[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4092 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 4092

    To enhance the opportunities of needy families to achieve self-
   sufficiency and access quality child care, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 9, 2002

  Mr. McKeon (for himself, Mr. Boehner, Mr. Petri, Mr. Hoekstra, Mr. 
   Greenwood, Mr. Upton, Mr. Tancredo, Mr. DeMint, Mr. Isakson, Mr. 
  Keller, and Mr. Culberson) introduced the following bill; which was 
   referred to the Committee on Education and the Workforce, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
    To enhance the opportunities of needy families to achieve self-
   sufficiency and access quality child care, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Working Toward 
Independence Act of 2002''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title.
                         TITLE I--TANF PROGRAM

Sec. 101. Work participation requirements.
Sec. 102. Universal engagement policy.
Sec. 103. Work-related performance objectives.
Sec. 104. Bonus to reward employment achievement.
TITLE II--AMENDMENTS TO THE CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT 
                                OF 1990

Sec. 201. Short title.
Sec. 202. Goals.
Sec. 203. Authorization of appropriations.
Sec. 204. Application and plan.
Sec. 205. Activities to improve the quality of child care.
Sec. 206. Definitions.
                 TITLE III--BROADENED WAIVER AUTHORITY

Sec. 301. State program demonstration projects.
                       TITLE VII--EFFECTIVE DATE

Sec. 401. Effective date.

                         TITLE I--TANF PROGRAM

SEC. 101. WORK PARTICIPATION REQUIREMENTS.

    (a) In General.--Section 407 of the Social Security Act (42 U.S.C. 
607) is amended by striking all that precedes subsection (b)(3) and 
inserting the following:

``SEC. 407. WORK PARTICIPATION REQUIREMENTS.

    ``(a) Participation Rate Requirements.--A State to which a grant is 
made under section 403 for a fiscal year shall achieve a minimum 
participation rate equal to not less than--
            ``(1) 50 percent for fiscal year 2003;
            ``(2) 55 percent for fiscal year 2004;
            ``(3) 60 percent for fiscal year 2005;
            ``(4) 65 percent for fiscal year 2006; and
            ``(5) 70 percent for fiscal year 2007 and each succeeding 
        fiscal year.
    ``(b) Calculation of Participation Rates.--
            ``(1) Average monthly rate.--For purposes of subsection 
        (a), the participation rate of a State for a fiscal year is the 
        average of the participation rates of the State for each month 
        in the fiscal year.
            ``(2) Monthly participation rates; incorporation of 40-hour 
        work week standard.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the participation rate of a State for a month is--
                            ``(i) the total number of countable hours 
                        (as defined in subsection (c)) with respect to 
                        the counted families for the State for the 
                        month; divided by
                            ``(ii) 160 multiplied by the number of 
                        counted families for the State for the month.
                    ``(B) Counted families defined.--
                            ``(i) In general.--In subparagraph (A), the 
                        term `counted family' means, with respect to a 
                        State and a month, a family that includes a 
                        work-eligible individual and that receives 
                        assistance in the month under the State program 
                        funded under this part, subject to clause (ii).
                            ``(ii) State option to exclude certain 
                        families.--At the option of a State, the term 
                        `counted family' shall not include--
                                    ``(I) a family in the first month 
                                for which the family is a recipient of 
                                assistance under the State program; or
                                    ``(II) a family in which the 
                                youngest child has not attained 12 
                                months of age, except to the extent 
                                that the State, on a case-by-case 
                                basis, has elected to permit or require 
                                the family to engage in direct work 
                                activities or other activities 
                                specified by the State.
                            ``(iii) State option to include individuals 
                        receiving assistance under a tribal family 
                        assistance plan or tribal work program.--At the 
                        option of a State, the term `counted family' 
                        may include families in the State that are 
                        receiving assistance under a tribal family 
                        assistance plan approved under section 412 or 
                        under a tribal work program to which funds are 
                        provided under this part.
                    ``(C) Work-eligible individual defined.--In this 
                section, the term `work-eligible individual' means an 
                individual--
                            ``(i) who is married, or is a single head 
                        of household; and
                            ``(ii) whose needs are (or, but for 
                        sanctions under this part that have been in 
                        effect for more than 3 months (whether or not 
                        consecutive) in the preceding 12 months or 
                        under part D, would be) included in determining 
                        the amount of cash assistance to be provided to 
                        the family under the State program funded under 
                        this part.''.
    (b) Revision of Caseload Reduction Credit.--Section 
407(b)(3)(A)(ii) of such Act (42 U.S.C. 607(b)(3)(A)(ii)) is amended to 
read as follows:
                            ``(ii) the average monthly number of 
                        families that received assistance under the 
                        State program funded under this part during--
                                    ``(I) if the fiscal year is fiscal 
                                year 2003, fiscal year 1996;
                                    ``(II) if the fiscal year is fiscal 
                                year 2004, fiscal year 1998;
                                    ``(III) if the fiscal year is 
                                fiscal year 2005, fiscal year 2001; or
                                    ``(IV) if the fiscal year is fiscal 
                                year 2006 or any succeeding fiscal 
                                year, the then 4th preceding fiscal 
                                year.''.
    (c) Countable Hours.--Section 407 of such Act (42 U.S.C. 607) is 
amended by striking subsections (c) and (d) and inserting the 
following:
    ``(c) Countable Hours.--
            ``(1) Definition.--In subsection (b)(2), the term 
        `countable hours' means, with respect to a family for a month, 
        the total number of hours in the month in which any member of 
        the family who is a work-eligible individual is engaged in a 
        direct work activity or other activity specified by the State, 
        subject to the other provisions of this subsection.
            ``(2) Limitations.--Subject to such regulations as the 
        Secretary may prescribe:
                    ``(A) Minimum weekly average of 24 hours of direct 
                work activities required.--If the work-eligible 
                individuals in a family are engaged in a direct work 
                activity for an average total of fewer than 24 hours 
                per week in a month, then the number of countable hours 
                with respect to the family for the month shall be zero.
                    ``(B) Maximum weekly average of 16 hours of other 
                activities.--An average of not more than 16 hours per 
                week of other activities referred to in paragraph (1) 
                may be considered countable hours in a month with 
                respect to a family.
            ``(3) Special rules.--For purposes of paragraph (1):
                    ``(A) Participation in qualified activities.--
                            ``(i) In general.--If, with the approval of 
                        the State, the work-eligible individuals in a 
                        family are engaged in 1 or more qualified 
                        activities for an average total of at least 24 
                        hours per week in a month, then all such 
                        engagement in the month shall be considered 
                        engagement in a direct work activity, subject 
                        to clause (iii).
                            ``(ii) Qualified activity defined.--The 
                        term `qualified activity' means an activity 
                        specified by the State, including a program 
                        meeting such standards and criteria as the 
                        State may specify consistent with the purposes 
                        of this part, such as--
                                    ``(I) substance abuse counseling or 
                                treatment;
                                    ``(II) rehabilitation treatment and 
                                services;
                                    ``(III) work-related education or 
                                training directed effectively at 
                                enabling the family member to work; or
                                    ``(IV) job search or job readiness 
                                assistance.
                            ``(iii) Limitation.--Clause (i) may not be 
                        applied to a family for more than 3 months in 
                        any period of 24 consecutive months.
                    ``(B) School attendance by teen head of 
                household.--A family shall be considered to be engaged 
                in a direct work activity for an average of 40 hours 
                per week in a month if the family includes an 
                individual who is married or is a single head of 
                household who has not attained 20 years of age, and the 
                individual--
                            ``(i) maintains satisfactory attendance at 
                        secondary school or the equivalent in the 
                        month; or
                            ``(ii) participates in education directly 
                        related to employment for an average of at 
                        least 20 hours per week in the month.
    ``(d) Direct Work Activities.--In this section, the term `direct 
work activities' means--
            ``(1) unsubsidized employment;
            ``(2) subsidized private sector employment;
            ``(3) subsidized public sector employment;
            ``(4) on-the-job training;
            ``(5) supervised work experience; or
            ``(6) supervised community service.
    (d) Penalties Against Individuals.--Section 407(e) of such Act (42 
U.S.C. 607(e)) is amended--
            (1) in paragraph (1), in the matter that precedes 
        subparagraph (A)--
                    (A) by striking ``work'' and inserting 
                ``activities''; and
                    (B) by inserting ``and the family does not 
                otherwise engage in activities in accordance with the 
                self-sufficiency plan established for the family 
                pursuant to section 408(b) for the number of hours 
                required by the self-sufficiency plan,'' before ``the 
                State shall''; and
            (2) in paragraph (2)--
                    (A) in the matter that precedes subparagraph (A), 
                by striking ``work'' and inserting ``activities''; and
                    (B) in subparagraph (A), by striking ``work'' and 
                inserting ``activity''.
    (e) Conforming Amendments.--
            (1) Section 404(k)(1)(D) of such Act (42 U.S.C. 
        604(k)(1)(D)) is amended by striking ``work activities (as 
        defined in section 407(d)'' and inserting ``direct work 
        activities''.
            (2) Section 407(b) of such Act (42 U.S.C. 607(b)) is 
        amended by striking paragraphs (4) and (5).
            (3) Section 407(f) of such Act (42 U.S.C. 607(f)) is 
        amended in each of paragraphs (1) and (2) by striking ``work 
        activity described in subsection (d)'' and inserting ``direct 
        work activity''.
            (4) The heading of section 409(a)(14) of such Act (42 
        U.S.C. 609(a)(14)) is amended by inserting ``or refusing to 
engage in activities under a family self-sufficiency plan'' after 
``work''.

SEC. 102. UNIVERSAL ENGAGEMENT POLICY.

    (a) Modification of State Plan Requirements.--Section 402(a)(1)(A) 
of the Social Security Act (42 U.S.C. 602(a)(1)(A)) is amended by 
striking clauses (ii) and (iii) and inserting the following:
                            ``(ii) Require a parent or caretaker 
                        receiving assistance under the program to 
                        engage in work and alternative self-sufficiency 
                        activities (as defined by the State), 
                        consistent with section 407(e)(2).
                            ``(iii) Require families receiving 
                        assistance under the program to engage in 
                        activities in accordance with family self-
                        sufficiency plans developed pursuant to section 
                        408(b).''.
    (b) Establishment of Family Self-Sufficiency Plans.--Section 408(b) 
of such Act (42 U.S.C. 608(b)) is amended to read as follows:
    ``(b) Family Self-Sufficiency Plans.--
            ``(1) In general.--A State to which a grant is made under 
        section 403 shall--
                    ``(A) establish for each family receiving 
                assistance under the State program funded under this 
                part a self-sufficiency plan that specifies appropriate 
                activities described in the State plan submitted 
                pursuant to section 402, including direct work 
                activities as appropriate designed to assist the family 
                in achieving their maximum degree of self-sufficiency;
                    ``(B) require, at a minimum, each member of the 
                family who is a work eligible individual (as defined in 
                section 407(b)(2)(C)) to participate in activities in 
                accordance with the self-sufficiency plan;
                    ``(C) monitor the participation of such family 
                members in the activities and the progress of the 
                family toward self-sufficiency;
                    ``(D) regularly review the self-sufficiency plan; 
                and
                    ``(E) revise the self-sufficiency plan as 
                appropriate.
            ``(2) Timing.--The State shall comply with paragraph (1) 
        with respect to a family--
                    ``(A) in the case of a family that, as of October 
                1, 2002, is not receiving assistance from the State 
                program funded under this part, not later than 60 days 
                after the family first receives assistance on the basis 
                of the most recent application for the assistance; or
                    ``(B) in the case of a family that, as of such 
                date, is receiving the assistance, not later than 180 
                days after October 1, 2002.
            ``(3) State discretion.--A State shall have sole 
        discretion, consistent with section 407, to define and design 
        activities for families for purposes of this subsection, and to 
        develop methods for monitoring and reviewing progress pursuant 
        to this subsection.''.
    (c) Penalty for Failure To Establish Family Self-Sufficiency 
Plan.--Section 409(a)(3) of such Act (42 U.S.C. 609(a)(3)) is amended--
            (1) in the paragraph heading, by inserting ``or establish 
        family self-sufficiency plan'' after ``rates''; and
            (2) in subparagraph (A), by inserting ``or 408(b)'' after 
        ``407(a)''.

SEC. 103. WORK-RELATED PERFORMANCE OBJECTIVES.

    (a) State Plan Modifications.--Section 402(a)(1) of the Social 
Security Act (42 U.S.C. 602(a)(1)) is amended--
            (1) in subparagraph(A), by adding at the end the following:
                            ``(vii) The document shall--
                                    ``(I) describe how the State will 
                                pursue ending dependence of needy 
                                parents on government benefits by 
                                promoting job preparation and work;
                                    ``(II) include specific numerical 
                                and measurable performance objectives 
                                for accomplishing the purpose so 
                                described, which shall include 
                                objectives consistent with the criteria 
                                used by the Secretary in establishing 
                                performance targets under section 
                                403(a)(4)(B) if available; and
                                    ``(III) describe the methodology 
                                that the State will use to measure 
                                State performance in relation to each 
                                such objective.
                            ``(viii) The document shall describe any 
                        strategy and program the State may be 
                        undertaking to address--
                                    ``(I) employment retention and 
                                advancement for recipients of 
                                assistance under the State program 
                                funded under this part, including 
                                placement into high-demand jobs;
                                    ``(II) services for struggling and 
                                noncompliant families and clients with 
                                special problems; and
                                    ``(III) program integration, 
                                including the extent to which TANF 
                                employment and training services are 
                                provided through the One-Stop Career 
                                Center system created under the 
                                Workforce Investment Act of 1998, and 
                                the extent to which former recipients 
                                of such assistance have access to 
                                additional core, intensive, or training 
                                services funded through such Act.''; 
                                and
            (2) in subparagraph (B), by striking clause (iv).
    (b) Report on Annual Achievement of Performance Goals.--Section 411 
of such Act (42 U.S.C. 611) is amended by adding at the end the 
following:
    ``(c) Annual Report on Achievement of Performance Goals.--Beginning 
with fiscal year 2004, not later than 3 months after the end of each 
fiscal year, each eligible State shall submit to the Secretary a report 
on achievement and improvement during the preceding fiscal year under 
the numerical objectives referred to in section 402(a)(1)(A)(vii), 
using the measurement methodology described in such section.''.
    (c) Annual Ranking of States.--Section 413(d)(1) of such Act (42 
U.S.C. 613(d)(1)) is amended by striking ``long-term private sector 
jobs'' and inserting ``private sector jobs, the success of the 
recipients in retaining employment, the ability of the recipients to 
increase their wages,''.
    (d) Performance Improvement.--Section 413 of such Act (42 U.S.C. 
613) is amended by adding at the end the following:
    ``(k) Performance Improvement.--The Secretary, in consultation with 
States, shall develop uniform performance measures designed to assess 
the degree of effectiveness, and the degree of improvement, of State 
programs funded under this part in accomplishing the work-related 
purposes of this part.''.

SEC. 104. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

    Section 403(a)(4) of the Social Security Act (42 U.S.C. 603(a)(4)) 
is amended to read as follows:
            ``(4) Bonus to reward employment achievement.--
                    ``(A) In general.--The Secretary shall make a grant 
                in accordance with this paragraph to each State for 
                each bonus year for which the State achieves or exceeds 
                the employment performance targets established for the 
                State under subparagraph (B) for the fiscal year that 
                precedes the bonus year.
                    ``(B) Formula for measuring state performance; 
                employment performance targets.--
                            ``(i) Not later than 1 year after the date 
                        of the enactment of this paragraph, the 
                        Secretary, in consultation with States and the 
                        Secretary of Labor, shall develop a formula for 
                        measuring State performance with respect to 
                        employment entry, job retention, and increased 
                        earnings from employment for families receiving 
                        assistance under the State program funded under 
                        this part.
                            ``(ii) The Secretary, in consultation with 
                        a State, shall specify annual performance 
                        targets for each State with respect to the 
                        objectives outlined in the formula developed 
                        under clause (i).
                    ``(C) Amount of grant.--
                            ``(i) In general.--Subject to clause (ii) 
                        of this subparagraph, the Secretary shall 
                        determine the amount of the grant payable under 
                        this paragraph to a State for a bonus year 
                        referred to in subparagraph (A).
                            ``(ii) Limitations.--
                                    ``(I) The amount payable to a State 
                                under this paragraph for a bonus year 
                                shall not exceed 5 percent of the State 
                                family assistance grant.
                                    ``(II) The average annual total 
                                amount of grants made under this 
                                paragraph for each bonus year shall be 
                                $100,000,000.
                                    ``(III) The total amount of grants 
                                made under this paragraph for all bonus 
                                years shall equal $500,000,000.
                    ``(D) Bonus year defined.--In this paragraph, the 
                term `bonus year' means each of fiscal years 2004 
                through 2008.
                    ``(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal years 
                2004 through 2008 $500,000,000 for grants under this 
                paragraph.
                    ``(F) Sense of the congress.--It is the sense of 
                the Congress that in developing the bonus to reward 
                employment achievement under this paragraph, the 
                Secretary and States should consult with the Secretary 
                of Labor so that measures for employment achievement 
                under State programs funded under this part are 
                consistent with the core indicators of performance 
                which States report under subclauses (I) through (III) 
                of section 136(b)(2)(A)(i) of the Workforce Investment 
                Act of 1998.''.

TITLE II--AMENDMENTS TO THE CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT 
                                OF 1990

SEC. 201. SHORT TITLE.

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

SEC. 202. GOALS.

    Section 658A(b) of the Child Care and Development Block Grant Act 
of 1990 (42 U.S.C. 9801 note) is amended--
            (1) in paragraph (3) by striking ``encourage'' and 
        inserting ``assist'',
            (2) in paragraph (4) by striking ``and'' at the end,
            (3) by redesignating paragraph (5) as paragraph (7), and
            (4) by inserting after paragraph (4) the following:
            ``(5) to encourage States to improve the quality of child 
        care available to families;
            ``(6) to promote school readiness by encouraging the 
        exposure of young children in child care to nurturing 
        environments and developmentally-appropriate activities, 
        including activities to foster early cognitive and literacy 
        development; and''.

SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

    Section 658B of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858) is amended by striking ``$1,000,000,000 for each 
of the fiscal years 1996 through 2002'' and inserting ``$2,100,000,000 
for each of the fiscal years 2003 through 2007''.

SEC. 204. APPLICATION AND PLAN.

    Section 658E(c)(2) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--
            (1) by amending subparagraph (D) to read as follows:
                    ``(D) Consumer and child care provider education 
                information.--Certify that the State will collect and 
                disseminate, through resource and referral services and 
                other means as determined by the State, to parents of 
                eligible children, child care providers, and the 
                general public, information regarding--
                            ``(i) the promotion of informed child care 
                        choices, including information about the 
                        quality and availability of child care 
                        services;
                            ``(ii) research and best practices on 
                        children's development, including early 
                        cognitive development;
                            ``(iii) the availability of assistance to 
                        obtain child care services; and
                            ``(iv) other programs for which families 
                        that receive child care services for which 
                        financial assistance is provided under this 
                        subchapter may be eligible, including the food 
                        stamp program, the WIC program under section 17 
                        of the Child Nutrition Act of 1966, the child 
                        and adult care food program under section 17 of 
                        the Richard B. Russell National School Lunch 
                        Act, and the medicaid and CHIP programs under 
                        titles XIX and XXI of the Social Security 
                        Act.'', and
            (2) by inserting after subparagraph (H) the following:
                    ``(I) Coordination with other early child care 
                services and early childhood education programs.--
                Demonstrate how the State is coordinating child care 
                services provided under this subchapter with Head 
                Start, Early Reading First, Even Start, State pre-
                kindergarten programs, and other early childhood 
                education programs to expand accessibility to and 
                continuity of care and early education.
                    ``(J) Public-private partnerships.--Demonstrate how 
                the State encourages partnerships with private and 
                other public entities to increase the supply and 
                quality of child care services.
                    ``(K) Child care service quality.--
                            ``(i) Certification.--For each fiscal year 
                        after fiscal year 2003, certify that during the 
                        then preceding fiscal year the State was in 
                        compliance with section 658G and describe how 
                        funds were used to comply with such section 
                        during such preceding fiscal year.
                            ``(ii) Strategy.--For each fiscal year 
                        after fiscal year 2003, contain an outline of 
                        the strategy the State will implement during 
                        such fiscal year for which the State plan is 
                        submitted, to address the quality of child care 
                        services in child care settings that provide 
                        services for which assistance is made available 
                        under this subchapter, and include in such 
                        strategy--
                                    ``(I) a statement specifying how 
                                the State will address the activities 
                                described in paragraphs (1), (2), and 
                                (3) of section 658G;
                                    ``(II) a description of 
                                quantifiable, objective measures for 
                                evaluating the quality of child care 
                                services separately with respect to the 
                                activities listed in each of such 
                                paragraphs that the State will use to 
                                evaluate its progress in improving the 
                                quality of such child care services;
                                    ``(III) a list of State-developed 
                                child care service quality targets for 
                                such fiscal year quantified on the 
                                basis of such measures; and
                                    ``(IV) for each fiscal year after 
                                fiscal year 2003, a report on the 
                                progress made to achieve such targets 
                                during the then preceding fiscal year.
                            ``(iii) Rule of construction.--Nothing in 
                        this subparagraph shall be construed to require 
                        that the State apply measures for evaluating 
                        quality to specific types of child care 
                        providers.
                    ``(L) Access to care for certain populations.--
                Demonstrate how the State is addressing the child care 
                needs of parents eligible for child care services for 
                which financial assistance is provided under this 
                subchapter who have children with special needs, work 
                nontraditional hours, or require child care services 
                for infants or toddlers.''.

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

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

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

    ``A State that receives funds to carry out this subchapter for a 
fiscal year, shall use not less than 4 percent of the amount of such 
funds for activities provided through resource and referral services or 
other means, that are designed to improve the quality of child care 
services for which financial assistance is made available under this 
subchapter. Such activities include--
            ``(1) programs that provide training, education, and other 
        professional development activities to enhance the skills of 
        the child care workforce, including training opportunities for 
        caregivers in informal care settings;
            ``(2) activities within child care settings to enhance 
        early learning for young children, to promote early literacy, 
        and to foster school readiness;
            ``(3) initiatives to increase the retention and 
        compensation of child care providers, including tiered 
        reimbursement rates for providers that meet quality standards 
        as defined by the State; or
            ``(4) other activities deemed by the State to improve the 
        quality of child care services provided in such State.''.

SEC. 206. DEFINITIONS.

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

                 TITLE III--BROADENED WAIVER AUTHORITY

SEC. 301. STATE PROGRAM DEMONSTRATION PROJECTS.

    (a) Purpose.--The purpose of this section is to enable States to 
conduct demonstration projects involving individual programs, or 
integrating multiple public assistance, workforce development, and 
other programs, for the purpose of supporting working individuals and 
families, helping families escape welfare dependency, promoting child 
well-being, or helping build stronger families, using innovative 
approaches to strengthen service systems and provide more coordinated 
and effective service delivery.
    (b) Definitions.--In this section:
            (1) Administering secretary.--The term ``administering 
        Secretary'' means, with respect to a program administered by a 
        qualified agency, the head of the agency.
            (2) Qualified agency.--The term ``qualified agency'' 
        means--
                    (A) the Department of Labor; or
                    (B) the Department of Education.
    (c) Application Requirements.--A State desiring to conduct a 
demonstration project under this section involving 1 or more programs 
administered by 1 or more qualified agencies shall submit to the 
administering Secretary of each such program an application that 
contains the following:
            (1) Programs included.--A statement identifying each 
        program to be included in the project, and describing how the 
        purposes of each such program will be achieved by the project.
            (2) Population served.--A statement identifying the 
        population to be served by the project and specifying the 
        eligibility criteria to be used.
            (3) Description and justification.--A detailed description 
        of the proposed project, including--
                    (A) a description of how the project is expected to 
                improve or enhance achievement of the purposes of the 
                program or programs involved, from the standpoint of 
                quality, of cost-effectiveness, or of both; and
                    (B) a description of the performance objectives for 
                the project, including any proposed modifications to 
                the performance measures and reporting requirements 
                used in the program or programs involved.
            (4) Waivers requested.--A description of the waivers 
        requested of statutory and regulatory requirements under the 
        program or programs involved, and a justification of the need 
        for each waiver.
            (5) Cost neutrality.--Such information and assurances as 
        necessary to establish to the satisfaction of each concerned 
        administering Secretary that the proposed project is reasonably 
        expected to meet the requirements of subsection (d)(3).
            (6) Evaluation and reports.--An assurance that the State 
        will conduct ongoing and final evaluations of the project, and 
        make interim and final reports to each concerned administering 
        Secretary, at such times and in such manner as each such 
        Secretary may require.
            (7) Other information and assurances.--Such other 
        information and assurances as each concerned administering 
        Secretary may require.
    (d) Approval of State Applications.--
            (1) In general.--The administering Secretary with respect 
        to a program that is identified in an application submitted 
        pursuant to subsection (c) and that is proposed to be included 
        in a demonstration project to be conducted under this section 
        may approve the project and waive any requirement applicable to 
        the program, to the extent consistent with this section and 
        necessary and appropriate for the conduct of the project, if 
        the Secretary determines that the project proposed in the 
        application--
                    (A) has a reasonable likelihood of achieving the 
                objectives of the program or programs involved; and
                    (B) may reasonably be expected to meet the cost 
                neutrality requirements of paragraph (3).
            (2) Agreement of each administering secretary required for 
        proposals involving more than 1 qualified agency.--
                    (A) In general.--A State may not conduct a 
                demonstration project under this section unless each 
                administering Secretary with respect to any program 
                proposed to be included in the project has approved the 
                application to conduct the project.
                    (B) Agreement with respect to funding and 
                implementation.--Before approving a State proposal 
                under this section, each administering Secretary shall 
                have in place an agreement with respect to the payment 
                of funds and responsibilities required of the Secretary 
                with respect to the project.
                    (C) 90-day approval deadline.--An application to 
                conduct a demonstration project under this section is 
                considered approved for purposes of this section 
                unless, within 90 days after an administering Secretary 
                with respect to a program proposed to be included in 
                the project has received the application, the 
                administering Secretary, in writing, notifies the State 
                that submitted the application that the application is 
                disapproved (and the reasons for disapproval) or that 
                specified additional information is needed.
            (3) Cost-neutrality requirements.--
                    (A) Limit on total costs.--An application to 
                conduct a demonstration project under this section 
                shall not be approved unless it can reasonably be 
expected that, for each fiscal year in which the project is in effect, 
the total costs of the project will not exceed the estimated combined 
total Federal cost for the fiscal year of the program or programs 
included in the project if the program or programs had not been 
included in the project.
                    (B) Limit on federal payments.--The total amount of 
                payments that may be made to a State for a fiscal year 
                with respect to a demonstration project conducted under 
                this section that includes 1 or more programs in the 
                jurisdiction of an administering Secretary shall not 
                exceed the estimated amount of the payments that the 
                Secretary would have made to the State with respect to 
                the program or programs if not included in the project.
    (e) Duration of Projects.--A demonstration project under this 
section may be approved for a term of not more than 5 years, and may be 
renewed for 1 or more additional terms of not more than 5 years.
    (f) Reports to Congress.--Each administering Secretary shall 
provide annually to the Congress a report concerning demonstration 
projects approved under this section, including--
            (1) the projects approved for each participating State;
            (2) the number of waivers granted under this section, and 
        the specific statutory provisions waived; and
            (3) recommendations for modification of programs based on 
        outcomes of the projects.

                       TITLE VII--EFFECTIVE DATE

SEC. 701. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided, the amendments made 
by this Act shall take effect on October 1, 2002.
    (b) Extension of Effective Date for State Law Amendment.--In the 
case of a State plan under this part which the Secretary determines 
requires State legislation in order for the plan to meet the additional 
requirements imposed by the amendments made by this Act, the effective 
date of the amendments shall be 3 months after the first day of the 
first calendar quarter beginning after the close of the first regular 
session of the State legislature that begins after the date of the 
enactment of this Act. For purposes of the preceding sentence, in the 
case of a State that has a 2-year legislative session, each year of the 
session shall be considered to be a separate regular session of the 
State legislature.
                                 <all>