[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 685 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 685

  To amend title IV of the Social Security Act to strengthen working 
                   families, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 3, 2001

   Mr. Bayh (for himself, Ms. Snowe, Mr. Graham, Mr. Lieberman, Mrs. 
     Lincoln, Ms. Landrieu, Mr. Kohl, Mr. Johnson, Mr. Breaux, Mr. 
  Rockefeller, Mrs. Clinton, and Mr. Carper) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend title IV of the Social Security Act to strengthen working 
                   families, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Strengthening 
Working Families Act of 2001''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
               TITLE I--PROMOTING RESPONSIBLE FATHERHOOD

Sec. 101. Block grants to States to encourage media campaigns.
Sec. 102. Responsible fatherhood block grant.
Sec. 103. National clearinghouse for responsible fatherhood programs.
         TITLE II--CHILD SUPPORT DISTRIBUTION TO FAMILIES FIRST

               Subtitle A--Distribution of Child Support

Sec. 201. Distribution of child support collected by States on behalf 
                            of children receiving certain welfare 
                            benefits.
   Subtitle B--Demonstrations of Expanded Information and Enforcement

Sec. 211. Guidelines for involvement of public non-IV-D child support 
                            enforcement agencies in child support 
                            enforcement.
Sec. 212. Demonstrations involving establishment and enforcement of 
                            child support obligations by public non-IV-
                            D child support enforcement agencies.
Sec. 213. GAO report to Congress on private child support enforcement 
                            agencies.
Sec. 214. Effective date.
                    Subtitle C--Expanded Enforcement

Sec. 221. Decrease in amount of child support arrearage triggering 
                            passport denial.
Sec. 222. Use of tax refund intercept program to collect past-due child 
                            support on behalf of children who are not 
                            minors.
Sec. 223. Garnishment of compensation paid to veterans for service-
                            connected disabilities in order to enforce 
                            child support obligations.
                       Subtitle D--Miscellaneous

Sec. 231. Technical correction to changed dates for abstinence 
                            evaluation.
Sec. 232. Report on undistributed child support payments.
Sec. 233. Use of new hire information to assist in administration of 
                            unemployment compensation programs.
Sec. 234. Immigration provisions.
Sec. 235. Correction of errors in conforming amendments in the Welfare-
                            to-Work and Child Support Amendments of 
                            1999.
Sec. 236. Increase in payment rate to States for expenditures for 
                            short-term training of staff of certain 
                            child welfare agencies.
                       Subtitle E--Effective Date

Sec. 241. Effective date.
   TITLE III--EARNED INCOME TAX CREDIT EXPANSION FOR LARGER FAMILIES

Sec. 301. Increased earned income tax credit for families with 
                            qualifying children.
Sec. 302. Simplification of definition of earned income.
Sec. 303. Simplification of definition of child dependent.
Sec. 304. Other modifications to earned income tax credit.
          TITLE IV--RESTORATION OF SOCIAL SERVICES BLOCK GRANT

Sec. 401. Restoration of authority to transfer up to 10 percent of TANF 
                            funds to the Social Services Block Grant.
Sec. 402. Restoration of funds for the Social Services Block Grant.
Sec. 403. Requirement to submit annual report on State activities.
           TITLE V--ENCOURAGING EMPLOYER SPONSORED CHILD CARE

Sec. 501. Allowance of credit for employer expenses for child care 
                            assistance.
                        TITLE VI--CHILD WELFARE

Sec. 601. Strong families, safe children.
Sec. 602. Expansion of John H. Chafee Foster Care Independence Program.
Sec. 603. Elimination of opt-out provision for State requirement to 
                            conduct criminal background check on 
                            prospective foster or adoptive parents.

               TITLE I--PROMOTING RESPONSIBLE FATHERHOOD

SEC. 101. BLOCK GRANTS TO STATES TO ENCOURAGE MEDIA CAMPAIGNS.

    (a) In General.--Part D of title IV of the Social Security Act (42 
U.S.C. 651 et seq.) is amended by adding at the end the following:

``SEC. 469C. BLOCK GRANTS TO STATES FOR MEDIA CAMPAIGNS PROMOTING 
              RESPONSIBLE FATHERHOOD.

    ``(a) Definitions.--In this section:
            ``(1) Broadcast advertisement.--The term `broadcast 
        advertisement' means a communication intended to be aired by a 
        television or radio broadcast station, including a 
        communication intended to be transmitted through a cable 
        channel.
            ``(2) Child at risk.--The term `child at risk' means each 
        young child whose family income does not exceed the poverty 
        line.
            ``(3) Poverty line.--The term `poverty line' has the 
        meaning given such term in section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981 (including any revision required by 
        such section) that is applicable to a family of the size 
        involved.
            ``(4) Printed or other advertisement.--The term `printed or 
        other advertisement' includes any communication intended to be 
        distributed through a newspaper, magazine, outdoor advertising 
        facility, mailing, or any other type of general public 
        advertising, but does not include any broadcast advertisement.
            ``(5) State.--The term `State' means each of the 50 States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        United States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            ``(6) Young child.--The term `young child' means an 
        individual under age 5.
    ``(b) State Certifications.--Not later than October 1 of each 
fiscal year for which a State desires to receive an allotment under 
this section, the chief executive officer of the State shall submit to 
the Secretary a certification that the State will--
            ``(1) use such funds to promote the formation and 
        maintenance of married 2-parent families, strengthen fragile 
        families, and promote responsible fatherhood through media 
        campaigns conducted in accordance with the requirements of 
        subsection (d);
            ``(2) return any unused funds to the Secretary in 
        accordance with the reconciliation process under subsection 
        (e); and
            ``(3) comply with the reporting requirements under 
        subsection (f).
    ``(c) Payments to States.--For each of fiscal years 2002 through 
2006, the Secretary shall pay to each State that submits a 
certification under subsection (b), from any funds appropriated under 
subsection (h), for the fiscal year an amount equal to the amount of 
the allotment determined for the fiscal year under subsection (g).
    ``(d) Establishment of Media Campaigns.--Each State receiving an 
allotment under this section for a fiscal year shall use the allotment 
to conduct media campaigns as follows:
            ``(1) Conduct of media campaigns.--
                    ``(A) Radio and television media campaigns.--
                            ``(i) Production of broadcast 
                        advertisements.--At the option of the State, to 
produce broadcast advertisements that promote the formation and 
maintenance of married 2-parent families, strengthen fragile families, 
and promote responsible fatherhood.
                            ``(ii) Air time challenge program.--At the 
                        option of the State, to establish an air time 
                        challenge program under which the State may 
                        spend amounts allotted under this section to 
                        purchase time from a broadcast station to air a 
                        broadcast advertisement produced under 
                        subparagraph (A), but only if the State obtains 
                        an amount of time of the same class and during 
                        a comparable period to air the advertisement 
                        using non-Federal contributions.
                    ``(B) Other media campaigns.--At the option of the 
                State, to conduct a media campaign that consists of the 
                production and distribution of printed or other 
                advertisements that promote the formation and 
                maintenance of married 2-parent families, strengthen 
                fragile families, and promote responsible fatherhood.
            ``(2) Administration of media campaigns.--A State may 
        administer media campaigns funded under this section directly 
        or through grants, contracts, or cooperative agreements with 
        public agencies, local governments, or private entities, 
        including charitable and religious organizations.
            ``(3) Consultation with domestic violence assistance 
        centers.--In developing broadcast and printed advertisements to 
        be used in the media campaigns conducted under paragraph (1), 
        the State or other entity administering the campaign shall 
        consult with representatives of State and local domestic 
        violence centers.
            ``(4) Non-federal contributions.--In this subsection, the 
        term `non-Federal contributions' includes contributions by the 
        State and by public and private entities. Such contributions 
        may be in cash or in kind. Such term does not include any 
        amounts provided by the Federal Government, or services 
        assisted or subsidized to any significant extent by the Federal 
        Government, or any amount expended by a State before October 1, 
        2002.
    ``(e) Reconciliation Process.--
            ``(1) 3-year availability of amounts allotted.--Each State 
        that receives an allotment under this section shall return to 
        the Secretary any unused portion of the amount allotted to a 
        State under this section for a fiscal year not later than the 
        last day of the second succeeding fiscal year together with any 
        earnings on such unused portion.
            ``(2) Procedure for redistribution of unused allotments.--
        The Secretary shall establish an appropriate procedure for 
        redistributing to States that have expended the entire amount 
        allotted under this section any amount that is--
                    ``(A) returned to the Secretary by States under 
                paragraph (1); or
                    ``(B) not allotted to a State under this section 
                because the State did not submit a certification under 
                subsection (b) by October 1 of a fiscal year.
    ``(f) Reporting Requirements.--
            ``(1) Monitoring and evaluation.--Each State receiving an 
        allotment under this section for a fiscal year shall monitor 
        and evaluate the media campaigns conducted using funds made 
        available under this section in such manner as the Secretary, 
        in consultation with the States, determines appropriate.
            ``(2) Annual reports.--Not less frequently than annually, 
        each State receiving an allotment under this section for a 
        fiscal year shall submit to the Secretary reports on the media 
        campaigns conducted under this section at such time, in such 
        manner, and containing such information as the Secretary may 
        require.
    ``(g) Amount of Allotments.--
            ``(1) In general.--Except as provided in paragraph (2), of 
        the amount appropriated for the purpose of making allotments 
        under this section for a fiscal year, the Secretary shall allot 
        to each State that submits a certification under subsection (b) 
        for the fiscal year an amount equal to the sum of--
                    ``(A) the amount that bears the same ratio to 50 
                percent of such funds as the number of young children 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) as bears to the number of such children in 
                all States; and
                    ``(B) the amount that bears the same ratio to 50 
                percent of such funds as the number of children at risk 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) bears to the number of such children in 
                all States.
            ``(2) Minimum allotments.--No allotment for a fiscal year 
        under this section shall be less than--
                    ``(A) in the case of a State other than the 
                Commonwealth of Puerto Rico, the United States Virgin 
                Islands, Guam, American Samoa, and the Commonwealth of 
                the Northern Mariana Islands, 1 percent of the amount 
                appropriated for the fiscal year under subsection (h); 
                and
                    ``(B) in the case of the Commonwealth of Puerto 
                Rico, the United States Virgin Islands, Guam, American 
                Samoa, and the Commonwealth of the Northern Mariana 
                Islands, 0.5 percent of such amount.
            ``(3) Pro rata reductions.--The Secretary shall make such 
        pro rata reductions to the allotments determined under 
        paragraph (1) as are necessary to comply with the requirements 
        of paragraph (2).
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated $25,000,000 for each of fiscal years 2002 through 2006 for 
purposes of making allotments to States under this section.''.
    (b) Evaluation.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct an evaluation of the impact of the media 
        campaigns funded under section 469C of the Social Security Act, 
        as added by subsection (a).
            (2) Report.--Not later than December 31, 2004, the 
        Secretary of Health and Human Services shall report to Congress 
        the results of the evaluation under paragraph (1).
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated $1,000,000 for fiscal year 2002 for purposes 
        of conducting the evaluation required under this subsection, to 
        remain available until expended.

SEC. 102. RESPONSIBLE FATHERHOOD BLOCK GRANT.

    (a) In General.--Part D of title IV of the Social Security Act (42 
U.S.C. 651 et seq.), as amended by section 101, is amended by adding at 
the end the following:

``SEC. 469D. RESPONSIBLE FATHERHOOD BLOCK GRANT.

    ``(a) Definitions.--In this section:
            ``(1) Child at risk.--The term `child at risk' has the 
        meaning given such term in section 469C(a)(2).
            ``(2) Poverty line.--The term `poverty line' has the 
        meaning given such term in section 469C(a)(3).
            ``(3) State.--The term `State' has the meaning given such 
        term in section 469C(a)(5).
            ``(4) Young child.--The term `young child' has the meaning 
        given such term in section 469C(a)(6).
    ``(b) State Certifications.--Not later than October 1 of each 
fiscal year for which a State desires to receive an allotment under 
this section, the chief executive officer of the State shall submit to 
the Secretary a certification that the State will--
            ``(1) comply with the matching requirements under 
        subsection (c)(2);
            ``(2) use such funds to promote responsible fatherhood in 
        accordance with the requirements of subsection (d);
            ``(3) use such funds to promote or sustain marriage in 
        accordance with subparagraph (A) or (B) of subsection (d)(2);
            ``(4) return any unused funds to the Secretary in 
        accordance with the reconciliation process under subsection 
        (e); and
            ``(5) comply with the reporting requirements under 
        subsection (f).
    ``(c) Payments to States.--
            ``(1) In general.--Subject to paragraph (2), for each of 
        fiscal years 2002 through 2006, the Secretary shall pay to each 
        State that submits a certification described in subsection (b), 
        from any funds appropriated under subsection (h), for the 
        fiscal year an amount equal to the amount of the allotment 
        determined under subsection (g).
            ``(2) Matching requirement.--The Secretary may not make a 
        payment to a State under paragraph (1) unless the State agrees 
        that, with respect to the costs to be incurred by the State in 
        supporting the programs described in subsection (d), the State 
        will make available non-Federal contributions in an amount 
        equal to 25 percent of the amount of Federal funds paid to the 
        State under such clause.
            ``(3) Non-federal contributions.--In this subsection, the 
        term `non-Federal contributions' includes contributions by the 
        State and by public and private entities. Such contributions 
        may be in cash or in kind. Such term does not include any 
        amounts provided by the Federal Government, or services 
        assisted or subsidized to any significant extent by the Federal 
        Government or any amount expended by a State before October 1, 
        2002.
    ``(d) Responsible Fatherhood Programs.--
            ``(1) Support of programs.--A State shall use the 
        allotments received under this section to support programs 
        described in paragraph (2) directly or through a grant, 
        contract, or cooperative agreement with any public agency, 
        local government, or private entity (including any charitable 
        or religious organization) with experience in administering 
        such a program.
            ``(2) Programs described.--Responsible Fatherhood programs 
        include programs that--
                    ``(A) promote marriage through such activities as 
                counseling, mentoring, disseminating information about 
                the benefits of marriage and 2-parent involvement for 
                children, enhancing relationship skills, teaching on 
                how to control aggressive behavior, and disseminating 
                information on the causes of domestic violence and 
                child abuse;
                    ``(B) sustain marriages through marriage 
                preparation programs, premarital counseling, marital 
                inventories, skills-based marriage education, financial 
                planning seminars, and divorce education and reduction 
                programs, including mediation and counseling;
                    ``(C) promote responsible parenting through such 
                activities as counseling, mentoring, disseminating 
                information about good parenting practices, skills-
                based parenting education, encouraging child support 
                payments, and other methods; and
                    ``(D) help fathers and their families avoid or 
                leave cash welfare and improve their economic status by 
                providing such activities as work first services, job 
                search, job training, subsidized employment, job 
                retention, job enhancement, and encouraging education, 
                including career-advancing education, dissemination of 
                employment materials, coordination with existing 
                employment services such as Welfare to Work and 
                referrals to local employment training initiatives, and 
                other methods.
            ``(3) Targeted low-income participants.--Not less than 50 
        percent of the participants in each program supported under 
        paragraph (1) shall be--
                    ``(A) parents of a child who is, or within the past 
                24 months has been, a recipient of assistance or 
                services under a State program funded under this part; 
                or
                    ``(B) parents, including an expectant parent or a 
                married parent, whose income (after adjustment for 
                court-ordered child support paid or received) does not 
                exceed 150 percent of the poverty line.
            ``(4) Consultation with domestic violence assistance 
        centers.--Each State or entity administering a program 
        supported under paragraph (1) shall consult with 
        representatives of State and local domestic violence centers.
            ``(5) Supplement not supplant.--Amounts allotted to a State 
        under this section shall be used to supplement and not supplant 
        other Federal, State, or local funds provided to the State 
        under this part or any other provision of law that are used to 
        support programs and activities similar to the a responsible 
        fatherhood program described in paragraph (2).
            ``(6) Restrictions on use.--No amount allotted under this 
        section may be used for court proceedings on matters of child 
        visitation or child custody, or for legislative advocacy.
    ``(e) Reconciliation Process.--
            ``(1) 3-year availability of amounts allotted.--Each State 
        that receives an allotment under this section shall return to 
        the Secretary any unused portion of the amount allotted to a 
        State under this section for a fiscal year not later than the 
        last day of the second succeeding fiscal year, together with 
        any earnings on such unused portion.
            ``(2) Procedure for redistribution of unused allotments.--
        The Secretary shall establish an appropriate procedure for 
        redistributing to States that have expended the entire amount 
        allotted under this section any amount that is--
                    ``(A) returned to the Secretary by States under 
                paragraph (1); or
                    ``(B) not allotted to a State under this section 
                because the State did not submit a certification under 
                subsection (b) by October 1 of a fiscal year.
    ``(f) Reporting Requirements.--
            ``(1) Monitoring and evaluation.--Each State receiving an 
        allotment under this section shall monitor and evaluate the 
        programs supported using funds made available under this 
        section in such manner as the Secretary, in consultation with 
        the States, determines appropriate.
            ``(2) Annual reports.--Not less frequently than annually, 
        each State receiving an allotment under this section for a 
        fiscal year shall submit to the Secretary reports on the 
        programs supported under this section at such time, in such 
        manner, and containing such information as the Secretary may 
        reasonably require.
    ``(g) Amount of Allotments.--
            ``(1) In general.--Except as provided in paragraph (2), of 
        the amount appropriated for the purpose of making allotments 
        under this section for a fiscal year the Secretary shall allot 
        to each State that submits a certification under subsection (b) 
        for that fiscal year an amount equal to the sum of--
                    ``(A) the amount that bears the same ratio to 50 
                percent of such funds as the number of young children 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) as bears to the number of such children in 
                all States; and
                    ``(B) the amount that bears the same ratio to 50 
                percent of such funds as the number of children at risk 
                in the State (as determined by the Secretary based on 
                the most recent March supplement to the Current 
                Population Survey of the Bureau of the Census before 
                the beginning of the calendar year in which such fiscal 
                year begins) bears to the number of such children in 
                all States.
            ``(2) Minimum allotments.--No allotment for a fiscal year 
        under this section shall be less than--
                    ``(A) in the case of a State other than the 
                Commonwealth of Puerto Rico, the United States Virgin 
                Islands, Guam, American Samoa, and the Commonwealth of 
                the Northern Mariana Islands, 1 percent of the amount 
                appropriated for the fiscal year under subsection (h); 
                and
                    ``(B) in the case of the Commonwealth of Puerto 
                Rico, the United States Virgin Islands, Guam, American 
                Samoa, and the Commonwealth of the Northern Mariana 
                Islands, 0.5 percent of such amount.
            ``(3) Pro rata reductions.--The Secretary shall make such 
        pro rata reductions to the allotments determined under 
        paragraph (1) as are necessary to comply with the requirements 
        of paragraph (2).
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated $50,000,000 for each of fiscal years 2002 through 2006 for 
purposes of making allotments to States under this section.''.
    (b) Evaluation and Report.--
            (1) Evaluation.--
                    (A) In general.--The Secretary of Health and Human 
                Services (in this subsection referred to as the 
                ``Secretary''), in consultation with the Secretary of 
                Labor, shall, directly or through a grant, contract, or 
                interagency agreement, conduct an evaluation of the 
                projects funded under section 469D of the Social 
                Security Act (as added by subsection (a)).
                    (B) Outcomes assessment.--The evaluation conducted 
                under subparagraph (A) shall assess, among other 
                outcomes selected by the Secretary, effects of the 
projects on marriage, parenting, employment, earnings, payment of child 
support, and incidence of domestic violence and child abuse.
                    (C) Project selection.--In selecting projects for 
                the evaluation, the Secretary should include projects 
                that are most likely to further the purposes of this 
                section.
                    (D) Random assignment.--In conducting the 
                evaluation, random assignment should be used wherever 
                possible.
            (2) Report.--Not later than December 31, 2004, the 
        Secretary shall submit to Congress a report on the results of 
        the evaluation conducted under paragraph (1).
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated $1,000,000 for each of fiscal years 2002 
        through 2006 to carry out this subsection.

SEC. 103. NATIONAL CLEARINGHOUSE FOR RESPONSIBLE FATHERHOOD PROGRAMS.

    Part D of title IV of the Social Security Act (42 U.S.C. 651), as 
amended by section 102, is amended by adding at the end the following:

``SEC. 469E. MEDIA CAMPAIGN NATIONAL CLEARINGHOUSE FOR RESPONSIBLE 
              FATHERHOOD.

    ``(a) Media Campaign and National Clearinghouse.--
            ``(1) In general.--From any funds appropriated under 
        subsection (c), the Secretary shall contract with a nationally 
        recognized, nonprofit fatherhood promotion organization 
        described in subsection (b) to--
                    ``(A) develop, promote, and distribute to 
                interested States, local governments, public agencies, 
                and private entities a media campaign that encourages 
                the appropriate involvement of both parents in the life 
                of any child of the parents, with a priority for 
                programs that specifically address the issue of 
                responsible fatherhood; and
                    ``(B) develop a national clearinghouse to assist 
                States and communities in efforts to promote and 
                support marriage and responsible fatherhood by 
                collecting, evaluating, and making available (through 
                the Internet and by other means) to other States 
                information regarding the media campaigns established 
                under section 469C.
            ``(2) Coordination with domestic violence programs.--The 
        Secretary shall ensure that the nationally recognized nonprofit 
        fatherhood promotion organization with a contract under 
        paragraph (1) coordinates the media campaign developed under 
        subparagraph (A) of such paragraph and the national 
        clearinghouse developed under subparagraph (B) of such 
        paragraph with a national, State, or local domestic violence 
        program.
    ``(b) Nationally Recognized, Nonprofit Fatherhood Promotion 
Organization Described.--The nationally recognized, nonprofit 
fatherhood promotion organization described in this subsection is such 
an organization that has at least 4 years of experience in--
            ``(1) designing and disseminating a national public 
        education campaign, including the production and successful 
        placement of television, radio, and print public service 
        announcements that promote the importance of responsible 
        fatherhood; and
            ``(2) providing consultation and training to community-
        based organizations interested in implementing fatherhood 
        outreach, support, or skill development programs with an 
        emphasis on promoting married fatherhood as the ideal.
    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated $2,000,000 for each of fiscal years 2002 through 2006 to 
carry out this section.''.

         TITLE II--CHILD SUPPORT DISTRIBUTION TO FAMILIES FIRST

               Subtitle A--Distribution of Child Support

SEC. 201. DISTRIBUTION OF CHILD SUPPORT COLLECTED BY STATES ON BEHALF 
              OF CHILDREN RECEIVING CERTAIN WELFARE BENEFITS.

    (a) Modification of Rule Requiring Assignment of Support Rights as 
a Condition of Receiving TANF.--Section 408(a)(3) of the Social 
Security Act (42 U.S.C. 608(a)(3)) is amended to read as follows:
            ``(3) No assistance for families not assigning certain 
        support rights to the state.--A State to which a grant is made 
        under section 403 shall require, as a condition of paying 
        assistance to a family under the State program funded under 
        this part, that a member of the family assign to the State any 
        rights the family member may have (on behalf of the family 
        member or of any other person for whom the family member has 
        applied for or is receiving such assistance) to support from 
        any other person, not exceeding the total amount of assistance 
        so paid to the family, which accrues during the period that the 
        family receives assistance under the program.''.
    (b) Increasing Child Support Payments to Families and Simplifying 
Child Support Distribution Rules.--
            (1) Distribution rules.--
                    (A) In general.--Section 457(a) of such Act (42 
                U.S.C. 657(a)) is amended to read as follows:
    ``(a) In General.--Subject to subsections (e) and (f), the amounts 
collected on behalf of a family as support by a State pursuant to a 
plan approved under this part shall be distributed as follows:
            ``(1) Families receiving assistance.--In the case of a 
        family receiving assistance from the State, the State shall--
                    ``(A) pay to the Federal Government the Federal 
                share of the amount collected, subject to paragraph 
                (3)(A);
                    ``(B) retain, or pay to the family, the State share 
                of the amount collected, subject to paragraph (3)(B); 
                and
                    ``(C) pay to the family any remaining amount.
            ``(2) Families that formerly received assistance.--In the 
        case of a family that formerly received assistance from the 
        State:
                    ``(A) Current support.--To the extent that the 
                amount collected does not exceed the current support 
                amount, the State shall pay the amount to the family.
                    ``(B) Arrearages.--Except as otherwise provided in 
                the State plan approved under section 454, to the 
                extent that the amount collected exceeds the current 
                support amount, the State--
                            ``(i) shall first pay to the family the 
                        excess amount, to the extent necessary to 
                        satisfy support arrearages not assigned 
                        pursuant to section 408(a)(3);
                            ``(ii) if the amount collected exceeds the 
                        amount required to be paid to the family under 
                        clause (i), shall--
                                    ``(I) pay to the Federal 
                                Government, the Federal share of the 
                                excess amount described in this clause, 
                                subject to paragraph (3)(A); and
                                    ``(II) retain, or pay to the 
                                family, the State share of the excess 
                                amount described in this clause, 
                                subject to paragraph (3)(B); and
                            ``(iii) shall pay to the family any 
                        remaining amount.
            ``(3) Limitations.--
                    ``(A) Federal reimbursements.--The total of the 
                amounts paid by the State to the Federal Government 
                under paragraphs (1) and (2) of this subsection with 
                respect to a family shall not exceed the Federal share 
                of the amount assigned with respect to the family 
                pursuant to section 408(a)(3).
                    ``(B) State reimbursements.--The total of the 
                amounts retained by the State under paragraphs (1) and 
                (2) of this subsection with respect to a family shall 
                not exceed the State share of the amount assigned with 
                respect to the family pursuant to section 408(a)(3).
            ``(4) Families that never received assistance.--In the case 
        of any other family, the State shall pay the amount collected 
        to the family.
            ``(5) Families under certain agreements.--Notwithstanding 
        paragraphs (1) through (4), in the case of an amount collected 
        for a family in accordance with a cooperative agreement under 
        section 454(33), the State shall distribute the amount 
        collected pursuant to the terms of the agreement.
            ``(6) State financing options.--To the extent that the 
        State share of the amount payable to a family pursuant to 
        paragraph (2)(B) of this subsection exceeds the amount that the 
        State estimates (under procedures approved by the Secretary) 
        would have been payable to the family pursuant to former 
        section 457(a)(2)(B) (as in effect for the State immediately 
        before the date this subsection first applies to the State) if 
        such former section had remained in effect, the State may elect 
        to use the grant made to the State under section 403(a) to pay 
        the amount, or to have the payment considered a qualified State 
        expenditure for purposes of section 409(a)(7), but not both.
            ``(7) State option to pass through additional support with 
        federal financial participation.--
                    ``(A) In general.--Notwithstanding paragraphs (1) 
                and (2), a State shall not be required to pay to the 
                Federal Government the Federal share of an amount 
                collected on behalf of a family that is not a recipient 
                of assistance under the State program funded under part 
                A, to the extent that the State pays the amount to the 
                family.
                    ``(B) Recipients of tanf for less than 5 years.--
                            ``(i) In general.--Notwithstanding 
                        paragraphs (1) and (2), a State shall not be 
                        required to pay to the Federal Government the 
                        Federal share of an amount collected on behalf 
                        of a family that is a recipient of assistance 
                        under the State program funded under part A 
                        and, if the family includes an adult, that has 
                        received the assistance for not more than 5 
                        years after the date of enactment of this 
                        paragraph, to the extent that--
                                    ``(I) the State pays the amount to 
                                the family; and
                                    ``(II) subject to clause (ii), the 
                                amount is disregarded in determining 
                                the amount and type of the assistance 
                                provided to the family.
                            ``(ii) Limitation.--Of the amount 
                        disregarded as described in clause (i)(II), the 
                        maximum amount that may be taken into account 
                        for purposes of clause (i) shall not exceed 
                        $400 per month, except that, in the case of a 
                        family that includes two or more children, the 
                        State may elect to increase the maximum amount 
                        to not more than $600 per month.
            ``(8) States with demonstration waivers.--Notwithstanding 
        the preceding paragraphs, a State with a waiver under section 
        1115 that became effective on or before October 1, 1997, the 
        terms of which allow pass through of child support payments, 
        may pass through such payments in accordance with such terms 
        with respect to families subject to the waiver.''.
                    (B) State plan to include election as to which 
                rules to apply in distributing child support arrearages 
                collected on behalf of families formerly receiving 
                assistance.--Section 454 of such Act (42 U.S.C. 654) is 
                amended--
                            (i) by striking ``and'' at the end of 
                        paragraph (32);
                            (ii) by striking the period at the end of 
                        paragraph (33) and inserting ``; and''; and
                            (iii) by inserting after paragraph (33) the 
                        following:
            ``(34) include an election by the State to apply section 
        457(a)(2)(B) or former section 457(a)(2)(B) (as in effect for 
        the State immediately before the date this paragraph first 
        applies to the State) to the distribution of the amounts which 
        are the subject of such sections, and for so long as the State 
        elects to so apply such former section, the amendments made by 
        subsection (e) of section 201 of the Strengthening Working 
        Families Act of 2001 shall not apply with respect to the State, 
        notwithstanding subsection (f)(1) of such section 201.''.
                    (C) Approval of estimation procedures.--Not later 
                than October 1, 2002, the Secretary of Health and Human 
                Services, in consultation with the States (as defined 
                for purposes of part D of title IV of the Social 
                Security Act), shall establish the procedures to be 
                used to make the estimate described in section 
                457(a)(6) of such Act.
            (2) Current support amount defined.--Section 457(c) of such 
        Act (42 U.S.C. 657(c)) is amended by adding at the end the 
        following:
            ``(5) Current support amount.--The term `current support 
        amount' means, with respect to amounts collected as support on 
        behalf of a family, the amount designated as the monthly 
        support obligation of the noncustodial parent in the order 
        requiring the support.''.
    (c) Ban on Recovery of Medicaid Costs for Certain Births.--Section 
454 of such Act (42 U.S.C. 654), as amended by subsection (b)(1)(B), is 
amended--
            (1) by striking ``and'' at the end of paragraph (33);
            (2) by striking the period at the end of paragraph (34) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (34) the following:
            ``(35) provide that the State shall not use the State 
        program operated under this part to collect any amount owed to 
        the State by reason of costs incurred under the State plan 
        approved under title XIX for the birth of a child for whom 
        support rights have been assigned pursuant to section 
        408(a)(3), 471(a)(17), or 1912.''.
    (d) State Option To Discontinue Certain Support Assignments.--
Section 457(b) of such Act (42 U.S.C. 657(b)) is amended by striking 
``shall'' and inserting ``may''.
    (e) Conforming Amendments.--
            (1) Section 404(a) of such Act (42 U.S.C. 604(a)) is 
        amended--
                    (A) by striking ``or'' at the end of paragraph (1);
                    (B) by striking the period at the end of paragraph 
                (2) and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(3) to fund payment of an amount pursuant to section 
        457(a)(2)(B), but only to the extent that the State properly 
        elects under section 457(a)(6) to use the grant to fund the 
        payment.''.
            (2) Section 409(a)(7)(B)(i) of such Act (42 U.S.C. 
        609(a)(7)(B)(i)) is amended--
                    (A) in subclause (I)(aa), by striking 
                ``457(a)(1)(B)'' and inserting ``457(a)(1)''; and
                    (B) by adding at the end the following:
                                    ``(V) Portions of certain child 
                                support payments collected on behalf of 
                                and distributed to families no longer 
                                receiving assistance.--Any amount paid 
                                by a State pursuant to section 
                                457(a)(2)(B), but only to the extent 
                                that the State properly elects under 
                                section 457(a)(6) to have the payment 
                                considered a qualified State 
                                expenditure.''.
    (f) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on October 1, 2005, and shall apply to payments 
        under parts A and D of title IV of the Social Security Act for 
        calendar quarters beginning on or after such date, and without 
        regard to whether regulations to implement the amendment (in 
        the case of State programs operated under such part D) are 
        promulgated by such date.
            (2) State option to accelerate effective date.--In 
        addition, a State may elect to have the amendment made by 
        subsection (a), the amendments made by subsections (b) and (e), 
        or the amendment made by subsection (d) apply to the State and 
        to amounts collected by the State, on and after such date as 
        the State may select that is after the date of enactment of 
        this Act, by including an election to that effect in the State 
plan under part D of title IV of the Social Security Act.

   Subtitle B--Demonstrations of Expanded Information and Enforcement

SEC. 211. GUIDELINES FOR INVOLVEMENT OF PUBLIC NON-IV-D CHILD SUPPORT 
              ENFORCEMENT AGENCIES IN CHILD SUPPORT ENFORCEMENT.

    (a) In General.--Not later than October 1, 2002, the Secretary, in 
consultation with States, local governments, and individuals or 
companies knowledgeable about involving public non-IV-D child support 
enforcement agencies in child support enforcement, shall develop 
recommendations which address the participation of public non-IV-D 
child support enforcement agencies in the establishment and enforcement 
of child support obligations. The matters addressed by the 
recommendations shall include substantive and procedural rules which 
should be followed with respect to privacy safeguards, data security, 
due process rights, administrative compatibility with State and Federal 
automated systems, eligibility requirements (such as registration, 
licensing, and posting of bonds) for access to information and use of 
enforcement mechanisms, recovery of costs by charging fees, penalties 
for violations of the rules, treatment of collections for purposes of 
section 458 of such Act, and avoidance of duplication of effort.
    (b) Definitions.--In this title:
            (1) Child support.--The term ``child support'' has the 
        meaning given in section 459(i)(2) of the Social Security Act.
            (2) Public non-iv-d child support enforcement agency.--The 
        term ``public non-IV-D child support enforcement agency'' means 
        an agency, of a political subdivision of a State, which is 
        principally responsible for the operation of a child support 
        registry or for the establishment or enforcement of an 
        obligation to pay child support other than pursuant to the 
        State plan approved under part D of title IV of such Act, or a 
        clerk of court office of a political subdivision of a State.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) State.--The term ``State'' shall have the meaning given 
        in section 1101(a)(1) of the Social Security Act for purposes 
        of part D of title IV of such Act.

SEC. 212. DEMONSTRATIONS INVOLVING ESTABLISHMENT AND ENFORCEMENT OF 
              CHILD SUPPORT OBLIGATIONS BY PUBLIC NON-IV-D CHILD 
              SUPPORT ENFORCEMENT AGENCIES.

    (a) Purpose.--The purpose of this section is to determine the 
extent to which public non-IV-D child support enforcement agencies may 
contribute effectively to the establishment and enforcement of child 
support obligations.
    (b) Applications.--
            (1) Consideration.--The Secretary shall consider all 
        applications received from States desiring to conduct 
        demonstration projects under this section.
            (2) Preferences.--In considering which applications to 
        approve under this section, the Secretary shall give preference 
        to applications submitted by States that had a public non-IV-D 
        child support enforcement agency as of January 1, 2001.
            (3) Approval.--
                    (A) Timing; limitation on number of projects.--On 
                July 1, 2003, the Secretary may approve not more than 
                10 applications for projects providing for the 
                participation of a public non-IV-D child support 
                enforcement agency in the establishment and enforcement 
                of child support obligations, and, if the Secretary 
                receives at least five such applications that meet such 
                requirements as the Secretary may establish, shall 
                approve not less than five such applications.
                    (B) Requirements.--The Secretary may not approve an 
                application for a project unless--
                            (i) the applicant and the Secretary have 
                        entered into a written agreement which 
                        addresses at a minimum, privacy safeguards, 
                        data security, due process rights, automated 
                        systems, liability, oversight, and fees, and 
                        the applicant has made a commitment to conduct 
                        the project in accordance with the written 
                        agreement and such other requirements as the 
                        Secretary may establish;
                            (ii) the project includes a research plan 
                        (but such plan shall not be required to use 
                        random assignment) that is focused on assessing 
                        the costs and benefits of the project; and
                            (iii) the project appears likely to 
                        contribute significantly to the achievement of 
                        the purpose of this title.
    (c) Demonstration Authority.--On approval of an application 
submitted by a State under this section--
            (1) the State agency responsible for administering the 
        State plan under part D of title IV of the Social Security Act 
        may, subject to the privacy safeguards of section 454(26) of 
        such Act, provide to any public non-IV-D child support 
        enforcement agency participating in the demonstration project 
        all information in the State Directory of New Hires and any 
        information obtained through information comparisons under 
        section 453(j)(3) of such Act about an individual with respect 
        to whom the public non-IV-D agency is seeking to establish or 
        enforce a child support obligation, if the public non-IV-D 
        agency meets such requirements as the State may establish and 
        has entered into an agreement with the State under which the 
        public non-IV-D agency has made a binding commitment to carry 
        out establishment and enforcement activities with respect to 
        the child support obligation subject to the same data security, 
        privacy protection, and due process requirements applicable to 
        the State agency and in accordance with procedures approved by 
        the head of the State agency;
            (2) the State agency may charge and collect fees from any 
        such public non-IV-D agency to recover costs incurred by the 
        State agency in providing information and services to the 
        public non-IV-D agency under the demonstration project;
            (3) if a public non-IV-D child support enforcement agency 
        has agreed to collect past-due support (as defined in section 
        464(c) of such Act) owed by a named individual, and the State 
        agency has submitted a notice to the Secretary of the Treasury 
        pursuant to section 464 of such Act on behalf of the public 
        non-IV-D agency, then the Secretary of the Treasury shall 
        consider the State agency to have agreed to collect such 
        support for purposes of such section 464, and the State agency 
        may collect from the public non-IV-D agency any fee which the 
        State is required to pay for the cost of applying the offset 
        procedure in the case;
            (4) for so long as a public non-IV-D child support 
        enforcement agency is participating in the demonstration 
        project, the public non-IV-D agency shall be considered part of 
        the State agency for purposes of section 469A of such Act; and
            (5) for so long as a public non-IV-D child support 
        enforcement agency is participating in the demonstration 
        project, the public non-IV-D agency shall be considered part of 
        the State agency for purposes of section 303(e) of such Act but 
        only with respect to any child support obligation that the 
        public non-IV-D agency has agreed to collect.
    (d) Waiver Authority.--The Secretary may waive or vary the 
applicability of any provision of section 303(e), 454(31), 464, 
466(a)(7), 466(a)(17), and 469A of the Social Security Act to the 
extent necessary to enable the conduct of demonstration projects under 
this section, subject to the preservation of the data security, privacy 
protection, and due process requirements of part D of title IV of such 
Act.
    (e) Federal Audit.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct an audit of the demonstration projects 
        conducted under this section for the purpose of examining and 
        evaluating the manner in which information and enforcement 
        tools are used by the public non-IV-D child support enforcement 
        agencies participating in the projects.
            (2) Report to congress.--
                    (A) In general.--The Comptroller General of the 
                United States shall submit to Congress a report on the 
                audit required by paragraph (1).
                    (B) Timing.--The report required by subparagraph 
                (A) shall be so submitted not later than October 1, 
                2005.
    (f) Secretarial Report to Congress.--
            (1) In general.--The Secretary shall submit to Congress a 
        report on the demonstration projects conducted under this 
        section, which shall include the results of any research or 
        evaluation conducted pursuant to this title, and shall include 
        policy recommendations regarding the establishment and 
        enforcement of child support obligations by the agencies 
        involved.
            (2) Timing.--The report required by paragraph (1) shall be 
        so submitted not later than October 1, 2006.

SEC. 213. GAO REPORT TO CONGRESS ON PRIVATE CHILD SUPPORT ENFORCEMENT 
              AGENCIES.

    (a) In General.--Not later than October 1, 2002, the Comptroller 
General of the United States shall submit to Congress a report on the 
activities of private child support enforcement agencies that shall be 
designed to help Congress determine whether the agencies are providing 
a needed service in a fair manner using accepted debt collection 
practices and at a reasonable fee.
    (b) Matters To Be Addressed.--Among the matters addressed by the 
report required by subsection (a) shall be the following:
            (1) The number of private child support enforcement 
        agencies.
            (2) The types of debt collection activities conducted by 
        the private agencies.
            (3) The fees charged by the private agencies.
            (4) The methods used by the private agencies to collect 
        fees from custodial parents.
            (5) The nature and degree of cooperation the private 
        agencies receive from State agencies responsible for 
        administering State plans under part D of title IV of the 
        Social Security Act.
            (6) The extent to which the conduct of the private agencies 
        is subject to State or Federal regulation, and if so, the 
        extent to which the regulations are effectively enforced.
            (7) The amount of child support owed but uncollected and 
        changes in this amount in recent years.
            (8) The average period of time required for the completion 
        of successful enforcement actions yielding collections of past-
        due child support by both the child support enforcement 
        programs operated pursuant to State plans approved under part D 
        of title IV of the Social Security Act and, to the extent 
        known, by private child support enforcement agencies.
            (9) The types of Federal and State child support 
        enforcement remedies and resources currently available to 
        private child support enforcement agencies, and the types of 
        such remedies and resources now restricted to use by State 
        agencies administering State plans referred to in paragraph 
        (8).
    (c) Private Child Support Enforcement Agency Defined.--In this 
section, the term ``private child support enforcement agency'' means a 
person or any other non-public entity which seeks to establish or 
enforce an obligation to pay child support (as defined in section 
459(i)(2) of the Social Security Act).

SEC. 214. EFFECTIVE DATE.

    This title shall take effect on the date of enactment of this Act.

                    Subtitle C--Expanded Enforcement

SEC. 221. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING 
              PASSPORT DENIAL.

    Section 452(k) of the Social Security Act (42 U.S.C. 652(k)) is 
amended by striking ``$5,000'' and inserting ``$2,500''.

SEC. 222. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE CHILD 
              SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

    Section 464 of the Social Security Act (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).

SEC. 223. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-
              CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD SUPPORT 
              OBLIGATIONS.

    Section 459(h) of the Social Security Act (42 U.S.C. 659(h)) is 
amended--
            (1) in paragraph (1)(A)(ii)--
                    (A) in subclause (IV), by striking ``or'' after the 
                semicolon;
                    (B) in subclause (V), by inserting ``or'' after the 
                semicolon; and
                    (C) by adding at the end the following:
                                    ``(VI) subject to paragraph (3), 
                                other than periodic benefits or 
                                payments described in subclause (V), by 
                                the Secretary of Veterans Affairs as 
                                compensation for a service-connected 
                                disability paid by the Secretary to a 
                                former member of the Armed Forces;'';
            (2) in paragraph (1)(B)(iii), by striking ``subparagraph 
        (A)(ii)(V)'' and inserting ``subclauses (V) and (VI) of 
        subparagraph (A)(ii)''; and
            (3) by adding at the end the following:
            ``(3) Limitations with respect to compensation paid to 
        veterans for service-connected disabilities.--
                    ``(A) Alimony and child support.--Compensation 
                described in paragraph (1)(A)(ii)(VI) 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) Limitation.--Not more than 50 percent of any 
                payment of compensation described in subparagraph (A) 
                may be withheld pursuant to this section.''.

                       Subtitle D--Miscellaneous

SEC. 231. TECHNICAL CORRECTION TO CHANGED DATES FOR ABSTINENCE 
              EVALUATION.

    (a) In General.--Section 513 of H.R. 5656, as enacted into law by 
section 1(a)(1) of Public Law 106-554 (114 Stat. 2763A-71), is 
amended--
            (1) in subsection (a), by striking ``Section 
        403(a)(5)(G)(iii) of the Social Security Act (42 U.S.C. 
        603(a)(5)(G)(iii))'' and inserting ``Section 403(a)(5)(H)(iii) 
        of the Social Security Act (42 U.S.C. 603(a)(5)(H)(iii))''; and
            (2) in subsection (b), by striking ``Section 403(a)(5)(H)'' 
        and inserting ``Section 403(a)(5)(G)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of section 513 of H.R. 
5656, as so enacted into law.

SEC. 232. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

    Not later than 6 months after the date of 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 due to a change in address. 
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. 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. 233. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRATION OF 
              UNEMPLOYMENT COMPENSATION PROGRAMS.

    (a) In General.--Section 453(j) of the Social Security Act (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, 2001.

SEC. 234. IMMIGRATION PROVISIONS.

    (a) Nonimmigrant Aliens Ineligible To Receive Visas and Excluded 
From Admission for Nonpayment of Child Support.--
            (1) In general.--Section 212(a)(10) of the Immigration and 
        Nationality Act (8 U.S.C. 1182(a)(10)) is amended by adding at 
        the end the following:
                    ``(F) Nonpayment of child support.--
                            ``(i) In general.--Any nonimmigrant alien 
                        is inadmissible who is legally obligated under 
                        a judgment, decree, or order to pay child 
                        support (as defined in section 459(i) of the 
                        Social Security Act), and whose failure to pay 
                        such child support has resulted in an arrearage 
                        exceeding $2,500, until child support payments 
                        under the judgment, decree, or order are 
                        satisfied or the nonimmigrant alien is in 
                        compliance with an approved payment agreement.
                            ``(ii) Waiver authorized.--The Attorney 
                        General may waive the application of clause (i) 
                        in the case of an alien, if the Attorney 
                        General--
                                    ``(I) has received a request for 
                                the waiver from the court or 
                                administrative agency having 
                                jurisdiction over the judgment, decree, 
                                or order obligating the alien to pay 
                                child support that is referred to in 
                                such clause; or
                                    ``(II) determines that there are 
                                prevailing humanitarian or public 
                                interest concerns.''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect 180 days after the date of enactment of this 
        Act.
    (b) Authorization To Serve Legal Process in Child Support Cases on 
Certain Arriving Aliens.--
            (1) In general.--Section 235(d) of the Immigration and 
        Nationality Act (8 U.S.C. 1225(d)) is amended by adding at the 
        end the following:
            ``(5) Authority to serve process in child support cases.--
                    ``(A) In general.--To the extent consistent with 
                State law, immigration officers are authorized to serve 
                on any alien who is an applicant for admission to the 
                United States legal process with respect to any action 
                to enforce or establish a legal obligation of an 
                individual to pay child support (as defined in section 
                459(i) of the Social Security Act).
                    ``(B) Definition.--For purposes of subparagraph 
                (A), the term `legal process' means any writ, order, 
                summons, or other similar process, which is issued by--
                            ``(i) a court or an administrative agency 
                        of competent jurisdiction in any State, 
                        territory, or possession of the United States; 
                        or
                            ``(ii) an authorized official pursuant to 
                        an order of such a court or agency or pursuant 
                        to State or local law.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to aliens applying for admission to the United 
        States on or after 180 days after the date of enactment of this 
        Act.
    (c) Authorization To Share Child Support Enforcement Information To 
Enforce Immigration and Naturalization Law.--
            (1) Secretarial responsibility.--Section 452 of the Social 
        Security Act (42 U.S.C. 652) is amended by adding at the end 
        the following:
    ``(m) If the Secretary receives a certification by a State agency, 
in accordance with section 454(36), that an individual who is a 
nonimmigrant alien (as defined in section 101(a)(15) of the Immigration 
and Nationality Act) owes arrearages of child support in an amount 
exceeding $2,500, the Secretary may, at the request of the State 
agency, the Secretary of State, or the Attorney General, or on the 
Secretary's own initiative, provide the certification to the Secretary 
of State and the Attorney General in order to enable them to carry out 
their responsibilities under sections 212(a)(10) and 235(d) of such 
Act.''.
            (2) State agency responsibility.--Section 454 of the Social 
        Security Act (42 U.S.C. 654), as amended by section 201(c), is 
        amended--
                    (A) by striking ``and'' at the end of paragraph 
                (34);
                    (B) by striking the period at the end of paragraph 
                (35) and inserting ``; and''; and
                    (C) by inserting after paragraph (35) the 
                following:
            ``(36) provide that the State agency will have in effect a 
        procedure for certifying to the Secretary, in such format and 
        accompanied by such supporting documentation as the Secretary 
        may require, determinations that nonimmigrant aliens owe 
        arrearages of child support in an amount exceeding $2,500.''.

SEC. 235. CORRECTION OF ERRORS IN CONFORMING AMENDMENTS IN THE WELFARE-
              TO-WORK AND CHILD SUPPORT AMENDMENTS OF 1999.

    The amendments made by section 2402 of the Emergency Supplemental 
Act, 2000 (Public Law 106-246; 114 Stat. 555) shall take effect as if 
included in the enactment of section 806 of the Departments of Labor, 
Health, and Human Services, and Education, and Related Agencies 
Appropriations Act, 2000 (as enacted into law by section 1000(a)(4) of 
Public Law 106-113; 113 Stat. 1501A-286).

SEC. 236. INCREASE IN PAYMENT RATE TO STATES FOR EXPENDITURES FOR 
              SHORT-TERM TRAINING OF STAFF OF CERTAIN CHILD WELFARE 
              AGENCIES.

    Section 474(a)(3)(B) of the Social Security Act (42 U.S.C. 
674(a)(3)(B)) is amended by inserting ``, or State-licensed or State-
approved child welfare agencies providing services,'' after ``child 
care institutions''.

                       Subtitle E--Effective Date

SEC. 241. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act and 
subject to subsection (b), this Act and the amendments made by this Act 
shall take effect on October 1, 2002, and shall apply to payments under 
part D of title IV of the Social Security Act for calendar quarters 
beginning on or after such date, and without regard to whether 
regulations to implement such amendments are promulgated by such date.
    (b) Delay Permitted if State Legislation Required.--In the case of 
a State plan approved under section 454 of the Social Security Act 
which requires State legislation (other than legislation appropriating 
funds) in order for the plan to meet the additional requirements 
imposed by the amendments made by this Act, the State plan shall not be 
regarded as failing to comply with the additional requirements solely 
on the basis of the failure of the plan to meet the additional 
requirements before the first day of the first calendar quarter 
beginning after the close of the first regular session of the State 
legislature that begins after the date of enactment of this Act. For 
purposes of the previous sentence, in the case of a State that has a 2-
year legislative session, each year of such session shall be deemed to 
be a separate regular session of the State legislature.

   TITLE III--EARNED INCOME TAX CREDIT EXPANSION FOR LARGER FAMILIES

SEC. 301. INCREASED EARNED INCOME TAX CREDIT FOR FAMILIES WITH 
              QUALIFYING CHILDREN.

    (a) In General.--The table in section 32(b)(1)(A) of the Internal 
Revenue Code of 1986 (relating to percentages) is amended--
            (1) in the first item by striking ``15.98'' and inserting 
        ``16.00'',
            (2) in the second item--
                    (A) by striking ``or more'', and
                    (B) by striking ``21.06'' and inserting ``16.00'', 
                and
            (3) by inserting after the second item the following new 
        item:


 
 
 
``3 or more qualifying children....  45..................................                 16.00''.
 

      
    (b) Special Phaseout Rule.--
            (1) In general.--Section 32(b) of the Internal Revenue Code 
        of 1986 (relating to percentage and amounts) is amended by 
        adding at the end the following new paragraph:
            ``(3) Special phaseout rule.--Notwithstanding the table in 
        paragraph (1)(A), in the case of an eligible individual with 2 
        or more qualifying children, the phaseout percentage is 21.06 
        percent with respect to so much of the modified adjusted gross 
        income (or, if greater, the earned income) of the taxpayer for 
        the taxable year as exceeds $22,017.''.
            (2) Inflation adjustments.--Section 32(j) of such Code 
        (relating to inflation adjustments) is amended by redesignating 
        paragraph (2) as paragraph (3), and inserting after paragraph 
        (1), the following new paragraph:
            ``(2) Special phaseout amount.--In the case of any taxable 
        year beginning after 2001, the dollar amount in subsection 
        (b)(3) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                ``calendar year 2000'' for ``calendar year 1992 in 
                subparagraph (B) thereof.''.
            (3) Rounding.--Section 32(j)(3) of such Code (relating to 
        rounding) (as redesignated by paragraph (2)) is amended by 
        striking ``subsection (b)(2)'' and inserting ``subsections 
        (b)(2) and (b)(3)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 302. SIMPLIFICATION OF DEFINITION OF EARNED INCOME.

    (a) In General.--Section 32(c)(2)(A)(i) of the Internal Revenue 
Code of 1986 (defining earned income) is amended by inserting ``, but 
only if such amounts are includible in gross income for the taxable 
year'' after ``other employee compensation''.
    (b) Conforming Amendment.--Section 32(c)(2)(B) of the Internal 
Revenue Code of 1986 (defining earned income) is amended by striking 
``and'' at the end of clause (iv), by striking the period at the end of 
clause (v) and inserting ``, and'', and by adding at the end the 
following new clause:
                            ``(vi) the requirement under subparagraph 
                        (A)(i) that an amount be includible in gross 
                        income shall not apply if such amount is exempt 
                        from tax under section 7873 or is derived 
                        directly from restricted and allotted land 
                        under the Act of February 8, 1887 (commonly 
                        known as the Indian General Allotment Act) (25 
                        U.S.C. 331 et seq.) or from land held under 
                        Acts or treaties containing an exception 
                        provision similar to the Indian General 
                        Allotment Act.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received in taxable years beginning after December 31, 
2001.

SEC. 303. SIMPLIFICATION OF DEFINITION OF CHILD DEPENDENT.

    (a) Removal of Support Test for Certain Individuals.--Section 
152(a) of the Internal Revenue Code of 1986 (relating to general 
definition) is amended to read as follows:
    ``(a) General Definition.--For purposes of this subtitle--
            ``(1) Dependent.--The term `dependent' means--
                    ``(A) any individual described in paragraph (2) 
                over half of whose support, for the calendar year in 
                which the taxable year of the taxpayer begins, was 
                received from the taxpayer (or is treated under 
                subsection (c) as received from the taxpayer), or
                    ``(B) any individual described in subsection (f).
            ``(2) Individuals.--An individual is described in this 
        paragraph if such individual is--
                    ``(A) a brother, sister, stepbrother, or stepsister 
                of the taxpayer,
                    ``(B) the father or mother of the taxpayer, or an 
                ancestor of either,
                    ``(C) a stepfather or stepmother of the taxpayer,
                    ``(D) a son or daughter of a brother or sister of 
                the taxpayer,
                    ``(E) a brother or sister of the father or mother 
                of the taxpayer,
                    ``(F) a son-in-law, daughter-in-law, father-in-law, 
                mother-in-law, brother-in-law, or sister-in-law of the 
                taxpayer, or
                    ``(G) an individual (other than an individual who 
                at any time during the taxable year was the spouse, 
                determined without regard to section 7703, of the 
                taxpayer) who, for the taxable year of the taxpayer, 
                has as their principal place of abode the home of the 
                taxpayer and is a member of the taxpayer's 
                household.''.
    (b) Other Modifications.--Section 152 of the Internal Revenue Code 
of 1986 (relating to dependent defined) is amended by adding at the end 
the following new subsection:
    ``(f) Subsection (f) Dependents.--
            ``(1) In general.--An individual is described in this 
        subsection for the taxable year if such individual--
                    ``(A) bears a relationship to the taxpayer 
                described in paragraph (2),
                    ``(B) except in the case of an eligible foster 
                child or as provided in subsection (e), has the same 
                principal place of abode as the taxpayer for more than 
                one-half of such taxable year, and
                    ``(C)(i) has not attained the age of 19 at the 
                close of the calendar year in which the taxable year 
                begins, or
                    ``(ii) is a student (within the meaning of section 
                151(c)(4)) who has not attained the age of 24 at the 
                close of such calendar year.
            ``(2) Relationship test.--An individual bears a 
        relationship to the taxpayer described in this paragraph if 
        such individual is--
                    ``(A) a son or daughter of the taxpayer, or a 
                descendant of either, or
                    ``(B) a stepson or stepdaughter of the taxpayer.
            ``(3) Special rules.--
                    ``(A) 2 or more claiming dependent.--Except as 
                provided in subparagraph (B), if an individual may be 
                claimed as a dependent by 2 or more taxpayers (but for 
                this subparagraph) for a taxable year beginning in the 
                same calendar year, only the taxpayer with the highest 
                adjusted gross income for such taxable year shall be 
                allowed the deduction with respect to such individual.
                    ``(B) Release of claim to exemption.--Subparagraph 
                (A) shall not apply with respect to an individual if--
                            ``(i) the taxpayer with the highest 
                        adjusted gross income under subparagraph (A), 
                        for any calendar year signs a written 
                        declaration (in such manner and form as the 
                        Secretary may by regulations prescribe) that 
                        such taxpayer will not claim such individual as 
                        a dependent for any taxable year beginning in 
                        such calendar year,
                            ``(ii) the other taxpayer provides over 
                        half of such individual's support for the 
                        calendar year in which the taxable year of such 
                        other taxpayer begins, and
                            ``(iii) such other taxpayer attaches such 
                        written declaration to such taxpayer's return 
                        for the taxable year beginning during such 
                        calendar year.''.
    (c) Rules Relating to Foster Child.--Section 152(b)(2) of the 
Internal Revenue Code of 1986 (relating to rules relating to general 
definition) is amended by striking ``a foster child'' and all that 
follows through ``individual)'' and inserting ``an eligible foster 
child (as defined in section 32(c)(3)(B)(iii)) of an individual''.
    (d) Exemption From Gross Income Test.--Section 151(c)(3) of the 
Internal Revenue Code of 1986 (relating to definition of child) is 
amended by striking ``or stepdaughter'' and inserting ``stepdaughter, 
or a descendant of such individual''.
    (e) Waiver of Deduction for Divorced Parents.--
            (1) In general.--So much of section 152(e) as precedes 
        paragraph (4) of the Internal Revenue Code of 1986 (relating to 
        support test in case of child of divorced parents, etc.) is 
        amended to read as follows:
    ``(e) Special Rules for Child of Divorced Parents.--
            ``(1) Release of claim to exemption.--In the case of a 
        child (as defined in section 151(c)(3)) of parents--
                    ``(A) who are divorced or legally separated under a 
                decree of divorce or separate maintenance,
                    ``(B) who are separated under a written separation 
                agreement, or
                    ``(C) who live apart at all times during the last 6 
                months of the calendar year,
        the custodial parent who is entitled to the deduction under 
        section 151 for a taxable year with respect to such child may 
        release such deduction to the noncustodial parent.
            ``(2) Procedure.--The noncustodial parent may claim a child 
        described in paragraph (1) as a dependent for the taxable year 
        if--
                    ``(A) the custodial parent signs a written 
                declaration (in such manner and form as the Secretary 
                may by regulations prescribe) that such custodial 
                parent will not claim such child as a dependent for any 
                taxable year beginning in such calendar year,
                    ``(B) the custodial parent and the noncustodial 
                parent provide over half of such child's support for 
                the calendar year in which the taxable years of such 
                parents begin, and
                    ``(C) the noncustodial parent attaches such written 
                declaration to such noncustodial parent's return for 
                the taxable year beginning during such calendar year.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Custodial parent.--The term `custodial 
                parent' means, with regard to an individual, a parent 
                who has custody of such individual for a greater 
                portion of the calendar year than the noncustodial 
                parent.
                    ``(B) Noncustodial parent.--The term `noncustodial 
                parent' means the parent who is not the custodial 
                parent.''.
            (2) Pre-1985 instruments.--Section 152(e)(4)(A) of such 
        Code (relating to exception for certain pre-1985 instruments) 
        is amended by striking ``A child'' and all that follows through 
        ``noncustodial parent'' and inserting ``A noncustodial parent 
        described in paragraph (1) shall be entitled to the deduction 
        under section 151 for a taxable year with respect to a child 
        if''.
    (f) Conforming Amendments.--
            (1) Section 1(g)(5)(A) of the Internal Revenue Code of 1986 
        is amended by inserting ``as in effect on the day before the 
        date of the enactment of the Strengthening Working Families Act 
        of 2001'' after ``152(e)''.
            (2) Section 2(b)(1)(A)(i) of such Code is amended by 
        striking ``paragraph (2) or (4) of''.
            (3) Section 2(b)(3)(B)(i) of such Code is amended by 
        striking ``paragraph (9)'' and inserting ``paragraph (2)(G)''.
            (4) Section 21(e)(5)(A) of such Code is amended by striking 
        ``paragraph (2) or (4) of''.
            (5) Section 21(e)(5) of such Code is amended in the matter 
        following subclause (B) by inserting ``as in effect on the day 
        before the date of the enactment of the Strengthening Working 
        Families Act of 2001'' after ``152(e)(1)''.
            (6) Section 32(c)(1)(G) of such Code is amended by striking 
        ``(3)(D).'' and inserting ``(1)(C). An individual whose 
        qualifying child or qualifying children are not taken into 
        account under subsection (b) solely by reason of paragraph 
        (3)(D) shall be treated as an eligible individual if such 
        individual otherwise meets the requirements of subparagraph 
        (A)(ii).''.
            (7) Section 32(c)(3)(B)(ii) of such Code is amended by 
        striking ``paragraph (2) or (4) of''.
            (8) Section 51(i)(1)(C) of such Code is amended by striking 
        ``152(a)(9)'' and inserting ``152(a)(2)(G)''.
            (9) Section 152(b) of such Code is amended by striking 
        ``specified in subsection (a)'' and inserting ``specified in 
        subsection (a)(2) or (f)(2)''.
            (10) Section 152(c) of such Code is amended by striking 
        ``(a)'' and inserting ``(a)(1)''.
            (11) Section 7703(b)(1) of such Code is amended by striking 
        ``paragraph (2) or (4) of''.
            (12) The following provisions of such Code are each amended 
        by striking ``paragraphs (1) through (8) of section 152(a)'' 
        and inserting ``subparagraphs (A) through (F) of subsection 
        (a)(2) or subsection (f)(2) of section 152'':
                    (A) Section 170(g)(3).
                    (B) Subparagraphs (A) and (B) of section 51(i)(1).
                    (C) The second sentence of section 213(d)(11).
                    (D) Section 529(e)(2)(B).
                    (E) Section 7702B(f)(2)(C)(iii).
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 304. OTHER MODIFICATIONS TO EARNED INCOME TAX CREDIT.

    (a) Modification of Joint Return Requirement.--Subsection (d) of 
section 32 of the Internal Revenue Code of 1986 (relating to married 
individuals) is amended to read as follows:
    ``(d) Married Individuals.--
            ``(1) In general.--If the taxpayer is married at the close 
        of the taxable year, the credit shall be allowed under 
        subsection (a) only if the taxpayer and his spouse file a joint 
        return for the taxable year.
            ``(2) Marital status.--For purposes of paragraph (1), an 
        individual legally separated from his spouse under a decree of 
        divorce or of separate maintenance shall not be considered as 
        married.
            ``(3) Certain married individuals living apart.--For 
        purposes of paragraph (1), if--
                    ``(A) an individual--
                            ``(i) is married and files a separate 
                        return, and
                            ``(ii) has a qualifying child who is a son, 
                        daughter, stepson, or stepdaughter of such 
                        individual, and
                    ``(B) during the last 6 months of such taxable 
                year, such individual and such individual's spouse do 
                not have the same principal place of abode,
        such individual shall not be considered as married.''.
    (b) Modification of Rule Where There Are 2 or More Eligible 
Individuals.--Subparagraph (C) of section 32(c)(1) of the Internal 
Revenue Code of 1986 (relating to 2 or more eligible individuals) is 
amended to read as follows:
                    ``(C) 2 or more eligible individuals.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), if 2 or more individuals would 
                        (but for this subparagraph and after 
                        application of subparagraph (B)) be treated as 
                        eligible individuals with respect to the same 
                        qualifying child for taxable years beginning in 
                        the same calendar year, only the individual 
                        with the highest modified adjusted gross income 
                        for such taxable years shall be treated as an 
                        eligible individual with respect to such 
                        qualifying child.
                            ``(ii) Exception for certain parents.--An 
                        otherwise eligible individual who is not 
                        treated under clause (i) as the only eligible 
                        individual with respect to any qualifying child 
                        shall be treated as an eligible individual with 
                        respect to such child if--
                                    ``(I) such child is the son, 
                                daughter, stepson, or stepdaughter of 
                                such individual,
                                    ``(II) such child is not taken into 
                                account under subsection (b) by any 
                                other individual, and
                                    ``(III) the limitation under 
                                subsection (a)(2) for the individual 
                                who would (but for this clause) be 
                                treated under clause (i) as the only 
                                eligible individual with respect to 
                                such child would be greater than zero 
                                (determined as if such individual had 2 
                                qualifying children).''.
    (c) Expansion of Mathematical Error Authority.--Paragraph (2) of 
section 6213(g) of the Internal Revenue Code of 1986 (relating to 
definitions) is amended by striking ``and'' at the end of subparagraph 
(K), by striking the period at the end of subparagraph (L) and 
inserting ``, and'', and by inserting after subparagraph (L) the 
following new subparagraph:
                    ``(M) the entry on the return claiming the credit 
                under section 32 with respect to a child if, according 
                to the Federal Case Registry of Child Support Orders 
                established under section 453(h) of the Social Security 
                Act, the taxpayer is a noncustodial parent of such 
                child.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2000.
            (2) Expansion of mathematical error authority.--The 
        amendment made by subsection (c) shall apply to taxable years 
        beginning after December 31, 2001.

          TITLE IV--RESTORATION OF SOCIAL SERVICES BLOCK GRANT

SEC 401. RESTORATION OF AUTHORITY TO TRANSFER UP TO 10 PERCENT OF TANF 
              FUNDS TO THE SOCIAL SERVICES BLOCK GRANT.

    (a) In General.--Section 404(d)(2) of the Social Security Act (42 
U.S.C. 604(d)(2)) is amended to read as follows:
            ``(2) Limitation on amount transferable to title xx 
        programs.--A State may use not more than 10 percent of the 
        amount of any grant made to the State under section 403(a) for 
        a fiscal year to carry out State programs pursuant to title 
        XX.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to amounts made available for fiscal year 2002 and each fiscal year 
thereafter.

SEC. 402. RESTORATION OF FUNDS FOR THE SOCIAL SERVICES BLOCK GRANT.

    (a) In General.--Section 2003(c) of the Social Security Act (42 
U.S.C. 1397b(c)) is amended--
            (1) in paragraph (10), by striking ``and'' at the end; and
            (2) by striking paragraph (11) and inserting the following 
        new paragraphs:
            ``(11) $1,725,000,000 for the fiscal year 2001; and
            ``(12) $2,380,000,000 for the fiscal year 2002 and each 
        fiscal year thereafter.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of the Departments of 
Labor, Health and Human Services, and Education, and Related Agencies 
Appropriations Act, 2001 (as enacted into law by section 1(a)(1) of 
Public Law 106-554).

SEC. 403. REQUIREMENT TO SUBMIT ANNUAL REPORT ON STATE ACTIVITIES.

    (a) In General.--Section 2006(c) of the Social Security Act (42 
U.S.C. 1397e(c)) is amended by adding at the end the following new 
sentence: ``The Secretary shall compile the information submitted by 
the States and submit that information to Congress on an annual 
basis.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to information submitted by States under section 2006 of the Social 
Security Act (42 U.S.C. 1397e) with respect to fiscal year 2001 and 
each fiscal year thereafter.

           TITLE V--ENCOURAGING EMPLOYER SPONSORED CHILD CARE

SEC. 501. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE 
              ASSISTANCE.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following:

``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.

    ``(a) In General.--For purposes of section 38, the employer-
provided child care credit determined under this section for the 
taxable year is an amount equal to the sum of--
            ``(1) 25 percent of the qualified child care expenditures, 
        and
            ``(2) 10 percent of the qualified child care resource and 
        referral expenditures,
of the taxpayer for such taxable year.
    ``(b) Dollar Limitation.--The credit allowable under subsection (a) 
for any taxable year shall not exceed $150,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified child care expenditure.--
                    ``(A) In general.--The term `qualified child care 
                expenditure' means any amount paid or incurred--
                            ``(i) to acquire, construct, rehabilitate, 
                        or expand property--
                                    ``(I) which is to be used as part 
                                of a qualified child care facility of 
                                the taxpayer,
                                    ``(II) with respect to which a 
                                deduction for depreciation (or 
                                amortization in lieu of depreciation) 
                                is allowable, and
                                    ``(III) which does not constitute 
                                part of the principal residence (within 
                                the meaning of section 121) of the 
                                taxpayer or any employee of the 
                                taxpayer,
                            ``(ii) for the operating costs of a 
                        qualified child care facility of the taxpayer, 
                        including costs related to the training of 
                        employees, to scholarship programs, and to the 
                        providing of increased compensation to 
                        employees with higher levels of child care 
                        training,
                            ``(iii) under a contract with a qualified 
                        child care facility to provide child care 
                        services to employees of the taxpayer, or
                            ``(iv) to reimburse an employee for 
                        expenses for child care which enables the 
                        employee to be gainfully employed including 
                        expenses related to--
                                    ``(I) day care and before and after 
                                school care,
                                    ``(II) transportation associated 
                                with such care, and
                                    ``(III) before and after school and 
                                holiday programs including educational 
                                and recreational programs and camp 
                                programs.
                    ``(B) Fair market value.--The term `qualified child 
                care expenditures' shall not include expenses in excess 
                of the fair market value of such care.
            ``(2) Qualified child care facility.--
                    ``(A) In general.--The term `qualified child care 
                facility' means a facility--
                            ``(i) the principal use of which is to 
                        provide child care assistance, and
                            ``(ii) which meets the requirements of all 
                        applicable laws and regulations of the State or 
                        local government in which it is located, 
                        including the licensing of the facility as a 
                        child care facility.
                Clause (i) shall not apply to a facility which is the 
                principal residence (within the meaning of section 121) 
                of the operator of the facility.
                    ``(B) Special rules with respect to a taxpayer.--A 
                facility shall not be treated as a qualified child care 
                facility with respect to a taxpayer unless--
                            ``(i) enrollment in the facility is open to 
                        employees of the taxpayer during the taxable 
                        year,
                            ``(ii) if the facility is the principal 
                        trade or business of the taxpayer, at least 30 
                        percent of the enrollees of such facility are 
                        dependents of employees of the taxpayer, and
                            ``(iii) the use of such facility (or the 
                        eligibility to use such facility) does not 
                        discriminate in favor of employees of the 
                        taxpayer who are highly compensated employees 
                        (within the meaning of section 414(q)).
            ``(3) Qualified child care resource and referral 
        expenditure.--
                    ``(A) In general.--The term `qualified child care 
                resource and referral expenditure' means any amount 
                paid or incurred under a contract to provide child care 
                resource and referral services to an employee of the 
                taxpayer.
                    ``(B) Nondiscrimination.--The services shall not be 
                treated as qualified unless the provision of such 
                services (or the eligibility to use such services) does 
                not discriminate in favor of employees of the taxpayer 
                who are highly compensated employees (within the 
                meaning of section 414(q)).
    ``(d) Recapture of Acquisition and Construction Credit.--
            ``(1) In general.--If, as of the close of any taxable year, 
        there is a recapture event with respect to any qualified child 
        care facility of the taxpayer, then the tax of the taxpayer 
        under this chapter for such taxable year shall be increased by 
        an amount equal to the product of--
                    ``(A) the applicable recapture percentage, and
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the qualified child care 
                expenditures of the taxpayer described in subsection 
                (c)(1)(A) with respect to such facility had been zero.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

  
                                                         The applicable
  
                                                              recapture
            ``If the recapture event occurs in:
                                                         percentage is:
                Years 1-3............................          100     
                Year 4...............................           85     
                Year 5...............................           70     
                Year 6...............................           55     
                Year 7...............................           40     
                Year 8...............................           25     
                Years 9 and 10.......................           10     
                Years 11 and thereafter..............            0.    
                    ``(B) Years.--For purposes of subparagraph (A), 
                year 1 shall begin on the first day of the taxable year 
                in which the qualified child care facility is placed in 
                service by the taxpayer.
            ``(3) Recapture event defined.--For purposes of this 
        subsection, the term `recapture event' means--
                    ``(A) Cessation of operation.--The cessation of the 
                operation of the facility as a qualified child care 
                facility.
                    ``(B) Change in ownership.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the disposition of a taxpayer's 
                        interest in a qualified child care facility 
                        with respect to which the credit described in 
                        subsection (a) was allowable.
                            ``(ii) Agreement to assume recapture 
                        liability.--Clause (i) shall not apply if the 
                        person acquiring such interest in the facility 
                        agrees in writing to assume the recapture 
                        liability of the person disposing of such 
                        interest in effect immediately before such 
                        disposition. In the event of such an 
                        assumption, the person acquiring the interest 
                        in the facility shall be treated as the 
                        taxpayer for purposes of assessing any 
                        recapture liability (computed as if there had 
                        been no change in ownership).
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under subpart A, B, or D of this 
                part.
                    ``(C) No recapture by reason of casualty loss.--The 
                increase in tax under this subsection shall not apply 
                to a cessation of operation of the facility as a 
                qualified child care facility by reason of a casualty 
                loss to the extent such loss is restored by 
                reconstruction or replacement within a reasonable 
                period established by the Secretary.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons which are treated as 
        a single employer under subsections (a) and (b) of section 52 
        shall be treated as a single taxpayer.
            ``(2) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(3) Allocation in the case of partnerships.--In the case 
        of partnerships, the credit shall be allocated among partners 
        under regulations prescribed by the Secretary.
    ``(f) No Double Benefit.--
            ``(1) Reduction in basis.--For purposes of this subtitle--
                    ``(A) In general.--If a credit is determined under 
                this section with respect to any property by reason of 
                expenditures described in subsection (c)(1)(A), the 
                basis of such property shall be reduced by the amount 
                of the credit so determined.
                    ``(B) Certain dispositions.--If, during any taxable 
                year, there is a recapture amount determined with 
                respect to any property the basis of which was reduced 
                under subparagraph (A), the basis of such property 
                (immediately before the event resulting in such 
                recapture) shall be increased by an amount equal to 
                such recapture amount. For purposes of the preceding 
                sentence, the term `recapture amount' means any 
                increase in tax (or adjustment in carrybacks or 
                carryovers) determined under subsection (d).
            ``(2) Other deductions and credits.--No deduction or credit 
        shall be allowed under any other provision of this chapter with 
        respect to the amount of the credit determined under this 
        section.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 is 
        amended by striking ``plus'' at the end of paragraph (12), by 
        striking the period at the end of paragraph (13) and inserting 
        ``, plus'', and by adding at the end the following:
            ``(14) the employer-provided child care credit determined 
        under section 45E.''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following:

                              ``Sec. 45E. Employer-provided child care 
                                        credit.''
            (3) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (26), by striking the period at 
        the end of paragraph (27) and inserting ``, and'', and by 
        adding at the end the following:
            ``(28) in the case of a facility with respect to which a 
        credit was allowed under section 45E, to the extent provided in 
        section 45E(f)(1).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

                        TITLE VI--CHILD WELFARE

SEC. 601. STRONG FAMILIES, SAFE CHILDREN.

    (a) Reauthorization of Program.--Section 430(b) of the Social 
Security Act (42 U.S.C. 629(b)) is amended--
            (1) in paragraph (7), by striking ``and'' at the end;
            (2) in paragraph (8), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(9) for each of fiscal years 2002 through 2006, 
        $505,000,000.''.
    (b) Renaming of Program.--The heading for subpart 2 of part B of 
title IV of the Social Security Act (42 U.S.C. 629-629d) is amended to 
read as follows:

             ``Subpart 2--Strong Families, Safe Children''.

SEC. 602. EXPANSION OF JOHN H. CHAFEE FOSTER CARE INDEPENDENCE PROGRAM.

    (a) Increase in Authorization of Appropriations.--Section 477(h) of 
the Social Security Act (42 U.S.C. 677(h)) is amended by striking 
``$140,000,000 for each fiscal year'' and inserting ``$200,000,000 for 
fiscal year 2002 and each fiscal year thereafter''.
    (b) Waiting Youth Scholarship Fund.--
            (1) Assistance and support for children adopted after age 
        16.--Section 477(a) of the Social Security Act (42 U.S.C. 
        677(a)) is amended--
                    (A) in paragraph (4), by striking ``and'' at the 
                end;
                    (B) in paragraph (5), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(6) to provide assistance and support to children adopted 
        after having attained age 16, specifically in the preparation 
        for and expenses associated with postsecondary training and 
        educational institutions.''.
            (2) Scholarships.--Section 477 of the Social Security Act 
        (42 U.S.C. 677) is amended by adding at the end the following 
        new subsection:
    ``(i) Scholarships for Postsecondary or Vocational Education.--
            ``(1) In general.--The Secretary shall reserve $60,000,000 
        of the amount specified in subsection (h) for a fiscal year to 
        provide scholarships to former foster care recipients who have 
        attained 18 years of age but have not attained 21 years of age 
        for postsecondary or vocational educational expenses incurred 
        by such recipients.
            ``(2) Limitation.--The total dollar value of all 
        scholarships provided to a former foster care recipient under 
        paragraph (1) for a fiscal year may not exceed $5,000.
            ``(3) Disregard for purposes of other federal educational 
        assistance.--A scholarship awarded under this subsection to a 
        former foster care recipient described in paragraph (1) shall 
        not be considered for purposes of determining the recipient's 
        eligibility for, or amount of, any other Federal education 
        assistance.''.
            (3) Conforming amendment.--Section 477(c)(1) of the Social 
        Security Act (42 U.S.C. 677(c)(1)) is amended by striking 
        ``subsection (g)(2)'' and inserting ``subsections (g)(2) and 
        (i)''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2001.

SEC. 603. ELIMINATION OF OPT-OUT PROVISION FOR STATE REQUIREMENT TO 
              CONDUCT CRIMINAL BACKGROUND CHECK ON PROSPECTIVE FOSTER 
              OR ADOPTIVE PARENTS.

    (a) Elimination of Opt-Out Provision.--Section 471(a)(20) of the 
Social Security Act (42 U.S.C. 671(a)(20)) is amended--
            (1) by striking ``(A) unless an election provided for in 
        subparagraph (B) is made with respect to the State,'';
            (2) in subparagraph (A), by striking ``and'' at the end;
            (3) by striking subparagraph (B);
            (4) by striking ``(i)'' and inserting ``(A)''; and
            (5) by striking ``(ii)'' and inserting ``(B)''.
    (b) Effective Date.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by subsection (a) take effect on the date of enactment of 
        this Act.
            (2) Delay permitted if state legislation required.--In the 
        case of a State plan under part E of title IV of the Social 
        Security Act which the Secretary of Health and Human Services 
        determines requires State legislation (other than legislation 
        appropriating funds) in order for the plan to meet the 
        additional requirements imposed by the amendments made by 
        subsection (a), the State plan shall not be regarded as failing 
        to comply with the requirements of such part solely on the 
        basis of the failure of the plan to meet such additional 
        requirements before the first day of the first calendar quarter 
        beginning after the close of the first regular session of the 
        State legislature that begins after the date of enactment of 
        this Act. For purposes of the previous sentence, in the case of 
        a State that has a 2-year legislative session, each year of 
        such session shall be deemed to be a separate regular session 
        of the State legislature.
                                 <all>