[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2631 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2631

To amend the temporary assistance to needy families program under part 
    A of title IV of the Social Security Act to provide grants for 
          transitional jobs programs, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 18, 2002

  Mr. Bingaman (for himself and Mrs. Murray) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the temporary assistance to needy families program under part 
    A of title IV of the Social Security Act to provide grants for 
          transitional jobs programs, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Support, Training, Employment 
Programs Act of 2002'' or the ``STEP Act of 2002''.

SEC. 2. TRANSITIONAL JOBS GRANTS.

    Section 403(a) of the Social Security Act (42 U.S.C. 603(a)) is 
amended by adding at the end the following:
            ``(6) Transitional jobs grants.--
                    ``(A) Purpose.--The purpose of this paragraph is to 
                provide funding so that States and localities can 
                create and expand transitional jobs programs that--
                            ``(i) combine time-limited employment that 
                        is subsidized with public funds, with skill 
                        development and barrier removal activities, 
                        pursuant to an individualized plan;
                            ``(ii) provide job development and 
                        placement assistance to individual participants 
                        to help them move from subsidized employment in 
                        transitional jobs into unsubsidized employment, 
                        as well as retention services after the 
                        transition to unsubsidized employment; and
                            ``(iii) serve recipients of assistance 
                        under the State program funded under this part 
                        and other low-income individuals who have been 
                        unable to secure employment through job search 
                        or other employment-related services because of 
                        limited skills, experience, or other barriers 
                        to employment.
                    ``(B) Authority to make grants.--Each transitional 
                jobs State (as determined under subparagraph (C)) shall 
                receive a grant under this paragraph for each fiscal 
                year specified in subparagraph (K) for which the State 
                is a transitional jobs State, in an amount equal to the 
                allotment for the State as specified under subparagraph 
                (D) for the fiscal year.
                    ``(C) Transitional jobs state.--A State shall be 
                considered a transitional jobs State for a fiscal year 
                for purposes of this paragraph if the Secretary of 
                Labor determines that the State meets the following 
                requirements:
                            ``(i) The State has submitted to the 
                        Secretary of Labor and the Secretary of Health 
                        and Human Services (in the form of an addendum 
                        to the State plan submitted under section 402) 
                        a plan which is approved by the Secretary of 
                        Labor based on the plan's compliance with the 
                        following requirements:
                                    ``(I) The plan describes how, 
                                consistent with this paragraph, the 
                                State will use any funds provided under 
                                this paragraph during the fiscal year.
                                    ``(II) The plan contains evidence 
                                that the plan was developed in 
                                consultation and coordination with 
                                appropriate entities including 
                                employers, labor organizations, and 
                                community-based organizations that work 
                                with low-income families, and includes 
                                a certification as required under 
                                section 402(a)(4) with regard to the 
                                transitional jobs services that the 
                                State proposes to provide.
                                    ``(III) The plan specifies the 
                                criteria that will be used to select 
                                entities who will receive funding to 
                                operate transitional jobs programs.
                                    ``(IV) The plan describes 
                                specifically how the State will address 
                                the needs of rural areas, Indian 
                                tribes, and cities with large 
                                concentrations of residents with an 
                                income that is less than the poverty 
                                line, or who are unemployed.
                                    ``(V) The plan describes how the 
                                State will ensure that a grantee to 
                                which information is disclosed pursuant 
                                to this paragraph or section 454A(f)(5) 
                                has procedures for safeguarding the 
                                information and for ensuring that the 
                                information is used solely for the 
                                purpose described in this paragraph or 
                                that section.
                                    ``(VI) The plan describes 
                                categories of jobs that are in demand 
                                in various areas of the State and which 
                                offer the opportunity for advancement 
                                to better jobs. The plan also shall 
                                provide assurances that the ability of 
                                organizations seeking to operate 
                                transitional jobs programs to best 
                                prepare participants for those jobs 
                                will be given weight in the selection 
                                of program operators.
                            ``(ii) The State has agreed to negotiate in 
                        good faith with the Secretary of Health and 
                        Human Services with respect to the substance 
                        and funding of any evaluations and to cooperate 
                        with the conduct of any such evaluations.
                    ``(D) Allotments to states.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), the amount of the allotment for a 
                        transitional jobs State for a fiscal year shall 
                        be the available amount for the fiscal year 
                        multiplied by the State percentage for the 
                        fiscal year.
                            ``(ii) Minimum allotment.--The amount of 
                        the allotment for a transitional jobs State 
                        (other than Guam, the Virgin Islands, or 
                        American Samoa) for a fiscal year shall not be 
                        less than 0.4 percent of the available amount 
                        for the fiscal year.
                            ``(iii) Pro rata reduction.--Subject to 
                        clause (ii), the Secretary of Labor shall make 
                        pro rata reductions in the allotments to States 
                        under this subparagraph for a fiscal year as 
                        necessary to ensure that the total amount of 
                        the allotments does not exceed the available 
                        amount for the fiscal year.
                            ``(iv) Available amount.--As used in this 
                        subparagraph, the term `available amount' 
                        means, for a fiscal year, 80 percent of the sum 
                        of--
                                    ``(I) the amount specified in 
                                subparagraph (K) for the fiscal year;
                                    ``(II) any funds available under 
                                this subparagraph that have not been 
                                allotted due to a determination by the 
                                Secretary that any State has not met 
                                the requirements of subparagraph (C); 
                                and
                                    ``(III) any available amount for 
                                the immediately preceding fiscal year 
                                that has not been obligated by the 
                                State.
                            ``(v) State percentage.--As used in this 
                        subparagraph, the term `State percentage' 
                        means, with respect to a fiscal year and a 
                        State, \1/2\ of the sum of--
                                    ``(I) the percentage represented by 
                                the number of individuals in the State 
                                whose income is less than the poverty 
                                line divided by the number of such 
                                individuals in the United States; and
                                    ``(II) the percentage represented 
                                by the number of adults who are 
                                recipients of assistance under the 
                                State program funded under this part 
                                divided by the number of adults in the 
                                United States who are recipients of 
                                assistance under any State program 
                                funded under this part.
                            ``(vi) Administration of funds.--
                                    ``(I) In general.--Subject to 
                                subclause (II), funds made available to 
                                a State under this paragraph shall be 
                                administered by an agency or agencies, 
                                as determined by the chief executive 
                                officer of the State, which may include 
                                the agency that administers the State 
                                program funded under this part, the 
                                State board designated to administer 
                                the Workforce Investment Act of 1998 
                                (29 U.S.C. 2801 et seq.) in the State, 
                                or any other appropriate agency.
                                    ``(II) Coordination with tanf 
                                agency.--If an agency other than the 
                                State agency that administers the State 
                                program funded under this part 
                                administers funds made available to a 
                                State under this paragraph, that agency 
                                shall coordinate the planning and 
                                administration of such funds with the 
                                State agency that administers the State 
                                program funded under this part.
                            ``(vii) Distribution of funds within 
                        states.--
                                    ``(I) In general.--A State to which 
                                a grant is made under this paragraph 
                                shall allocate not less than 90 percent 
                                of the amount of the grant to eligible 
                                applicants for the operation of 
                                transitional jobs programs consistent 
                                with subparagraph (E). Any funds not 
                                used for such operation may be used to 
                                provide technical assistance to program 
                                operators and worksite employers, 
                                administration, or for other purposes 
                                consistent with this paragraph.
                                    ``(II) Eligible applicants.--As 
                                used in subclause (I), the term 
                                `eligible applicant' means a political 
                                subdivision of a State, a local 
                                workforce investment board established 
                                under section 117 of the Workforce 
                                Investment Act of 1998 (29 U.S.C. 
                                2832), an Indian tribe, or a private 
                                entity.
                    ``(E) Limitations on use of funds.--
                            ``(i) Allowable activities.--An entity to 
                        which funds are provided under subparagraph 
                        (D)(vii) shall use the funds to operate 
                        transitional jobs programs consistent with the 
                        following:
                                    ``(I) An entity which secures a 
                                grant to operate a transitional jobs 
                                program (in this subparagraph referred 
                                to as a `program operator'), under this 
                                paragraph shall place eligible 
                                individuals in temporary, publicly 
                                subsidized jobs. Individuals placed in 
                                such positions shall perform work 
                                directly for the program operator, or 
                                at other public and nonprofit 
                                organizations (in this subparagraph 
                                referred to as `worksite employers') 
                                within the community. Funds provided 
                                under subparagraph (D) shall be used to 
                                subsidize 100 percent of the wages paid 
                                to participants as well as employer-
                                paid payroll costs for such 
                                participants, except as provided in 
                                clause (v) regarding placements in the 
                                private, for-profit sector.
                                    ``(II) Transitional jobs programs 
                                shall provide paid employment for not 
                                less than 30, nor more than 40 hours 
                                per week, except that a parent with a 
                                child under the age of 6, a child who 
                                is disabled, or a child with other 
                                special needs, or an individual who for 
                                other reasons cannot successfully 
                                participate for 30 to 40 hours per 
                                week, may, at State discretion, be 
                                allowed to participate for more limited 
                                hours, but not less than 20 hours per 
                                week.
                                    ``(III) Program operators shall--
                                            ``(aa) develop an 
                                        individual plan for each 
                                        participant, the goal of which 
                                        shall focus on preparation for 
                                        unsubsidized jobs in demand in 
                                        the local economy which offer 
                                        the potential for advancement 
                                        and growth;
                                            ``(bb) develop transitional 
                                        work placements for 
                                        participants that will best 
prepare them for jobs in demand in the local economy that offer the 
potential for wage growth and advancement; and
                                            ``(cc) provide case 
                                        management services and ensure 
                                        that appropriate education, 
                                        training, and other services 
                                        are available to participants 
                                        consistent with each 
                                        participant's individual plan.
                                    ``(IV) Program operators shall 
                                provide job placement assistance to 
                                help participants obtain unsubsidized 
                                employment, and shall provide retention 
                                services for 12 months after entry into 
                                unsubsidized employment.
                                    ``(V) In any work week in which a 
                                participant is employed at least 30 
                                hours, a minimum of 20 percent of 
                                scheduled hours and a maximum of 50 
                                percent of scheduled hours, shall 
                                involve participation in education or 
                                training activities designed to improve 
                                the participant's employability and 
                                potential earnings, or other services 
                                designed to reduce or eliminate any 
                                barriers that may impede the 
                                participant's ability to secure 
                                unsubsidized employment.
                                    ``(VI) The maximum duration of any 
                                placement in a transitional jobs 
                                program shall not be less than 6 
                                months, nor more than 24 months. 
                                Nothing in this subclause shall be 
                                construed to bar a participant from 
                                moving into unsubsidized employment at 
                                a point prior to the maximum duration 
                                of the program. States may approve 
                                programs of varying durations 
                                consistent with this subclause.
                                    ``(VII) Participants shall be paid 
                                at the rate paid to unsubsidized 
                                employees of the worksite employer, (or 
                                program operator where work is 
                                performed directly for the program 
                                operator,) who perform comparable work 
                                at the worksite where the individual is 
                                placed. If no other employees perform 
                                the same or comparable work then wages 
                                shall be set, at a minimum, at 50 
                                percent of the Lower Living Standard 
                                Income Level (in this subparagraph 
                                referred to as the `LLSIL'), as 
                                specified in section 101(24) of the 
                                Workforce Investment Act of 1998, for 
                                family of 3 based on 35 hours per week.
                                    ``(VIII) Participants shall receive 
                                supervision from the worksite employer 
                                or program operator consistent with the 
                                goal of addressing the limited work 
                                experience and skills of program 
                                participants.
                            ``(ii) Consultation.--An application 
                        submitted by an entity seeking to become a 
                        program operator shall include an assurance by 
                        the applicant that the transitional jobs 
                        program carried out by the applicant shall--
                                    ``(I) provide in the design, 
                                recruitment, and operation of the 
                                program for broad-based input from the 
                                community served and potential 
                                participants in the program and 
                                community-based agencies with a 
                                demonstrated record of experience in 
                                providing services, prospective 
                                worksite employers, local labor 
                                organizations representing employees of 
                                prospective worksite employers, if 
                                these entities exist in the area to be 
                                served by the program, and employers, 
                                and membership-based groups that 
                                represent low-income individuals; and
                                    ``(II) prior to the placement of 
                                participants, consult with the 
                                appropriate local labor organization, 
                                if any, representing employees in the 
                                area who are engaged in the same or 
                                similar as that proposed to be carried 
                                out by such program to ensure 
                                compliance with the nondisplacement 
                                requirements specified in subparagraph 
                                (L).
                            ``(iii) Eligibility for other work 
                        supports.--Participants shall be eligible for 
                        subsidized child care, transportation 
                        assistance, and other needed support services 
                        on the same basis as other recipients of cash 
                        assistance under the State program funded under 
                        this part.
                            ``(iv) Wages not considered assistance.--
                        Wages paid to program participants shall not be 
                        considered to be assistance for purposes of 
                        section 408(a)(7).
                            ``(v) Private sector placements.--
                        Placements of participants with private, for-
                        profit entities shall be permitted only under 
                        the following conditions:
                                    ``(I) Except as provided in clause 
                                (vi), not more than 20 percent of the 
                                total number of participants in 
                                transitional jobs in a State at any 
                                time may be placed at worksite 
                                employers which are private, for-profit 
                                companies.
                                    ``(II) When placements are made at 
                                private, for-profit, entities the 
                                entity shall pay for at least 50 
                                percent of programs costs (including 
                                wages) for each participant.
                                    ``(III) Not more than 5 percent of 
                                a private, for-profit entity's 
                                workforce may be composed of 
                                transitional jobs programs subsidized 
                                participants at any point in time, and 
                                no supervisor at the entity shall have 
                                the responsibility for supervising more 
                                than one transitional job program 
                                participant.
                                    ``(IV) A private, for-profit entity 
                                shall not be allowed to participate as 
                                a worksite employer or program operator 
                                if the entity has previously exhibited 
                                a pattern of failing to provide 
                                transitional jobs participants with 
                                continued, unsubsidized employment with 
                                wages, benefits, and working 
                                conditions, that are equal to those 
                                provided to other unsubsidized 
                                employees who have worked a similar 
                                length of time and are doing similar 
                                work.
                                    ``(V) The duration of any 
                                subsidized placement under this clause 
                                shall be limited to the period of time 
                                required for the participant to become 
                                proficient in the performance of the 
                                tasks of the job for which the 
                                participant is employed.
                                    ``(VI) Transitional jobs 
                                participants shall only be placed with 
                                private, for-profit entities in which 
                                the participants will have the 
                                opportunity for permanent, unsubsidized 
                                employment in positions where they will 
                                learn skills that provide a clear 
                                pathway to higher paying jobs.
                                    ``(VII) At the time a transitional 
                                jobs placement is made, the entity 
                                shall agree in writing--
                                            ``(aa) to hire the 
                                        participant into an 
                                        unsubsidized position at the 
                                        completion of the agreed upon 
                                        subsidized placement, or 
                                        sooner, provided that the 
                                        transitional jobs participant's 
                                        job performance has been 
                                        satisfactory; and
                                            ``(bb) to provide the 
                                        participant with access to 
                                        employee benefits that would be 
                                        available to an individual in 
                                        an unsubsidized position of the 
                                        employer within 12 months of 
                                        the participant's initial 
                                        placement in the subsidized 
                                        position.
                            ``(vi) Exception to 20 percent limitation 
                        on private sector placements.--
                                    ``(I) In general.--A State may 
                                exceed the 20 percent limitation under 
                                clause (v)(I) if necessary because of 
                                the limited number of placement 
                                opportunities in public and non-profit 
                                organizations in rural areas of the 
                                State, but only if the State includes 
                                in its plan a request to exceed such 
                                limitation and provides specific 
                                information describing why private 
                                placements in excess of the 20 percent 
                                limitation are necessary, including a 
                                specification of the rural areas in the 
                                State in which insufficient nonprofit 
                                or public sector placements are 
                                available and the projected 
                                distribution of private sector 
                                placements throughout the State.
                                    ``(II) Consideration of requests.--
                                The Secretary shall by regulation 
                                develop procedures for the prompt 
                                consideration and resolution of 
                                requests by a State to exceed the 20 
                                percent limitation under clause (v)(I).
                                    ``(III) Limitation remains in non-
                                designated areas.--If a request to 
                                exceed such 20 percent limitation is 
                                approved, the 20 percent limitation 
                                shall not apply in those areas of the 
                                State that have been designated to 
                                exceed such limit, but shall continue 
                                to apply in those areas of the State 
                                not so designated.
                                    ``(IV) Inclusion of information in 
                                annual report.--With respect to any 
                                year in which the Secretary authorizes 
                                the State to exceed such 20 percent 
                                limitation, a State shall report on the 
                                number and geographic location of 
                                private sector slots used during the 
                                year in addition to the information 
                                required to be reported by the State 
                                under clauses (vii) and (viii) of 
                                subparagraph (G) .
                    ``(F) General eligibility.--
                            ``(i) In general.--Not less than \2/3\ of 
                        the participants in a transitional jobs program 
                        within a State during a fiscal year shall be 
                        individuals who are, at the time they enter the 
                        program--
                                    ``(I) receiving assistance under 
                                the State program funded under this 
                                part;
                                    ``(II) not receiving assistance 
                                under the State program funded under 
                                this part, but who are unemployed, and 
                                who were recipients of assistance under 
                                a State program funded under this part 
                                within the immediately preceding 12-
                                month period;
                                    ``(III) custodial parents of a 
                                minor child who meet the financial 
                                eligibility criteria for assistance 
                                under the State program funded under 
                                this part; or
                                    ``(IV) noncustodial parents with 
                                income below 100 percent of the poverty 
                                line (as defined in section 673(2) of 
                                the Omnibus Budget Reconciliation Act 
                                of 1981, including any revision 
                                required by such section, applicable to 
                                a family of the size involved).
                            ``(ii) State option to further limit 
                        eligibility.--A State may further limit the 
                        eligibility of noncustodial parents to those 
                        noncustodial parents for whom at least 1 of the 
                        following applies to a minor child of the 
                        noncustodial parent:
                                    ``(I) The minor child is eligible 
                                for, or is receiving, assistance under 
                                the State program funded under this 
                                part.
                                    ``(II) The minor child received 
                                assistance under the program funded 
                                under this part in the 12-month period 
                                preceding the date of the determination 
                                but no longer receives such assistance.
                                    ``(III) The minor child is eligible 
                                for, or is receiving, assistance under 
                                the Food Stamp Act of 1977, benefits 
                                under the supplemental security income 
                                program under title XVI of this Act, 
                                medical assistance under title XIX of 
                                this Act, or child health assistance 
                                under title XXI of this Act.
                            ``(iii) Consultation.--A transitional jobs 
                        program that provides services to non-custodial 
                        parents shall consult with the State child 
                        support program funded under part D so that 
                        child support services are coordinated with 
                        transitional jobs program services.
                            ``(iv) Limitation.--Not more than \1/3\ of 
                        all participants in a transitional jobs program 
                        within a State during a fiscal year shall be 
                        individuals who have attained at least age 18 
                        with income below 100 percent of the poverty 
                        line (as defined in section 673(2) of the 
                        Omnibus Budget Reconciliation Act of 1981, 
                        including any revision required by such 
                        section, applicable to a family of the size 
                        involved) who are not eligible under clause 
                        (i).
                            ``(v) Methodology.--A State may use any 
                        reasonable methodology in calculating whether a 
                        participant satisfies the requirements of 
                        clause (i), make up \2/3\ or more of all 
                        participants, and whether participants 
                        satisfying the requirements of clause (iv) make 
                        up not more than \1/3\ of all participants in a 
                        fiscal year.
                            ``(vi) Authority to provide work-related 
                        services to individuals who have reached the 5 
                        year limit.--A program operator under this 
                        paragraph may use the funds to provide 
                        transitional job program participation to 
                        individuals who, but for section 408(a)(7), 
                        would be eligible for assistance under the 
                        program funded under this part of the State in 
                        which the entity is located.
                    ``(G) Relationship to other provisions of this 
                part; administrative provisions.--
                            ``(i) Rules governing use of funds.--The 
                        provisions of section 404, other than 
                        subsection (f) of section 404, shall not apply 
                        to a grant made under this paragraph.
                            ``(ii) Work participation requirements.--
                        With respect to any month in which a recipient 
                        of assistance under a State or tribal program 
                        funded under this part satisfactorily 
participates in a transitional jobs program funded under a grant made 
under this paragraph, such participation shall be considered to satisfy 
the work participation requirements of section 407 and included for 
purposes of determining monthly participation rates under subsection 
(b)(1)(B)(i) of that section.
                            ``(iii) Administration.--Section 416 shall 
                        not apply to the programs under this paragraph.
                            ``(iv) Prohibition against use of grant 
                        funds for any other fund matching 
                        requirement.--An entity to which funds are 
                        provided under this paragraph shall not use any 
                        part of the funds to fulfill any obligation of 
                        any State or political subdivision under 
                        subsection (b) or section 418 or any other 
                        provision of this Act or other Federal law.
                            ``(v) Deadline for expenditure.--An entity 
                        to which funds are provided under this 
                        paragraph shall remit to the Secretary of Labor 
                        any part of the funds that are not expended 
                        within 3 years after the date on which the 
                        funds are so provided.
                            ``(vi) Regulations.--Within 90 days after 
                        the date of the enactment of this paragraph, 
                        the Secretary of Labor, after consultation with 
                        the Secretary of Health and Human Services, 
                        shall prescribe such regulations as may be 
                        necessary to implement this paragraph.
                            ``(vii) Reporting requirements.--The 
                        Secretary of Labor, in consultation with the 
                        Secretary of Health and Human Services, shall 
                        establish requirements for the collection and 
                        maintenance of financial and participant 
                        information and the reporting of such 
                        information by entities carrying out activities 
                        under this paragraph. Such reporting 
                        requirements shall include, at a minimum, that 
                        States report disaggregated data on individual 
                        participants that include the following:
                                    ``(I) Demographic information about 
                                the participant including education 
                                level, literacy level, and prior work 
                                experience.
                                    ``(II) Identity of the program 
                                operator that provides or provided 
                                services to the participant, and the 
                                duration of participation.
                                    ``(III) The nature of education, 
                                training or other services received by 
                                the participant.
                                    ``(IV) Reason for the participant's 
                                leaving the programs.
                                    ``(V) Whether the participant 
                                secured unsubsidized employment during 
                                or within 60 days after the employment 
                                of the participant in a transitional 
                                job, and if so, details about the 
                                participant's unsubsidized employment 
                                including industry, occupation, 
                                starting wages and hours, availability 
                                of employer sponsored health insurance, 
                                sick and vacation leave.
                                    ``(VI) The extent to which 
                                subsidized and unsubsidized placements 
                                are in jobs or occupations identified 
                                in the State's plan as being in demand 
                                in the local economy and offering the 
                                opportunity for advancement and wage 
                                growth.
                            ``(viii) Additional reporting 
                        requirements.--States shall collect and report 
                        follow-up data for a sampling of participants 
                        reflecting their employment and earning status 
                        12 months after entering unsubsidized 
                        employment.
                            ``(ix) Annual report to congress.--The 
                        Secretary of Labor shall submit an annual 
                        report to Congress on the activities conducted 
                        with grants made under this paragraph that 
                        includes information regarding the employment 
                        and earning status of participants in such 
                        activities.
                    ``(H) National competitive grants.--
                            ``(i) In general.--The Secretary of Labor 
                        shall award grants in accordance with this 
                        subparagraph, in fiscal years 2003 through 
                        2007, for transitional jobs programs proposed 
                        by eligible applicants, based on the following:
                                    ``(I) The extent to which the 
                                proposal seeks to provide services in 
                                multiple sites that include sites in 
                                more than 1 State.
                                    ``(II) The extent to which the 
                                proposal seeks to provide services in a 
                                labor market area or region that 
                                includes portions of more than 1 State.
                                    ``(III) The extent to which the 
                                proposal seeks to provide transitional 
                                jobs in a State that is not eligible to 
                                receive an allotment under subparagraph 
                                (D).
                                    ``(IV) The extent to which the 
                                applicant proposes to provide 
                                transitional jobs in either rural areas 
                                or areas where there is a high 
                                concentration of residents with income 
                                that is less than the poverty line.
                                    ``(V) The effectiveness of the 
                                proposal in helping individuals who are 
                                least job ready move into unsubsidized 
                                jobs that provide pathways to stable 
                                employment and livable wages.
                            ``(ii) Eligible applicants.--In this 
                        subparagraph, the term `eligible applicant' 
                        means a local workforce investment board 
                        established under section 117 of the Workforce 
                        Investment Act of 1998 (29 U.S.C. 2832), a 
                        political subdivision of a State, or a private 
                        entity
                            ``(iii) Funding.--For grants under this 
                        subparagraph for each fiscal year specified in 
                        clause (i), there shall be available to the 
                        Secretary of Labor an amount equal to 13.5 
                        percent of the sum of--
                                    ``(I) the amount specified in 
                                subparagraph (K) for the fiscal year;
                                    ``(II) any amount available for the 
                                immediately preceding fiscal year that 
                                has not been obligated by a State; and
                                    ``(III) any funds available under 
                                this paragraph that have not been 
                                allotted due to a determination by the 
                                Secretary of Labor that the State has 
                                not qualified as a transitional jobs 
                                State.
                    ``(I) Funding for indian tribes.--5 percent of the 
                amount specified in subparagraph (K) for each fiscal 
                year shall be reserved for grants to Indian tribes 
under subparagraph (P).
                    ``(J) Funding for evaluations of transitional jobs 
                programs.--1.5 percent of the amount specified in 
                subparagraph (K) for each fiscal year shall be reserved 
                for use by the Secretary to carry out subparagraph (O).
                    ``(K) Appropriations.--
                            ``(i) In general.--Out of any money in the 
                        Treasury of the United States not otherwise 
                        appropriated, there are appropriated for grants 
                        under this paragraph--
                                    ``(I) $250,000,000 for fiscal year 
                                2003;
                                    ``(II) $375,000,000 for fiscal year 
                                2004; and
                                    ``(III) $500,000,000 for each of 
                                fiscal years 2005 through 2007.
                            ``(ii) Availability.--The amounts made 
                        available pursuant to clause (i) shall remain 
                        available for such period as is necessary to 
                        make the grants provided for in this paragraph.
                    ``(L) Worker protections.--
                            ``(i) Nonduplication.--
                                    ``(I) In general.--Assistance 
                                provided through a grant made under 
                                this paragraph shall be used only for a 
                                program that does not duplicate, and is 
                                in addition to, an activity otherwise 
                                available in the locality of such 
                                program.
                                    ``(II) Private, nonprofit entity.--
                                Assistance provided through a grant 
                                made available under this paragraph 
                                shall not be provided to a private 
                                nonprofit entity to conduct activities 
                                that are the same or substantially 
                                equivalent to activities provided by a 
                                State or local government agency in the 
                                area in which such entity resides, 
                                unless the requirements of clause (ii) 
                                are met.
                            ``(ii) Nondisplacement.--
                                    ``(I) In general.--An employer 
                                shall not displace an employee or 
                                position (including partial 
                                displacement such as reduction in 
                                hours, wages, or employment benefits) 
                                or impair existing contracts for 
                                services or collective bargaining 
                                agreements, as a result of the use by 
                                such employer of a participant in a 
                                program receiving assistance under a 
                                grant made under this paragraph, and no 
                                participant shall be assigned to fill 
                                any established unfilled position 
                                vacancy.
                                    ``(II) Job opportunities.--A job 
                                opportunity shall not be created under 
                                this section that will infringe in any 
                                manner on the promotional opportunity 
                                of an employed individual.
                                    ``(III) Limitation on services.--
                                            ``(aa) Supplantation of 
                                        hiring.--A participant in any 
                                        transitional job program that 
                                        receives funds under a grant 
                                        made under this paragraph shall 
                                        not perform any services or 
                                        duties or engage in activities 
                                        that will supplant the hiring 
                                        of unsubsidized workers.
                                            ``(bb) Duties formerly 
                                        performed by another 
                                        employee.--A participant in any 
                                        transitional job program that 
                                        receives funds under a grant 
                                        made under this paragraph shall 
                                        not perform services or duties 
                                        that are services, duties, or 
                                        activities with respect to 
                                        which an individual has recall 
                                        rights pursuant to a collective 
                                        bargaining agreement or 
                                        applicable personnel 
                                        procedures, or which had been 
                                        performed by or were assigned 
                                        to any employee who recently 
                                        resigned or was discharged, any 
                                        employee who is subject to a 
                                        reduction in force, any 
                                        employee who is on leave 
                                        (terminal, temporary, vacation, 
                                        emergency, or sick), or any 
                                        employee who is on strike or 
                                        who is being locked out.
                            ``(iii) Concurrence of local labor 
                        organization.--No work assignment under a 
                        transitional job program that receives funds 
                        under a grant made under this paragraph shall 
                        be made until the program operator has obtained 
                        the written concurrence of any local labor 
                        organization representing employees who are 
                        engaged in the same or substantially similar 
                        work as that proposed to be carried out for the 
                        program operator or worksite employer with whom 
                        a participant is placed.
                            ``(iv) Application of worker protection 
                        laws.--Participants employed in transitional 
                        jobs created under a transitional job program 
                        that receives funds under a grant made under 
                        this paragraph shall be considered to be 
                        employees for all purposes under Federal and 
                        State law, including laws relating to health 
                        and safety, civil rights, and worker's 
                        compensation.
                    ``(M) Grievance procedure.--
                            ``(i) In general.--The State shall 
                        establish and maintain a grievance procedure 
                        for resolving complaints by unsubsidized 
                        employees of program operators or worksite 
                        employers or such employees' representatives 
                        alleging violations of clause (i), (ii), or 
                        (iii) of subparagraph (L), or by participants 
                        alleging violations of clause (ii), (iii), or 
                        (iv) of such subparagraph.
                            ``(ii) Limitation.--Except in the case of a 
                        grievance that alleges fraud or criminal 
                        activity, a grievance shall be made not later 
                        than 1 year after the date of the alleged 
                        occurrence of the event that is the subject of 
                        the grievance.
                            ``(iii) Hearing.--A hearing on any 
                        grievance made under this subparagraph shall be 
                        conducted not later than 30 days after the 
                        filing of the grievance.
                            ``(iv) Deadline for decision.--A decision 
                        on any grievance made under this subparagraph 
                        shall be made not later than 60 days after the 
                        filing of the grievance.
                            ``(v) Binding arbitration.--
                                    ``(I) In general.--In the event of 
                                a decision on a grievance that is 
                                adverse to the party who filed such 
                                grievance, or, in the event on 
                                noncompliance with the 60-day period 
                                required under clause (iv), the party 
                                who filed the grievance may submit the 
                                grievance to binding arbitration before 
a qualified arbitrator who is jointly selected and independent of the 
interested parties.
                                    ``(II) Selection of arbitrator.--If 
                                the parties cannot agree on an 
                                arbitrator, the chief executive officer 
                                of the State shall appoint an 
                                arbitrator from a list of qualified 
                                arbitrators within 15 days after 
                                receiving a request for such 
                                appointment from a party to the 
                                grievance.
                                    ``(III) Deadline for proceeding.--
                                An arbitration proceeding shall be held 
                                not later than 45 days after the 
                                request for the arbitration proceeding, 
                                or, if the arbitrator is appointed by 
                                the chief executive officer of the 
                                State in accordance with subclause 
                                (II), not later than 30 days after the 
                                appointment of such arbitrator.
                                    ``(IV) Deadline for decision.--A 
                                decision concerning a grievance that 
                                has been submitted to binding 
                                arbitration under this clause shall be 
                                made not later than 30 days after the 
                                date the arbitration proceeding begins.
                                    ``(V) Cost.--
                                            ``(aa) In general.--Except 
                                        as provided in item (bb), the 
                                        cost of an arbitration 
                                        proceeding shall be divided 
                                        evenly between the parties to 
                                        the arbitration.
                                            ``(bb) Employee is 
                                        prevailing party.--If an 
                                        employee or such employee's 
                                        representative prevails under a 
                                        binding arbitration proceeding 
                                        under this clause, the State 
                                        agency shall pay the total cost 
                                        of such proceeding and the 
                                        attorneys' fees of such 
                                        employee or representative.
                            ``(vi) Remedies.--Remedies for a grievance 
                        filed under this subparagraph include--
                                    ``(I) prohibition of the work 
                                assignment in the program funded under 
                                a grant made under this paragraph;
                                    ``(II) reinstatement of the 
                                displaced employee to the position held 
                                by such employee prior to displacement;
                                    ``(III) payment of lost wages and 
                                benefits of the displaced employee;
                                    ``(IV) reestablishment of other 
                                relevant terms, conditions, and 
                                privileges of employment of the 
                                displaced employee; and
                                    ``(V) such equitable relief as is 
                                necessary to make the displaced 
                                employee whole.
                            ``(vii) Judicial review.--An action to 
                        enforce remedy or an arbitration award under 
                        this paragraph may be brought in any district 
                        court of the United States, without regard to 
                        the amount in controversy or the citizenship of 
                        the parties to the action.
                            ``(viii) Non-exclusive procedures.--The 
                        grievance procedures specified in this 
                        subparagraph are not exclusive and an aggrieved 
                        employee or participant in a program funded 
                        under a grant made under this paragraph may use 
                        alternative procedures available under 
                        applicable contracts, collective bargaining 
                        agreements, or Federal or State laws.
                    ``(N) Non-preemption of state law.--The provisions 
                of subparagraphs (L) and (M) of this paragraph shall 
                not be construed to preempt any provision of State law 
                that affords greater protections to employees or to 
                other participants engaged in work activities under a 
                program funded under this part than is afforded by the 
                provisions of this paragraph.
                    ``(O) Evaluation of transitional jobs programs.--
                            ``(i) Evaluation.--The Secretary, in 
                        consultation with the Secretary of Labor--
                                    ``(I) shall develop a plan to 
                                evaluate the extent to which 
                                transitional jobs programs funded under 
                                this paragraph have been effective in 
                                promoting sustained, unsubsidized 
                                employment for each group of eligible 
                                participants;
                                    ``(II) may evaluate the use of such 
                                grants by such grantees as the 
                                Secretary deems appropriate, in 
                                accordance with an agreement entered 
                                into with the grantees after good-faith 
                                negotiations; and
                                    ``(III) should include the 
                                following outcome measures in the plan 
                                developed under subclause (I):
                                            ``(aa) Placements in 
                                        unsubsidized employment.
                                            ``(bb) Placements in 
                                        unsubsidized employment that 
                                        last for at least 12 months, 
                                        and the extent to which 
                                        individuals are employed 
                                        continuously for at least 12 
                                        months.
                                            ``(cc) Earnings of 
                                        individuals who obtain 
                                        employment at the time of 
                                        placement.
                                            ``(dd) Earnings of 
                                        individuals one year after 
                                        placement.
                                            ``(ee) The occupations and 
                                        industries in which wage growth 
                                        and retention performance is 
                                        greatest.
                                            ``(ff) Average expenditures 
                                        per participant.
                    ``(P) Grants to indian tribes.--
                            ``(i) In general.--The Secretary shall 
                        award a grant in accordance with this 
                        subparagraph to an Indian tribe for each fiscal 
                        year specified in subparagraph (K) for which 
                        the Indian tribe is a transitional jobs tribe, 
                        in such amount as the Secretary of Labor deems 
                        appropriate.
                            ``(ii) Transitional jobs tribe.--An Indian 
                        tribe shall be considered a transitional jobs 
                        tribe for a fiscal year for purposes of this 
                        subparagraph if the Indian tribe meets the 
                        following requirements:
                                    ``(I) The Indian tribe has 
                                submitted to the Secretary a plan which 
                                describes how, consistent with this 
                                paragraph, the Indian tribe will use 
                                any funds provided under this 
                                subparagraph during the fiscal year. If 
                                the Indian tribe has a tribal family 
                                assistance plan, the plan referred to 
                                in the preceding sentence shall be 
in the form of an addendum to the tribal family assistance plan.
                                    ``(II) The Indian tribe is 
                                operating a program under a tribal 
                                family assistance plan approved by the 
                                Secretary, a program described in 
                                section 412(a)(2)(C), or an employment 
                                program funded through other sources 
                                under which substantial services are 
                                provided to recipients of assistance 
                                under a program funded under this part.
                                    ``(III) The Indian tribe has agreed 
                                to negotiate in good faith with the 
                                Secretary with respect to the substance 
                                and funding of any evaluation under 
                                subparagraph (O), and to cooperate with 
                                the conduct of any such evaluation.''.

SEC. 3. INNOVATIVE BUSINESS LINK PARTNERSHIP FOR EMPLOYERS AND 
              NONPROFIT ORGANIZATIONS.

    (a) Authority To Award Grants.--The Secretary of Health and Human 
Services and the Secretary of Labor (in this section referred to as the 
``Secretaries'') jointly shall award grants in accordance with this 
section for projects proposed by eligible applicants based on the 
following:
            (1) The potential effectiveness of the proposed project in 
        carrying out the activities described in subsection (e).
            (2) Evidence of the ability of the eligible applicant to 
        leverage private, State, and local resources.
            (3) Evidence of the ability of the eligible applicant to 
        coordinate with other organizations at the State and local 
        level.
    (b) Definition of Eligible Applicant.--In this section, the term 
``eligible applicant'' means a nonprofit organization, a local 
workforce investment board established under section 117 of the 
Workforce Investment Act of 1998 (29 U.S.C. 2832), or a political 
subdivision of a State. In addition, in order to qualify as an eligible 
applicant for purposes of subsection (e), the applicant must provide 
evidence that the application has been developed by and will be 
implemented by a local or regional consortium that includes, at 
minimum, employers or employer associations, education and training 
providers, and social service providers.
    (c) Requirements.--In awarding grants under this section, the 
Secretaries shall--
            (1) consider the needs of rural areas and cities with large 
        concentrations of residents with an income that is less than 
        the 150 percent of the poverty line; and
            (2) ensure that all of the funds made available under this 
        section (other than funds reserved for use by the Secretaries 
        under subsection (j)) shall be used for activities described in 
        subsection (e).
    (d) Determination of Grant Amount.--
            (1) In general.--Subject to paragraph (2), in determining 
        the amount of a grant to be awarded under this section for a 
        project proposed by an eligible applicant, the Secretaries 
        shall provide the eligible applicant with an amount sufficient 
        to ensure that the project has a reasonable opportunity to be 
        successful, taking into account--
                    (A) the number and characteristics of the 
                individuals to be served by the project;
                    (B) the level of unemployment in such area;
                    (C) the job opportunities and job growth in such 
                area;
                    (D) the poverty rate for such area; and
                    (E) such other factors as the Secretary deems 
                appropriate in the area to be served by the project.
            (2) Award ceiling.--A grant awarded to an eligible 
        applicant under this section may not exceed $10,000,000.
    (e) Allowable Activities.--
            (1) Promote business linkages.--An eligible applicant 
        awarded a grant under this section shall use funds provided 
        under the grant to promote business linkages in which funds 
        shall be used to fund new or expanded programs that are 
        designed to--
                    (A) substantially increase the wages of low-income 
                parents, noncustodial parents, and other low-income 
                individuals, whether employed or unemployed, who have 
                limited English proficiency or other barriers to 
                employment by upgrading job and related skills in 
                partnership with employers, especially by providing 
                services at or near work sites; and
                    (B) identify and strengthen career pathways by 
                expanding and linking work and training opportunities 
                for low-earning workers in collaboration with 
                employers.
            (2) Consideration of in-kind, in-cash resources.--In 
        determining which programs to fund under this subsection, an 
        eligible applicant awarded a grant under this section shall 
        consider the ability of a consortium to provide funds in-kind 
        or in-cash (including employer-provided, paid release time) to 
        help support the programs for which funding is sought.
            (3) Priority.--In determining which programs to fund under 
        this subsection, an eligible applicant awarded a grant under 
        this section shall give priority given to programs that include 
        education or training for which participants receive credit 
        toward a recognized credential.
            (4) Use of funds.--
                    (A) In general.--Funds provided to a program under 
                this subsection may be used for a comprehensive set of 
                employment and training benefits and services, 
                including job development, job matching, curricula 
                development, wage subsidies, retention services, and 
                such others as the program deems necessary to achieve 
                the overall objectives of this subsection.
                    (B) Provision of services.--So long as a program is 
                principally designed to assist eligible individuals, 
                funds may be provided to a program under this 
                subsection that is designed to provide services to 
                categories of low-earning employees for 1 or more 
                employers and such a program may provide services to 
                individuals who do not meet the definition of low-
                income established for the program.
    (f) Definition of Eligible Individual.--In this section, the term 
``eligible individual'' means--
                    (A) an individual who is a parent who is a 
                recipient of assistance under a State or tribal program 
                funded under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.);
                    (B) an individual who is a parent who has ceased to 
                receive assistance under such a State or tribal 
                program; or
                    (C) a noncustodial parent who is unemployed, or 
                having difficulty in paying child support obligations.
    (g) Application.--Each eligible applicant desiring a grant under 
this section shall submit an application to the Secretaries at such 
time, in such manner, and accompanied by such information as the 
Secretaries may require.
    (h) Assessments and Reports by Grantees.--
            (1) In general.--An eligible applicant that receives a 
        grant under this section shall assess and report on the 
        outcomes of programs funded under the grant, including outcomes 
        related to job placement, 1-year employment retention, wage at 
        placement, and earnings progression, as specified by the 
        Secretaries.
            (2) Assistance.--The Secretaries shall--
                    (A) assist grantees in conducting the assessment 
                required under paragraph (1) by making available where 
                practicable low-cost means of tracking the labor market 
                outcomes of participants; and
                    (B) encourage States to also provide such 
                assistance.
    (i) Application to Requirements of the State TANF Program.--
            (1) Work participation requirements.--With respect to any 
        month in which a recipient of assistance under a State or 
        tribal program funded under part A of title IV of the Social 
        Security Act (42 U.S.C. 601 et seq.) who satisfactorily 
        participates in a business linkage program described in 
        subsection (e) that is paid for with funds made available under 
        a grant made under this section, such participation shall be 
        considered to satisfy the work participation requirements of 
        section 407 of the Social Security Act (42 U.S.C. 607)) and 
        included for purposes of determining monthly participation 
        rates under subsection (b)(1)(B)(i) of such section.
            (2) Participation not considered assistance.--A benefit or 
        service provided with funds made available under a grant made 
        under this section shall not be considered assistance for any 
        purpose under a State or tribal program funded under part A of 
        title IV of the Social Security Act (42 U.S.C. 601 et seq.).
    (j) Assessments by the Secretaries.--
            (1) Reservation of funds.--Of the amount appropriated under 
        subsection (k), $3,000,000 is reserved for use by the 
        Secretaries to prepare an interim and final report summarizing 
        and synthesizing outcomes and lessons learned from the programs 
        funded through grants awarded under this section.
            (2) Interim and final assessments.--With respect to the 
        reports prepared under paragraph (1), the Secretaries shall 
        submit--
                    (A) the interim report not later than 4 years after 
                the date of enactment of this Act; and
                    (B) the final report not later than 6 years after 
                such date of enactment.
    (k) Appropriation.--Out of any money in the Treasury of the United 
States not otherwise appropriated, there are appropriated for carrying 
out this section, $250,000,000 for the period of fiscal years 2003 
through 2007.
                                 <all>