[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4737 Referred in Senate (RFS)]

  2d Session
                                H. R. 4737


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                 May 16 (legislative day, May 9), 2002

     Received; read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 AN ACT


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

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

SECTION 1. SHORT TITLE.

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

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
Sec. 4. Findings.
                             TITLE I--TANF

Sec. 101. Purposes.
Sec. 102. Family assistance grants.
Sec. 103. Promotion of family formation and healthy marriage.
Sec. 104. Supplemental grant for population increases in certain 
                            States.
Sec. 105. Bonus to reward employment achievement.
Sec. 106. Contingency fund.
Sec. 107. Use of funds.
Sec. 108. Repeal of Federal loan for State welfare programs.
Sec. 109. Universal engagement and family self-sufficiency plan 
                            requirements.
Sec. 110. Work participation requirements.
Sec. 111. Maintenance of effort.
Sec. 112. Performance improvement.
Sec. 113. Data collection and reporting.
Sec. 114. Direct funding and administration by Indian tribes.
Sec. 115. Research, evaluations, and national studies.
Sec. 116. Studies by the Census Bureau and the General Accounting 
                            Office.
Sec. 117. Definition of assistance.
Sec. 118. Technical corrections.
Sec. 119. Fatherhood program.
Sec. 120. State option to make TANF programs mandatory partners with 
                            one-stop employment training centers.
Sec. 121. Sense of the Congress.
                          TITLE II--CHILD CARE

Sec. 201. Short title.
Sec. 202. Goals.
Sec. 203. Authorization of appropriations.
Sec. 204. Application and plan.
Sec. 205. Activities to improve the quality of child care.
Sec. 206. Report by Secretary.
Sec. 207. Definitions.
Sec. 208. Entitlement funding.
                    TITLE III--TAXPAYER PROTECTIONS

Sec. 301. Exclusion from gross income for interest on overpayments of 
                            income tax by individuals.
Sec. 302. Deposits made to suspend running of interest on potential 
                            underpayments.
Sec. 303. Partial payment of tax liability in installment agreements.
                        TITLE IV--CHILD SUPPORT

Sec. 401. Federal matching funds for limited pass through of child 
                            support payments to families receiving 
                            TANF.
Sec. 402. State option to pass through all child support payments to 
                            families that formerly received TANF.
Sec. 403. Mandatory review and adjustment of child support orders for 
                            families receiving TANF.
Sec. 404. Mandatory fee for successful child support collection for 
                            family that has never received TANF.
Sec. 405. Report on undistributed child support payments.
Sec. 406. Use of new hire information to assist in administration of 
                            unemployment compensation programs.
Sec. 407. Decrease in amount of child support arrearage triggering 
                            passport denial.
Sec. 408. Use of tax refund intercept program to collect past-due child 
                            support on behalf of children who are not 
                            minors.
Sec. 409. Garnishment of compensation paid to veterans for service-
                            connected disabilities in order to enforce 
                            child support obligations.
Sec. 410. Improving Federal debt collection practices.
Sec. 411. Maintenance of technical assistance funding.
Sec. 412. Maintenance of Federal Parent Locator Service funding.
                         TITLE V--CHILD WELFARE

Sec. 501. Extension of authority to approve demonstration projects.
Sec. 502. Elimination of limitation on number of waivers.
Sec. 503. Elimination of limitation on number of States that may be 
                            granted waivers to conduct demonstration 
                            projects on same topic.
Sec. 504. Elimination of limitation on number of waivers that may be 
                            granted to a single State for demonstration 
                            projects.
Sec. 505. Streamlined process for consideration of amendments to and 
                            extensions of demonstration projects 
                            requiring waivers.
Sec. 506. Availability of reports.
Sec. 507. Technical correction.
                 TITLE VI--SUPPLEMENTAL SECURITY INCOME

Sec. 601. Review of State agency blindness and disability 
                            determinations.
                 TITLE VII--STATE AND LOCAL FLEXIBILITY

Sec. 701. Program coordination demonstration projects.
Sec. 702. State food assistance block grant demonstration project.
                    TITLE VIII--ABSTINENCE EDUCATION

Sec. 801. Extension of abstinence education funding under maternal and 
                            child health program.
               TITLE IX--TRANSITIONAL MEDICAL ASSISTANCE

Sec. 901. One-year reauthorization of transitional medical assistance.
Sec. 902. Adjustment to payments for medicaid administrative costs to 
                            prevent duplicative payments and to fund a 
                            1-year extension of transitional medical 
                            assistance.
                        TITLE X--EFFECTIVE DATE

Sec. 1001. Effective date.

SEC. 3. REFERENCES.

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

SEC. 4. FINDINGS.

    The Congress makes the following findings:
            (1) The Temporary Assistance for Needy Families (TANF) 
        Program established by the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (Public Law 104-193) has 
        succeeded in moving families from welfare to work and reducing 
        child poverty.
                    (A) There has been a dramatic increase in the 
                employment of current and former welfare recipients. 
                The percentage of working recipients reached an all-
                time high in fiscal years 1999 and 2000. In fiscal year 
                1999, 33 percent of adult recipients were working, 
                compared to less than 7 percent in fiscal year 1992, 
                and 11 percent in fiscal year 1996. All States met the 
                overall participation rate standard in fiscal year 
                2000, as did the District of Columbia and Puerto Rico.
                    (B) Earnings for welfare recipients remaining on 
                the rolls have also increased significantly, as have 
                earnings for female-headed households. The increases 
                have been particularly large for the bottom 2 income 
                quintiles, that is, those women who are most likely to 
                be former or present welfare recipients.
                    (C) Welfare dependency has plummeted. As of 
                September 2001, 2,103,000 families and 5,333,000 
                individuals were receiving assistance. Accordingly, the 
                number of families in the welfare caseload and the 
                number of individuals receiving cash assistance 
                declined 52 percent and 56 percent, respectively, since 
                the enactment of TANF. These declines have persisted 
                even as unemployment rates have increased: unemployment 
                rates nationwide rose 25 percent, from 3.9 percent in 
                September 2000 to 4.9 percent in September 2001, while 
                welfare caseloads continued to drop by 7 percent.
                    (D) The child poverty rate continued to decline 
                between 1996 and 2000, falling 21 percent from 20.5 to 
                16.2 percent. The 2000 child poverty rate is the lowest 
                since 1979. Child poverty rates for African-American 
                and Hispanic children have also fallen dramatically 
                during the past 6 years. African-American child poverty 
                is at the lowest rate on record and Hispanic child 
                poverty has had the largest 4-year decrease on record.
                    (E) Despite these gains, States have had mixed 
                success in fully engaging welfare recipients in work 
                activities. While all States have met the overall work 
                participation rates required by law, in 2000, in an 
                average month, only about \1/3\ of all families with an 
                adult participated in work activities that were 
                countable toward the State's participation rate. Eight 
                jurisdictions failed to meet the more rigorous 2-parent 
                work requirements, and about 20 States are not subject 
                to the 2-parent requirements, most because they moved 
                their 2-parent cases to separate State programs where 
                they are not subject to a penalty for failing the 2-
                parent rates.
            (2) As a Nation, we have made substantial progress in 
        reducing teen pregnancies and births, slowing increases in 
        nonmarital childbearing, and improving child support 
        collections and paternity establishment.
                    (A) The teen birth rate has fallen continuously 
                since 1991, down a dramatic 22 percent by 2000. During 
                the period of 1991-2000, teenage birth rates fell in 
                all States and the District of Columbia, Puerto Rico, 
                and the Virgin Islands. Declines also have spanned age, 
                racial, and ethnic groups. There has been success in 
                lowering the birth rate for both younger and older 
                teens. The birth rate for those 15-17 years of age is 
                down 29 percent since 1991, and the rate for those 18 
                and 19 is down 16 percent. Between 1991 and 2000, teen 
                birth rates declined for all women ages 15-19--white, 
                African American, American Indian, Asian or Pacific 
                Islander, and Hispanic women ages 15-19. The rate for 
                African American teens--until recently the highest--
                experienced the largest decline, down 31 percent from 
                1991 to 2000, to reach the lowest rate ever reported 
                for this group. Most births to teens are nonmarital; in 
                2000, about 73 percent of the births to teens aged 15-
                19 occurred outside of marriage.
                    (B) Nonmarital childbearing continued to increase 
                slightly in 2000, however not at the sharp rates of 
                increase seen in recent decades. The birth rate among 
                unmarried women in 2000 was 3.5 percent lower than its 
                peak reached in 1994, while the proportion of births 
                occurring outside of marriage has remained at 
                approximately 33 percent since 1998.
                    (C) The negative consequences of out-of-wedlock 
                birth on the mother, the child, the family, and society 
                are well documented. These include increased likelihood 
                of welfare dependency, increased risks of low birth 
                weight, poor cognitive development, child abuse and 
                neglect, and teen parenthood, and decreased likelihood 
                of having an intact marriage during adulthood.
                    (D) An estimated 23,900,000 children do not live 
                with their biological father. 16,000,000 children live 
                with their mother only. These facts are attributable 
                largely to declining marriage rates, increasing divorce 
                rates, and increasing rates of nonmarital births during 
                the latter part of the 20th century.
                    (E) There has been a dramatic rise in cohabitation 
                as marriages have declined. Only 40 percent of children 
                of cohabiting couples will see their parents marry. 
                Those who do marry experience a 50 percent higher 
                divorce rate. Children in single-parent households and 
                cohabiting households are at much higher risk of child 
                abuse than children in intact married and stepparent 
                families.
                    (F) Children who live apart from their biological 
                fathers, on average, are more likely to be poor, 
                experience educational, health, emotional, and 
                psychological problems, be victims of child abuse, 
                engage in criminal behavior, and become involved with 
                the juvenile justice system than their peers who live 
                with their married, biological mother and father. A 
                child living in a single-parent family is nearly 5 
                times as likely to be poor as a child living in a 
                married-couple family. In married-couple families, the 
                child poverty rate is 8.1 percent, in households headed 
                by a single mother, the poverty rate is 39.7 percent.
                    (G) Since the enactment of the Personal 
                Responsibility and Work Opportunity Reconciliation Act 
                of 1996, child support collections within the child 
                support enforcement system have grown every year, 
                increasing from $12,000,000,000 in fiscal year 1996 to 
                nearly $19,000,000,000 in fiscal year 2001. The number 
                of paternities established or acknowledged in fiscal 
                year 2002 reached an historic high of over 1,500,000--
                which includes a nearly 100 percent increase through 
                in-hospital acknowledgement programs to 688,510 in 2000 
                from 349,356 in 1996. Child support collections were 
                made in over 7,000,000 cases in fiscal year 2000, 
                significantly more than the almost 4,000,000 cases 
                having a collection in 1996.
            (3) The Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 gave States great flexibility in the 
        use of Federal funds to develop innovative programs to help 
        families leave welfare and begin employment and to encourage 
        the formation of 2-parent families.
                    (A) Total Federal and State TANF expenditures in 
                fiscal year 2000 were $24,000,000,000, up from 
                $22,600,000,000 for the previous year. This increased 
                spending is attributable to significant new investments 
                in supportive services in the TANF program, such as 
                child care and activities to support work.
                    (B) Since the welfare reform effort began there has 
                been a dramatic increase in work participation 
                (including employment, community service, and work 
                experience) among welfare recipients, as well as an 
                unprecedented reduction in the caseload because 
                recipients have left welfare for work.
                    (C) States are making policy choices and investment 
                decisions best suited to the needs of their citizens.
                            (i) To expand aid to working families, all 
                        States disregard a portion of a family's earned 
                        income when determining benefit levels.
                            (ii) Most States increased the limits on 
                        countable assets above the former Aid to 
                        Families with Dependent Children (AFDC) 
                        program. Every State has increased the vehicle 
                        asset level above the prior AFDC limit for a 
                        family's primary automobile.
                            (iii) States are experimenting with 
                        programs to promote marriage and father 
                        involvement. Over half the States have 
                        eliminated restrictions on 2-parent families. 
                        Many States use TANF, child support, or State 
                        funds to support community-based activities to 
                        help fathers become more involved in their 
                        children's lives or strengthen relationships 
                        between mothers and fathers.
            (4) Therefore, it is the sense of the Congress that 
        increasing success in moving families from welfare to work, as 
        well as in promoting healthy marriage and other means of 
        improving child well-being, are very important Government 
        interests and the policy contained in part A of title IV of the 
        Social Security Act (as amended by this Act) is intended to 
        serve these ends.

                             TITLE I--TANF

SEC. 101. PURPOSES.

    Section 401(a) (42 U.S.C. 601(a)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``increase'' and inserting ``improve child well-being by 
        increasing'';
            (2) in paragraph (1), by inserting ``and services'' after 
        ``assistance'';
            (3) in paragraph (2), by striking ``parents on government 
        benefits'' and inserting ``families on government benefits and 
        reduce poverty''; and
            (4) in paragraph (4), by striking ``two-parent families'' 
        and inserting ``healthy, 2-parent married families, and 
        encourage responsible fatherhood''.

SEC. 102. FAMILY ASSISTANCE GRANTS.

    (a) Extension of Authority.--Section 403(a)(1)(A) (42 U.S.C. 
603(a)(1)(A)) is amended--
            (1) by striking ``1996, 1997, 1998, 1999, 2000, 2001, and 
        2002'' and inserting ``2003 through 2007''; and
            (2) by inserting ``payable to the State for the fiscal 
        year'' before the period.
    (b) State Family Assistance Grant.--Section 403(a)(1) (42 U.S.C. 
603(a)(1)) is amended by striking subparagraphs (B) through (E) and 
inserting the following:
                    ``(B) State family assistance grant.--The State 
                family assistance grant payable to a State for a fiscal 
                year shall be the amount that bears the same ratio to 
                the amount specified in subparagraph (C) of this 
                paragraph as the amount required to be paid to the 
                State under this paragraph for fiscal year 2002 
                (determined without regard to any reduction pursuant to 
                section 412(a)(1)) bears to the total amount required 
                to be paid under this paragraph for fiscal year 2002.
                    ``(C) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each of fiscal 
                years 2003 through 2007 $16,566,542,000 for grants 
                under this paragraph.''.
    (c) Matching Grants for the Territories.--Section 1108(b)(2) (42 
U.S.C. 1308(b)(2)) is amended by striking ``1997 through 2002'' and 
inserting ``2003 through 2007''.

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

    (a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is 
amended by adding at the end the following:
                            ``(vii) Encourage equitable treatment of 
                        married, 2-parent families under the program 
                        referred to in clause (i).''.
    (b) Healthy Marriage Promotion Grants; Repeal of Bonus for 
Reduction of Illegitimacy Ratio.--Section 403(a)(2) (42 U.S.C. 
603(a)(2)) is amended to read as follows:
            ``(2) Healthy marriage promotion grants.--
                    ``(A) Authority.--The Secretary shall award 
                competitive grants to States, territories, and tribal 
                organizations for not more than 50 percent of the cost 
                of developing and implementing innovative programs to 
                promote and support healthy, married, 2-parent 
                families.
                    ``(B) Healthy marriage promotion activities.--Funds 
                provided under subparagraph (A) shall be used to 
                support any of the following programs or activities:
                            ``(i) Public advertising campaigns on the 
                        value of marriage and the skills needed to 
                        increase marital stability and health.
                            ``(ii) Education in high schools on the 
                        value of marriage, relationship skills, and 
                        budgeting.
                            ``(iii) Marriage education, marriage 
                        skills, and relationship skills programs, that 
                        may include parenting skills, financial 
                        management, conflict resolution, and job and 
                        career advancement, for non-married pregnant 
                        women and non-married expectant fathers.
                            ``(iv) Pre-marital education and marriage 
                        skills training for engaged couples and for 
                        couples interested in marriage.
                            ``(v) Marriage enhancement and marriage 
                        skills training programs for married couples.
                            ``(vi) Divorce reduction programs that 
                        teach relationship skills.
                            ``(vii) Marriage mentoring programs which 
                        use married couples as role models and mentors 
                        in at-risk communities.
                            ``(viii) Programs to reduce the 
                        disincentives to marriage in means-tested aid 
                        programs, if offered in conjunction with any 
                        activity described in this subparagraph.
                    ``(C) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each of fiscal 
                years 2003 through 2007 $100,000,000 for grants under 
                this paragraph.''.
    (c) Counting of Spending on Non-Eligible Families to Prevent and 
Reduce Incidence of Out-of-Wedlock Births, Encourage Formation and 
Maintenance of Healthy, 2-Parent Married Families, or Encourage 
Responsible Fatherhood.--Section 409(a)(7)(B)(i) (42 U.S.C. 
609(a)(7)(B)(i)) is amended by adding at the end the following:
                                    ``(V) Counting of spending on non-
                                eligible families to prevent and reduce 
                                incidence of out-of-wedlock births, 
                                encourage formation and maintenance of 
                                healthy, 2-parent married families, or 
                                encourage responsible fatherhood.--The 
                                term `qualified State expenditures' 
                                includes the total expenditures by the 
                                State during the fiscal year under all 
                                State programs for a purpose described 
                                in paragraph (3) or (4) of section 
                                401(a).''.

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

    Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)) is amended--
            (1) in the subparagraph heading, by striking ``of grants 
        for fiscal year 2002'';
            (2) in clause (i), by striking ``fiscal year 2002'' and 
        inserting ``each of fiscal years 2002 through 2006'';
            (3) in clause (ii), by striking ``2002'' and inserting 
        ``2006''; and
            (4) in clause (iii), by striking ``fiscal year 2002'' and 
        inserting ``each of fiscal years 2002 through 2006''.

SEC. 105. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

    (a) Reallocation of Funding.--Section 403(a)(4) (42 U.S.C. 
603(a)(4)) is amended--
            (1) in the paragraph heading, by striking ``high 
        performance states'' and inserting ``employment achievement'';
            (2) in subparagraph (D)(ii)--
                    (A) in subclause (I), by striking ``equals 
                $200,000,000'' and inserting ``(other than 2003) equals 
                $200,000,000, and for bonus year 2003 equals 
                $100,000,000''; and
                    (B) in subclause (II), by striking 
                ``$1,000,000,000'' and inserting ``$900,000,000''; and
            (3) in subparagraph (F), by striking ``$1,000,000,000'' and 
        inserting ``$900,000,000''.
    (b) Bonus to Reward Employment Achievement.--
            (1) In general.--Section 403(a)(4) (42 U.S.C. 603(a)(4)) is 
        amended by striking subparagraphs (A) through (F) and inserting 
        the following:
                    ``(A) In general.--The Secretary shall make a grant 
                pursuant to this paragraph to each State for each bonus 
                year for which the State is an employment achievement 
                State.
                    ``(B) Amount of grant.--
                            ``(i) In general.--Subject to clause (ii) 
                        of this subparagraph, the Secretary shall 
                        determine the amount of the grant payable under 
                        this paragraph to an employment achievement 
                        State for a bonus year, which shall be based on 
                        the performance of the State as determined 
                        under subparagraph (D)(i) for the fiscal year 
                        that immediately precedes the bonus year.
                            ``(ii) Limitation.--The amount payable to a 
                        State under this paragraph for a bonus year 
                        shall not exceed 5 percent of the State family 
                        assistance grant.
                    ``(C) Formula for measuring state performance.--
                            ``(i) In general.--Subject to clause (ii), 
                        not later than October 1, 2003, the Secretary, 
                        in consultation with the States, shall develop 
                        a formula for measuring State performance in 
                        operating the State program funded under this 
                        part so as to achieve the goals of employment 
                        entry, job retention, and increased earnings 
                        from employment for families receiving 
                        assistance under the program, as measured on an 
                        absolute basis and on the basis of improvement 
                        in State performance.
                            ``(ii) Special rule for bonus year 2004.--
                        For the purposes of awarding a bonus under this 
                        paragraph for bonus year 2004, the Secretary 
                        may measure the performance of a State in 
                        fiscal year 2003 using the job entry rate, job 
                        retention rate, and earnings gain rate 
                        components of the formula developed under 
                        section 403(a)(4)(C) as in effect immediately 
                        before the effective date of this paragraph.
                    ``(D) Determination of state performance.--For each 
                bonus year, the Secretary shall--
                            ``(i) use the formula developed under 
                        subparagraph (C) to determine the performance 
                        of each eligible State for the fiscal year that 
                        precedes the bonus year; and
                            ``(ii) prescribe performance standards in 
                        such a manner so as to ensure that--
                                    ``(I) the average annual total 
                                amount of grants to be made under this 
                                paragraph for each bonus year equals 
                                $100,000,000; and
                                    ``(II) the total amount of grants 
                                to be made under this paragraph for all 
                                bonus years equals $500,000,000.
                    ``(E) Definitions.--In this paragraph:
                            ``(i) Bonus year.--The term `bonus year' 
                        means each of fiscal years 2004 through 2008.
                            ``(ii) Employment achievement state.--The 
                        term `employment achievement State' means, with 
                        respect to a bonus year, an eligible State 
                        whose performance determined pursuant to 
                        subparagraph (D)(i) for the fiscal year 
                        preceding the bonus year equals or exceeds the 
                        performance standards prescribed under 
                        subparagraph (D)(ii) for such preceding fiscal 
                        year.
                    ``(F) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal years 
                2004 through 2008 $500,000,000 for grants under this 
                paragraph.
                    ``(G) Grants for tribal organizations.--This 
                paragraph shall apply with respect to tribal 
                organizations in the same manner in which this 
                paragraph applies with respect to States. In 
                determining the criteria under which to make grants to 
                tribal organizations under this paragraph, the 
                Secretary shall consult with tribal organizations.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on October 1, 2003.

SEC. 106. CONTINGENCY FUND.

    (a) Deposits Into Fund.--Section 403(b)(2) (42 U.S.C. 603(b)(2)) is 
amended--
            (1) by striking ``1997, 1998, 1999, 2000, 2001, and 2002'' 
        and inserting ``2003 through 2007''; and
            (2) by striking all that follows ``$2,000,000,000'' and 
        inserting a period.
    (b) Grants.--Section 403(b)(3)(C)(ii) (42 U.S.C. 603(b)(3)(C)(ii)) 
is amended by striking ``fiscal years 1997 through 2002'' and inserting 
``fiscal years 2003 through 2007''.
    (c) Definition of Needy State.--Clauses (i) and (ii) of section 
403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by inserting after 
``1996'' the following: ``, and the Food Stamp Act of 1977 as in effect 
during the corresponding 3-month period in the fiscal year preceding 
such most recently concluded 3-month period,''.
    (d) Annual Reconciliation: Federal Matching of State Expenditures 
Above ``Maintenance of Effort'' Level.--Section 403(b)(6) (42 U.S.C. 
603(b)(6)) is amended--
            (1) in subparagraph (A)(ii)--
                    (A) by adding ``and'' at the end of subclause (I);
                    (B) by striking ``; and'' at the end of subclause 
                (II) and inserting a period; and
                    (C) by striking subclause (III);
            (2) in subparagraph (B)(i)(II), by striking all that 
        follows ``section 409(a)(7)(B)(iii))'' and inserting a period;
            (3) by amending subparagraph (B)(ii)(I) to read as follows:
                                    ``(I) the qualified State 
                                expenditures (as defined in section 
                                409(a)(7)(B)(i)) for the fiscal year; 
                                plus''; and
            (4) by striking subparagraph (C).
    (e) Consideration of Certain Child Care Expenditures in Determining 
State Compliance With Contingency Fund Maintenance of Effort 
Requirement.--Section 409(a)(10) (42 U.S.C. 609(a)(10)) is amended--
            (1) by striking ``(other than the expenditures described in 
        subclause (I)(bb) of that paragraph)) under the State program 
        funded under this part'' and inserting a close parenthesis; and
            (2) by striking ``excluding any amount expended by the 
        State for child care under subsection (g) or (i) of section 402 
        (as in effect during fiscal year 1994) for fiscal year 1994,''.

SEC. 107. USE OF FUNDS.

    (a) General Rules.--Section 404(a)(2) (42 U.S.C. 604(a)(2)) is 
amended by striking ``in any manner that'' and inserting ``for any 
purposes or activities for which''.
    (b) Treatment of Interstate Immigrants.--
            (1) State plan provision.--Section 402(a)(1)(B) (42 U.S.C. 
        602(a)(1)(B)) is amended by striking clause (i) and 
        redesignating clauses (ii) through (iv) as clauses (i) through 
        (iii), respectively.
            (2) Use of funds.--Section 404 (42 U.S.C. 604) is amended 
        by striking subsection (c).
    (c) Increase in Amount Transferable to Child Care.--Section 
404(d)(1) (42 U.S.C. 604(d)(1)) is amended by striking ``30'' and 
inserting ``50''.
    (d) Increase in Amount Transferable to Title XX Programs.--Section 
404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is amended to read as follows:
                    ``(B) Applicable percent.--For purposes of 
                subparagraph (A), the applicable percent is 10 percent 
                for fiscal year 2003 and each succeeding fiscal 
                year.''.
    (e) Clarification of Authority of States To Use TANF Funds Carried 
Over From Prior Years To Provide TANF Benefits and Services.--Section 
404(e) (42 U.S.C. 604(e)) is amended to read as follows:
    ``(e) Authority To Carryover or Reserve Certain Amounts for 
Benefits or Services or for Future Contingencies.--
            ``(1) Carryover.--A State or tribe may use a grant made to 
        the State or tribe under this part for any fiscal year to 
        provide, without fiscal year limitation, any benefit or service 
        that may be provided under the State or tribal program funded 
        under this part.
            ``(2) Contingency reserve.--A State or tribe may designate 
        any portion of a grant made to the State or tribe under this 
        part as a contingency reserve for future needs, and may use any 
        amount so designated to provide, without fiscal year 
        limitation, any benefit or service that may be provided under 
        the State or tribal program funded under this part. If a State 
        or tribe so designates a portion of such a grant, the State 
        shall, on an annual basis, include in its report under section 
        411(a) the amount so designated.''.

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

    (a) Repeal.--Section 406 (42 U.S.C. 606) is repealed.
    (b) Conforming Amendments.--
            (1) Section 409(a) (42 U.S.C. 609(a)) is amended by 
        striking paragraph (6).
            (2) Section 412 (42 U.S.C. 612) is amended by striking 
        subsection (f) and redesignating subsections (g) through (i) as 
        subsections (f) through (h), respectively.
            (3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by 
        striking ``406,''.

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

    (a) Modification of State Plan Requirements.--Section 402(a)(1)(A) 
(42 U.S.C. 602(a)(1)(A)) is amended by striking clauses (ii) and (iii) 
and inserting the following:
                            ``(ii) Require a parent or caretaker 
                        receiving assistance under the program to 
                        engage in work or alternative self-sufficiency 
                        activities (as defined by the State), 
                        consistent with section 407(e)(2).
                            ``(iii) Require families receiving 
                        assistance under the program to engage in 
                        activities in accordance with family self-
                        sufficiency plans developed pursuant to section 
                        408(b).''.
    (b) Establishment of Family Self-Sufficiency Plans.--
            (1) In general.--Section 408(b) (42 U.S.C. 608(b)) is 
        amended to read as follows:
    ``(b) Family Self-Sufficiency Plans.--
            ``(1) In general.--A State to which a grant is made under 
        section 403 shall--
                    ``(A) assess, in the manner deemed appropriate by 
                the State, of the skills, prior work experience, and 
                employability of each work-eligible individual (as 
                defined in section 407(b)(2)(C)) receiving assistance 
                under the State program funded under this part;
                    ``(B) establish for each family that includes such 
                an individual, in consultation as the State deems 
                appropriate with the individual, a self-sufficiency 
                plan that specifies appropriate activities described in 
                the State plan submitted pursuant to section 402, 
                including direct work activities as appropriate 
                designed to assist the family in achieving their 
                maximum degree of self-sufficiency, and that provides 
                for the ongoing participation of the individual in the 
                activities;
                    ``(C) require, at a minimum, each such individual 
                to participate in activities in accordance with the 
                self-sufficiency plan;
                    ``(D) monitor the participation of each such 
                individual in the activities specified in the self 
                sufficiency plan, and regularly review the progress of 
                the family toward self-sufficiency;
                    ``(E) upon such a review, revise the self-
                sufficiency plan and activities as the State deems 
                appropriate.
            ``(2) Timing.--The State shall comply with paragraph (1) 
        with respect to a family--
                    ``(A) in the case of a family that, as of October 
                1, 2002, is not receiving assistance from the State 
                program funded under this part, not later than 60 days 
                after the family first receives assistance on the basis 
                of the most recent application for the assistance; or
                    ``(B) in the case of a family that, as of such 
                date, is receiving the assistance, not later than 12 
                months after the date of enactment of this subsection.
            ``(3) State discretion.--A State shall have sole 
        discretion, consistent with section 407, to define and design 
        activities for families for purposes of this subsection, to 
        develop methods for monitoring and reviewing progress pursuant 
        to this subsection, and to make modifications to the plan as 
        the State deems appropriate to assist the individual in 
        increasing their degree of self-sufficiency.
            ``(4) Rule of interpretation.--Nothing in this part shall 
        preclude a State from requiring participation in work and any 
        other activities the State deems appropriate for helping 
        families achieve self-sufficiency and improving child well-
        being.''.
            (2) Penalty for failure to establish family self-
        sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is 
        amended--
                    (A) in the paragraph heading, by inserting ``or 
                establish family self-sufficiency plan'' after 
                ``rates''; and
                    (B) in subparagraph (A), by inserting ``or 408(b)'' 
                after ``407(a)''.

SEC. 110. WORK PARTICIPATION REQUIREMENTS.

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

``SEC. 407. WORK PARTICIPATION REQUIREMENTS.

    ``(a) Participation Rate Requirements.--A State to which a grant is 
made under section 403 for a fiscal year shall achieve a minimum 
participation rate equal to not less than--
            ``(1) 50 percent for fiscal year 2003;
            ``(2) 55 percent for fiscal year 2004;
            ``(3) 60 percent for fiscal year 2005;
            ``(4) 65 percent for fiscal year 2006; and
            ``(5) 70 percent for fiscal year 2007 and each succeeding 
        fiscal year.
    ``(b) Calculation of Participation Rates.--
            ``(1) Average monthly rate.--For purposes of subsection 
        (a), the participation rate of a State for a fiscal year is the 
        average of the participation rates of the State for each month 
        in the fiscal year.
            ``(2) Monthly participation rates; incorporation of 40-hour 
        work week standard.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the participation rate of a State for a month is--
                            ``(i) the total number of countable hours 
                        (as defined in subsection (c)) with respect to 
                        the counted families for the State for the 
                        month; divided by
                            ``(ii) 160 multiplied by the number of 
                        counted families for the State for the month.
                    ``(B) Counted families defined.--
                            ``(i) In general.--In subparagraph (A), the 
                        term `counted family' means, with respect to a 
                        State and a month, a family that includes a 
                        work-eligible individual and that receives 
                        assistance in the month under the State program 
                        funded under this part, subject to clause (ii).
                            ``(ii) State option to exclude certain 
                        families.--At the option of a State, the term 
                        `counted family' shall not include--
                                    ``(I) a family in the first month 
                                for which the family receives 
                                assistance from a State program funded 
                                under this part on the basis of the 
                                most recent application for such 
                                assistance; or
                                    ``(II) on a case-by-case basis, a 
                                family in which the youngest child has 
                                not attained 12 months of age.
                            ``(iii) State option to include individuals 
                        receiving assistance under a tribal family 
                        assistance plan or tribal work program.--At the 
                        option of a State, the term `counted family' 
                        may include families in the State that are 
                        receiving assistance under a tribal family 
                        assistance plan approved under section 412 or 
                        under a tribal work program to which funds are 
                        provided under this part.
                    ``(C) Work-eligible individual defined.--In this 
                section, the term `work-eligible individual' means an 
                individual--
                            ``(i) who is married or a single head of 
                        household; and
                            ``(ii) whose needs are (or, but for 
                        sanctions under this part that have been in 
                        effect for more than 3 months (whether or not 
                        consecutive) in the preceding 12 months or 
                        under part D, would be) included in determining 
                        the amount of cash assistance to be provided to 
                        the family under the State program funded under 
                        this part.''.
    (b) Recalibration of Caseload Reduction Credit.--Section 
407(b)(3)(A)(ii) (42 U.S.C. 607(b)(3)(A)(ii)) is amended to read as 
follows:
                            ``(ii) the average monthly number of 
                        families that received assistance under the 
                        State program funded under this part during--
                                    ``(I) if the fiscal year is fiscal 
                                year 2003, fiscal year 1996;
                                    ``(II) if the fiscal year is fiscal 
                                year 2004, fiscal year 1998;
                                    ``(III) if the fiscal year is 
                                fiscal year 2005, fiscal year 2001; or
                                    ``(IV) if the fiscal year is fiscal 
                                year 2006 or any succeeding fiscal 
                                year, the then 4th preceding fiscal 
                                year.''.
    (c) Superachiever Credit.--Section 407(b) (42 U.S.C. 607(b)) is 
amended by striking paragraphs (4) and (5) and inserting the following:
            ``(4) Superachiever credit.--
                    ``(A) In general.--The participation rate, 
                determined under paragraphs (1) and (2) of this 
                subsection, of a superachiever State for a fiscal year 
                shall be increased by the lesser of--
                            ``(i) the amount (if any) of the 
                        superachiever credit applicable to the State; 
                        or
                            ``(ii) the number of percentage points (if 
                        any) by which the minimum participation rate 
                        required by subsection (a) for the fiscal year 
                        exceeds 50 percent.
                    ``(B) Superachiever state.--For purposes of 
                subparagraph (A), a State is a superachiever State if 
                the State caseload for fiscal year 2001 has declined by 
                at least 60 percent from the State caseload for fiscal 
                year 1995.
                    ``(C) Amount of credit.--The superachiever credit 
                applicable to a State is the number of percentage 
                points (if any) by which the decline referred to in 
                subparagraph (B) exceeds 60 percent.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) State caseload for fiscal year 
                        2001.--The term `State caseload for fiscal year 
                        2001' means the average monthly number of 
                        families that received assistance during fiscal 
                        year 2001 under the State program funded under 
                        this part.
                            ``(ii) State caseload for fiscal year 
                        1995.--The term `State caseload for fiscal year 
                        1995' means the average monthly number of 
                        families that received aid under the State plan 
                        approved under part A (as in effect on 
                        September 30, 1995) during fiscal year 1995.''.
    (d) Countable Hours.--Section 407 of such Act (42 U.S.C. 607) is 
amended by striking subsections (c) and (d) and inserting the 
following:
    ``(c) Countable Hours.--
            ``(1) Definition.--In subsection (b)(2), the term 
        `countable hours' means, with respect to a family for a month, 
        the total number of hours in the month in which any member of 
        the family who is a work-eligible individual is engaged in a 
        direct work activity or other activities specified by the State 
        (excluding an activity that does not address a purpose 
        specified in section 401(a)), subject to the other provisions 
        of this subsection.
            ``(2) Limitations.--Subject to such regulations as the 
        Secretary may prescribe:
                    ``(A) Minimum weekly average of 24 hours of direct 
                work activities required.--If the work-eligible 
                individuals in a family are engaged in a direct work 
                activity for an average total of fewer than 24 hours 
                per week in a month, then the number of countable hours 
                with respect to the family for the month shall be zero.
                    ``(B) Maximum weekly average of 16 hours of other 
                activities.--An average of not more than 16 hours per 
                week of activities specified by the State (subject to 
                the exclusion described in paragraph (1)) may be 
                considered countable hours in a month with respect to a 
                family.
            ``(3) Special rules.--For purposes of paragraph (1):
                    ``(A) Participation in qualified activities.--
                            ``(i) In general.--If, with the approval of 
                        the State, the work-eligible individuals in a 
                        family are engaged in 1 or more qualified 
                        activities for an average total of at least 24 
                        hours per week in a month, then all such 
                        engagement in the month shall be considered 
                        engagement in a direct work activity, subject 
                        to clause (iii).
                            ``(ii) Qualified activity defined.--The 
                        term `qualified activity' means an activity 
                        specified by the State (subject to the 
                        exclusion described in paragraph (1)) that 
                        meets such standards and criteria as the State 
                        may specify, including--
                                    ``(I) substance abuse counseling or 
                                treatment;
                                    ``(II) rehabilitation treatment and 
                                services;
                                    ``(III) work-related education or 
                                training directed at enabling the 
                                family member to work;
                                    ``(IV) job search or job readiness 
                                assistance; and
                                    ``(V) any other activity that 
                                addresses a purpose specified in 
                                section 401(a).
                            ``(iii) Limitation.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), clause (i) 
                                shall not apply to a family for more 
                                than 3 months in any period of 24 
                                consecutive months.
                                    ``(II) Special rule applicable to 
                                education and training.--A State may, 
                                on a case-by-case basis, apply clause 
                                (i) to a work-eligible individual so 
                                that participation by the individual in 
                                education or training, if needed to 
                                permit the individual to complete a 
                                certificate program or other work-
                                related education or training directed 
                                at enabling the individual to fill a 
                                known job need in a local area, may be 
                                considered countable hours with respect 
                                to the family of the individual for not 
                                more than 4 months in any period of 24 
                                consecutive months.
                    ``(B) School attendance by teen head of 
                household.--The work-eligible members of a family shall 
                be considered to be engaged in a direct work activity 
                for an average of 40 hours per week in a month if the 
                family includes an individual who is married, or is a 
                single head of household, who has not attained 20 years 
                of age, and the individual--
                            ``(i) maintains satisfactory attendance at 
                        secondary school or the equivalent in the 
                        month; or
                            ``(ii) participates in education directly 
                        related to employment for an average of at 
                        least 20 hours per week in the month.
    ``(d) Direct Work Activity.--In this section, the term `direct work 
activity' means--
            ``(1) unsubsidized employment;
            ``(2) subsidized private sector employment;
            ``(3) subsidized public sector employment;
            ``(4) on-the-job training;
            ``(5) supervised work experience; or
            ``(6) supervised community service.''.
    (e) Penalties Against Individuals.--Section 407(e)(1) (42 U.S.C. 
607(e)(1)) is amended to read as follows:
            ``(1) Reduction or termination of assistance.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), if an individual in a family receiving assistance 
                under a State program funded under this part fails to 
                engage in activities required in accordance with this 
                section, or other activities required by the State 
                under the program, and the family does not otherwise 
                engage in activities in accordance with the self-
                sufficiency plan established for the family pursuant to 
                section 408(b), the State shall--
                            ``(i) if the failure is partial or persists 
                        for not more than 1 month--
                                    ``(I) reduce the amount of 
                                assistance otherwise payable to the 
                                family pro rata (or more, at the option 
                                of the State) with respect to any 
                                period during a month in which the 
                                failure occurs; or
                                    ``(II) terminate all assistance to 
                                the family, subject to such good cause 
                                exceptions as the State may establish; 
                                or
                            ``(ii) if the failure is total and persists 
                        for at least 2 consecutive months, terminate 
                        all cash payments to the family including 
                        qualified State expenditures (as defined in 
                        section 409(a)(7)(B)(i)) for at least 1 month 
                        and thereafter until the State determines that 
                        the individual has resumed full participation 
                        in the activities, subject to such good cause 
                        exceptions as the State may establish.
                    ``(B) Special rule.--In the event of a conflict 
                between a requirement of clause (i)(II) or (ii) of 
                subparagraph (A) and a requirement of a State 
                constitution, or of a State statute that, before 1966, 
                obligated local government to provide assistance to 
                needy parents and children, the State constitutional or 
                statutory requirement shall control.''.
    (f) Conforming Amendments.--
            (1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of 
        paragraphs (1) and (2) by striking ``work activity described in 
        subsection (d)'' and inserting ``direct work activity''.
            (2) The heading of section 409(a)(14) (42 U.S.C. 
        609(a)(14)) is amended by inserting ``or refusing to engage in 
        activities under a family self-sufficiency plan'' after 
        ``work''.

SEC. 111. MAINTENANCE OF EFFORT.

    (a) In General.--Section 409(a)(7) (42 U.S.C. 609(a)(7)) is 
amended--
            (1) in subparagraph (A) by striking ``fiscal year 1998, 
        1999, 2000, 2001, 2002, or 2003'' and inserting ``fiscal year 
        2003, 2004, 2005, 2006, 2007 or 2008''; and
            (2) in subparagraph (B)(ii)--
                    (A) by inserting ``preceding'' before ``fiscal 
                year''; and
                    (B) by striking ``for fiscal years 1997 through 
                2002,''.
    (b) State Spending on Promoting Healthy Marriage.--
            (1) In general.--Section 404 (42 U.S.C. 604) is amended by 
        adding at the end the following:
    ``(l) Marriage Promotion.--A State, territory, or tribal 
organization to which a grant is made under section 403(a)(2) may use a 
grant made to the State, territory, or tribal organization under any 
other provision of section 403 for marriage promotion activities, and 
the amount of any such grant so used shall be considered State funds 
for purposes of section 403(a)(2).''.
            (2) Federal tanf funds used for marriage promotion 
        disregarded for purposes of maintenance of effort 
        requirement.--Section 409(a)(7)(B)(i) (42 U.S.C. 
        609(a)(7)(B)(i)), as amended by section 103(c) of this Act, is 
        amended by adding at the end the following:
                                    ``(VI) Exclusion of federal tanf 
                                funds used for marriage promotion 
                                activities.--Such term does not include 
                                the amount of any grant made to the 
                                State under section 403 that is 
                                expended for a marriage promotion 
                                activity.''.

SEC. 112. PERFORMANCE IMPROVEMENT.

    (a) State Plans.--Section 402(a) (42 U.S.C. 602(a)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) by redesignating clause (vi) and clause 
                        (vii) (as added by section 103(a) of this Act) 
                        as clauses (vii) and (viii), respectively; and
                            (ii) by striking clause (v) and inserting 
                        the following:
                            ``(v) The document shall--
                                    ``(I) describe how the State will 
                                pursue ending dependence of needy 
                                families on government benefits and 
                                reducing poverty by promoting job 
                                preparation and work;
                                    ``(II) describe how the State will 
                                encourage the formation and maintenance 
                                of healthy 2-parent married families, 
                                encourage responsible fatherhood, and 
                                prevent and reduce the incidence of 
                                out-of-wedlock pregnancies;
                                    ``(III) include specific, 
                                numerical, and measurable performance 
                                objectives for accomplishing subclauses 
                                (I) and (II), and with respect to 
                                subclause (I), include objectives 
                                consistent with the criteria used by 
                                the Secretary in establishing 
                                performance targets under section 
                                403(a)(4)(B) if available; and
                                    ``(IV) describe the methodology 
                                that the State will use to measure 
                                State performance in relation to each 
                                such objective.
                            ``(vi) Describe any strategies and programs 
                        the State may be undertaking to address--
                                    ``(I) employment retention and 
                                advancement for recipients of 
                                assistance under the program, including 
                                placement into high-demand jobs, and 
                                whether the jobs are identified using 
                                labor market information;
                                    ``(II) efforts to reduce teen 
                                pregnancy;
                                    ``(III) services for struggling and 
                                noncompliant families, and for clients 
                                with special problems; and
                                    ``(IV) program integration, 
                                including the extent to which 
                                employment and training services under 
                                the program are provided through the 
                                One-Stop delivery system created under 
                                the Workforce Investment Act of 1998, 
                                and the extent to which former 
                                recipients of such assistance have 
                                access to additional core, intensive, 
                                or training services funded through 
                                such Act.''; and
                    (B) in subparagraph (B), by striking clause (iii) 
                (as so redesignated by section 107(b)(1) of this Act) 
                and inserting the following:
                            ``(iii) The document shall describe 
                        strategies and programs the State is 
                        undertaking to engage religious organizations 
                        in the provision of services funded under this 
                        part and efforts related to section 104 of the 
                        Personal Responsibility and Work Opportunity 
                        Reconcilation Act of 1996.
                            ``(iv) The document shall describe 
                        strategies to improve program management and 
                        performance.''; and
            (2) in paragraph (4), by inserting ``and tribal'' after 
        ``that local''.
    (b) Consultation With State Regarding Plan and Design of Tribal 
Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(G) provides an assurance that the State in which 
                the tribe is located has been consulted regarding the 
                plan and its design.''.
    (c) Performance Measures.--Section 413 (42 U.S.C. 613) is amended 
by adding at the end the following:
    ``(k) Performance Improvement.--The Secretary, in consultation with 
the States, shall develop uniform performance measures designed to 
assess the degree of effectiveness, and the degree of improvement, of 
State programs funded under this part in accomplishing the purposes of 
this part.''.
    (d) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C. 
613(d)(1)) is amended by striking ``long-term private sector jobs'' and 
inserting ``private sector jobs, the success of the recipients in 
retaining employment, the ability of the recipients to increase their 
wages''.

SEC. 113. DATA COLLECTION AND REPORTING.

    (a) Contents of Report.-- Section 411(a)(1)(A) (42 U.S.C. 
611(a)(1)(A)) is amended--
            (1) in clause (vii), by inserting ``and minor parent'' 
        after ``of each adult'';
            (2) in clause (viii), by striking ``and educational 
        level'';
            (3) in clause (ix), by striking ``, and if the latter 2, 
        the amount received'';
            (4) in clause (x)--
                    (A) by striking ``each type of''; and
                    (B) by inserting before the period ``and, if 
                applicable, the reason for receipt of the assistance 
                for a total of more than 60 months'';
            (5) in clause (xi), by striking the subclauses and 
        inserting the following:
                                    ``(I) Subsidized private sector 
                                employment.
                                    ``(II) Unsubsidized employment.
                                    ``(III) Public sector employment, 
                                supervised work experience, or 
                                supervised community service.
                                    ``(IV) On-the-job training.
                                    ``(V) Job search and placement.
                                    ``(VI) Training.
                                    ``(VII) Education.
                                    ``(VIII) Other activities directed 
                                at the purposes of this part, as 
                                specified in the State plan submitted 
                                pursuant to section 402.'';
            (6) in clause (xii), by inserting ``and progress toward 
        universal engagement'' after ``participation rates'';
            (7) in clause (xiii), by striking ``type and'' before 
        ``amount of assistance'';
            (8) in clause (xvi), by striking subclause (II) and 
        redesignating subclauses (III) through (V) as subclauses (II) 
        through (IV), respectively; and
            (9) by adding at the end the following:
                            ``(xviii) The date the family first 
                        received assistance from the State program on 
                        the basis of the most recent application for 
                        such assistance.
                            ``(xix) Whether a self-sufficiency plan is 
                        established for the family in accordance with 
                        section 408(b).
                            ``(xx) With respect to any child in the 
                        family, the marital status of the parents at 
                        the birth of the child, and if the parents were 
                        not then married, whether the paternity of the 
                        child has been established.''.
    (b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 611(a)(1)(B)) 
is amended--
            (1) in clause (i)--
                    (A) by striking ``a sample'' and inserting 
                ``samples''; and
                    (B) by inserting before the period ``, except that 
                the Secretary may designate core data elements that 
                must be reported on all families''; and
            (2) in clause (ii), by striking ``funded under this part'' 
        and inserting ``described in subparagraph (A)''.
    (c) Report on Families That Become Ineligible To Receive 
Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
            (1) by striking paragraph (5);
            (2) by redesignating paragraph (6) as paragraph (5); and
            (3) by inserting after paragraph (5) (as so redesignated) 
        the following:
            ``(6) Report on families that become ineligible to receive 
        assistance.--The report required by paragraph (1) for a fiscal 
        quarter shall include for each month in the quarter the number 
        of families and total number of individuals that, during the 
        month, became ineligible to receive assistance under the State 
        program funded under this part (broken down by the number of 
        families that become so ineligible due to earnings, changes in 
        family composition that result in increased earnings, 
        sanctions, time limits, or other specified reasons).''.
    (d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) is 
amended--
            (1) by inserting ``and to collect the necessary data'' 
        before ``with respect to which reports'';
            (2) by striking ``subsection'' and inserting ``section''; 
        and
            (3) by striking ``in defining the data elements'' and all 
        that follows and inserting ``, the National Governors' 
        Association, the American Public Human Services Association, 
        the National Conference of State Legislatures, and others in 
        defining the data elements.''.
    (e) Additional Reports by States.--Section 411 (42 U.S.C. 611) is 
amended--
            (1) by redesignating subsection (b) as subsection (e); and
            (2) by inserting after subsection (a) the following:
    ``(b) Annual Reports on Program Characteristics.--Not later than 90 
days after the end of fiscal year 2004 and each succeeding fiscal year, 
each eligible State shall submit to the Secretary a report on the 
characteristics of the State program funded under this part and other 
State programs funded with qualified State expenditures (as defined in 
section 409(a)(7)(B)(i)). The report shall include, with respect to 
each such program, the program name, a description of program 
activities, the program purpose, the program eligibility criteria, the 
sources of program funding, the number of program beneficiaries, 
sanction policies, and any program work requirements.
    ``(c) Monthly Reports on Caseload.--Not later than 3 months after 
the end of a calendar month that begins 1 year or more after the 
enactment of this subsection, each eligible State shall submit to the 
Secretary report on the number of families and total number of 
individuals receiving assistance in the calendar month under the State 
program funded under this part.
    ``(d) Annual Report on Performance Improvement.--Beginning with 
fiscal year 2004, not later than January 1 of each fiscal year, each 
eligible State shall submit to the Secretary a report on achievement 
and improvement during the preceding fiscal year under the numerical 
performance goals and measures under the State program funded under 
this part with respect to each of the matters described in section 
402(a)(1)(A)(v).''.
    (f) Annual Reports to Congress by the Secretary.--Section 411(e), 
as so redesignated by subsection (e) of this section, is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``and each fiscal year thereafter'' and inserting ``and by July 
        1 of each fiscal year thereafter'';
            (2) in paragraph (2), by striking ``families applying for 
        assistance,'' and by striking the last comma; and
            (3) in paragraph (3), by inserting ``and other programs 
        funded with qualified State expenditures (as defined in section 
        409(a)(7)(B)(i))'' before the semicolon.
    (g) Increased Analysis of State Single Audit Reports.--Section 411 
(42 U.S.C. 611) is amended by adding at the end the following:
    ``(f) Increased Analysis of State Single Audit Reports.--
            ``(1) In general.--Within 3 months after a State submits to 
        the Secretary a report pursuant to section 7502(a)(1)(A) of 
        title 31, United States Code, the Secretary shall analyze the 
        report for the purpose of identifying the extent and nature of 
        problems related to the oversight by the State of 
        nongovernmental entities with respect to contracts entered into 
        by such entities with the State program funded under this part, 
        and determining what additional actions may be appropriate to 
        help prevent and correct the problems.
            ``(2) Inclusion of program oversight section in annual 
        report to the congress.--The Secretary shall include in each 
        report under subsection (a) a section on oversight of State 
        programs funded under this part, including findings on the 
        extent and nature of the problems referred to in paragraph (1), 
        actions taken to resolve the problems, and to the extent the 
        Secretary deems appropriate make recommendations on changes 
        needed to resolve the problems.''.

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

    (a) Tribal Family Assistance Grant.--Section 412(a)(1)(A) (42 
U.S.C. 612(a)(1)(A)) is amended by striking ``1997, 1998, 1999, 2000, 
2001, and 2002'' and inserting ``2003 through 2007''.
    (b) Grants for Indian Tribes That Received JOBS funds.--Section 
412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by striking ``1997, 
1998, 1999, 2000, 2001, and 2002'' and inserting ``2003 through 2007''.

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

    (a) Secretary's Fund for Research, Demonstrations, and Technical 
Assistance.--Section 413 (42 U.S.C. 613), as amended by section 112(c) 
of this Act, is further amended by adding at the end the following:
    ``(l) Funding for Research, Demonstrations, and Technical 
Assistance.--
            ``(1) In general.--Out of any money in the Treasury of the 
        United States not otherwise appropriated, there are 
        appropriated $102,000,000 for each of fiscal years 2003 through 
        2007, which shall be available to the Secretary for the purpose 
        of conducting and supporting research and demonstration 
        projects by public or private entities, and providing technical 
        assistance to States, Indian tribal organizations, and such 
        other entities as the Secretary may specify that are receiving 
        a grant under this part, which shall be expended primarily on 
        activities described in section 403(a)(2)(B), and which shall 
        be in addition to any other funds made available under this 
        part.
            ``(2) Set aside for demonstration projects for coordination 
        of provision of child welfare and tanf services to tribal 
        families at risk of child abuse or neglect.--
                    ``(A) In general.--Of the amounts made available 
                under paragraph (1) for a fiscal year, $2,000,000 shall 
                be awarded on a competitive basis to fund demonstration 
                projects designed to test the effectiveness of tribal 
                governments or tribal consortia in coordinating the 
                provision to tribal families at risk of child abuse or 
                neglect of child welfare services and services under 
                tribal programs funded under this part.
                    ``(B) Use of funds.--A grant made to such a project 
                shall be used--
                            ``(i) to improve case management for 
                        families eligible for assistance from such a 
                        tribal program;
                            ``(ii) for supportive services and 
                        assistance to tribal children in out-of-home 
                        placements and the tribal families caring for 
                        such children, including families who adopt 
                        such children; and
                            ``(iii) for prevention services and 
                        assistance to tribal families at risk of child 
                        abuse and neglect.
                    ``(C) Reports.--The Secretary may require a 
                recipient of funds awarded under this paragraph to 
                provide the Secretary with such information as the 
                Secretary deems relevant to enable the Secretary to 
                facilitate and oversee the administration of any 
                project for which funds are provided under this 
                paragraph.''.
    (b) Funding of Studies and Demonstrations.--Section 413(h)(1) (42 
U.S.C. 613(h)(1)) is amended in the matter preceding subparagraph (A) 
by striking ``1997 through 2002'' and inserting ``2003 through 2007''.
    (c) Report on Enforcement of Certain Affidavits of Support and 
Sponsor Deeming.--Not later than March 31, 2004, the Secretary of 
Health and Human Services, in consultation with the Attorney General, 
shall submit to the Congress a report on the enforcement of affidavits 
of support and sponsor deeming as required by section 421, 422, and 432 
of the Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996.
    (d) Report on Coordination.--Not later than 6 months after the date 
of the enactment of this Act, the Secretary of Health and Human 
Services and the Secretary of Labor shall jointly submit a report to 
the Congress describing common or conflicting data elements, 
definitions, performance measures, and reporting requirements in the 
Workforce Investment Act of 1998 and part A of title IV of the Social 
Security Act, and, to the degree each Secretary deems appropriate, at 
the discretion of either Secretary, any other program administered by 
the respective Secretary, to allow greater coordination between the 
welfare and workforce development systems.

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

    (a) Census Bureau Study.--
            (1) In general.--Section 414(a) (42 U.S.C. 614(a)) is 
        amended to read as follows:
    ``(a) In General.--The Bureau of the Census shall implement a new 
longitudinal survey of program dynamics, developed in consultation with 
the Secretary and made available to interested parties, to allow for 
the assessment of the outcomes of continued welfare reform on the 
economic and child well-being of low-income families with children, 
including those who received assistance or services from a State 
program funded under this part, and, to the extent possible, shall 
provide State representative samples. The content of the survey should 
include such information as may be necessary to examine the issues of 
out-of-wedlock childbearing, marriage, welfare dependency and 
compliance with work requirements, the beginning and ending of spells 
of assistance, work, earnings and employment stability, and the well-
being of children.''.
            (2) Appropriation.--Section 414(b) (42 U.S.C. 614(b)) is 
        amended by striking ``1996,'' and all that follows through 
        ``2002'' and inserting ``2003 through 2007''.
    (b) GAO Study.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study to determine the combined effect 
        of the phase-out rates for Federal programs and policies which 
        provide support to low-income families and individuals as they 
        move from welfare to work, at all earning levels up to $35,000 
        per year, for at least 5 States including Wisconsin and 
        California, and any potential disincentives the combined phase-
        out rates create for families to achieve independence or to 
        marry.
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this subsection, the Comptroller General shall 
        submit a report to Congress containing the results of the study 
        conducted under this section and, as appropriate, any 
        recommendations consistent with the results.

SEC. 117. DEFINITION OF ASSISTANCE.

    (a) In General.--Section 419 (42 U.S.C. 619) is amended by adding 
at the end the following:
            ``(6) Assistance.--
                    ``(A) In general.--The term `assistance' means 
                payment, by cash, voucher, or other means, to or for an 
                individual or family for the purpose of meeting a 
                subsistence need of the individual or family (including 
                food, clothing, shelter, and related items, but not 
                including costs of transportation or child care).
                    ``(B) Exception.--The term `assistance' does not 
                include a payment described in subparagraph (A) to or 
                for an individual or family on a short-term, 
                nonrecurring basis (as defined by the State in 
                accordance with regulations prescribed by the 
                Secretary).''.
    (b) Conforming Amendments.--
            (1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by 
        striking ``assistance'' and inserting ``aid''.
            (2) Section 404(f) (42 U.S.C. 604(f)) is amended by 
        striking ``assistance'' and inserting ``benefits or services''.
            (3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is 
        amended in the heading by striking ``assistance'' and inserting 
        ``aid''.
            (4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by 
        striking ``assistance'' and inserting ``aid''.

SEC. 118. TECHNICAL CORRECTIONS.

    (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by inserting 
a comma after ``appropriate''.
    (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 611(a)(1)(A)(ii)(III)) 
is amended by striking the last close parenthesis.
    (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is amended by 
striking ``section'' and inserting ``sections''.
    (d)(1) Section 413 (42 U.S.C. 613) is amended by striking 
subsection (g) and redesignating subsections (h) through (j) and 
subsections (k) and (l) (as added by sections 112(c) and 115(a) of this 
Act, respectively) as subsections (g) through (k), respectively.
    (2) Each of the following provisions is amended by striking 
``413(j)'' and inserting ``413(i)'':
            (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
        603(a)(5)(A)(ii)(III)).
            (B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
            (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
            (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

SEC. 119. FATHERHOOD PROGRAM.

    (a) Short Title.--This section may be cited as the ``Promotion and 
Support of Responsible Fatherhood and Healthy Marriage Act of 2002''.
    (b) Fatherhood Program.--
            (1) In general.--Title I of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (Public Law 104-
        193) is amended by adding at the end the following:

``SEC. 117. FATHERHOOD PROGRAM.

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

                      `PART C--FATHERHOOD PROGRAM

`SEC. 441. FINDINGS AND PURPOSES.

    `(a) Findings.--The Congress finds that there is substantial 
evidence strongly indicating the urgent need to promote and support 
involved, committed, and responsible fatherhood, and to encourage and 
support healthy marriages between parents raising children, including 
data demonstrating the following:
            `(1) In approximately 90 percent of cases where a parent is 
        absent, that parent is the father.
            `(2) By some estimates, 60 percent of children born in the 
        1990's will spend a significant portion of their childhood in a 
        home without a father.
            `(3) Nearly 75 percent of children in single-parent homes 
        will experience poverty before they are 11 years old, compared 
        with only 20 percent of children in 2-parent families.
            `(4) Low income is positively correlated with children's 
        difficulties with education, social adjustment, and 
        delinquency, and single-parent households constitute a 
        disproportionate share of low-income households.
            `(5) Where families (whether intact or with a parent 
        absent) are living in poverty, a significant factor is the 
        father's lack of job skills.
            `(6) Children raised in 2-parent married families, on 
        average, fare better as a group in key areas, including better 
        school performance, reduced rates of substance abuse, crime, 
        and delinquency, fewer health, emotional, and behavioral 
        problems, lower rates of teenage sexual activity, less risk of 
        abuse or neglect, and lower risk of teen suicide.
            `(7) Committed and responsible fathering during infancy and 
        early childhood contributes to the development of emotional 
        security, curiosity, and math and verbal skills.
            `(8) An estimated 24,000,000 children (33.5 percent) live 
        apart from their biological father.
            `(9) A recent national survey indicates that of all 
        children under age 18 not living with their biological father, 
        29 percent had not seen their father even once in the last 12 
        months.
    `(b) Purposes.--The purposes of this part are:
            `(1) To provide for projects and activities by public 
        entities and by nonprofit community entities, including 
        religious organizations, designed to test promising approaches 
        to accomplishing the following objectives:
                    `(A) Promoting responsible, caring, and effective 
                parenting through counseling, mentoring, and parenting 
                education, dissemination of educational materials and 
                information on parenting skills, encouragement of 
                positive father involvement, including the positive 
                involvement of nonresident fathers, and other methods.
                    `(B) Enhancing the abilities and commitment of 
                unemployed or low-income fathers to provide material 
                support for their families and to avoid or leave 
                welfare programs by assisting them to take full 
                advantage of education, job training, and job search 
                programs, to improve work habits and work skills, to 
                secure career advancement by activities such as 
                outreach and information dissemination, coordination, 
                as appropriate, with employment services and job 
                training programs, including the One-Stop delivery 
                system established under title I of the Workforce 
                Investment Act of 1998, encouragement and support of 
                timely payment of current child support and regular 
                payment toward past due child support obligations in 
                appropriate cases, and other methods.
                    `(C) Improving fathers' ability to effectively 
                manage family business affairs by means such as 
                education, counseling, and mentoring in matters 
                including household management, budgeting, banking, and 
                handling of financial transactions, time management, 
                and home maintenance.
                    `(D) Encouraging and supporting healthy marriages 
                and married fatherhood through such activities as 
                premarital education, including the use of premarital 
                inventories, marriage preparation programs, skills-
                based marriage education programs, marital therapy, 
                couples counseling, divorce education and reduction 
                programs, divorce mediation and counseling, 
                relationship skills enhancement programs, including 
                those designed to reduce child abuse and domestic 
                violence, and dissemination of information about the 
                benefits of marriage for both parents and children.
            `(2) Through the projects and activities described in 
        paragraph (1), to improve outcomes for children with respect to 
        measures such as increased family income and economic security, 
        improved school performance, better health, improved emotional 
        and behavioral stability and social adjustment, and reduced 
        risk of delinquency, crime, substance abuse, child abuse and 
        neglect, teen sexual activity, and teen suicide.
            `(3) To evaluate the effectiveness of various approaches 
        and to disseminate findings concerning outcomes and other 
        information in order to encourage and facilitate the 
        replication of effective approaches to accomplishing these 
        objectives.

`SEC. 442. DEFINITIONS.

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

`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

    `(a) In General.--The Secretary may make grants for fiscal years 
2003 through 2007 to public and nonprofit community entities, including 
religious organizations, and to Indian tribes and tribal organizations, 
for demonstration service projects and activities designed to test the 
effectiveness of various approaches to accomplish the objectives 
specified in section 441(b)(1).
    `(b) Eligibility Criteria for Full Service Grants.--In order to be 
eligible for a grant under this section, except as specified in 
subsection (c), an entity shall submit an application to the Secretary 
containing the following:
            `(1) Project description.--A statement including--
                    `(A) a description of the project and how it will 
                be carried out, including the geographical area to be 
                covered and the number and characteristics of clients 
                to be served, and how it will address each of the 4 
                objectives specified in section 441(b)(1); and
                    `(B) a description of the methods to be used by the 
                entity or its contractor to assess the extent to which 
                the project was successful in accomplishing its 
                specific objectives and the general objectives 
                specified in section 441(b)(1).
            `(2) Experience and qualifications.--A demonstration of 
        ability to carry out the project, by means such as 
        demonstration of experience in successfully carrying out 
        projects of similar design and scope, and such other 
        information as the Secretary may find necessary to demonstrate 
        the entity's capacity to carry out the project, including the 
        entity's ability to provide the non-Federal share of project 
        resources.
            `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
            `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
            `(5) Coordination with specified programs.--An undertaking 
        to coordinate, as appropriate, with State and local entities 
        responsible for the programs under parts A, B, and D of this 
        title, including programs under title I of the Workforce 
        Investment Act of 1998 (including the One-Stop delivery 
        system), and such other programs as the Secretary may require.
            `(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
            `(7) Self-initiated evaluation.--If the entity elects to 
        contract for independent evaluation of the project (part or all 
        of the cost of which may be paid for using grant funds), a 
        commitment to submit to the Secretary a copy of the evaluation 
        report within 30 days after completion of the report and not 
        more than 1 year after completion of the project.
            `(8) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the Secretary's 
        evaluation of projects assisted under this section, by means 
        including random assignment of clients to service recipient and 
        control groups, if determined by the Secretary to be 
        appropriate, and affording the Secretary access to the project 
        and to project-related records and documents, staff, and 
        clients.
    `(c) Eligibility Criteria for Limited Purpose Grants.--In order to 
be eligible for a grant under this section in an amount under $25,000 
per fiscal year, an entity shall submit an application to the Secretary 
containing the following:
            `(1) Project description.--A description of the project and 
        how it will be carried out, including the number and 
        characteristics of clients to be served, the proposed duration 
        of the project, and how it will address at least 1 of the 4 
        objectives specified in section 441(b)(1).
            `(2) Qualifications.--Such information as the Secretary may 
        require as to the capacity of the entity to carry out the 
        project, including any previous experience with similar 
        activities.
            `(3) Coordination with related programs.--As required by 
        the Secretary in appropriate cases, an undertaking to 
        coordinate and cooperate with State and local entities 
        responsible for specific programs relating to the objectives of 
        the project including, as appropriate, jobs programs and 
        programs serving children and families.
            `(4) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
            `(5) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the Secretary's 
        evaluation of projects assisted under this section, by means 
        including affording the Secretary access to the project and to 
        project-related records and documents, staff, and clients.
    `(d) Considerations in Awarding Grants.--
            `(1) Diversity of projects.--In awarding grants under this 
        section, the Secretary shall seek to achieve a balance among 
        entities of differing sizes, entities in differing geographic 
        areas, entities in urban and in rural areas, and entities 
        employing differing methods of achieving the purposes of this 
        section, including working with the State agency responsible 
        for the administration of part D to help fathers satisfy child 
        support arrearage obligations.
            `(2) Preference for projects serving low-income fathers.--
        In awarding grants under this section, the Secretary may give 
        preference to applications for projects in which a majority of 
        the clients to be served are low-income fathers.
    `(e) Federal Share.--
            `(1) In general.--Grants for a project under this section 
        for a fiscal year shall be available for a share of the cost of 
        such project in such fiscal year equal to--
                    `(A) up to 80 percent (or up to 90 percent, if the 
                entity demonstrates to the Secretary's satisfaction 
                circumstances limiting the entity's ability to secure 
                non-Federal resources) in the case of a project under 
                subsection (b); and
                    `(B) up to 100 percent, in the case of a project 
                under subsection (c).
            `(2) Non-federal share.--The non-Federal share may be in 
        cash or in kind. In determining the amount of the non-Federal 
        share, the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

    `(a) In General.--The Secretary may make grants under this section 
for fiscal years 2003 through 2007 to eligible entities (as specified 
in subsection (b)) for 2 multicity, multistate projects demonstrating 
approaches to achieving the objectives specified in section 441(b)(1). 
One of the projects shall test the use of married couples to deliver 
program services.
    `(b) Eligible Entities.--An entity eligible for a grant under this 
section must be a national nonprofit fatherhood promotion organization 
that meets the following requirements:
            `(1) Experience with fatherhood programs.--The organization 
        must have substantial experience in designing and successfully 
        conducting programs that meet the purposes described in section 
        441.
            `(2) Experience with multicity, multistate programs and 
        government coordination.--The organization must have experience 
        in simultaneously conducting such programs in more than 1 major 
        metropolitan area in more than 1 State and in coordinating such 
        programs, where appropriate, with State and local government 
        agencies and private, nonprofit agencies (including community-
        based and religious organizations), including State or local 
        agencies responsible for child support enforcement and 
        workforce development.
    `(c) Application Requirements.--In order to be eligible for a grant 
under this section, an entity must submit to the Secretary an 
application that includes the following:
            `(1) Qualifications.--
                    `(A) Eligible entity.--A demonstration that the 
                entity meets the requirements of subsection (b).
                    `(B) Other.--Such other information as the 
                Secretary may find necessary to demonstrate the 
                entity's capacity to carry out the project, including 
                the entity's ability to provide the non-Federal share 
                of project resources.
            `(2) Project description.--A description of and commitments 
        concerning the project design, including the following:
                    `(A) In general.--A detailed description of the 
                proposed project design and how it will be carried out, 
                which shall--
                            `(i) provide for the project to be 
                        conducted in at least 3 major metropolitan 
                        areas;
                            `(ii) state how it will address each of the 
                        4 objectives specified in section 441(b)(1);
                            `(iii) demonstrate that there is a 
                        sufficient number of potential clients to allow 
                        for the random selection of individuals to 
                        participate in the project and for comparisons 
                        with appropriate control groups composed of 
                        individuals who have not participated in such 
                        projects; and
                            `(iv) demonstrate that the project is 
                        designed to direct a majority of project 
                        resources to activities serving low-income 
                        fathers (but the project need not make services 
                        available on a means-tested basis).
                    `(B) Oversight, evaluation, and adjustment 
                component.--An agreement that the entity--
                            `(i) in consultation with the evaluator 
                        selected pursuant to section 445, and as 
                        required by the Secretary, will modify the 
                        project design, initially and (if necessary) 
                        subsequently throughout the duration of the 
                        project, in order to facilitate ongoing and 
                        final oversight and evaluation of project 
                        operation and outcomes (by means including, to 
                        the maximum extent feasible, random assignment 
                        of clients to service recipient and control 
                        groups), and to provide for mid-course 
                        adjustments in project design indicated by 
                        interim evaluations;
                            `(ii) will submit to the Secretary revised 
                        descriptions of the project design as modified 
                        in accordance with clause (i); and
                            `(iii) will cooperate fully with the 
                        Secretary's ongoing oversight and ongoing and 
                        final evaluation of the project, by means 
                        including affording the Secretary access to the 
                        project and to project-related records and 
                        documents, staff, and clients.
            `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
            `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
            `(5) Coordination with specified programs.--An undertaking 
        to coordinate, as appropriate, with State and local entities 
        responsible for the programs funded under parts A, B, and D of 
        this title, programs under title I of the Workforce Investment 
        Act of 1998 (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
            `(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits (in addition to those required under the 
        preceding provisions of paragraph (2)) as the Secretary may 
        find necessary for purposes of oversight of project activities 
        and expenditures.
    `(d) Federal Share.--
            `(1) In general.--Grants for a project under this section 
        for a fiscal year shall be available for up to 80 percent of 
        the cost of such project in such fiscal year.
            `(2) Non-federal share.--The non-Federal share may be in 
        cash or in kind. In determining the amount of the non-Federal 
        share, the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 445. EVALUATION.

    `(a) In General.--The Secretary, directly or by contract or 
cooperative agreement, shall evaluate the effectiveness of service 
projects funded under sections 443 and 444 from the standpoint of the 
purposes specified in section 441(b)(1).
    `(b) Evaluation Methodology.--Evaluations under this section 
shall--
            `(1) include, to the maximum extent feasible, random 
        assignment of clients to service delivery and control groups 
        and other appropriate comparisons of groups of individuals 
        receiving and not receiving services;
            `(2) describe and measure the effectiveness of the projects 
        in achieving their specific project goals; and
            `(3) describe and assess, as appropriate, the impact of 
        such projects on marriage, parenting, domestic violence, child 
        abuse and neglect, money management, employment and earnings, 
        payment of child support, and child well-being, health, and 
        education.
    `(c) Evaluation Reports.--The Secretary shall publish the following 
reports on the results of the evaluation:
            `(1) An implementation evaluation report covering the first 
        24 months of the activities under this part to be completed by 
        36 months after initiation of such activities.
            `(2) A final report on the evaluation to be completed by 
        September 30, 2010.

`SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

    `The Secretary is authorized, by grant, contract, or cooperative 
agreement, to carry out projects and activities of national 
significance relating to fatherhood promotion, including--
            `(1) Collection and dissemination of information.--
        Assisting States, communities, and private entities, including 
        religious organizations, in efforts to promote and support 
        marriage and responsible fatherhood by collecting, evaluating, 
        developing, and making available (through the Internet and by 
        other means) to all interested parties information regarding 
        approaches to accomplishing the objectives specified in section 
        441(b)(1).
            `(2) Media campaign.--Developing, promoting, and 
        distributing to interested States, local governments, public 
        agencies, and private nonprofit organizations, including 
        charitable and religious organizations, a media campaign that 
        promotes and encourages involved, committed, and responsible 
        fatherhood and married fatherhood.
            `(3) Technical assistance.--Providing technical assistance, 
        including consultation and training, to public and private 
        entities, including community organizations and faith-based 
        organizations, in the implementation of local fatherhood 
        promotion programs.
            `(4) Research.--Conducting research related to the purposes 
        of this part.

`SEC. 447. NONDISCRIMINATION.

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

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

    `(a) Authorization.--There are authorized to be appropriated 
$20,000,000 for each of fiscal years 2003 through 2007 to carry out the 
provisions of this part.
    `(b) Reservation.--Of the amount appropriated under this section 
for each fiscal year, not more than 15 percent shall be available for 
the costs of the multicity, multicounty, multistate demonstration 
projects under section 444, evaluations under section 445, and projects 
of national significance under section 446.'.
    ``(b) Inapplicability of Effective Date Provisions.--Section 116 
shall not apply to the amendment made by subsection (a) of this 
section.''.
            (2) Clerical amendment.--Section 2 of such Act is amended 
        in the table of contents by inserting after the item relating 
        to section 116 the following new item:

``Sec. 117. Fatherhood program.''.

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

    Section 408 of the Social Security Act (42 U.S.C. 608) is amended 
by adding at the end the following:
    ``(h) State Option to Make TANF Programs Mandatory Partners With 
One-Stop Employment Training Centers.--For purposes of section 121(b) 
of the Workforce Investment Act of 1998, a State program funded under 
part A of title IV of the Social Security Act shall be considered a 
program referred to in paragraph (1)(B) of such section, unless, after 
the date of the enactment of this subsection, the Governor of the State 
notifies the Secretaries of Health and Human Services and Labor in 
writing of the decision of the Governor not to make the State program a 
mandatory partner.''.

SEC. 121. SENSE OF THE CONGRESS.

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

                          TITLE II--CHILD CARE

SEC. 201. SHORT TITLE.

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

SEC. 202. GOALS.

    (a) Goals.--Section 658A(b) of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9801 note) is amended--
            (1) in paragraph (3) by striking ``encourage'' and 
        inserting ``assist'',
            (2) by amending paragraph (4) to read as follows:
            ``(4) to assist State to provide child care to low-income 
        parents;'',
            (3) by redesignating paragraph (5) as paragraph (7), and
            (4) by inserting after paragraph (4) the following:
            ``(5) to encourage States to improve the quality of child 
        care available to families;
            ``(6) to promote school readiness by encouraging the 
        exposure of young children in child care to nurturing 
        environments and developmentally-appropriate activities, 
        including activities to foster early cognitive and literacy 
        development; and''.
    (b) Conforming Amendment.--Section 658E(c)(3)(B) of the Child Care 
and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(3)(B)) is 
amended by striking ``through (5)'' and inserting ``through (7)''.

SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

    Section 658B of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858) is amended--
            (1) by striking ``is'' and inserting ``are'', and
            (2) by striking ``$1,000,000,000 for each of the fiscal 
        years 1996 through 2002'' and inserting ``$2,300,000,000 for 
        fiscal year 2003, $2,500,000,000 for fiscal year 2004, 
        $2,700,000,000 for fiscal year 2005, $2,900,000,000 for fiscal 
        year 2006, and $3,100,000,000 for fiscal year 2007''.

SEC. 204. APPLICATION AND PLAN.

    Section 658E(c)(2) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--
            (1) by amending subparagraph (D) to read as follows:
                    ``(D) Consumer and child care provider education 
                information.--Certify that the State will collect and 
                disseminate, through resource and referral services and 
                other means as determined by the State, to parents of 
                eligible children, child care providers, and the 
                general public, information regarding--
                            ``(i) the promotion of informed child care 
                        choices, including information about the 
                        quality and availability of child care 
                        services;
                            ``(ii) research and best practices on 
                        children's development, including early 
                        cognitive development;
                            ``(iii) the availability of assistance to 
                        obtain child care services; and
                            ``(iv) other programs for which families 
                        that receive child care services for which 
                        financial assistance is provided under this 
                        subchapter may be eligible, including the food 
                        stamp program, the WIC program under section 17 
                        of the Child Nutrition Act of 1966, the child 
                        and adult care food program under section 17 of 
                        the Richard B. Russell National School Lunch 
                        Act, and the medicaid and CHIP programs under 
                        titles XIX and XXI of the Social Security 
                        Act.'', and
            (2) by inserting after subparagraph (H) the following:
                    ``(I) Coordination with other early child care 
                services and early childhood education programs.--
                Demonstrate how the State is coordinating child care 
                services provided under this subchapter with Head 
                Start, Early Reading First, Even Start, Ready-To-Learn 
                Television, State pre-kindergarten programs, and other 
                early childhood education programs to expand 
                accessibility to and continuity of care and early 
                education without displacing services provided by the 
                current early care and education delivery system.
                    ``(J) Public-private partnerships.--Demonstrate how 
                the State encourages partnerships with private and 
                other public entities to leverage existing service 
                delivery systems of early childhood education and 
                increase the supply and quality of child care services.
                    ``(K) Child care service quality.--
                            ``(i) Certification.--For each fiscal year 
                        after fiscal year 2003, certify that during the 
                        then preceding fiscal year the State was in 
                        compliance with section 658G and describe how 
                        funds were used to comply with such section 
                        during such preceding fiscal year.
                            ``(ii) Strategy.--For each fiscal year 
                        after fiscal year 2003, contain an outline of 
                        the strategy the State will implement during 
                        such fiscal year for which the State plan is 
                        submitted, to address the quality of child care 
                        services in child care settings that provide 
                        services for which assistance is made available 
                        under this subchapter, and include in such 
                        strategy--
                                    ``(I) a statement specifying how 
                                the State will address the activities 
                                described in paragraphs (1), (2), and 
                                (3) of section 658G;
                                    ``(II) a description of 
                                quantifiable, objective measures for 
                                evaluating the quality of child care 
                                services separately with respect to the 
                                activities listed in each of such 
                                paragraphs that the State will use to 
                                evaluate its progress in improving the 
                                quality of such child care services;
                                    ``(III) a list of State-developed 
                                child care service quality targets for 
                                such fiscal year quantified on the 
                                basis of such measures; and
                                    ``(IV) for each fiscal year after 
                                fiscal year 2003, a report on the 
                                progress made to achieve such targets 
                                during the then preceding fiscal year.
                            ``(iii) Rule of construction.--Nothing in 
                        this subparagraph shall be construed to require 
                        that the State apply measures for evaluating 
                        quality to specific types of child care 
                        providers.
                    ``(L) Access to care for certain populations.--
                Demonstrate how the State is addressing the child care 
                needs of parents eligible for child care services for 
                which financial assistance is provided under this 
                subchapter who have children with special needs, work 
                nontraditional hours, or require child care services 
                for infants or toddlers.''.

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

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

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

    ``A State that receives funds to carry out this subchapter for a 
fiscal year, shall use not less than 6 percent of the amount of such 
funds for activities provided through resource and referral services or 
other means, that are designed to improve the quality of child care 
services for which financial assistance is made available under this 
subchapter. Such activities include--
            ``(1) programs that provide training, education, and other 
        professional development activities to enhance the skills of 
        the child care workforce, including training opportunities for 
        caregivers in informal care settings;
            ``(2) activities within child care settings to enhance 
        early learning for young children, to promote early literacy, 
        and to foster school readiness;
            ``(3) initiatives to increase the retention and 
        compensation of child care providers, including tiered 
        reimbursement rates for providers that meet quality standards 
        as defined by the State; or
            ``(4) other activities deemed by the State to improve the 
        quality of child care services provided in such State.''.

SEC. 206. REPORT BY SECRETARY.

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

``SEC. 658L. REPORT BY SECRETARY.

    ``(a) Report Required.--Not later than October 1, 2004, and 
biennially thereafter, the Secretary shall prepare and submit to the 
Committee on Education and the Workforce of the House of 
Representatives and the Committee on Health, Education, Labor and 
Pensions of the Senate a report that contains the following:
            ``(1) A summary and analysis of the data and information 
        provided to the Secretary in the State reports submitted under 
        section 658K.
            ``(2) Aggregated statistics on the supply of, demand for, 
        and quality of child care, early education, and non-school-
        hours programs.
            ``(3) An assessment, and where appropriate, recommendations 
        for the Congress concerning efforts that should be undertaken 
        to improve the access of the public to quality and affordable 
        child care in the United States.
    ``(b) Collection of Information.--The Secretary may utilize the 
national child care data system available through resource and referral 
organizations at the local, State, and national level to collect the 
information required by subsection (a)(2).

SEC. 207. DEFINITIONS.

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

SEC. 208. ENTITLEMENT FUNDING.

    Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(G) $2,917,000,000 for each of fiscal years 2003 
                through 2007.''.

                    TITLE III--TAXPAYER PROTECTIONS

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

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

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

    ``(a) In General.--In the case of an individual, gross income shall 
not include interest paid under section 6611 on any overpayment of tax 
imposed by this subtitle.
    ``(b) Exception.--Subsection (a) shall not apply in the case of a 
failure to claim items resulting in the overpayment on the original 
return if the Secretary determines that the principal purpose of such 
failure is to take advantage of subsection (a).
    ``(c) Special Rule for Determining Modified Adjusted Gross 
Income.--For purposes of this title, interest not included in gross 
income under subsection (a) shall not be treated as interest which is 
exempt from tax for purposes of sections 32(i)(2)(B) and 6012(d) or any 
computation in which interest exempt from tax under this title is added 
to adjusted gross income.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139 the following new item:

                              ``Sec. 139A. Exclusion from gross income 
                                        for interest on overpayments of 
                                        income tax by individuals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to interest received after December 31, 2006.

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

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

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

    ``(a) Authority To Make Deposits Other Than As Payment of Tax.--A 
taxpayer may make a cash deposit with the Secretary which may be used 
by the Secretary to pay any tax imposed under subtitle A or B or 
chapter 41, 42, 43, or 44 which has not been assessed at the time of 
the deposit. Such a deposit shall be made in such manner as the 
Secretary shall prescribe.
    ``(b) No Interest Imposed.--To the extent that such deposit is used 
by the Secretary to pay tax, for purposes of section 6601 (relating to 
interest on underpayments), the tax shall be treated as paid when the 
deposit is made.
    ``(c) Return of Deposit.--Except in a case where the Secretary 
determines that collection of tax is in jeopardy, the Secretary shall 
return to the taxpayer any amount of the deposit (to the extent not 
used for a payment of tax) which the taxpayer requests in writing.
    ``(d) Payment of Interest.--
            ``(1) In general.--For purposes of section 6611 (relating 
        to interest on overpayments), a deposit which is returned to a 
        taxpayer shall be treated as a payment of tax for any period to 
        the extent (and only to the extent) attributable to a 
        disputable tax for such period. Under regulations prescribed by 
        the Secretary, rules similar to the rules of section 6611(b)(2) 
        shall apply.
            ``(2) Disputable tax.--
                    ``(A) In general.--For purposes of this section, 
                the term `disputable tax' means the amount of tax 
                specified at the time of the deposit as the taxpayer's 
                reasonable estimate of the maximum amount of any tax 
                attributable to disputable items.
                    ``(B) Safe harbor based on 30-day letter.--In the 
                case of a taxpayer who has been issued a 30-day letter, 
                the maximum amount of tax under subparagraph (A) shall 
                not be less than the amount of the proposed deficiency 
                specified in such letter.
            ``(3) Other definitions.--For purposes of paragraph (2)--
                    ``(A) Disputable item.--The term `disputable item' 
                means any item of income, gain, loss, deduction, or 
                credit if the taxpayer--
                            ``(i) has a reasonable basis for its 
                        treatment of such item, and
                            ``(ii) reasonably believes that the 
                        Secretary also has a reasonable basis for 
                        disallowing the taxpayer's treatment of such 
                        item.
                    ``(B) 30-day letter.--The term `30-day letter' 
                means the first letter of proposed deficiency which 
                allows the taxpayer an opportunity for administrative 
                review in the Internal Revenue Service Office of 
                Appeals.
            ``(4) Rate of interest.--The rate of interest allowable 
        under this subsection shall be the Federal short-term rate 
        determined under section 6621(b), compounded daily.
    ``(e) Use of Deposits.--
            ``(1) Payment of tax.--Except as otherwise provided by the 
        taxpayer, deposits shall be treated as used for the payment of 
        tax in the order deposited.
            ``(2) Returns of deposits.--Deposits shall be treated as 
        returned to the taxpayer on a last-in, first-out basis.''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 67 of such Code is amended by adding at the end the following 
new item:

                              ``Sec. 6603. Deposits made to suspend 
                                        running of interest on 
                                        potential underpayments, 
                                        etc.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to deposits made after the date of the enactment of this 
        Act.
            (2) Coordination with deposits made under revenue procedure 
        84-58.--In the case of an amount held by the Secretary of the 
        Treasury or his delegate on the date of the enactment of this 
        Act as a deposit in the nature of a cash bond deposit pursuant 
        to Revenue Procedure 84-58, the date that the taxpayer 
        identifies such amount as a deposit made pursuant to section 
        6603 of the Internal Revenue Code (as added by this Act) shall 
        be treated as the date such amount is deposited for purposes of 
        such section 6603.

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

    (a) In General.--
            (1) Section 6159(a) of the Internal Revenue Code of 1986 
        (relating to authorization of agreements) is amended--
                    (A) by striking ``satisfy liability for payment 
                of'' and inserting ``make payment on'', and
                    (B) by inserting ``full or partial'' after 
                ``facilitate''.
            (2) Section 6159(c) of such Code (relating to Secretary 
        required to enter into installment agreements in certain cases) 
        is amended in the matter preceding paragraph (1) by inserting 
        ``full'' before ``payment''.
    (b) Requirement To Review Partial Payment Agreements Every Two 
Years.--Section 6159 of such Code is amended by redesignating 
subsections (d) and (e) as subsections (e) and (f), respectively, and 
inserting after subsection (c) the following new subsection:
    ``(d) Secretary Required To Review Installment Agreements for 
Partial Collection Every Two Years.--In the case of an agreement 
entered into by the Secretary under subsection (a) for partial 
collection of a tax liability, the Secretary shall review the agreement 
at least once every 2 years.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to agreements entered into on or after the date of the enactment 
of this Act.

                        TITLE IV--CHILD SUPPORT

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

    (a) In General.--Section 457(a) (42 U.S.C. 657(a)) is amended--
            (1) in paragraph (1)(A), by inserting ``subject to 
        paragraph (7)'' before the semicolon; and
            (2) by adding at the end the following:
            ``(7) Federal matching funds for limited pass through of 
        child support payments to families receiving tanf.--
        Notwithstanding paragraph (1), a State shall not be required to 
        pay to the Federal Government the Federal share of an amount 
        collected during a month on behalf of a family that is a 
        recipient of assistance under the State program funded under 
        part A, to the extent that--
                    ``(A) the State distributes the amount to the 
                family;
                    ``(B) the total of the amounts so distributed to 
                the family during the month--
                            ``(i) exceeds the amount (if any) that, as 
                        of December 31, 2001, was required under State 
                        law to be distributed to a family under 
                        paragraph (1)(B); and
                            ``(ii) does not exceed the greater of--
                                    ``(I) $100; or
                                    ``(II) $50 plus the amount 
                                described in clause (i); and
                    ``(C) the amount is disregarded in determining the 
                amount and type of assistance provided to the family 
                under the State program funded under part A.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts distributed on or after October 1, 2004.

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

    (a) In General.--Section 457(a) (42 U.S.C. 657(a)), as amended by 
section 401(a) of this Act, is amended--
            (1) in paragraph (2)(B), in the matter preceding clause 
        (i), by inserting ``, except as provided in paragraph (8),'' 
        after ``shall''; and
            (2) by adding at the end the following:
            ``(8) State option to pass through all child support 
        payments to families that formerly received tanf.--In lieu of 
        applying paragraph (2) to any family described in paragraph 
        (2), a State may distribute to the family any amount collected 
        during a month on behalf of the family.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts distributed on or after October 1, 2004.

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

    (a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C. 
666(a)(10)(A)(i)) is amended--
            (1) by striking ``parent, or,'' and inserting ``parent 
        or''; and
            (2) by striking ``upon the request of the State agency 
        under the State plan or of either parent,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2004.

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

    (a) In General.--Section 454(6)(B) (42 U.S.C. 654(6)(B)) is 
amended--
            (1) by inserting ``(i)'' after ``(B)'';
            (2) by redesignating clauses (i) and (ii) as subclauses (I) 
        and (II), respectively;
            (3) by adding ``and'' after the semicolon; and
            (4) by adding after and below the end the following new 
        clause:
                    ``(ii) in the case of an individual who has never 
                received assistance under a State program funded under 
                part A and for whom the State has collected at least 
                $500 of support, the State shall impose an annual fee 
                of $25 for each case in which services are furnished, 
                which shall be retained by the State from support 
                collected on behalf of the individual (but not from the 
                1st $500 so collected), paid by the individual applying 
                for the services, recovered from the absent parent, or 
                paid by the State out of its own funds (the payment of 
                which from State funds shall not be considered as an 
                administrative cost of the State for the operation of 
                the plan, and shall be considered income to the 
                program);''.
    (b) Conforming Amendment.--Section 457(a)(3) (42 U.S.C. 657(a)(3)) 
is amended to read as follows:
            ``(3) Families that never received assistance.--In the case 
        of any other family, the State shall distribute to the family 
        the portion of the amount so collected that remains after 
        withholding any fee pursuant to section 454(6)(B)(ii).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003.

SEC. 405. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

    Not later than 6 months after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall submit to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report on the procedures that the 
States use generally to locate custodial parents for whom child support 
has been collected but not yet distributed. The report shall include an 
estimate of the total amount of such undistributed child support and 
the average length of time it takes for such child support to be 
distributed. To the extent the Secretary deems appropriate, the 
Secretary shall include in the report recommendations as to whether 
additional procedures should be established at the State or Federal 
level to expedite the payment of undistributed child support.

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

    (a) In General.--Section 453(j) (42 U.S.C. 653(j)) is amended by 
adding at the end the following:
            ``(7) Information comparisons and disclosure to assist in 
        administration of unemployment compensation programs.--
                    ``(A) In general.--If a State agency responsible 
                for the administration of an unemployment compensation 
                program under Federal or State law transmits to the 
                Secretary the name and social security account number 
                of an individual, the Secretary shall, if the 
                information in the National Directory of New Hires 
                indicates that the individual may be employed, disclose 
                to the State agency the name, address, and employer 
                identification number of any putative employer of the 
                individual, subject to this paragraph.
                    ``(B) Condition on disclosure.--The Secretary shall 
                make a disclosure under subparagraph (A) only to the 
                extent that the Secretary determines that the 
                disclosure would not interfere with the effective 
                operation of the program under this part.
                    ``(C) Use of information.--A State agency may use 
                information provided under this paragraph only for 
                purposes of administering a program referred to in 
                subparagraph (A).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2003.

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

    (a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is amended 
by striking ``$5,000'' and inserting ``$2,500''.
    (b) Conforming Amendment.--Section 454(31) (42 U.S.C. 654(31)) is 
amended by striking ``$5,000'' and inserting ``$2,500''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003.

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

    (a) In General.--Section 464 (42 U.S.C. 664) is amended--
            (1) in subsection (a)(2)(A), by striking ``(as that term is 
        defined for purposes of this paragraph under subsection (c))''; 
        and
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1) Except as provided in 
                        paragraph (2), as used in'' and inserting 
                        ``In''; and
                            (ii) by inserting ``(whether or not a 
                        minor)'' after ``a child'' each place it 
                        appears; and
                    (B) by striking paragraphs (2) and (3).
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2004.

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

    (a) In General.--Section 459(h) (42 U.S.C. 659(h)) is amended--
            (1) in paragraph (1)(A)(ii)(V), by striking all that 
        follows ``Armed Forces'' and inserting a semicolon; and
            (2) by adding at the end the following:
            ``(3) Limitations with respect to compensation paid to 
        veterans for service-connected disabilities.--Notwithstanding 
        any other provision of this section:
                    ``(A) Compensation described in paragraph 
                (1)(A)(ii)(V) shall not be subject to withholding 
                pursuant to this section--
                            ``(i) for payment of alimony; or
                            ``(ii) for payment of child support if the 
                        individual is fewer than 60 days in arrears in 
                        payment of the support.
                    ``(B) Not more than 50 percent of any payment of 
                compensation described in paragraph (1)(A)(ii)(V) may 
                be withheld pursuant to this section.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2004.

SEC. 410. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

    Section 3716(h)(3) of title 31, United States Code, is amended to 
read as follows:
    ``(3) In applying this subsection with respect to any debt owed to 
a State, other than past due support being enforced by the State, 
subsection (c)(3)(A) shall not apply. Subsection (c)(3)(A) shall apply 
with respect to past due support being enforced by the State 
notwithstanding any other provision of law, including sections 207 and 
1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), 
section 413(b) of Public law 91-173 (30 U.S.C. 923(b)), and section 14 
of the Act of August 29, 1935 (45 U.S.C. 231m).''.

SEC. 411. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

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

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

    Section 453(o) (42 U.S.C. 653(o)) is amended--
            (1) in the 1st sentence, by inserting ``or the amount 
        appropriated under this paragraph for fiscal year 2002, 
        whichever is greater,'' before ``which shall be available''; 
        and
            (2) in the 2nd sentence, by striking ``for each of fiscal 
        years 1997 through 2001''.

                         TITLE V--CHILD WELFARE

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

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

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

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

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

    Section 1130 (42 U.S.C. 1320a-9) is amended by adding at the end 
the following:
    ``(h) No Limit on Number of States That May Be Granted Waivers To 
Conduct Same or Similar Demonstration Projects.--The Secretary shall 
not refuse to grant a waiver to a State under this section on the 
grounds that a purpose of the waiver or of the demonstration project 
for which the waiver is necessary would be the same as or similar to a 
purpose of another waiver or project that is or may be conducted under 
this section.''.

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

    Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at 
the end the following:
    ``(i) No Limit on Number of Waivers Granted to, or Demonstration 
Projects That May Be Conducted by, a Single State.--The Secretary shall 
not impose any limit on the number of waivers that may be granted to a 
State, or the number of demonstration projects that a State may be 
authorized to conduct, under this section.''.

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

    Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at 
the end the following:
    ``(j) Streamlined Process for Consideration of Amendments and 
Extensions.--The Secretary shall develop a streamlined process for 
consideration of amendments and extensions proposed by States to 
demonstration projects conducted under this section.''.

SEC. 506. AVAILABILITY OF REPORTS.

    Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at 
the end the following:
    ``(k) Availability of Reports.--The Secretary shall make available 
to any State or other interested party any report provided to the 
Secretary under subsection (f)(2), and any evaluation or report made by 
the Secretary with respect to a demonstration project conducted under 
this section, with a focus on information that may promote best 
practices and program improvements.''.

SEC. 507. TECHNICAL CORRECTION.

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

                 TITLE VI--SUPPLEMENTAL SECURITY INCOME

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

    Section 1633 (42 U.S.C. 1383b) is amended by adding at the end the 
following:
    ``(e)(1) The Commissioner of Social Security shall review 
determinations, made by State agencies pursuant to subsection (a) in 
connection with applications for benefits under this title on the basis 
of blindness or disability, that individuals who have attained 18 years 
of age are blind or disabled as of a specified onset date. The 
Commissioner of Social Security shall review such a determination 
before any action is taken to implement the determination.
    ``(2)(A) In carrying out paragraph (1), the Commissioner of Social 
Security shall review--
            ``(i) at least 20 percent of all determinations referred to 
        in paragraph (1) that are made in fiscal year 2003;
            ``(ii) at least 40 percent of all such determinations that 
        are made in fiscal year 2004; and
            ``(iii) at least 50 percent of all such determinations that 
        are made in fiscal year 2005 or thereafter.
    ``(B) In carrying out subparagraph (A), the Commissioner of Social 
Security shall, to the extent feasible, select for review the 
determinations which the Commissioner of Social Security identifies as 
being the most likely to be incorrect.''.

                 TITLE VII--STATE AND LOCAL FLEXIBILITY

SEC. 701. PROGRAM COORDINATION DEMONSTRATION PROJECTS.

    (a) Purpose.--The purpose of this section is to establish a program 
of demonstration projects in a State or portion of a State to 
coordinate multiple public assistance, workforce development, and other 
programs, for the purpose of supporting working individuals and 
families, helping families escape welfare dependency, promoting child 
well-being, or helping build stronger families, using innovative 
approaches to strengthen service systems and provide more coordinated 
and effective service delivery.
    (b) Definitions.--In this section:
            (1) Administering secretary.--The term ``administering 
        Secretary'' means, with respect to a qualified program, the 
        head of the Federal agency responsible for administering the 
        program.
            (2) Qualified program.--The term ``qualified program'' 
        means--
                    (A) a program under part A of title IV of the 
                Social Security Act;
                    (B) the program under title XX of such Act;
                    (C) activities funded under title I of the 
                Workforce Investment Act of 1998, except subtitle C of 
                such title;
                    (D) a demonstration project authorized under 
                section 505 of the Family Support Act of 1988;
                    (E) activities funded under the Wagner-Peyser Act;
                    (F) activities funded under the Adult Education and 
                Family Literacy Act;
                    (G) activities funded under the Child Care and 
                Development Block Grant Act of 1990;
                    (H) activities funded under the United States 
                Housing Act of 1937 (42 U.S.C. 1437 et seq.), except 
                that such term shall not include--
                            (i) any program for rental assistance under 
                        section 8 of such Act (42 U.S.C. 1437f); and
                            (ii) the program under section 7 of such 
                        Act (42 U.S.C. 1437e) for designating public 
                        housing for occupancy by certain populations;
                    (I) activities funded under title I, II, III, or IV 
                of the McKinney-Vento Homeless Assistance Act (42 
                U.S.C. 11301 et seq.); or
                    (J) the food stamp program as defined in section 
                3(h) of the Food Stamp Act of 1977 (7 U.S.C. 2012(h)).
    (c) Application Requirements.--The head of a State entity or of a 
sub-State entity administering 2 or more qualified programs proposed to 
be included in a demonstration project under this section shall (or, if 
the project is proposed to include qualified programs administered by 2 
or more such entities, the heads of the administering entities (each of 
whom shall be considered an applicant for purposes of this section) 
shall jointly) submit to the administering Secretary of each such 
program an application that contains the following:
            (1) Programs included.--A statement identifying each 
        qualified program to be included in the project, and describing 
        how the purposes of each such program will be achieved by the 
        project.
            (2) Population served.--A statement identifying the 
        population to be served by the project and specifying the 
        eligibility criteria to be used.
            (3) Description and justification.--A detailed description 
        of the project, including--
                    (A) a description of how the project is expected to 
                improve or enhance achievement of the purposes of the 
                programs to be included in the project, from the 
                standpoint of quality, of cost-effectiveness, or of 
                both; and
                    (B) a description of the performance objectives for 
                the project, including any proposed modifications to 
                the performance measures and reporting requirements 
                used in the programs.
            (4) Waivers requested.--A description of the statutory and 
        regulatory requirements with respect to which a waiver is 
        requested in order to carry out the project, and a 
        justification of the need for each such waiver.
            (5) Cost neutrality.--Such information and assurances as 
        necessary to establish to the satisfaction of the administering 
        Secretary, in consultation with the Director of the Office of 
        Management and Budget, that the proposed project is reasonably 
        expected to meet the applicable cost neutrality requirements of 
        subsection (d)(4).
            (6) Evaluation and reports.--An assurance that the 
        applicant will conduct ongoing and final evaluations of the 
        project, and make interim and final reports to the 
        administering Secretary, at such times and in such manner as 
        the administering Secretary may require.
            (7) Public housing agency plan.--In the case of an 
        application proposing a demonstration project that includes 
        activities referred to in subsection (b)(2)(H) of this 
        section--
                    (A) a certification that the applicable annual 
                public housing agency plan of any agency affected by 
                the project that is approved under section 5A of the 
                United States Housing Act of 1937 (42 U.S.C. 1437c-1) 
                by the Secretary includes the information specified in 
                paragraphs (1) through (4) of this subsection; and
                    (B) any resident advisory board recommendations, 
                and other information, relating to the project that, 
                pursuant to section 5A(e)(2) of the United States 
                Housing Act of 1937 (42 U.S.C. 1437c-1(e)(2), is 
                required to be included in the public housing agency 
                plan of any public housing agency affected by the 
                project.
            (8) Other information and assurances.--Such other 
        information and assurances as the administering Secretary may 
        require.
    (d) Approval of Applications.--
            (1) In general.--The administering Secretary with respect 
        to a qualified program that is identified in an application 
        submitted pursuant to subsection (c) may approve the 
        application and, except as provided in paragraph (2), waive any 
        requirement applicable to the program, to the extent consistent 
        with this section and necessary and appropriate for the conduct 
        of the demonstration project proposed in the application, if 
        the administering Secretary determines that the project--
                    (A) has a reasonable likelihood of achieving the 
                objectives of the programs to be included in the 
                project;
                    (B) may reasonably be expected to meet the 
                applicable cost neutrality requirements of paragraph 
                (4), as determined by the Director of the Office of 
                Management and Budget; and
                    (C) includes the coordination of 2 or more 
                qualified programs.
            (2) Provisions excluded from waiver authority.--A waiver 
        shall not be granted under paragraph (1)--
                    (A) with respect to any provision of law relating 
                to--
                            (i) civil rights or prohibition of 
                        discrimination;
                            (ii) purposes or goals of any program;
                            (iii) maintenance of effort requirements;
                            (iv) health or safety;
                            (v) labor standards under the Fair Labor 
                        Standards Act of 1938; or
                            (vi) environmental protection;
                    (B) with respect to section 241(a) of the Adult 
                Education and Family Literacy Act;
                    (C) in the case of a program under the United 
                States Housing Act of 1937 (42 U.S.C. 1437 et seq.), 
                with respect to any requirement under section 5A of 
                such Act (42 U.S.C. 1437c-1; relating to public housing 
                agency plans and resident advisory boards);
                    (D) in the case of a program under the Workforce 
                Investment Act, with respect to any requirement the 
                waiver of which would violate section 189(i)(4)(A)(i) 
                of such Act;
                    (E) in the case of the food stamp program (as 
                defined in section 3(h) of the Food Stamp Act of 1977 
                (7 U.S.C. 2012(h)), with respect to any requirement 
                under--
                            (i) section 6 (if waiving a requirement 
                        under such section would have the effect of 
                        expanding eligibility for the program), 7(b) or 
                        16(c) of the Food Stamp Act of 1977 (7 U.S.C. 
                        2011 et seq.); or
                            (ii) title IV of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996 (8 U.S.C. 1601 et 
                        seq.);
                    (F) with respect to any requirement that a State 
                pass through to a sub-State entity part or all of an 
                amount paid to the State;
                    (G) if the waiver would waive any funding 
                restriction or limitation provided in an appropriations 
                Act, or would have the effect of transferring 
                appropriated funds from 1 appropriations account to 
                another; or
                    (H) except as otherwise provided by statute, if the 
                waiver would waive any funding restriction applicable 
                to a program authorized under an Act which is not an 
                appropriations Act (but not including program 
                requirements such as application procedures, 
                performance standards, reporting requirements, or 
                eligibility standards), or would have the effect of 
                transferring funds from a program for which there is 
                direct spending (as defined in section 250(c)(8) of the 
                Balanced Budget and Emergency Deficit Control Act of 
                1985) to another program.
            (3) Agreement of each administering secretary required.--
                    (A) In general.--An applicant may not conduct a 
                demonstration project under this section unless each 
                administering Secretary with respect to any program 
                proposed to be included in the project has approved the 
                application to conduct the project.
                    (B) Agreement with respect to funding and 
                implementation.--Before approving an application to 
                conduct a demonstration project under this section, an 
                administering Secretary shall have in place an 
                agreement with the applicant with respect to the 
                payment of funds and responsibilities required of the 
                administering Secretary with respect to the project.
            (4) Cost-neutrality requirement.--
                    (A) General rule.--Notwithstanding any other 
                provision of law (except subparagraph (B)), the total 
                of the amounts that may be paid by the Federal 
                Government for a fiscal year with respect to the 
                programs in the State in which an entity conducting a 
                demonstration project under this section is located 
                that are affected by the project shall not exceed the 
                estimated total amount that the Federal Government 
                would have paid for the fiscal year with respect to the 
                programs if the project had not been conducted, as 
                determined by the Director of the Office of Management 
                and Budget.
                    (B) Special rule.--If an applicant submits to the 
                Director of the Office of Management and Budget a 
                request to apply the rules of this subparagraph to the 
                programs in the State in which the applicant is located 
                that are affected by a demonstration project proposed 
                in an application submitted by the applicant pursuant 
                to this section, during such period of not more than 5 
                consecutive fiscal years in which the project is in 
                effect, and the Director determines, on the basis of 
                supporting information provided by the applicant, to 
                grant the request, then, notwithstanding any other 
                provision of law, the total of the amounts that may be 
                paid by the Federal Government for the period with 
                respect to the programs shall not exceed the estimated 
                total amount that the Federal Government would have 
                paid for the period with respect to the programs if the 
                project had not been conducted.
            (5) 90-day approval deadline.--
                    (A) In general.--If an administering Secretary 
                receives an application to conduct a demonstration 
                project under this section and does not disapprove the 
                application within 90 days after the receipt, then--
                            (i) the administering Secretary is deemed 
                        to have approved the application for such 
                        period as is requested in the application, 
                        except to the extent inconsistent with 
                        subsection (e); and
                            (ii) any waiver requested in the 
                        application which applies to a qualified 
                        program that is identified in the application 
                        and is administered by the administering 
                        Secretary is deemed to be granted, except to 
                        the extent inconsistent with paragraph (2) or 
                        (4) of this subsection.
                    (B) Deadline extended if additional information is 
                sought.--The 90-day period referred to in subparagraph 
                (A) shall not include any period that begins with the 
                date the Secretary requests the applicant to provide 
                additional information with respect to the application 
                and ends with the date the additional information is 
                provided.
    (e) Duration of Projects.--A demonstration project under this 
section may be approved for a term of not more than 5 years.
    (f) Reports to Congress.--
            (1) Report on disposition of applications.--Within 90 days 
        after an administering Secretary receives an application 
        submitted pursuant to this section, the administering Secretary 
        shall submit to each Committee of the Congress which has 
        jurisdiction over a qualified program identified in the 
        application notice of the receipt, a description of the 
        decision of the administering Secretary with respect to the 
        application, and the reasons for approving or disapproving the 
        application.
            (2) Reports on projects.--Each administering Secretary 
        shall provide annually to the Congress a report concerning 
        demonstration projects approved under this section, including--
                    (A) the projects approved for each applicant;
                    (B) the number of waivers granted under this 
                section, and the specific statutory provisions waived;
                    (C) how well each project for which a waiver is 
                granted is improving or enhancing program achievement 
                from the standpoint of quality, cost-effectiveness, or 
                both;
                    (D) how well each project for which a waiver is 
                granted is meeting the performance objectives specified 
                in subsection (c)(3)(B);
                    (E) how each project for which a waiver is granted 
                is conforming with the cost-neutrality requirements of 
                subsection (d)(4); and
                    (F) to the extent the administering Secretary deems 
                appropriate, recommendations for modification of 
                programs based on outcomes of the projects.
    (g) Amendment to United States Housing Act of 1937.--Section 5A(d) 
of the United States Housing Act of 1937 (42 U.S.C. 1437c-1(d)) is 
amended--
            (1) by redesignating paragraph (18) as paragraph (19); and
            (2) by inserting after paragraph (17) the following new 
        paragraph:
            ``(18) Program coordination demonstration projects.--In the 
        case of an agency that administers an activity referred to in 
        section 701(b)(2)(H) of the Personal Responsibility, Work, and 
        Family Promotion Act of 2002 that, during such fiscal year, 
        will be included in a demonstration project under section 701 
        of such Act, the information that is required to be included in 
        the application for the project pursuant to paragraphs (1) 
        through (4) of section 701(b) of such Act.''.

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

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

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

    ``(a) Establishment.--The Secretary shall establish a program to 
make grants to States in accordance with this section to provide--
            ``(1) food assistance to needy individuals and families 
        residing in the State;
            ``(2) funds to operate an employment and training program 
        under subsection (g) for needy individuals under the program; 
        and
            ``(3) funds for administrative costs incurred in providing 
        the assistance.
    ``(b) Election.--
            ``(1) In general.--A State may elect to participate in the 
        program established under subsection (a).
            ``(2) Election revocable.--A State that elects to 
        participate in the program established under subsection (a) may 
        subsequently reverse the election of the State only once 
        thereafter. Following the reversal, the State shall only be 
        eligible to participate in the food stamp program in accordance 
        with the other sections of this Act and shall not receive a 
        block grant under this section.
            ``(3) Program exclusive.--A State that is participating in 
        the program established under subsection (a) shall not be 
        subject to, or receive any benefit under, this Act except as 
        provided in this section.
    ``(c) Lead Agency.--
            ``(1) Designation.--A State desiring to participate in the 
        program established under subsection (a) shall designate, in an 
        application submitted to the Secretary under subsection (d)(1), 
        an appropriate State agency that complies with paragraph (2) to 
        act as the lead agency for the State.
            ``(2) Duties.--The lead agency shall--
                    ``(A) administer, either directly, through other 
                State agencies, or through local agencies, the 
                assistance received under this section by the State;
                    ``(B) develop the State plan to be submitted to the 
                Secretary under subsection (d)(1); and
                    ``(C) coordinate the provision of food assistance 
                under this section with other Federal, State, and local 
                programs.
    ``(d) Application and Plan.--
            ``(1) Application.--To be eligible to receive assistance 
        under this section, a State shall prepare and submit to the 
        Secretary an application at such time, in such manner, and 
        containing such information as the Secretary shall by 
        regulation require, including--
                    ``(A) an assurance that the State will comply with 
                the requirements of this section;
                    ``(B) a State plan that meets the requirements of 
                paragraph (2); and
                    ``(C) an assurance that the State will comply with 
                the requirements of the State plan under paragraph (2).
            ``(2) Requirements of plan.--
                    ``(A) Lead agency.--The State plan shall identify 
                the lead agency.
                    ``(B) Use of block grant funds.--The State plan 
                shall provide that the State shall use the amounts 
                provided to the State for each fiscal year under this 
                section--
                            ``(i) to provide food assistance to needy 
                        individuals and families residing in the State, 
                        other than residents of institutions who are 
                        ineligible for food stamps under section 3(i);
                            ``(ii) to administer an employment and 
                        training program under subsection (g) for needy 
                        individuals under the program and to provide 
                        reimbursements to needy individuals and 
                        families as would be allowed under section 
                        16(h)(3); and
                            ``(iii) to pay administrative costs 
                        incurred in providing the assistance.
                    ``(C) Assistance for entire state.--The State plan 
                shall provide that benefits under this section shall be 
                available throughout the entire State.
                    ``(D) Notice and hearings.--The State plan shall 
                provide that an individual or family who applies for, 
                or receives, assistance under this section shall be 
                provided with notice of, and an opportunity for a 
                hearing on, any action under this section that 
                adversely affects the individual or family.
                    ``(E) Other assistance.--
                            ``(i) Coordination.--The State plan may 
                        coordinate assistance received under this 
                        section with assistance provided under the 
                        State program funded under part A of title IV 
                        of the Social Security Act (42 U.S.C. 601 et 
                        seq.).
                            ``(ii) Penalties.--If an individual or 
                        family is penalized for violating part A of 
                        title IV of the Act, the State plan may reduce 
                        the amount of assistance provided under this 
                        section or otherwise penalize the individual or 
                        family.
                    ``(F) Eligibility limitations.--The State plan 
                shall describe the income and resource eligibility 
                limitations that are established for the receipt of 
                assistance under this section.
                    ``(G) Receiving benefits in more than 1 
                jurisdiction.--The State plan shall establish a system 
                to verify and otherwise ensure that no individual or 
                family shall receive benefits under this section in 
                more than 1 jurisdiction within the State.
                    ``(H) Privacy.--The State plan shall provide for 
                safeguarding and restricting the use and disclosure of 
                information about any individual or family receiving 
                assistance under this section.
                    ``(I) Other information.--The State plan shall 
                contain such other information as may be required by 
                the Secretary.
            ``(3) Approval of application and plan.--During fiscal 
        years 2003 through 2007, the Secretary may approve the 
        applications and State plans that satisfy the requirements of 
        this section of not more than 5 States for a term of not more 
        than 5 years.
    ``(e) Construction of Facilities.--No funds made available under 
this section shall be expended for the purchase or improvement of land, 
or for the purchase, construction, or permanent improvement of any 
building or facility.
    ``(f) Benefits for Aliens.--No individual shall be eligible to 
receive benefits under a State plan approved under subsection (d)(3) if 
the individual is not eligible to participate in the food stamp program 
under title IV of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (8 U.S.C. 1601 et seq.).
    ``(g) Employment and Training.--Each State shall implement an 
employment and training program for needy individuals under the 
program.
    ``(h) Enforcement.--
            ``(1) Review of compliance with state plan.--The Secretary 
        shall review and monitor State compliance with this section and 
        the State plan approved under subsection (d)(3).
            ``(2) Noncompliance.--
                    ``(A) In general.--If the Secretary, after 
                reasonable notice to a State and opportunity for a 
                hearing, finds that--
                            ``(i) there has been a failure by the State 
                        to comply substantially with any provision or 
                        requirement set forth in the State plan 
                        approved under subsection (d)(3); or
                            ``(ii) in the operation of any program or 
                        activity for which assistance is provided under 
                        this section, there is a failure by the State 
                        to comply substantially with any provision of 
                        this section, the Secretary shall notify the 
                        State of the finding and that no further 
                        payments will be made to the State under this 
                        section (or, in the case of noncompliance in 
                        the operation of a program or activity, that no 
                        further payments to the State will be made with 
                        respect to the program or activity) until the 
                        Secretary is satisfied that there is no longer 
                        any failure to comply or that the noncompliance 
                        will be promptly corrected.
                    ``(B) Other sanctions.--In the case of a finding of 
                noncompliance made pursuant to subparagraph (A), the 
                Secretary may, in addition to, or in lieu of, imposing 
                the sanctions described in subparagraph (A), impose 
                other appropriate sanctions, including recoupment of 
                money improperly expended for purposes prohibited or 
                not authorized by this section and disqualification 
                from the receipt of financial assistance under this 
                section.
                    ``(C) Notice.--The notice required under 
                subparagraph (A) shall include a specific 
                identification of any additional sanction being imposed 
                under subparagraph (B).
            ``(3) Issuance of regulations .--The Secretary shall 
        establish by regulation procedures for--
                    ``(A) receiving, processing, and determining the 
                validity of complaints concerning any failure of a 
                State to comply with the State plan or any requirement 
                of this section; and
                    ``(B) imposing sanctions under this section.
    ``(i) Payments.--
            ``(1) In general.--For each fiscal year, the Secretary 
        shall pay to a State that has an application approved by the 
        Secretary under subsection (d)(3) an amount that is equal to 
        the allotment of the State under subsection (l)(2) for the 
        fiscal year.
            ``(2) Method of payment.--The Secretary shall make payments 
        to a State for a fiscal year under this section by issuing 1 or 
        more letters of credit for the fiscal year, with necessary 
        adjustments on account of overpayments or underpayments, as 
        determined by the Secretary.
            ``(3) Spending of funds by state.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), payments to a State from an allotment 
                under subsection (l)(2) for a fiscal year may be 
                expended by the State only in the fiscal year.
                    ``(B) Carryover.--The State may reserve up to 10 
                percent of an allotment under subsection (l)(2) for a 
                fiscal year to provide assistance under this section in 
                subsequent fiscal years, except that the reserved funds 
                may not exceed 30 percent of the total allotment 
                received under this section for a fiscal year.
            ``(4) Provision of food assistance.--A State may provide 
        food assistance under this section in any manner determined 
        appropriate by the State to provide food assistance to needy 
        individuals and families in the State, such as electronic 
        benefits transfer limited to food purchases, coupons limited to 
        food purchases, or direct provision of commodities.
            ``(5) Definition of food assistance.--In this section, the 
        term `food assistance' means assistance that may be used only 
        to obtain food, as defined in section 3(g).
    ``(j) Audits.--
            ``(1) Requirement.--After the close of each fiscal year, a 
        State shall arrange for an audit of the expenditures of the 
        State during the program period from amounts received under 
        this section.
            ``(2) Independent auditor.--An audit under this section 
        shall be conducted by an entity that is independent of any 
        agency administering activities that receive assistance under 
        this section and be in accordance with generally accepted 
        auditing principles.
            ``(3) Payment accuracy.--Each annual audit under this 
        section shall include an audit of payment accuracy under this 
        section that shall be based on a statistically valid sample of 
        the caseload in the State.
            ``(4) Submission.--Not later than 30 days after the 
        completion of an audit under this section, the State shall 
        submit a copy of the audit to the legislature of the State and 
        to the Secretary.
            ``(5) Repayment of amounts.--Each State shall repay to the 
        United States any amounts determined through an audit under 
        this section to have not been expended in accordance with this 
        section or to have not been expended in accordance with the 
        State plan, or the Secretary may offset the amounts against any 
        other amount paid to the State under this section.
    ``(k) Nondiscrimination.--
            ``(1) In general.--The Secretary shall not provide 
        financial assistance for any program, project, or activity 
        under this section if any person with responsibilities for the 
        operation of the program, project, or activity discriminates 
        with respect to the program, project, or activity because of 
        race, religion, color, national origin, sex, or disability.
            ``(2) Enforcement.--The powers, remedies, and procedures 
        set forth in title VI of the Civil Rights Act of 1964 (42 
        U.S.C. 2000d et seq.) may be used by the Secretary to enforce 
        paragraph (1).
    ``(l) Allotments.--
            ``(1) Definition of state.--In this section, the term 
        'State' means each of the 50 States, the District of Columbia, 
        Guam, and the Virgin Islands of the United States.
            ``(2) State allotment.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), from the amounts made available under 
                section 18 of this Act for each fiscal year, the 
                Secretary shall allot to each State participating in 
                the program established under subsection (a) an amount 
                that is equal to the sum of--
                            ``(i) the greater of, as determined by the 
                        Secretary--
                                    ``(I) the total dollar value of all 
                                benefits issued under the food stamp 
                                program established under this Act by 
                                the State during fiscal year 2002; or
                                    ``(II) the average per fiscal year 
                                of the total dollar value of all 
                                benefits issued under the food stamp 
                                program by the State during each of 
                                fiscal years 2000 through 2002; and
                            ``(ii) the greater of, as determined by the 
                        Secretary--
                                    ``(I) the total amount received by 
                                the State for administrative costs and 
                                the employment and training program 
                                under subsections (a) and (h), 
                                respectively, of section 16 of this Act 
                                for fiscal year 2002; or
                                    ``(II) the average per fiscal year 
                                of the total amount received by the 
                                State for administrative costs and the 
                                employment and training program under 
                                subsections (a) and (h), respectively, 
                                of section 16 of this Act for each of 
                                fiscal years 2000 through 2002.
                    ``(B) Insufficient funds.--If the Secretary finds 
                that the total amount of allotments to which States 
                would otherwise be entitled for a fiscal year under 
                subparagraph (A) will exceed the amount of funds that 
                will be made available to provide the allotments for 
                the fiscal year, the Secretary shall reduce the 
                allotments made to States under this subsection, on a 
                pro rata basis, to the extent necessary to allot under 
                this subsection a total amount that is equal to the 
                funds that will be made available.''.

                    TITLE VIII--ABSTINENCE EDUCATION

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

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

               TITLE IX--TRANSITIONAL MEDICAL ASSISTANCE

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

    (a) In General.--Section 1925(f) (42 U.S.C. 1396r-6(f)) is amended 
by striking ``2002'' and inserting ``2003''.
    (b) Conforming Amendment.--Section 1902(e)(1)(B) (42 U.S.C. 
1396a(e)(1)(B)) is amended by striking ``2002'' and inserting ``2003''.

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

    Section 1903 (42 U.S.C. 1396b) is amended--
            (1) in subsection (a)(7), by striking ``section 
        1919(g)(3)(B)'' and inserting ``subsection (x) and section 
        1919(g)(3)(C)''; and
            (2) by adding at the end the following:
    ``(x) Adjustments to Payments for Administrative Costs To Fund 1-
Year Extension of Transitional Medical Assistance.--
            ``(1) Reductions in payments for administrative costs.--
        Effective for each calendar quarter in fiscal year 2003 and 
        fiscal year 2004, the Secretary shall reduce the amount paid 
        under subsection (a)(7) to each State by an amount equal to 50 
        percent for fiscal year 2003, and 75 percent for fiscal year 
        2004, of one-quarter of the annualized amount determined for 
        the medicaid program under section 16(k)(2)(B) of the Food 
        Stamp Act of 1977 (7 U.S.C. 2025(k)(2)(B)).
            ``(2) Allocation of administrative costs.--None of the 
        funds or expenditures described in section 16(k)(5)(B) of the 
        Food Stamp Act of 1977 (7 U.S.C. 2025(k)(5)(B)) may be used to 
        pay for costs--
                    ``(A) eligible for reimbursement under subsection 
                (a)(7) (or costs that would have been eligible for 
                reimbursement but for this subsection); and
                    ``(B) allocated for reimbursement to the program 
                under this title under a plan submitted by a State to 
                the Secretary to allocate administrative costs for 
                public assistance programs;
        except that, for purposes of subparagraph (A), the reference in 
        clause (iii) of that section to `subsection (a)' is deemed a 
        reference to subsection (a)(7) and clause (iv)(II) of that 
        section shall be applied as if `medicaid program' were 
        substituted for `food stamp program'.''.

                        TITLE X--EFFECTIVE DATE

SEC. 1001. EFFECTIVE DATE.

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

            Passed the House of Representatives May 16, 2002.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.