such waiver applies. 
        Such child care shall be provided in a manner that is 
        consistent with the provisions of the Child Care and 
        Development Block Grant Act of 1990, and shall include coverage 
        for transportation and other work-related expenses relating to 
        such care in a manner consistent with section 402(g) of the 
        Social Security Act.

SEC. 405. REGULATIONS.

    The Secretaries, in consultation with the Secretary of Agriculture, 
shall promulgate regulations that such Secretaries determine necessary 
to carry out this title. Such regulations shall ensure that individuals 
in an economically depressed community that receives a waiver under 
this title will continue to receive a level of benefits that, at a 
minimum, is comparable to the level of benefits that otherwise would be 
received under the programs described under section 403(b) if such 
waiver were not granted. Such regulations shall also permit waivers of 
certain requirements under the programs referred to in section 403(b) 
with respect to States and communities participating in projects under 
this title, including requirements concerning the provision of matching 
funds and concerning mandatory participation rates.

SEC. 406. PLAN OF IMPLEMENTATION AND EFFECT OF TITLE.

    (a) Plan.--Not later than 6 months after the date of enactment of 
this title, the Secretaries shall prepare and submit to the appropriate 
committees of Congress a plan for the implementation of the 
demonstration projects established by the Secretaries under this title. 
Such plan shall contain--
            (1) a description of the manner in which such Secretaries 
        intend to implement such project;
            (2) a copy of the regulations that such Secretaries intend 
        to promulgate to carry out such project; and
            (3) an estimation of the number of applications that such 
        Secretaries expect to receive from communities for waivers 
        under this title and a description of the activities that will 
        be carried out with amounts to which any such waivers will 
        apply.
    (b) Effectiveness.--If, within 3 months after the date on which the 
plan of the Secretaries is submitted under subsection (a), the Congress 
has failed to consider and adopt a joint resolution for refusal of 
implementation or to modify such plan, such plan shall take effect.

SEC. 407. EVALUATION AND REPORT.

    (a) Evaluation.--The Secretaries, in consultation with the 
Secretary of Agriculture shall maintain an ongoing evaluation of the 
projects funded under this title.
    (b) Report.--Not later than 3 years after the date of enactment of 
this title, the Secretaries, in consultation with the Secretary of 
Agriculture shall prepare and submit to the Committee on Ways and Means 
of the House of Representatives and the Committee on Finance of the 
Senate a report concerning the effects of the waivers granted to 
communities under this title, that shall include the results of the 
evaluation conducted under subsection (a).

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