[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 367 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                 S. 367

 To amend part A of title IV of the Social Security Act to reauthorize 
and improve the temporary assistance to needy families program, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 12, 2003

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

_______________________________________________________________________

                                 A BILL


 
 To amend part A of title IV of the Social Security Act to reauthorize 
and improve the temporary assistance to needy families program, 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; AMENDMENTS TO SOCIAL 
              SECURITY ACT.

    (a) Short Title.--This Act may be cited as the ``Personal 
Responsibility and Work Opportunity Reconciliation Act Amendments of 
2003''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents; amendments to Social Security 
                            Act.
Sec. 2. Findings.
                            TITLE I--FUNDING

Sec. 101. Reauthorization and annual adjustment of State family 
                            assistance grants.
Sec. 102. Contingency fund.
Sec. 103. Bonus for reduction of child poverty.
Sec. 104. Reauthorization of other grants.
Sec. 105. Restoration of funding for the Social Services Block Grant.
Sec. 106. Repeal of Federal loans for State welfare programs.
Sec. 107. GAO reports on TANF funding and expenditures.
                       TITLE II--SUPPORTING WORK

Sec. 201. Making work pay.
Sec. 202. Increase in guaranteed funding for child care.
Sec. 203. Parents as scholars program.
Sec. 204. Elimination of recipients completing secondary school from 
                            limit on number of TANF recipients 
                            participating in vocational educational 
                            training.
Sec. 205. Vocational training and other preemployment activities.
Sec. 206. State option to credit months engaged in work or parents as 
                            scholars program for purposes of 5-year 
                            assistance limit.
Sec. 207. Innovative Business Link partnership for employers and 
                            nonprofit organizations.
                     TITLE III--SUPPORTING FAMILIES

Sec. 301. Elimination of separate work participation rate for 2-parent 
                            families.
Sec. 302. Ban on imposition of stricter eligibility criteria for 2-
                            parent families.
Sec. 303. Family formation fund.
Sec. 304. Ensuring child well-being.
Sec. 305. Funding for families assisted by a territory program.
                      TITLE IV--STATE FLEXIBILITY

Sec. 401. Pathway to self-sufficiency grants to improve coordination of 
                            assistance for low-income families.
Sec. 402. State option to offer wage subsidies.
Sec. 403. Exclusion of victims of domestic violence from 20 percent 
                            limitation on hardship exception.
Sec. 404. Clarification of authority of States to use TANF funds 
                            carried over from prior years to provide 
                            TANF benefits and services.
Sec. 405. Continuation of prewelfare reform waivers.
Sec. 406. State option to align foster care and adoption assistance 
                            eligibility with TANF eligibility.
Sec. 407. Promoting work and responsibility among all families with 
                            children.
Sec. 408. Authority to transfer TANF funds to carry out an access to 
                            jobs project or a reverse commute project.
                       TITLE V--HEALTHY CHILDREN

Sec. 501. Revision and simplification of the transitional medical 
                            assistance program (TMA).
Sec. 502. Optional coverage of legal immigrants under the medicaid 
                            program and title XXI.
Sec. 503. Second chance homes.
                    TITLE VI--PUBLIC ACCOUNTABILITY

Sec. 601. Public availability of State program and financial data 
                            submissions.
Sec. 602. Study and guidelines regarding compliance with 
                            nondiscrimination provisions.
Sec. 603. Ensuring TANF funds are not used to displace public 
                            employees; application of workplace laws to 
                            welfare recipients.
Sec. 604. Research and development.
Sec. 605. GAO study on impact of ban on SSI benefits for legal 
                            immigrants.
Sec. 606. Grants to improve States' policies and procedures for 
                            assisting individuals with barriers to 
                            work.
Sec. 607. Ensuring a professional TANF program staff.
                       TITLE VII--EFFECTIVE DATE

Sec. 701. Effective date.
    (c) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act (42 U.S.C. 301 et seq.).

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (Public Law 104-193; 110 Stat. 2105) 
        was a fundamental change to reform the Federal welfare system 
        to shift it from an entitlement program into a transition 
        program to help families move from welfare to work and personal 
        responsibility.
            (2) Since enactment of the 1996 welfare reform law, welfare 
        cash assistance caseloads have dropped dramatically, by nearly 
        50 percent, and approximately \2/3\ of welfare recipients who 
        have left the cash assistance rolls have left for work.
            (3) Another sign of reform and progress is that funding has 
        shifted from providing monthly cash assistance for parents to 
        stay at home to over \1/2\ of the funding targeted to pay for 
        work supports, such as child care, transportation, job 
        placement, limited job training, or other priorities.
            (4) More investments in quality child care will allow 
        parents to enter and continue in the workforce knowing that 
        their children have access to safe, meaningful child care, 
        hopefully with emphasis on child development and preparation to 
        ensure that each child gains the skills needed to enter school 
        ready to learn.
            (5) While families are moving from welfare to work, and 
        employment rates are up, many families struggle in low-wage 
        jobs and have trouble getting promised supports such as 
        medicaid, child care, food stamps, and other supports available 
        under programs intended to help families.
            (6) Child poverty rates are improving, but more must be 
        done to reduce poverty in the 2,000,000 families who are still 
        struggling.
            (7) Parents who remain on the welfare caseloads face 
        multiple barriers to employment and therefore need a range of 
        services to address their needs and move from welfare to work.
            (8) Children deserve to be raised in supportive homes, 
        preferably with 2 loving parents. It is crucial to end policies 
        that discriminate against serving 2-parent families within the 
        welfare system. It is also important to support innovative 
        programs to encourage full participation in child support and 
        child rearing by noncustodial parents.
            (9) Welfare reform has been successful because it has been 
        a flexible partnership between the Federal Government and the 
        States, and retaining the partnership and flexibility will be 
        important for the future.
            (10) The State agencies responsible for administering the 
        temporary assistance to needy families program have had to 
        assume many new and more complex responsibilities which 
        necessitates improving and upgrading the skills and ability of 
        the workers at those agencies to ensure high quality service 
        delivery and meet all program goals.
            (11) Studies indicate disparate racial treatment in the 
        implementation of the temporary assistance to  needy families 
program with respect to determining eligibility for assistance under 
the program, disseminating information, providing referral for 
services, and imposing sanctions for non-compliance with program 
requirements.

                            TITLE I--FUNDING

SEC. 101. REAUTHORIZATION AND ANNUAL ADJUSTMENT OF STATE FAMILY 
              ASSISTANCE GRANTS.

    (a) In General.--Section 403(a)(1) is amended (42 U.S.C. 
603(a)(1))--
            (1) in subparagraph (A), by striking ``1996'' and all that 
        follows through ``2002'' and inserting ``2004 through 2008'';
            (2) by redesignating subparagraph (E) as subparagraph (I);
            (3) by redesignating subparagraphs (B) through (D) as 
        subparagraphs (C) through (E), respectively;
            (4) in subparagraph (C), as so redesignated--
                    (A) in the heading, by striking ``State'' and 
                inserting ``Base state''; and
                    (B) by striking ``As used in this part, the term 
                `State family assistance grant' means'' and inserting 
                ``Subject to subparagraph (F), as used in this part, 
                the term `base State family assistance grant' means'';
            (5) by inserting after subparagraph (A), the following:
                    ``(B) State family assistance grant defined.--As 
                used in this part, the term `State family assistance 
                grant' means the sum of--
                            ``(i) the base State family assistance 
                        grant; and
                            ``(ii) the annual adjustment amount.'';
            (6) by inserting after subparagraph (E), as redesignated by 
        paragraph (3), the following:
                    ``(F) Update of base for certain states.--
                            ``(i) In general.--With respect to a base 
                        State family assistance grant made for any of 
                        fiscal years 2004 through 2008, in the case of 
                        a State that meets the criteria described in 
                        clause (ii) or (iii), subject to clause (v), 
                        the amount of the base State family assistance 
                        grant determined under this paragraph for that 
                        State for such a fiscal year shall be increased 
                        by the applicable amount described in clause 
                        (iv) for that fiscal year.
                            ``(ii) Receipt of supplemental grant for 
                        fiscal year 2002.--For purposes of clause (i), 
                        the criteria described in this clause is that a 
                        State received a supplemental grant under 
                        paragraph (3) for fiscal year 2002 (as in 
                        effect with respect to such fiscal year).
                            ``(iii) State basic tanf grant per poor 
                        person is below national average.--For purposes 
                        of clause (i), the criteria described in this 
                        clause is that, with respect to a State and a 
                        fiscal year, the State basic TANF grant per 
                        poor person for the immediately preceding 
                        fiscal year is less than the national average 
                        State basic TANF grant per poor person for such 
                        preceding fiscal year.
                            ``(iv) Applicable amount.--
                                    ``(I) All qualifying states.--For 
                                purposes of clause (i), the applicable 
                                amount described in this clause is the 
                                amount equal to 2.5 percent of the sum 
                                of--
                                            ``(aa) the amount required 
                                        to be paid to the State under 
                                        former section 403 (as in 
                                        effect during fiscal year 
                                        1994); and
                                            ``(bb) the amount (if any) 
                                        paid to the State under 
                                        paragraph (3) for fiscal year 
                                        2002 (as in effect with respect 
                                        to such fiscal year).
                                    ``(II) Original qualifying 
                                states.--In the case of a State that 
                                meets the criteria described in clause 
                                (ii), the amount determined under 
                                subclause (I) for a fiscal year shall 
                                be further increased by the amount 
                                described in item (bb) of that 
                                subclause.
                            ``(v) Preservation of update.--In the case 
                        of a State that fails to meet the criteria 
                        described in clause (iii) for a fiscal year but 
                        that did satisfy such criteria for a prior 
                        fiscal year, the amount of the base State 
                        family assistance grant determined under this 
                        paragraph for that State for such a fiscal year 
                        shall be increased by the amount determined for 
                        the State under clause (iv)(I) for the most 
                        recent fiscal year for which the State 
                        satisfied such criteria.
                            ``(vi) Definitions.--In this subparagraph:
                                    ``(I) State basic tanf grant per 
                                poor person.--The term `State basic 
                                TANF grant per poor person' means, with 
                                respect to a State and a preceding 
                                fiscal year--
                                            ``(aa) the base State 
                                        family assistance grant for the 
                                        State (as defined under 
                                        subparagraph (C) and, if 
                                        applicable, increased under 
                                        this subparagraph); divided by
                                            ``(bb) the number of 
                                        individuals, according to the 
                                        2000 Census Supplementary 
                                        Survey, who were residents of 
                                        the State and whose income does 
                                        not exceed the poverty line.
                                    ``(II) National average state basic 
                                tanf grant per poor person.--The term 
                                `national average State basic TANF 
                                grant per poor person' means, with 
                                respect to a preceding fiscal year, an 
                                amount equal to--
                                            ``(aa) the base State 
                                        family assistance grant (as 
                                        defined under subparagraph (C) 
                                        and increased under this 
                                        subparagraph) for all States 
                                        for that fiscal year; divided 
                                        by
                                            ``(bb) the number of 
                                        individuals, according to the 
                                        2000 Census Supplementary 
                                        Survey, who were residents of 
                                        any State and whose income does 
                                        not exceed the poverty line.
                                    ``(III) State.--The term `State' 
                                means each of the 50 States and the 
                                District of Columbia.
                    ``(G) Annual adjustment amount.--For purposes of 
                subparagraph (B), the annual adjustment amount with 
                respect to a State is the amount equal to the product 
                of--
                            ``(i) the difference between the amount 
                        appropriated under subparagraph (H) for grants 
under this paragraph for the fiscal year and the Base family assistance 
grant for the State; and
                            ``(ii) the number of children in poverty 
                        residing in the State divided by the total 
                        number of children in poverty residing in all 
                        States.
                    ``(H) Additional definitions.--In this paragraph:
                            ``(i) Children in poverty.--
                                    ``(I) In general.--The term 
                                `children in poverty' means, with 
                                respect to a State and a fiscal year, 
                                the number of children residing in the 
                                State who have not attained age 18 and 
                                whose family income is less than the 
                                poverty line.
                                    ``(II) Data.--The Secretary shall 
                                determine the number of children in 
                                poverty in a State using the most 
                                recent, accurate data available for the 
                                State.
                                    ``(III) Regulations.--The Secretary 
                                shall promulgate for public comment 
                                regulations that describe the 
                                methodology and data that the Secretary 
                                will use to determine the number of 
                                children in poverty in each State.
                            ``(ii) Poverty line.--The term `poverty 
                        line' has the meaning given the term in section 
                        673(2) of the Omnibus Budget Reconciliation Act 
                        of 1981, including any revision required by 
                        such section applicable to a family of the size 
                        involved.
                            ``(iii) Family income.--The term `family 
                        income' means cash income but does not include 
                        cash benefits from means-tested public programs 
                        or child support obligations.''; and
            (7) in subparagraph (I), as redesignated by paragraph (2), 
        by striking ``appropriated for fiscal years'' and all that 
        follows through the period and inserting ``appropriated for 
        State family assistance grants under this paragraph--
                            ``(i) for fiscal year 2004, 
                        $17,011,416,235;
                            ``(ii) for fiscal year 2005, 
                        $17,236,416,235;
                            ``(iii) for fiscal year 2006, 
                        $17,461,416,235;
                            ``(iv) for fiscal year 2007, 
                        $17,686,416,235; and
                            ``(v) for fiscal year 2008, 
                        $17,911,416,235.''.

SEC. 102. CONTINGENCY FUND.

    (a) Contingency Funding Available to Needy States.--Section 403(b) 
(42 U.S.C. 603(b)) is amended--
            (1) by striking paragraphs (1) through (3) and inserting 
        the following:
            ``(1) Contingency fund grants.--
                    ``(A) Payments.--Subject to subparagraph (C), each 
                State shall receive a contingency fund grant for each 
                eligible month in which the State is a needy State 
                under paragraph (3).
                    ``(B) Monthly contingency fund grant amount.--For 
                each eligible month in which a State is a needy State, 
                the State shall receive a contingency fund grant equal 
                to the higher of $0 and the applicable percentage (as 
                defined in subparagraph (D)(i)) of the product of--
                            ``(i) the estimated cost of an additional 
                        recipient family (as defined in subparagraph 
                        (D)(ii)); and
                            ``(ii) the increase in the number of 
                        families receiving assistance under the State 
                        program funded under this part or a program 
                        funded with qualified State expenditures (as 
                        defined in subparagraph (D)(iv)).
                    ``(C) Limitation.--The total amount paid to a 
                single State under subparagraph (A) during a fiscal 
                year shall not exceed the amount equal to 15 percent of 
                the State family assistance grant (as defined under 
                subparagraph (B) of subsection (a)(1) and increased 
                under subparagraph (E) of that subsection).
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Applicable percentage.--The term 
                        `applicable percentage' means the higher of--
                                    ``(I) 75 percent; and
                                    ``(II) the sum of the Federal 
                                medical assistance percentage for the 
                                State (as defined in section 1905(b)) 
                                plus 8 percentage points.
                            ``(ii) Estimated cost of an additional 
                        recipient family.--The term `estimated cost of 
                        an additional recipient family' means the 
                        amount equal to 120 percent of the basic 
                        assistance cost (as defined under clause (iii)) 
                        for families receiving assistance under the 
                        State program funded under this part or under a 
                        program funded with qualified State 
                        expenditures (as defined in section 
                        409(a)(7)(B)(i)).
                            ``(iii) Basic assistance cost.--
                                    ``(I) In general.--The term `basic 
                                assistance cost' means the amount equal 
                                to the maximum cash assistance grant 
                                for a family consisting of 3 
                                individuals under the State program 
                                funded under this part.
                                    ``(II) Rule for states with more 
                                than 1 maximum level.--In the case of a 
                                State that has more than 1 maximum cash 
                                assistance grant level for families 
                                consisting of 3 individuals, the basic 
                                assistance cost shall be the amount 
                                equal to the maximum cash assistance 
                                grant level applicable to the largest 
                                number of families consisting of 3 
                                individuals receiving assistance under 
                                the State program funded under this 
                                part or a State program funded with 
                                qualified State expenditures (as 
                                defined in section 409(a)(7)(B)(i)).
                            ``(iv) Increase in the number of families 
                        receiving assistance under the state program 
                        funded under this part or a program funded with 
                        qualified state expenditures.--The term 
                        `increase in the number of families receiving 
                        assistance under the State program funded under 
                        this part or a program funded with qualified 
                        State expenditures' means the increase in--
                                    ``(I) the number of families 
                                receiving assistance under the State 
                                program funded under this part and 
                                under a program funded with qualified 
                                State expenditures (as defined in 
                                section 409(a)(7)(B)(i)) in the most 
                                recent month for which data from the 
                                State are available; as compared to
                                    ``(II) the lower of the average 
                                monthly number of families receiving 
                                such assistance in either of the 2 
                                completed fiscal years immediately 
                                preceding the fiscal year in which the 
                                State qualifies as a needy State.
                    ``(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for the period of 
                fiscal years 2004 through 2008, such sums as are 
                necessary for making contingency fund grants under this 
                subsection in a total amount not to exceed 
                $2,000,000,000.'';
            (2) by redesignating paragraph (4) as paragraph (2); and
            (3) in paragraph (2), as so redesignated--
                    (A) by striking ``(3)(A)'' and inserting ``(1)''; 
                and
                    (B) by striking ``2-month'' and inserting ``3-
                month''.
    (b) Modification of Definition of Needy State.--Section 403(b) (42 
U.S.C. 603(b)) is further amended--
            (1) by striking paragraphs (5) through (7);
            (2) by redesignating paragraph (8) as paragraph (5); and
            (3) by inserting after paragraph (2) (as redesignated by 
        subsection (a)(2)) the following:
            ``(3) Initial determination of whether a state qualifies as 
        a needy state.--
                    ``(A) In general.--For purposes of paragraph (1), a 
                State will be initially determined to be a needy State 
                for a month if the State satisfies any of the 
                following:
                            ``(i) The--
                                    ``(I) average rate of total 
                                unemployment in the State for the 
                                period consisting of the most recent 3 
                                months for which data are available has 
                                increased by the lesser of 1.5 
                                percentage points or by 50 percent over 
                                the corresponding 3-month period in 
                                either of the 2 most recent preceding 
                                fiscal years; or
                                    ``(II) average insured unemployment 
                                rate for the most recent 3 months for 
                                which data are available has increased 
                                by 1 percentage point over the 
                                corresponding 3-month period in either 
                                of the 2 most recent preceding fiscal 
                                years.
                            ``(ii) As determined by the Secretary of 
                        Agriculture, the monthly average number of 
                        households (as of the last day of each month) 
                        that participated in the food stamp program in 
                        the State in the then most recently concluded 
                        3-month period for which data are available 
                        exceeds by at least 10 percent the monthly 
                        average number of households (as of the last 
                        day of each month) in the State that 
                        participated in the food stamp program in the 
                        corresponding 3-month period in either of the 2 
                        most recent preceding fiscal years.
                            ``(iii) As determined by the Secretary, the 
                        monthly average number of families that 
                        received assistance under the State program 
                        funded under this part or under a program 
                        funded with qualified State expenditures (as 
                        defined in section 409(a)(7)(B)(i)) in the most 
                        recently concluded 3-month period for which 
                        data are available from the State increased by 
                        at least 10 percent over the number of such 
                        families that received such benefits in the 
                        corresponding 3-month period in either of the 2 
                        most recent preceding fiscal years, provided 
                        that the Secretary makes a determination that 
                        the State's increased caseload was due, in 
                        large measure, to economic conditions rather 
                        than State policy changes.
                    ``(B) Duration.--
                            ``(i) In general.--A State that qualifies 
                        as a needy State--
                                    ``(I) under subparagraph (A)(i), 
                                shall be considered a needy State until 
                                either the State's (seasonally 
                                adjusted) total unemployment rate or 
                                (seasonally adjusted) insured 
                                unemployment rate, whichever rate was 
                                used to meet the definition as a needy 
                                State under that subparagraph for the 
                                most recently concluded 3-month period 
                                for which data are available, falls 
                                below the level attained in the 3-month 
                                period in which the State first 
                                qualified as a needy State under that 
                                subparagraph;
                                    ``(II) under subparagraph (A)(ii), 
                                shall be considered a needy State until 
                                the average monthly number of 
                                households participating in the food 
                                stamp program for the most recently 
                                concluded 3-month period for which data 
                                are available nationally falls below 
                                the food stamp base period level; and
                                    ``(III) under subparagraph 
                                (A)(iii), shall be considered a needy 
                                State until the number of families 
                                receiving assistance under the State 
                                program funded under this part or under 
                                a program funded with qualified State 
                                expenditures (as defined in section 
                                409(a)(7)(B)(i)) for the most recently 
                                concluded 3-month period for which data 
                                are available falls below the TANF base 
                                period level.
                            ``(ii) Seasonal variations.--
                        Notwithstanding subclauses (II) and (III) of 
                        clause (i), a State shall be considered a needy 
                        State--
                                    ``(I) under subparagraph (A)(ii), 
                                if with respect to the State, the 
                                monthly average number of households 
                                participating in the food stamp program 
                                for the most recent 3-month period for 
                                which data are available nationally 
                                falls below the food stamp base period 
                                level and the Secretary determines that 
                                this is due to expected seasonal 
                                variations in food stamp receipt in the 
                                State; and
                                    ``(II) under subparagraph (A)(iii), 
                                if, with respect to a State, the 
                                monthly average number of families 
                                receiving assistance under the State 
                                program funded under this part or under 
                                a program funded with qualified State 
                                expenditures (as defined in section 
                                409(a)(7)(B)(i)) for the most recently 
                                concluded 3-month period for which data 
                                are available nationally falls below 
                                the TANF base period level and the 
                                Secretary determines that this is due 
                                to expected seasonal variations in 
                                assistance receipt in the State.
                            ``(iii) Food stamp base period level.--In 
                        this subparagraph, the term `food stamp base 
                        period level' means the monthly average number 
                        of households participating in the food stamp 
                        program that corresponds to the most recent 3-
                        month period for which data are available at 
                        the time when the State first was determined to 
                        be a needy State under this paragraph.
                            ``(iv) TANF base period level.--In this 
                        subparagraph, the term `TANF base period level' 
                        means the monthly average number of families 
                        receiving assistance under the State program 
                        funded under this part or under a program 
                        funded with qualified State expenditures (as 
                        defined in section 409(a)(7)(B)(i)) that 
                        corresponds to the most recent 3 months for 
                        which data are available at the time when the 
                        State first was determined to be a needy State 
                        under this paragraph.
            ``(4) Exception.--
                    ``(A) In general.--Notwithstanding paragraph (3), a 
                State that has unobligated TANF reserves from prior 
                fiscal years that equal more than 25 percent of the 
                total amount of grants received by the State under 
                subsection (a) (other than welfare-to-work grants made 
                under paragraph (5) of that subsection prior to fiscal 
                year 1999) but not yet obligated as of the end of the 
                preceding fiscal year shall not be a needy State under 
                this subsection.
                    ``(B) Definition of unobligated tanf reserves.--In 
                subparagraph (A), the term `unobligated TANF reserves' 
                means the lessor of--
                            ``(i) the total amount of grants made to 
                        the State (regardless of the fiscal year in 
                        which such funds were awarded) under subsection 
                        (a) (other than welfare-to-work grants made 
                        under paragraph (5) of that subsection prior to 
                        fiscal year 1999) but not yet obligated as of 
                        the end of the preceding fiscal year; and
                            ``(ii) the total amount of grants made to 
                        the State under subsection (a) (other than 
                        welfare-to-work grants made under paragraph (5) 
                        of that subsection prior to fiscal year 1999) 
                        but not yet obligated as of the end of the 
                        preceding fiscal year, plus the difference 
                        between--
                                    ``(I) the pro rata share of the 
                                fiscal year grants to be made under 
                                subsection (a) to the State (other than 
                                such welfare-to-work grants); and
                                    ``(II) current year obligations of 
                                the total amount of grants made to all 
                                States under subsection (a) (regardless 
                                of the fiscal year in which such funds 
                                were awarded) (other than such welfare-
                                to-work grants) through the end of the 
                                most recent calendar quarter.''.
    (c) Clarification of Reporting Requirements.--Paragraph (5) of 
section 403(b) (42 U.S.C. 603(b)), as redesignated by subsection 
(b)(2), is amended by striking ``on the status of the Fund'' and 
inserting ``on the States that qualified for contingency funds and the 
amount of funding awarded under this subsection''.

SEC. 103. BONUS FOR REDUCTION OF CHILD POVERTY.

    (a) Child Poverty Reduction Bonus.--Section 403(a) (42 U.S.C. 
603(a)) is amended by adding at the end the following:
            ``(6) Bonus to reward states that reduce child poverty.--
                    ``(A) In general.--Beginning with fiscal year 2004, 
                the Secretary shall make a grant pursuant to this 
                paragraph to each State for each fiscal year for which 
                the State is a qualified child poverty reduction State.
                    ``(B) Amount of grant.--
                            ``(i) In general.--Subject to this 
                        subparagraph, the amount of the grant to be 
                        made to a qualified child poverty reduction 
                        State for a fiscal year shall be an amount 
                        equal to--
                                    ``(I) the number of children who 
                                had not attained 18 years of age by the 
                                end of the then most recently completed 
                                calendar year and who resided in the 
                                State as of the end of such calendar 
                                year, divided by the number of such 
                                children who resided in the United 
                                States as of the end of such calendar 
                                year; multiplied by
                                    ``(II) the amount appropriated 
                                pursuant to subparagraph (G) for the 
                                fiscal year.
                            ``(ii) Limitations.--
                                    ``(I) Minimum grant.--The amount of 
                                the grant to be made to a qualified 
                                child poverty reduction State for a 
                                fiscal year shall be not less than 
                                $500,000.
                                    ``(II) Maximum grant.--The amount 
                                of the grant to be made to a qualified 
                                child poverty reduction State for a 
                                fiscal year shall not exceed an amount 
                                equal to 3 percent of the State family 
                                assistance grant (as defined in 
                                subparagraph (B) of paragraph (1) and 
                                increased under subparagraph (E) of 
                                that paragraph) for the fiscal year.
                            ``(iii) Pro rata increase.--If the amount 
                        available for grants under this paragraph for a 
                        fiscal year is greater than the total amount of 
                        payments otherwise required to be made under 
                        this paragraph for the fiscal year, then the 
                        amount otherwise payable to any State for the 
                        fiscal year under this paragraph shall, subject 
                        to clause (ii)(II), be increased by such equal 
                        percentage as may be necessary to ensure that 
                        the total of the amounts payable for the fiscal 
                        year under this paragraph equals the amount 
                        available for the grants.
                            ``(iv) Pro rata reduction.--If the amount 
                        available for grants under this paragraph for a 
                        fiscal year is less than the total amount of 
                        payments otherwise required to be made under 
                        this paragraph for the fiscal year, then the 
                        amount otherwise payable to any State for the 
                        fiscal year under this paragraph shall, subject 
                        to clause (ii)(I), be reduced by such equal 
                        percentage as may be necessary to ensure that 
                        the total of the amounts payable for the fiscal 
                        year under this paragraph equals the amount 
                        available for the grants.
                    ``(C) Use of grant.--A State to which a grant is 
                made under this paragraph shall use the grant for any 
                purpose for which a grant made under this part may be 
                used.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Qualified child poverty reduction 
                        state.--The term `qualified child poverty 
reduction State' means, with respect to a fiscal year, a State if--
                                    ``(I) the child poverty rate 
                                achieved by the State for the then most 
                                recently completed calendar year for 
                                which such information is available is 
                                less than the lowest child poverty rate 
                                achieved by the State during the 
                                applicable period; and
                                    ``(II) the average depth of child 
                                poverty in the State for the then most 
                                recently completed calendar year for 
                                which such information is available is 
                                not greater than the average depth of 
                                child poverty in the State for the 
                                calendar year that precedes such then 
                                most recently completed calendar year.
                            ``(ii) Applicable period.--In clause (i), 
                        the term `applicable period' means, with 
                        respect to a State and the calendar year 
                        referred to in clause (i)(I), the period that--
                                    ``(I) begins with the calendar year 
                                that, as of October 1, 2003, precedes 
                                the then most recently completed 
                                calendar year for which such 
                                information is available; and
                                    ``(II) ends with the calendar year 
                                that precedes the calendar year 
                                referred to in clause (i)(I).
                            ``(iii) Child poverty rate.--The term 
                        `child poverty rate' means, with respect to a 
                        State and a calendar year, the percentage of 
                        children residing in the State during the 
                        calendar year whose family income for the 
                        calendar year is less than the poverty line 
                        then applicable to the family.
                            ``(iv) Average depth of child poverty.--The 
                        term `average depth of child poverty' means 
                        with respect to a State and a calendar year, 
                        the average dollar amount by which family 
                        income is exceeded by the poverty line, among 
                        children in the State whose family income for 
                        the calendar year is less than the applicable 
                        poverty line.
                            ``(v) Poverty line.--The term `poverty 
                        line' has the meaning given the term in section 
                        673(2) of the Omnibus Budget Reconciliation Act 
                        of 1981, including any revision required by 
                        such section applicable to a family of the size 
                        involved.
                            ``(vi) Family income.--The term `family 
                        income' means cash income, child support 
                        payments, Federal, State, or local government 
                        cash payments, and benefits under the Food 
                        Stamp Act of 1977 that are received by any 
                        family member, and family income shall be 
                        determined after payment of all taxes and 
                        receipt of any tax refund or rebate by any 
                        family member.
                    ``(E) Secretary shall determine appropriate data 
                source for calculations.--
                            ``(i) In general.--The Secretary shall 
                        determine the most reliable data source to use 
                        for the estimates required under this 
                        paragraph.
                            ``(ii) Different sources permitted.--The 
                        Secretary may employ different data sources or 
                        estimation procedures for different States.
                            ``(iii) Regulations.--The Secretary shall 
                        issue regulations indicating the data and 
                        estimation procedures to be used in this 
                        paragraph.
                    ``(F) Secretary to develop additional experimental 
                criteria to be used for fiscal years 2007 and 2008.--
                            ``(i) In general.--The Secretary shall 
                        develop experimental child poverty reduction 
                        bonus criteria to be used in addition to the 
                        criteria specified in subparagraph (D)(i) to 
                        determine which States are qualified child 
                        poverty reduction States for fiscal year 2007 
                        or 2008. The Secretary--
                                    ``(I) shall develop such criteria 
                                so that States that show improvement in 
                                such criteria are eligible for a bonus 
                                under this subparagraph for fiscal year 
                                2007 or 2008; and
                                    ``(II) may develop such criteria so 
                                that States that meet 1 or more of the 
                                criteria, regardless of past 
                                performance, qualify for a bonus under 
                                this paragraph for such a fiscal year.
                            ``(ii) No requirement to satisfy criteria 
                        for preceding fiscal years.--A State does not 
                        have to satisfy the criteria specified in 
                        subparagraph (D)(i) in order to be a qualified 
                        child poverty reduction State for fiscal year 
                        2007 or 2008 so long as the State satisfies 1 
                        or more of the experimental criteria developed 
                        under this subparagraph for such a fiscal year.
                            ``(iii) Requirements.--
                                    ``(I) In general.--The Secretary 
                                shall design the experimental criteria 
                                to be used under this subparagraph to 
                                measure the extent to which efforts 
                                conducted with Federal funds provided 
                                under this part or with non-Federal 
                                funds counting toward the State's 
                                qualified State expenditures under 
                                section 409(a)(7) are reducing the 
                                extent and severity of poverty among 
                                families with children or increasing 
                                the ability of families with children 
                                whose income is less than the poverty 
                                line meet the basic needs of such 
                                families such as food and housing.
                                    ``(II) Consideration of specific 
                                criteria.--In designing such criteria 
                                the Secretary shall consider criteria 
                                with respect to a specific State that 
                                measure--
                                            ``(aa) the extent to which 
                                        child care subsidies are 
                                        available to families with 
                                        children whose income is below 
                                        the poverty line and the impact 
                                        of such subsidies on the 
                                        ability of such families to 
                                        meet other basic needs such as 
                                        food and housing;
                                            ``(bb) State efforts in 
                                        ensuring that other federally 
                                        funded programs designed to 
                                        assist low-income families are 
                                        accessible and available to 
                                        such families; and
                                            ``(cc) the effectiveness of 
                                        the State's child support 
                                        enforcement system and the 
                                        affect of such system on the 
                                        extent and depth of child 
                                        poverty in the State.
                                    ``(III) Consultation.--The 
                                Secretary shall develop such criteria 
                                in consultation with the Secretary of 
                                Housing and Urban Development, the 
                                Secretary of Agriculture, States, and 
                                researchers in the area of child well-
                                being and poverty.
                                    ``(IV) Reports.--The Secretary 
                                shall submit to Congress the following 
                                reports:
                                            ``(aa) Interim report.--Not 
                                        later than December 31, 2005, 
                                        an interim report on the 
                                        Secretary's progress in 
                                        developing the experimental 
                                        criteria required under this 
                                        subparagraph, including a 
                                        description of the criteria 
                                        under consideration and 
                                        research initiated to test and 
                                        develop such criteria.
                                            ``(bb) Proposed measure 
                                        report.--Not later than 
                                        December 31, 2006, a final 
                                        report that describes the 
                                        experimental criteria developed 
                                        under this subparagraph that 
                                        the Secretary proposes to use 
                                        to award the fiscal years 2007 
                                        and 2008 child poverty 
                                        reduction bonuses under this 
                                        subparagraph.
                                    ``(V) Regulations.--Not later than 
                                January 31, 2006, the Secretary shall 
                                promulgate regulations for public 
                                comment on the experimental criteria 
                                proposed to be used to award the fiscal 
                                years 2007 and 2008 child poverty 
                                reduction bonuses under this 
                                subparagraph.
                    ``(G) Appropriations.--
                            ``(i) In general.--Out of any money in the 
                        Treasury of the United States not otherwise 
                        appropriated, there are appropriated for grants 
                        under this paragraph--
                                    ``(I) for fiscal year 2004, 
                                $25,000,000;
                                    ``(II) for each of fiscal years 
                                2005 and 2006, $50,000,000;
                                    ``(III) for fiscal year 2007, 
                                $75,000,000; and
                                    ``(IV) for fiscal year 2008, 
                                $100,000,000.
                            ``(ii) Development of experimental 
                        criteria.--Out of any money in the Treasury of 
                        the United States not otherwise appropriated, 
                        there are appropriated for the purpose of 
                        developing the experimental criteria required 
                        under subparagraph (F), $5,000,000 for each of 
                        fiscal years 2004 and 2005.
                            ``(iii) Allocation of funds for fiscal 
                        years 2007 and 2008.--With respect to each of 
                        fiscal years 2007 and 2008, not less than 
                        $25,000,000 of the amount appropriated under 
                        subclauses (III) and (IV) of clause (i) for 
                        each such fiscal year shall be used to award 
                        bonuses under this paragraph on the basis of 
                        the experimental criteria developed under 
                        subparagraph (F).
                            ``(iv) Availability.--Amounts made 
                        available under clause (i) shall remain 
                        available until expended.''.
    (b) Inclusion of Measurable Milestones in Corrective Action Plan.--
Section 413(i)(3) (42 U.S.C. 613(i)(3)) is amended in the second 
sentence by inserting ``and identify the measurable milestones for 
assessing the effectiveness of the plan'' before the period.

SEC. 104. REAUTHORIZATION OF OTHER GRANTS.

    (a) Reauthorization of Bonus To Reward High Performance States.--
Section 403(a)(4) (42 U.S.C. 603(a)(4)) is amended--
            (1) in subparagraph (E)(i), by striking ``1999'' and all 
        that follows through ``2003'' and inserting ``2004, 2005, 2006, 
        2007, 2008, and 2009''; and
            (2) in subparagraph (F) by striking ``1999 through 2003'' 
        and inserting ``2004 through 2009''.
    (b) Reauthorization of Grants for Indian Tribes.--Paragraphs (1)(A) 
and (2)(A) of section 412(a) (42 U.S.C. 612(a)) are each amended by 
striking ``1997'' and all that follows through ``2002'' and inserting 
``2004 through 2008''.
    (c) Continuation of Penalties for Failure of Any State To Maintain 
Certain Level of Historic Effort.--Section 409(a)(7) (42 U.S.C. 
608(a)(7)) is amended--
            (1) in subparagraph (A), by striking ``1998'' and all that 
        follows through ``2003'' and inserting ``2004, 2005, 2006, 
        2007, or 2008''; and
            (2) in subparagraph (B)(ii), by striking ``1997 through 
        2002'' and inserting ``2004 through 2008''.

SEC 105. RESTORATION OF FUNDING FOR THE SOCIAL SERVICES BLOCK GRANT.

    (a) Restoration of Funds for the Social Services Block Grant.--
Section 2003(c) (42 U.S.C. 1379b(c)) is amended--
            (1) in paragraph (10), by striking ``and'';
            (2) in paragraph (11), by striking ``and each fiscal year 
        thereafter.'' and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(12) $2,800,000,000 for fiscal year 2004 and each fiscal 
        year thereafter.''.
    (b) Restoration of Authority To Transfer Up to 10 Percent of TANF 
Funds.--Section 404(d)(2) (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.''.
    (c) Requirement To Submit Annual Report on State Activities.--
Section 2006(c) (42 U.S.C. 1397e(c)) is amended by adding at the end 
the following new sentence: ``Beginning with the reports prepared and 
transmitted by a State under subsection (a) for fiscal year 2004, the 
Secretary shall compile the information contained in the reports 
transmitted by the States under that subsection and shall submit the 
compilation to Congress on an annual basis.''.

SEC. 106. REPEAL OF FEDERAL LOANS FOR STATE WELFARE PROGRAMS.

    (a) In General.--Section 406 (42 U.S.C. 606) is repealed.
    (b) Application to Outstanding Loans.--With respect to any loan 
made under section 406 of the Social Security Act (42 U.S.C. 606) prior 
to the effective date of the repeal of that section under subsection 
(a), notwithstanding such repeal, the terms and conditions for such 
loan shall continue until the date on which the loan would, in the 
absence of such repeal, mature.

SEC. 107. GAO REPORTS ON TANF FUNDING AND EXPENDITURES.

    (a) Reports.--The Comptroller General of the United States shall 
submit to the Chairman and Ranking Member of the Committee on Ways and 
Means of the House of Representatives and to the Chairman and Ranking 
Member of the Committee on Finance of the Senate a report on the 
matters described in subsection (b) on each of the dates described in 
subsection (c).
    (b) Matters Described.--The matters described in this subsection 
are the following:
            (1) The amount of expenditures per State from funds 
        received under a grant made under section 403 of the Social 
        Security Act (42 U.S.C. 603).
            (2) The activities funded by the States with such funds.
            (3) The State-by-State variation on the matters described 
        in paragraphs (1) and (2).
            (4) The Federal resources available to each State for 
        funding welfare-to-work activities, including through funds 
        made available under a grant made under section 403 of the 
        Social Security Act (42 U.S.C. 603), funds considered to be 
        qualified State expenditures under section 409(a)(7) of such 
        Act (42 U.S.C. 609(a)(7)), funds made available to the State 
        under the Child Care and Development Block Grant Act of 1990 
        (42 U.S.C. 9858 et seq.), and funds made available to the State 
        under the Social Services Block Grant established under title 
        XX of the Social Security Act (42 U.S.C. 1397 et seq.).
            (5) A comparison of the Federal resources available to the 
        State to measure the effectiveness of the State's temporary 
        assistance to needy families program, such as the bonus to 
        reward high performance States established under section 
        403(a)(4) of the Social Security Act (42 U.S.C. 603(a)(4)), the 
        child poverty reduction bonus established under section 
        403(a)(6) of such Act (as amended by section 103), and studies 
        conducted by the State or other entities regarding the economic 
        self-sufficiency and well-being of individuals who have ceased 
        to receive assistance under the State temporary assistance to 
        needy families program (commonly referred to as ``leaver 
        studies'').
    (c) Dates Described.--The dates described in this subsection are 
the following:
            (1) March 30, 2005.
            (2) March 30, 2007.

                       TITLE II--SUPPORTING WORK

SEC. 201. MAKING WORK PAY.

    (a) Replacement of Caseload Reduction Credit With Employment 
Credit.--
            (1) Employment credit to reward states in which families 
        leave welfare for work; additional credit for families with 
        higher earnings.--
                    (A) In general.--Section 407(a) (42 U.S.C. 607(a)) 
                is amended by adding at the end the following:
            ``(3) Employment credit.--
                    ``(A) In general.--The minimum participation rate 
                otherwise applicable to a State under this subsection 
                for a fiscal year shall be reduced by the number of 
                percentage points in the employment credit for the 
                State for the fiscal year, as determined by the 
                Secretary--
                            ``(i) using information in the National 
                        Directory of New Hires, or
                            ``(ii) with respect to a recipient of 
                        assistance under the State program funded under 
                        this part who is placed with an employer whose 
                        hiring information is not reported to the 
                        National Directory of New Hires, using 
                        quarterly wage information submitted by the 
                        State to the Secretary not later than such date 
                        as the Secretary shall prescribe in 
                        regulations.
                    ``(B) Calculation of credit.--
                            ``(i) In general.--The employment credit 
                        for a State for a fiscal year is an amount 
                        equal to--
                                    ``(I) twice the average quarterly 
                                number of families that ceased to 
                                receive cash payments under the State 
                                program funded under this part during 
                                the preceding fiscal year and that were 
                                employed during the calendar quarter 
                                immediately succeeding the quarter in 
                                which the payments ceased, plus, at 
                                State option, twice the number of 
                                families that received a non-recurring 
                                short-term benefit under the State 
                                program funded under this part during 
                                the preceding fiscal year and that were 
                                employed in during the calendar quarter 
                                immediately succeeding the quarter in 
                                which the non-recurring short-term 
                                benefit was so received; divided by
                                    ``(II) the average monthly number 
                                of families that include an adult who 
                                received cash payments under the State 
                                program funded under this part during 
                                the preceding fiscal year, plus, if the 
                                State elected the option under 
                                subclause (I), twice the number of 
                                families that received a non-recurring 
                                short-term benefit under the State 
                                program funded under this part during 
                                the preceding fiscal year.
                            ``(ii) Special rule for former recipients 
                        with higher earnings.--In calculating the 
                        employment credit for a State for a fiscal 
                        year, a family that, during the preceding 
                        fiscal year, earned at least 33 percent of the 
                        average wage in the State (determined on the 
                        basis of State unemployment data) shall be 
                        considered to be 1.5 families.
                    ``(C) Publication of amount of credit.--Not later 
                than August 30 of each fiscal year, the Secretary shall 
                cause to be published in the Federal Register the 
                amount of the employment credit that will be used in 
                determining the minimum participation rate applicable 
                to a State under this subsection for the immediately 
                succeeding fiscal year.''.
                    (B) Authority of secretary to use information in 
                national directory of new hires.--Section 453(i) (42 
                U.S.C. 653(i)) is amended by adding at the end the 
                following:
            ``(5) Calculation of employment credit for purposes of 
        determining state work participation rates under tanf.--The 
        Secretary may use the information in the National Directory of 
        New Hires for purposes of calculating State employment credits 
        pursuant to section 407(a)(2).''.
            (2) Elimination of caseload reduction credit.--Section 
        407(b) (42 U.S.C. 607(b)) is amended by striking paragraph (3) 
        and redesignating paragraphs (4) and (5) as paragraphs (3) and 
        (4), respectively.
    (b) States To Receive Partial Credit Toward Work Participation Rate 
for Recipients Engaged in Part-Time Work.--Section 407(c)(1) (42 U.S.C. 
607(c)(1)) (as amended by section 301(a)(3)(A)) is amended by adding at 
the end the following: ``For purposes of subsection (b)(1)(B)(i), a 
family that does not include a recipient who is participating in work 
activities for an average of 30 hours per week during a month but 
includes a recipient who is participating in such activities during the 
month for an average of at least 50 percent of the minimum average 
number of hours per week specified for the month in the table set forth 
in this subparagraph shall be counted as a percentage of a family that 
includes an adult or minor child head of household who is engaged in 
work for the month, which percentage shall be the number of hours for 
which the recipient participated in such activities during the month 
divided by the number of hours of such participation required of the 
recipient under this section for the month.''.
    (c) TANF Recipients Who Qualify for Supplemental Security Income 
Benefits Removed From Work Participation Rate Calculation for Entire 
Year.--Section 407(b)(1)(B)(ii) (42 U.S.C. 607(b)(1)(B)(ii)) is 
amended--
            (1) in subclause (I), by inserting ``who has not become 
        eligible for supplemental security income benefits under title 
        XVI during the fiscal year'' before the semicolon; and
            (2) in subclause (II), by inserting ``, and that do not 
        include an adult or minor child head of household who has 
        become eligible for supplemental security income benefits under 
        title XVI during the fiscal year'' before the period.
    (d) State Option To Include Recipients of Substantial Child Care or 
Transportation Assistance in Work Participation Rate.--
            (1) In general.--Section 407(a)(1) (42 U.S.C. 607(a)(1)) is 
        amended by inserting ``(including, at the option of the State, 
        a family that includes an adult who is receiving substantial 
        child care or transportation assistance, as defined by the 
        Secretary, in consultation with directors of State programs 
        funded under this part, which definition shall specify for each 
        type of assistance a threshold which is a dollar value or a 
        length of time over which the assistance is received, and take 
        account of large one-time transition payments, except any 
        family taken into account under paragraph (2)(B)(i)(I))'' 
        before the colon.
            (2) Data collection and reporting.--Section 411(a)(1)(A) 
        (42 U.S.C. 611(a)(1)(A)) is amended in the matter preceding 
        clause (i) by inserting ``(including any family with respect to 
        whom the State has exercised its option under section 
        407(a)(1))'' after ``assistance''.
    (e) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this Act shall take effect on October 1, 
        2004.
            (2) State option to phase-in replacement of caseload 
        reduction credit with employment credit and delay applicability 
        of other provisions.--A State may elect to have the amendments 
        made by subsections (a)(2) and (b), (c), and (d) not apply to 
        the State program funded under part A of title IV of the Social 
        Security Act until October 1, 2005, and if the State makes the 
        election, then, in determining the participation rate of the 
        State for purposes of sections 407 and 409(a)(3) of the Social 
        Security Act for fiscal year 2005, the State shall be credited 
        with \1/2\ of the reduction in the rate that would otherwise 
        result from applying section 407(a)(2) of the Social Security 
        Act (as added by subsection (a)(1), and as so redesignated by 
        section 301(a)(1)(B)) to the State for fiscal year 2005 and \1/
        2\ of the reduction in the rate that would otherwise result 
        from applying section 407(b)(3) of the Social Security Act to 
        the State for fiscal year 2005.

SEC. 202. INCREASE IN GUARANTEED FUNDING FOR CHILD CARE.

    Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(G) $3,717,000,000 for each of fiscal years 2004 
                through 2006;
                    ``(H) $3,967,000,000 for each of fiscal years 2007 
                through 2008.''.

SEC. 203. PARENTS AS SCHOLARS PROGRAM.

    (a) State Option To Establish Parents as Scholars Program.--Section 
404 (42 U.S.C. 604) is amended by adding at the end the following new 
subsection:
    ``(l) Authority To Establish a Parents as Scholars Program.--
            ``(1)
                    ``(A) In general.--A State to which a grant is made 
                under section 403 may use the grant to establish a 
                parents as scholars program under which an eligible 
                participant may be provided support services described 
                in paragraph (4) based on the participant's need in 
                order to complete the program, and the State may 
                elect--
                            ``(i) in accordance with section 
                        407(c)(2)(E), to include the participant in the 
                        determination of the monthly work participation 
                        rates under paragraph (1)(B)(i) of section 
                        407(b); and
                            ``(ii) in accordance with section 
                        408(a)(7)(H), to credit the participant for any 
                        month in which the participant is engaged in 
                        the program for purposes of determining the 
                        number of months for which an adult has 
                        received assistance under a State or tribal 
                        program funded under this part.
                    ``(B) Limitation on number of eligible 
                participants.--The number of eligible participants that 
                may participate in a parents as scholars program 
                established under this subsection may not exceed the 
                amount equal to 5 percent of the total number of 
                recipients of assistance under the State program funded 
                under this part.
            ``(2) Definition of eligible participant.--
                    ``(A) In general.--In this subsection, the term 
                `eligible participant' means an individual who receives 
                assistance under the State program funded under this 
                part and satisfies the following requirements:
                            ``(i) The individual is enrolled as a full-
                        time student in a postsecondary 2- or 4-year 
                        degree program.
                            ``(ii) The individual does not have a 
                        marketable bachelor's degree.
                            ``(iii) The individual does not have the 
                        skills necessary to earn at least 85 percent of 
                        the median wage for the State or locality in 
                        which the individual resides.
                            ``(iv) The individual is--
                                    ``(I) pursuing a degree that will 
                                improve the individual's ability to 
                                support the individual's family, 
                                considering the local labor market and 
                                employment opportunities; and
                                    ``(II) demonstrating an ability to 
                                succeed in the educational program that 
                                has been chosen.
                            ``(v) The individual participates in a 
                        combination of education, training, study or 
                        worksite experience for an average of not less 
                        than 20 hours per week (including time spent 
                        studying at 150 percent of time spent in 
                        class).
                            ``(vi) After the first 24 months of 
                        participation in the program, the individual--
                                    ``(I) works not less than 15 hours 
                                per week (in addition to school and 
                                study time); or
                                    ``(II) engages in a combination of 
                                class hours, study hours (including 
                                time spent studying at 150 percent of 
                                time spent in class) and work for a 
                                total of not less than 40 hours per 
                                week.
                            ``(vii) During the period the individual 
                        participates in the program, the individual--
                                    ``(I) maintains not less than a 2.0 
                                grade point average;
                                    ``(II) attends classes as 
                                scheduled;
                                    ``(III) reports to the individual's 
                                caseworker for the program any changes 
                                that might affect the individual's 
                                participation;
                                    ``(IV) provides the individual's 
                                caseworker with a copy of any financial 
                                aid award letters; and
                                    ``(V) provides the individual's 
                                caseworker with the individual's 
                                semester grades as requested.
                    ``(B) Definition of full-time student.--
                            ``(i) In general.--In subparagraph (A)(i), 
                        the term `full-time student' means an 
                        individual is taking courses having the number 
                        of hours needed under the requirements of the 
                        educational institution in which the individual 
                        is enrolled, to complete the requirements of a 
                        degree within the usual timeframe of 2 or 4 
                        years, as applicable.
                            ``(ii) Exception.--The State may, for good 
                        cause, modify the number of hours required 
                        under clause (i) to allow additional time, not 
                        to exceed 150 percent of the usual timeframe 
                        required for completion of a 2- or 4-year 
                        degree, for an individual to complete a degree 
                        and be considered a full-time student under the 
                        program established under this subsection.
            ``(3) Modification of eligible participant requirements.--A 
        State may, for good cause, modify the requirements for an 
        eligible participant set forth in paragraph (2)(A).
            ``(4) Support services described.--For purposes of 
        paragraph (1), the support services described in this paragraph 
        include any or all of the following during the period the 
        eligible participant is in the program established under this 
        subsection:
                    ``(A) Child care for children under age 13, or 
                children who are physically or mentally incapable of 
                caring for themselves.
                    ``(B) Transportation services including--
                            ``(i) mileage at a set rate per mile or 
                        reimbursement for public or private 
                        transportation;
                            ``(ii) payment for automotive repairs, not 
                        to exceed $500 per year on a vehicle registered 
                        to the eligible participant; and
                            ``(iii) reimbursement for vehicle liability 
                        insurance, not to exceed $300, for the eligible 
                        participant's vehicle.
                    ``(C) Payment for books and supplies to the extent 
                that such items are not covered by grants and loans, 
                not to exceed $750 per academic year.
                    ``(D) Such other expenses, not to exceed $500, that 
                the State determines are necessary for the eligible 
                participant to complete the program established under 
                this subsection and that are not covered by any other 
                available support services program.''.
    (b) State Option To Include Parents as Scholars Participants in 
Determination of Work Participation Requirements.--Section 407(c)(2) 
(42 U.S.C. 607(c)(2)) is amended by adding at the end the following new 
subparagraph:
                    ``(E) State option to include parents as scholars 
                participants as engaged in work.--In the case of a 
                State that elects to establish a parents as scholars 
                program under section 404(l), the State may consider 
                individuals participating in that program as being 
                engaged in work for the month for purposes of 
                determining monthly participation rates under 
                subsection (b)(1)(B)(i).''.
    (c) Inclusion in Definition of Work Activity.--Section 407 of the 
Social Security Act (42 U.S.C. 607) is amended--
            (1) in subparagraphs (A) and (B) of subsection (c)(1), by 
        striking ``or (12)'' each place it appears and inserting 
        ``(12), or (13)''; and
            (2) in subsection (d)--
                    (A) in paragraph (11), by striking ``and'' at the 
                end;
                    (B) in paragraph (12), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(13) postsecondary education, but only in the case of an 
        individual participating in a parents as scholars program that 
        meets the requirements of section 404(l).''.

SEC. 204. ELIMINATION OF RECIPIENTS COMPLETING SECONDARY SCHOOL FROM 
              LIMIT ON NUMBER OF TANF RECIPIENTS PARTICIPATING IN 
              VOCATIONAL EDUCATIONAL TRAINING.

    (a) In General.--Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is 
amended by striking ``, or (if the month is in fiscal year 2000 or 
thereafter) deemed to be engaged in work for the month by reason of 
subparagraph (C) of this paragraph'' and inserting ``(determined 
without regard to any individual described in subparagraph (C)''.
    (b) Conforming Amendments.--
            (1) Section 407(c)(2)(C)(ii) (42 U.S.C. 607(c)(2)(C)(ii) is 
        amended by inserting ``including vocational educational 
        training'' after ``employment''.
            (2) Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is 
        amended in the heading, by striking ``educational activities'' 
        and inserting ``vocational educational activities''.

SEC. 205. VOCATIONAL TRAINING AND OTHER PREEMPLOYMENT ACTIVITIES.

    (a) Counting of Up to 24 Months of Vocational Training as Work 
Activity.--Section 407(d)(8) (42 U.S.C. 607(d)(8)) is amended by 
striking ``12'' and inserting ``24''.
    (b) Participation in English-as-a-Second-Language Program Allowable 
as a Preemployment Activity.--Section 407 (42 U.S.C. 607), as amended 
by section 203(c) and section 301(a), is amended--
            (1) in subsection (c)(1), by striking ``or (13)'' and 
        inserting ``(13), or (14)''; and
            (2) in subsection (d)--
                    (A) by striking ``and'' at the end of paragraph 
                (12);
                    (B) by striking the period at the end of paragraph 
                (13) and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(14) participation in an English-as-a-second-language 
        program.''.

SEC. 206. STATE OPTION TO CREDIT MONTHS ENGAGED IN WORK OR PARENTS AS 
              SCHOLARS PROGRAM FOR PURPOSES OF 5-YEAR ASSISTANCE LIMIT.

    Section 408(a)(7) (42 U.S.C. 608(a)(7)) is amended by adding at the 
end the following new subparagraph:
                    ``(H) State option to credit months engaged in work 
                or parents as scholars program.--In determining the 
                number of months for which an adult has received 
                assistance under a State or tribal program funded under 
                this part, the State or tribe may disregard any month 
                during which the adult is--
                            ``(i) engaged in a work activity defined in 
                        paragraph (1), (2), (3), (4), or (7) of section 
                        407(d) in accordance with the requirements of 
                        section 407(c); or
                            ``(ii) a participant in the parents as 
                        scholars program established under section 
                        404(l).''.

SEC. 207. INNOVATIVE BUSINESS LINK PARTNERSHIP FOR EMPLOYERS AND 
              NONPROFIT ORGANIZATIONS.

    Section 403(a) (42 U.S.C. 603(a)), as amended by section 103, is 
amended by adding at the end the following:
            ``(7) Innovative business link partnership grants.--
                    ``(A) In general.--The Secretary and the Secretary 
                of Labor (in this paragraph referred to as the 
                ``Secretaries'') jointly shall award grants in 
                accordance with this paragraph for projects proposed by 
                eligible applicants based on the following:
                            ``(i) The potential effectiveness of the 
                        proposed project in carrying out the activities 
                        described in subparagraph (E).
                            ``(ii) Evidence of the ability of the 
                        eligible applicant to leverage private, State, 
                        and local resources.
                            ``(iii) Evidence of the ability of the 
                        eligible applicant to coordinate with other 
                        organizations at the State and local level.
                    ``(B) Definition of eligible applicant.--
                            ``(i) In general.--In this paragraph, the 
                        term `eligible applicant' means a nonprofit 
                        organization, a local workforce investment 
                        board established under section 117 of the 
                        Workforce Investment Act of 1998 (29 U.S.C. 
                        2832), a State, a political subdivision of a 
                        State, or an Indian tribe.
                            ``(ii) Grants to promote business 
                        linkages.--
                                    ``(I) Additional eligible 
                                applicant.--Only for purposes of grants 
                                to carry out the activities described 
                                in subparagraph (E)(i), the term 
                                `eligible applicant' includes an 
                                employer.
                                    ``(II) Additional requirement.--In 
                                order to qualify as an eligible 
                                applicant for purposes of subparagraph 
                                (E)(i), the applicant must provide 
                                evidence that the application has been 
                                developed by and will be implemented by 
                                a local or regional consortium that 
                                includes, at minimum, employers or 
                                employer associations, and education 
                                and training providers, in consultation 
                                with local labor organizations and 
                                social service providers that work with 
                                low-income families or individuals with 
                                disabilities.
                    ``(C) Requirements.--
                            ``(i) In general.--In awarding grants under 
                        this paragraph, the Secretaries shall--
                                    ``(I) consider the needs of rural 
                                areas and cities with large 
                                concentrations of residents with an 
                                income that is less than 150 percent of 
                                the poverty line; and
                                    ``(II) ensure that--
                                            ``(aa) all of the funds 
                                        made available under this 
                                        paragraph (other than funds 
                                        reserved for use by the 
                                        Secretaries under subparagraph 
                                        (J)) shall be used for 
                                        activities described in 
                                        subparagraph (E);
                                            ``(bb) not less than 40 
                                        percent of the funds made 
                                        available under this paragraph 
                                        (other than funds so reserved) 
                                        shall be used for activities 
                                        described in subparagraph 
                                        (E)(i); and
                                            ``(cc) not less than 40 
                                        percent of the funds made 
                                        available under this paragraph 
                                        (other than funds so reserved) 
                                        shall be used  for the 
activities described in subparagraph (E)(ii).
                            ``(ii) Continuation of availability.--If 
                        any portion of the funds required to be used 
                        for activities referred to in item (bb) or (cc) 
                        of clause (i)(II) are not awarded in a fiscal 
                        year, such portion shall continue to be 
                        available in the subsequent fiscal year for the 
                        same activity, in addition to other amounts 
                        that may be available for such activities for 
                        that subsequent fiscal year.
                    ``(D) Determination of grant amount.--
                            ``(i) In general.--Subject to clause (ii), 
                        in determining the amount of a grant to be 
                        awarded under this paragraph for a project 
                        proposed by an eligible applicant, the 
                        Secretaries shall provide the eligible 
                        applicant with an amount sufficient to ensure 
                        that the project has a reasonable opportunity 
                        to be successful, taking into account--
                                    ``(I) the number and 
                                characteristics of the individuals to 
                                be served by the project;
                                    ``(II) the level of unemployment in 
                                the area to be served by the project;
                                    ``(III) the job opportunities and 
                                job growth in such area;
                                    ``(IV) the poverty rate for such 
                                area; and
                                    ``(V) such other factors as the 
                                Secretary deems appropriate in such 
                                area.
                            ``(ii) Maximum award for grants to promote 
                        business linkages or provide transitional jobs 
                        programs.--
                                    ``(I) In general.--In the case of a 
                                grant to carry out activities described 
                                in clause (i) or (ii) of subparagraph 
                                (E), an eligible applicant awarded a 
                                grant under this paragraph may not 
                                receive more than $10,000,000 per 
                                fiscal year under the grant.
                                    ``(II) Rule of construction.--
                                Nothing in subclause (I) shall be 
                                construed as precluding an otherwise 
                                eligible applicant from receiving 
                                separate grants to carry out activities 
                                described in clause (i) or (ii) of 
                                subparagraph (E).
                            ``(iii) Grant period.--The period in which 
                        a grant awarded under this paragraph may be 
                        used shall be specified for a period of not 
                        less than 36 months and not more than 60 
                        months.
                    ``(E) Allowable activities.--An eligible applicant 
                awarded a grant under this paragraph shall use funds 
                provided under the grant to do the following:
                            ``(i) Promote business linkages.--
                                    ``(I) In general.--To promote 
                                business linkages in which funds shall 
                                be used to fund new or expanded 
                                programs that are designed to--
                                            ``(aa) substantially 
                                        increase the wages of eligible 
                                        individuals (as defined in 
                                        subparagraph (F)), whether 
                                        employed or unemployed, who 
                                        have limited English 
                                        proficiency or other barriers 
                                        to employment by creating or 
                                        upgrading job and related 
                                        skills in partnership with 
                                        employers, especially by 
                                        providing supports and services 
                                        at or near work sites; and
                                            ``(bb) identify and 
                                        strengthen career pathways by 
                                        expanding and linking work and 
                                        training opportunities for such 
                                        individuals in collaboration 
                                        with employers.
                                    ``(II) Consideration of in-kind, 
                                in-cash resources.--In determining 
                                which programs to fund under this 
                                clause, an eligible applicant awarded a 
                                grant under this paragraph shall 
                                consider the ability of a consortium to 
                                provide funds in-kind or in-cash 
                                (including employer-provided, paid 
                                release time) to help support the 
                                programs for which funding is sought.
                                    ``(III) Priority.--In determining 
                                which programs to fund under this 
                                clause, an eligible applicant awarded a 
                                grant under this paragraph shall give 
                                priority to programs that include 
                                education or training for which 
                                participants receive credit toward a 
                                recognized credential, such as an 
                                occupational certificate or license.
                                    ``(IV) Use of funds.--
                                            ``(aa) In general.--Funds 
                                        provided to a program under 
                                        this clause may be used for a 
                                        comprehensive set of employment 
                                        and training benefits and 
                                        services, including job 
                                        development, job matching, 
                                        workplace supports and 
                                        accommodations, curricula 
                                        development, wage subsidies, 
                                        retention services, and such 
                                        other benefits or services as 
                                        the program deems necessary to 
                                        achieve  the overall objectives 
of this clause.
                                            ``(bb) Provision of 
                                        services.--So long as a program 
                                        is principally designed to 
                                        assist eligible individuals (as 
                                        defined in subparagraph (F)), 
                                        funds may be provided to a 
                                        program under this clause that 
                                        also serves low-earning 
                                        employees of 1 or more 
                                        employers even if such 
                                        individuals are not within the 
                                        definition of eligible 
                                        individual (as so defined).
                            ``(ii) Provide for transitional jobs 
                        programs.--
                                    ``(I) In general.--To provide for 
                                wage-paying transitional jobs programs 
                                which combine time-limited employment 
                                in the public or nonprofit private 
                                sector that is subsidized with public 
                                funds with skill development and 
                                activities to remove barriers to 
                                employment, pursuant to an 
                                individualized plan (or, in the case of 
                                an eligible individual described in 
                                subparagraph (F)(i), an individual 
                                responsibility plan developed for an 
                                individual under section 408(b)). Such 
                                programs also shall provide job 
                                development and placement assistance to 
                                individual participants to help them 
                                move from subsidized employment in 
                                transitional jobs into unsubsidized 
                                employment, as well as retention 
                                services after the transition to 
                                unsubsidized employment.
                                    ``(II) Eligible participants.--The 
                                Secretary shall ensure that individuals 
                                who participate in transitional jobs 
                                programs funded under a grant made 
                                under this paragraph shall be 
                                individuals who have been unemployed 
                                because of limited skills, experience, 
                                or other barriers to employment, and 
                                who are eligible individuals (as 
                                defined in subparagraph (F)), provided 
                                that so long as a program is designed 
                                to, and principally serves, eligible 
                                individuals (as so defined), a limited 
                                number of individuals who are 
                                unemployed because of limited skills, 
                                experience, or other barriers to 
                                employment, and who have an income 
                                below 100 percent of the Federal 
                                poverty line but who do not satisfy the 
                                definition of eligible individual (as 
                                so defined) may be served in the 
                                program to the extent the Secretaries 
                                determine that the inclusion of such 
                                individuals in the program is 
                                appropriate.
                                    ``(III) Use of funds.--Funds 
                                provided to a program under this clause 
                                may only be used in accordance with the 
                                following:
                                            ``(aa) To create subsidized 
                                        transitional jobs in which work 
                                        shall be performed directly for 
                                        the program operator or at 
                                        other public and nonprofit 
                                        organizations (in this 
                                        subclause referred to as 
                                        `worksite employers') in the 
                                        community, and in which 100 
                                        percent of the wages shall be 
                                        subsidized, except as described 
                                        in item (gg) regarding 
                                        placements in the private, for 
                                        profit sector.
                                            ``(bb) Participants shall 
                                        be paid at the rate paid to 
                                        unsubsidized employees of the 
                                        worksite employer who perform 
                                        comparable work at the worksite 
                                        where the individual is placed. 
                                        If no other employees perform 
                                        the same or comparable work 
                                        then wages shall be set, at a 
                                        minimum, at 50 percent of the 
                                        Lower Living Standard Income 
                                        Level (commonly referred to as 
                                        the `LLSIL'), as determined 
                                        under section 101(24) of the 
                                        Workforce Investment Act of 
                                        1998 (29 U.S.C. 2801(24)), for 
                                        a family of 3 based on 35 hours 
                                        per week.
                                            ``(cc) Transitional jobs 
                                        shall be limited to not less 
                                        than 6 months and not more than 
                                        24 months, however, nothing 
                                        shall preclude a participant 
                                        from moving into unsubsidized 
                                        employment at a point prior to 
                                        the maximum duration of the 
                                        transitional job placement. 
                                        Participants shall be paid 
                                        wages based on a workweek of 
                                        not less than 30 hours per week 
                                        or more than 40 hours per week, 
                                        except that a parent of a child 
                                        under the age of 6, a child who 
                                        is disabled, or a child with 
                                        other special needs, or an 
                                        individual who for other 
                                        reasons cannot successfully 
                                        participate for 30 to 40 hours 
                                        per week, may be allowed to 
                                        participate for more limited 
                                        hours, but not less than 20 
                                        hours per week. In any work 
                                        week, 50 percent to 80 percent 
                                        of hours shall be spent in the 
                                        transitional job and 20 percent 
                                        to 50 percent of hours shall be 
                                        spent in education or training, 
                                        or other services designed to 
                                        reduce or eliminate any 
                                        barriers.
                                            ``(dd) Program operators 
                                        shall provide case management 
                                        services and ensure access to 
                                        appropriate education, 
                                        training, and other services, 
                                        including job accommodation, 
                                        work supports, and supported 
                                        employment, as appropriate and 
                                        consistent with an individual 
                                        plan that is based on the 
                                        individual's strengths, 
                                        resources, priorities, 
                                        concerns, abilities, 
                                        capabilities, career interests, 
                                        and informed choice and that is 
                                        developed with each 
                                        participant. The goal of each 
                                        participant's plan shall focus 
                                        on preparation for unsubsidized 
                                        jobs in demand in the local 
                                        economy which offer the 
                                        potential for advancement and 
                                        growth. Services shall also 
                                        include job placement 
                                        assistance and retention 
                                        services, which may include 
                                        coaching and work place 
                                        supports, for 12 months after 
                                        entry into unsubsidized 
                                        placement. Participants shall 
                                        also receive support services 
                                        such as subsidized child care 
                                        and transportation, on the same 
                                        basis as those services are 
                                        made available to recipients of 
                                        assistance under the State 
                                        program funded under this part 
                                        who are engaged in work-related 
                                        activities.
                                            ``(ee) Providers shall work 
                                        with individual recipients to 
                                        determine eligibility for other 
                                        employment-related supports 
                                        which may include (but are not 
                                        limited to) supported 
                                        employment, other vocational 
                                        rehabilitation services, and 
                                        programs or services available 
                                        under the Workforce Investment 
                                        Act of 1998 (29 U.S.C. 2801 et 
                                        seq.), or the ticket to work 
                                        and self-sufficiency program 
                                        established under section 1148, 
                                        and, to the extent possible, 
                                        shall provide transitional 
                                        employment in collaboration 
                                        with entities providing, or 
                                        arranging for the provision of, 
                                        such other supports.
                                            ``(ff) Not more than 20 
                                        percent of the placements for a 
                                        grantee shall be with a private 
                                        for-profit company, except that 
                                        such 20 percent limit may be 
                                        waived by the Secretary for 
                                        programs in rural areas when 
                                        the grantee can demonstrate 
                                        insufficient public and non-
                                        profit worksites. When a 
                                        placement is made at a private 
                                        for-profit company, the company 
                                        shall pay 50 percent of program 
                                        costs (including wages) for 
                                        each participant, and the 
                                        company shall agree, in 
                                        writing, to hire each 
                                        participant into an 
                                        unsubsidized position at the 
                                        completion of the agreed upon 
                                        subsidized placement, or 
                                        sooner, provided that the 
                                        participant's job performance 
                                        has been satisfactory. Not more 
                                        than 5 percent of the workforce 
                                        of a private for-profit company 
                                        may be composed of transitional 
                                        jobs participants.
                                    ``(IV) Definition of transitional 
                                jobs program.--In this clause, the term 
                                `transitional jobs program' means a 
                                program that is intended to serve 
                                current and former recipients of 
                                assistance under a State or tribal 
                                program funded under this part and 
                                other low-income individuals who have 
                                been unable to secure employment 
                                through job search or other employment-
                                related services because of limited 
                                skills, experience, or other barriers 
                                to employment.
                            ``(iii) Capitalization.--To develop 
                        capitalization procedures for the delivery of 
                        self-sustainable social services.
                            ``(iv) Administrative expenditures.--Not 
                        more than 5 percent of the funds awarded to an 
                        eligible applicant under this paragraph may be 
                        used for administrative expenditures incurred 
                        in carrying out the activities described in 
                        clause (i), (ii), or (iii) or for expenditures 
                        related to carrying out the assessments and 
                        reports required under subparagraph (H).
                    ``(F) Definition of eligible individual.--In this 
                paragraph, the term `eligible individual' means--
                            ``(i) an individual who is a parent who is 
                        a recipient of assistance under a State or 
                        tribal program funded under this part;
                            ``(ii) an individual who is a parent who 
                        has ceased to receive assistance under such a 
                        State or tribal program;
                            ``(iii) an individual who is at risk of 
                        receiving assistance under a State or tribal 
                        program funded under this part;
                            ``(iv) an individual with a disability; or
                            ``(v) a noncustodial parent who is 
                        unemployed, or is having difficulty in paying 
                        child support obligations, including such a 
                        parent who is a former criminal offender.
                    ``(G) Application.--Each eligible applicant 
                desiring a grant under this paragraph shall submit an 
                application to the Secretaries at such time, in such 
                manner, and accompanied by such information as the 
                Secretaries may require.
                    ``(H) Assessments and reports by grantees.--
                            ``(i) In general.--An eligible applicant 
                        that receives a grant under this paragraph 
                        shall assess and report on the outcomes of 
                        programs funded under the grant, including the 
                        identity of each program operator, demographic 
                        information about each participant, including 
                        education level, literacy level, prior work 
                        experience and identified barriers to 
                        employment, the nature of education, training, 
                        or other services received by the participant, 
                        the reason for the participant's leaving the 
                        program, and outcomes related to the placement 
                        of the participant in an unsubsidized job, 
                        including 1-year employment retention, wage at 
                        placement, benefits, and earnings progression, 
                        as specified by the Secretaries.
                            ``(ii) Assistance.--The Secretaries shall--
                                    ``(I) assist grantees in conducting 
                                the assessment required under clause 
                                (i) by making available where 
                                practicable low-cost means of tracking 
                                the labor market outcomes of 
                                participants; and
                                    ``(II) encourage States to provide 
                                such assistance.
                    ``(I) Application to requirements of the state 
                program.--
                            ``(i) Work participation requirements.--
                        With respect to any month in which a recipient 
                        of assistance under a State or tribal program 
                        funded under this part who satisfactorily 
                        participates in a business linkage or 
                        transitional jobs program described in 
                        subparagraph (E) that is paid for with funds 
                        made available under a grant made under this 
                        paragraph, such participation shall be 
                        considered to satisfy the work participation 
                        requirements of section 407 and be included for 
                        purposes of determining monthly participation 
                        rates under subsection (b)(1)(B)(i) of that 
                        section.
                            ``(ii) Participation not considered 
                        assistance.--A benefit or service provided with 
                        funds made available under  a grant made under 
this paragraph shall not be considered assistance for any purpose under 
a State or tribal program funded under this part.
                    ``(J) Assessments by the secretaries.--
                            ``(i) Reservation of funds.--Of the amount 
                        appropriated under subparagraph (L) for each of 
                        fiscal years 2004 and 2005, $3,000,000 of such 
                        amount for each such fiscal year is reserved 
                        for use by the Secretaries to prepare an 
                        interim and final report summarizing and 
                        synthesizing outcomes and lessons learned from 
                        the programs funded through grants awarded 
                        under this paragraph.
                            ``(ii) Interim and final assessments.--With 
                        respect to the reports prepared under clause 
                        (i), the Secretaries shall submit--
                                    ``(I) the interim report not later 
                                than 4 years after the date of 
                                enactment of the Personal 
                                Responsibility and Work Opportunity 
                                Reconciliation Act Amendments of 2003; 
                                and
                                    ``(II) the final report not later 
                                than 6 years after such date of 
                                enactment.
                    ``(K) Evaluations.--
                            ``(i) Reservation of funds.--Of the amount 
                        appropriated under subparagraph (L) for a 
                        fiscal year, an amount equal to 1.5 percent of 
                        such amount for each such fiscal year shall be 
                        reserved for use by the Secretaries to conduct 
                        evaluations in accordance with the requirements 
                        of clause (ii).
                            ``(ii) Requirements.--The Secretaries--
                                    ``(I) shall develop a plan to 
                                evaluate the extent to which programs 
                                funded under grants made under this 
                                paragraph have been effective in 
                                promoting sustained, unsubsidized 
                                employment for each group of eligible 
                                participants, and in improving the 
                                skills and wages of participants in 
                                comparison to the participants' skills 
                                and wages prior to participation in the 
                                programs;
                                    ``(II) may evaluate the use of such 
                                a grant by a grantee, as the 
                                Secretaries deem appropriate, in 
                                accordance with an agreement entered 
                                into with the grantee after good-faith 
                                negotiations; and
                                    ``(III) shall include, as 
                                appropriate, the following outcome 
                                measures in the evaluation plan 
                                developed under subclause (I):
                                            ``(aa) Placements in 
                                        unsubsidized employment.
                                            ``(bb) Retention in 
                                        unsubsidized employment 6 
                                        months and 12 months after 
                                        initial placement.
                                            ``(cc) Earnings of 
                                        individuals at the time of 
                                        placement in unsubsidized 
                                        employment.
                                            ``(dd) Earnings of 
                                        individuals 12 months after 
                                        placement in unsubsidized 
                                        employment.
                                            ``(ee) The extent to which 
                                        unsubsidized job placements 
                                        include access to affordable 
                                        employer-sponsored health 
                                        insurance and paid leave 
                                        benefits.
                                            ``(ff) Comparison of pre- 
                                        and post-program wage rates of 
                                        participants.
                                            ``(gg) Comparison of pre- 
                                        and post-program skill levels 
                                        of participants.
                                            ``(hh) Wage growth and 
                                        employment retention in 
                                        relation to occupations and 
                                        industries at initial placement 
                                        in unsubsidized employment and 
                                        over the first 12 months after 
                                        initial placement.
                                            ``(ii) Recipient of cash 
                                        assistance under the State 
                                        program funded under this part.
                                            ``(jj) Average expenditures 
                                        per participant.
                            ``(iii) Reports to congress.--The 
                        Secretaries shall submit to Congress the 
                        following reports on the evaluations of 
                        programs funded under grants made under this 
                        paragraph:
                                    ``(I) Interim report.--An interim 
                                report not later than 4 years after the 
                                date of enactment of the Personal 
                                Responsibility and Work Opportunity 
                                Reconciliation Act Amendments of 2003.
                                    ``(II) Final report.--A final 
                                report not later than 6 years after 
                                such date of enactment.
                    ``(L) Appropriation.--
                            ``(i) In general.--Out of any money in the 
                        Treasury of the United States not otherwise 
                        appropriated, there is appropriated for grants 
                        under this section, $200,000,000 for each of 
                        fiscal years 2004 through 2008.
                            ``(ii) Availability.--Amounts appropriated 
                        under clause (i) for a fiscal year shall remain 
                        available for obligation for 5 fiscal years 
                        after the fiscal year in which the amount is 
                        appropriated.''.

                     TITLE III--SUPPORTING FAMILIES

SEC. 301. ELIMINATION OF SEPARATE WORK PARTICIPATION RATE FOR 2-PARENT 
              FAMILIES.

    (a) In General.--Section 407 (42 U.S.C. 607) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``All families'' 
                and inserting ``In general''; and
                    (B) by striking paragraph (2) and redesignating 
                paragraph (3) (as added by section 201(a)(1)) as 
                paragraph (2);
            (2) in subsection (b)--
                    (A) by striking paragraph (2);
                    (B) in paragraph (3) (as redesignated by section 
                201(a)(2)), by striking ``paragraphs (1)(B) and 
                (2)(B)'' and inserting ``paragraph (1)(B)'';
                    (C) in paragraph (4) (as so redesignated), by 
                striking ``rates'' and inserting ``rate''; and
                    (D) by redesignating such paragraphs (3) and (4) as 
                paragraphs (2) and (3), respectively; and
            (3) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``General rules.--'' and 
                        all that follows through ``For purposes'' in 
                        subparagraph (A) and inserting ``General 
                        rule.--For purposes''; and
                            (ii) by striking subparagraph (B); and
                    (B) in paragraph (2)(D)--
                            (i) by striking ``paragraphs (1)(B)(i) and 
                        (2)(B) of subsection (b)'' and inserting 
                        ``subsection (b)(1)(B)(i)''; and
                            (ii) by striking ``and in 2-parent 
                        families, respectively,''.
    (b) Conforming Amendment Removing Disincentive To Assist 2-Parent 
Families.--Section 409(a)(3)(A) (42 U.S.C. 609(a)(3)(A)) is amended by 
inserting ``(determined, in the case of a fiscal year prior to fiscal 
year 2004, without regard to the minimum participation rate required 
for that fiscal year under section 407(a)(2) (as in effect with respect 
to such fiscal year)'' after ``section 407(a) for the fiscal year''.

SEC. 302. BAN ON IMPOSITION OF STRICTER ELIGIBILITY CRITERIA FOR 2-
              PARENT FAMILIES.

    (a) Prohibition.--Section 408(a) (42 U.S.C. 608(a)) is amended by 
adding at the end the following:
            ``(12) Ban on imposition of stricter eligibility criteria 
        for 2-parent families.--In determining the eligibility of a 2-
        parent family for any benefit or service funded under this part 
        or funded with non-Federal funds counting toward the State's 
        qualified State expenditures under section 409(a)(7), the State 
        shall not impose a requirement that does not apply in 
        determining the eligibility of a 1-parent family for such 
        assistance.''.
    (b) Penalty.--Section 409(a) (42 U.S.C. 609(a)) is amended by 
adding at the end the following:
            ``(15) Penalty for imposition of stricter eligibility 
        criteria for 2-parent families.--
                    ``(A) In general.--If the Secretary determines that 
                a State to which a grant is made under section 403 for 
                a fiscal year has violated section 408(a)(12) during 
                the fiscal year, the Secretary shall reduce the grant 
                payable to the State under section 403(a)(1) for the 
                immediately succeeding fiscal year by an amount up to 5 
                percent of the State family assistance grant.
                    ``(B) Penalty based on severity of failure.--The 
                Secretary shall impose reductions under subparagraph 
                (A) with respect to a fiscal year based on the degree 
                of noncompliance.''.
    (c) Assurance of Equal Treatment.--Section 402(a) (42 U.S.C. 
602(a)) is amended by adding at the end the following:
            ``(8) Assurance of equal treatment of 2-parent families.--
        Not later than 180 days after the completion of the examination 
        required under section 302(b)(1) of the Personal Responsibility 
        and Work Opportunity Reconciliation Act Amendments of 2003, the 
        chief executive officer of the State shall submit to the 
        Secretary an assurance that in conducting the State program 
        funded under this part, the State does not have rules or 
        procedures that discriminate against 2-parent families.''.

SEC. 303. FAMILY FORMATION FUND.

    Section 403(a)(2) (42 U.S.C. 603(a)(2)) is amended to read as 
follows:
            ``(2) Family formation fund.--
                    ``(A) In general.--The Secretary shall provide 
                grants to States and localities for research, technical 
                assistance, replication, and adaptation of rigorously 
                evaluated programs, and to conduct demonstration 
                projects which are evaluated by independent entities in 
                accordance with evaluation criteria established by the 
                Secretary, in the following areas:
                            ``(i) Encouraging the formation and 
                        maintenance of 2-parent families and healthy 
                        marriages and reducing nonmarital births.
                            ``(ii) Reducing first and subsequent 
                        teenage pregnancies.
                            ``(iii) Increasing the ability of 
                        noncustodial parents to financially support and 
                        be involved with their children.
                    ``(B) Allocation of funds.--
                            ``(i) In general.--In making grants under 
                        this paragraph, the Secretary shall ensure that 
                        not less than 30 percent of the funds made 
                        available pursuant to this paragraph for a 
                        fiscal year are used in each of the areas 
                        described in a clause of subparagraph (A).
                            ``(ii) Reservation.--The Secretary may 
                        reserve up to 5 percent of the funds made 
                        available pursuant to this paragraph for a 
                        fiscal year to provide technical assistance and 
                        to conduct research through the Office of the 
                        Secretary.
                    ``(C) Grantee requirements.--A recipient of a grant 
                under this paragraph shall--
                            ``(i) consult with domestic violence 
                        experts and child advocates to ensure that 
                        programs funded under grants made under this 
                        paragraph do not result in an increase in 
                        family violence; and
                            ``(ii) offer marriage-related services only 
                        to individuals who voluntarily elect to receive 
                        such services.
                    ``(D) Grants criteria.--
                            ``(i) In general.--The Secretary shall 
                        promulgate for public comment criteria for 
                        selecting proposals for grants under this 
                        paragraph. Such criteria shall include, at a 
                        minimum, that the Secretary shall select 
                        proposals that satisfy the requirements of 
                        subparagraph (C) and identify the potential 
                        harm a demonstration project might have on 
                        subject families such as loss of income.
                            ``(ii) Priority for certain proposals.--
                        Within the allocation made available to carry 
                        out subparagraph (A)(ii), the Secretary shall 
                        give priority to proposals that seek to 
                        replicate or adapt teen pregnancy prevention 
                        programs that have been rigorously evaluated 
                        and shown to be successful.
                    ``(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each of fiscal 
                years 2004 through 2008 $100,000,000 for grants under 
                this paragraph.''.

SEC. 304. ENSURING CHILD WELL-BEING.

    (a) State Child Well-Being Assessment as Part of Individual 
Responsibility Plan.--Section 408(b)(2)(A) (42 U.S.C. 608(b)(2)(A)) is 
amended--
            (1) by redesignating clauses (iv) and (v) as clauses (v) 
        and (vi), respectively;
            (2) by inserting after clause (iii), the following:
                            ``(iv) sets forth a child well-being plan 
                        for each child in the family as part of the 
                        individual's responsibility as well as work, 
                        and offers, at a minimum, information 
                        concerning programs designed to promote each 
                        child's well-being, including health benefits 
                        coverage under titles XIX and XXI, benefits 
                        under the food stamp program and other 
                        nutrition programs, child care, child support 
                        enforcement, and other assistance or benefits 
that may be available for the child;''; and
            (3) in clause (v) (as redesignated by paragraph (1))--
                    (A) by striking ``and describe'' and inserting 
                ``describes''; and
                    (B) by inserting ``, and provides information 
                concerning ways to access services identified as 
                important to the well-being of each child in the 
                family'' before the semicolon.
    (b) Promulgation of Best Practice Standards.--Not later than 
December 31, 2004, the Secretary of Health and Human Services shall 
promulgate best practice standards regarding the most appropriate 
procedures for imposing sanctions against a family receiving assistance 
under the temporary assistance to needy families program funded under 
part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) 
for the family's (or any family member's) failure to comply with a 
requirement imposed under that program.
    (c) Requirement To Develop Plan; Technical Amendments.--
            (1) Development of plan.--Each State conducting a State 
        program funded under part A of title IV of the Social Security 
        Act (42 U.S.C. 601 et seq.) shall develop a child well-being 
        assessment for use in completing the child well-being plans 
        required under section 408(b)(2)(A)(iv) of the Social Security 
        Act (42 U.S.C. 608(b)(2)(A)(vi)) (as added by subsection (a)).
            (2) Technical amendments.--Section 408(b)(2) (42 U.S.C. 
        608(b)(2)) is amended--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i)--
                            (i) by striking ``subsection (a)'' and 
                        inserting ``paragraph (1)''; and
                            (ii) by striking ``may develop'' and 
                        inserting ``shall develop''; and
                    (B) in subparagraph (B), in the matter preceding 
                clause (i), by striking ``paragraph (1)'' and inserting 
                ``subparagraph (A)''.
    (d) Deadline for Implementation.--A State shall not be regarded as 
failing to comply with the requirement of section 408(b)(2)(A)(iv) of 
the Social Security Act (42 U.S.C. 608(b)(2)(A)(iv)) (as added by 
subsection (a)) before the date that is 1 year after the effective date 
of this Act with respect to the State, as determined under section 701.

SEC. 305. FUNDING FOR FAMILIES ASSISTED BY A TERRITORY PROGRAM.

    (a) Increase in Mandatory Ceiling Amount.--Section 1108(c)(4) (42 
U.S.C. 1308(c)(4)) is amended--
            (1) in subparagraph (A), by striking ``$107,255,000'' and 
        inserting ``$109,936,375'';
            (2) in subparagraph (B), by striking ``$4,686,000'' and 
        inserting ``$4,803,150'';
            (3) in subparagraph (C), by striking ``$3,554,000'' and 
        inserting ``$3,642,850''; and
            (4) in subparagraph (D), by striking ``$1,000,000'' and 
        inserting ``$1,250,000''.
    (b) Appropriation.--Section 1108(b)(2) (42 U.S.C. 1308(b)(2)) is 
amended by striking ``fiscal years 1997 through 2002'' and inserting 
``each of fiscal years 2004 through 2008''.

                      TITLE IV--STATE FLEXIBILITY

SEC. 401. PATHWAY TO SELF-SUFFICIENCY GRANTS TO IMPROVE COORDINATION OF 
              ASSISTANCE FOR LOW-INCOME FAMILIES.

    (a) Definitions.--In this section:
            (1) Eligible applicant.--The term ``eligible applicant'' 
        means a State or local government agency or a nonprofit entity.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (3) State.--The term ``State'' means each of the 50 States 
        of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, American Samoa, Guam, and the 
        United States Virgin Islands.
            (4) Support program for low-income families.--The term 
        ``support program for low-income families'' means a program 
        designed to provide low-income families and noncustodial 
        parents who need help with obtaining employment and fulfilling 
        child support obligations to children receiving assistance 
        under the temporary assistance to needy families program 
        established under part A of title IV of the Social Security Act 
        (42 U.S.C. 601 et seq.) with assistance or benefits to enable 
        the family or noncustodial parent to become self-sufficient and 
        includes--
                    (A) the temporary assistance to needy families 
                program established under part A of title IV of the 
                Social Security Act (42 U.S.C. 601 et seq.);
                    (B) the food stamp program established under the 
                Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
                    (C) the medicaid program funded under title XIX of 
                the Social Security Act (42 U.S.C. 1396 et seq.);
                    (D) the State children's health insurance program 
                (SCHIP) funded under title XXI of the Social Security 
                Act (42 U.S.C. 1397aa et seq.);
                    (E) the child care program funded under the Child 
                Care Development Block Grant Act of 1990 (42 U.S.C. 
                9858 et seq.);
                    (F) the child support program funded under part D 
                of title IV of the Social Security Act (42 U.S.C. 651 
                et seq.);
                    (G) the earned income tax credit under section 32 
                of the Internal Revenue Code of 1986;
                    (H) the low-income home energy assistance program 
                (LIHEAP) established under the Low-Income Home Energy 
                Assistance Act of 1981 (42 U.S.C. 8621 et seq.);
                    (I) the special supplemental nutrition program for 
                women, infants, and children (WIC) established under 
                section 17 of the Child Nutrition Act of 1966 (42 
                U.S.C. 1786);
                    (J) programs under the Workforce Investment Act of 
                1998 (29 U.S.C. 2801 et seq.);
                    (K) programs supporting low-income housing 
                assistance programs; and
                    (L) any other Federal, State, or locally funded 
                program designed to provide family and work support to 
                low-income families.
    (b) Authority To Award Grants.--
            (1) In general.--The Secretary may award grants to eligible 
        applicants to--
                    (A) improve the coordination of support programs 
                for low-income families and noncustodial parents 
                described in subsection (a)(4); and
                    (B) conduct outreach to such families and 
                noncustodial parents to promote enrollment in such 
                programs.
            (2) Preference.--In awarding grants under this section, the 
        Secretary shall give preference to eligible applicants that 
        include in the application submitted under subsection (c) 
        documentation demonstrating that the eligible applicant will 
        collaborate with other Federal, State, or local agencies or 
        nonprofit entities in carrying out activities under the grant.
    (c) Application.--Each eligible applicant desiring a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and accompanied by such information as the Secretary 
may require.
    (d) Annual Reports.--
            (1) In general.--The Secretary shall submit an interim and 
        final report to Congress describing the uses of grant funds 
        awarded under this section.
            (2) Dates for submission.--With respect to the reports 
        required under paragraph (1), the Secretary shall submit--
                    (A) the interim report, not later than December 31, 
                2006; and
                    (B) the final report, not later than December 31, 
                2009.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $150,000,000 for the period of 
fiscal years 2004 through 2008.

SEC. 402. STATE OPTION TO OFFER WAGE SUBSIDIES.

    (a) Clarification of Authority To Use Grant Funds.--Section 404 (42 
U.S.C. 604), as amended by section 203, is further amended by adding at 
the end the following:
    ``(m) Authority To Provide Wage Subsidies.--A State to which a 
grant is made under section 403 may use the grant to provide wage 
subsidies or other benefits or services to a family that includes an 
individual who has--
            ``(1) participated in a work activity described in 
        paragraph (1), (2), (3), (4), or (5) of section 407(d) for at 
        least 30 hours per week;
            ``(2) received at least such amount of income from the work 
        activity as the State may establish; and
            ``(3) complied with all work requirements applicable to the 
        individual under the State program funded under this part.''.
    (b) Effect of Wage Subsidies on 5-Year Limit.--Section 408(a)(7) 
(42 U.S.C. 608(a)(7)), as amended by section 206, is amended by adding 
at the end the following:
                    ``(I) Limitation on meaning of `assistance' for 
                families with income from employment.--For purposes of 
                this paragraph, at State option, a wage subsidy or 
                other benefit or service provided to a family under 
                section 404(m) during a month under the State program 
                funded under this part shall not be considered 
                assistance under the State program.''.

SEC. 403. EXCLUSION OF VICTIMS OF DOMESTIC VIOLENCE FROM 20 PERCENT 
              LIMITATION ON HARDSHIP EXCEPTION.

    Section 408(a)(7)(C) (42 U.S.C. 608(a)(7)(C)) is amended--
            (1) in clause (i), by striking ``by reason of'' and all 
        that follows through the period and inserting ``by reason of--
                                    ``(I) hardship; or
                                    ``(II) if the family includes an 
                                individual who has been battered or 
                                subjected to extreme cruelty.'';
            (2) in clause (ii), by striking ``clause (i)'' and 
        inserting ``clause (i)(I)''; and
            (3) in clause (iii), by striking ``clause (i)'' and 
        inserting ``clause (i)(II)''.

SEC. 404. CLARIFICATION OF AUTHORITY OF STATES TO USE TANF FUNDS 
              CARRIED OVER FROM PRIOR YEARS TO PROVIDE TANF BENEFITS 
              AND SERVICES.

    Section 404(e) (42 U.S.C. 604(e)) is amended--
            (1) in the subsection heading, by striking ``Assistance'' 
        and inserting ``Benefits or Services''; and
            (2) by striking ``assistance'' and inserting ``any benefit 
        or service that may be provided''.

SEC. 405. CONTINUATION OF PREWELFARE REFORM WAIVERS.

    Section 415 (42 U.S.C. 615) is amended by adding at the end the 
following new subsection:
    ``(e) Continuation of Waivers Approved Before Date of Enactment of 
Welfare Reform.--Notwithstanding paragraphs (1)(A) and (2)(A) of 
subsection (a), with respect to any State that is operating under a 
waiver described in that subsection which would otherwise expire on a 
date that occurs during the period that begins on September 30, 2002, 
and ends on September 30, 2008, the State may elect to continue to 
operate under that waiver, on the same terms and conditions as applied 
to the waiver on the day before such date, through September 30, 
2008.''.

SEC. 406. STATE OPTION TO ALIGN FOSTER CARE AND ADOPTION ASSISTANCE 
              ELIGIBILITY WITH TANF ELIGIBILITY.

    (a) Foster Care.--Section 472 (42 U.S.C. 672) is amended by adding 
at the end the following:
    ``(i)(1) Notwithstanding any other provision of this part, subject 
to paragraph (2), for purposes of determining whether a child is 
eligible for foster care maintenance payments under this part, a child 
shall be treated as a child who would have received aid under the State 
plan approved under section 402 (as in effect on July 16, 1996, or at 
State option, as in effect on December 31, 2002) only if the child 
meets the income and resource standards and methodologies for 
determining eligibility in effect under such plan (as so in effect).
    ``(2) For purposes of applying this subsection, a State may 
increase the income and resource standards and methodologies referred 
to in paragraph (1) up to the level of the income and resource 
standards and methodologies under the State plan under part A (as in 
effect as of the date of determining such eligibility).''.
    (b) Adoption Assistance.--Section 473 (42 U.S.C. 673) is amended by 
adding at the end the following:
    ``(d)(1) Notwithstanding any other provision of this part, subject 
to paragraph (2), for purposes of determining whether a child is 
eligible for adoption assistance under this part, a child shall be 
treated as a child who would have received aid under the State plan 
approved under section 402 (as in effect on July 16, 1996, or at State 
option, as in effect on December 31, 2002) only if the child meets the 
income and resource standards and methodologies for determining 
eligibility in effect under such plan (as so in effect).
    ``(2) For purposes of applying this subsection, a State may 
increase the income and resource standards and methodologies referred 
to in paragraph (1) up to the level of the income and resource 
standards and methodologies under the State plan under part A (as in 
effect as of the date of determining such eligibility).''.

SEC. 407. PROMOTING WORK AND RESPONSIBILITY AMONG ALL FAMILIES WITH 
              CHILDREN.

    (a) Eligibility for TANF for Legal Immigrants.--
            (1) Exception to 5-year bar.--Section 403(c)(2) of the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996 (8 U.S.C. 1613(c)(2)) is amended by adding at the end 
        the following:
                    ``(L) Assistance or benefits under a State program 
                funded under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.).''.
            (2) Conforming amendments.--
                    (A) Section 402(b) of the Personal Responsibility 
                and Work Opportunity Reconciliation Act of 1996 (8 
                U.S.C. 1612(b)) is amended--
                            (i) in paragraph (2)--
                                    (I) in subparagraph (A)(i), by 
                                striking ``(3)(C)'' and inserting 
                                ``(3)(B)'';
                                    (II) in subparagraph (A)(ii), by 
                                striking ``subparagraph (C)'' and 
                                inserting ``subparagraph (B)''; and
                                    (III) in subparagraph (E), by 
                                striking ``Medicaid exception'' and all 
                                that follows through ``program), 
                                section'' and inserting ``Exception for 
                                certain indians.--Section''; and
                            (ii) in paragraph (3), by striking 
                        subparagraph (A) and redesignating 
                        subparagraphs (B) and (C) as subparagraphs (A) 
                        and (B), respectively.
                    (B) Section 408(e) (42 U.S.C. 608(e)) is amended to 
                read as follows:
    ``(e) Application to Qualified Aliens.--Except as provided in 
subsection (f), a qualified alien (as defined in subsections (b) and 
(c) of section 431 of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (8 U.S.C. 1641) shall be eligible for any 
benefit or service under the State program funded under this part or 
with qualified State expenditures (as defined in section 
409(a)(7)(B)(i)) in the same manner as a citizen is eligible for such 
benefit or service under such program.''.
    (b) Federal Attribution of Sponsor's Income and Resources to 
Aliens.--
            (1) In general.--Section 408(f) (42 U.S.C. 608(f)) is 
        amended--
                    (A) in the heading, by striking ``Non-213A'' and 
                inserting ``Sponsored'';
                    (B) by striking the first sentence and inserting 
                ``The following rules shall apply in determining 
                whether an alien sponsored under section 213A of the 
                Immigration and Nationality Act (and, at the option of 
                the State, a non-213A alien) is eligible for cash 
                assistance under the State program funded under this 
                part, or in determining the amount of such assistance 
                to be provided to a sponsored alien.'';
                    (C) in paragraph (1)--
                            (i) in the first sentence, by striking 
                        ``non-213A'' and inserting ``sponsored'';
                            (ii) in subparagraph (B), by inserting 
                        ``(or, a greater amount as determined by the 
                        State)'' before the period; and
                            (iii) in subparagraph (C), by striking 
                        ``non-213a'' and inserting ``sponsored'';
                    (D) by striking paragraph (5) and inserting the 
                following:
            ``(5) Exceptions.--This subsection shall not apply to an 
        alien who is--
                    ``(A) a minor child if the sponsor of the alien or 
                any spouse of the sponsor is a parent of the alien; or
                    ``(B) described in subsection (e) or (f) of section 
                421 of the Personal Responsibility and Work Opportunity 
                Reconciliation Act of 1996 (8 U.S.C. 1631).''; and
                    (E) by adding at the end the following:
            ``(7) Inapplicability to family members who are not 
        sponsored aliens.--Income and resources of a sponsor which are 
        deemed under this subsection to be the income and resources of 
        any alien individual in a family shall not be considered in 
        determining the need of other family members except to the 
        extent such income or resources are actually available to such 
        other family members.
            ``(8) Rule of construction.--For purposes of section 421 of 
        the Personal Responsibility and Work Opportunity Reconciliation 
        Act of 1996 (8 U.S.C. 1631), the State program funded under 
        this part is not a Federal means-tested public benefits 
        program.''.
            (2) Conforming amendments.--Section 423(d) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1183a note) is amended by adding at the end the 
        following:
            ``(12) Assistance or benefits under part A of title IV of 
        the Social Security Act except for cash assistance provided to 
        a sponsored alien who is subject to deeming pursuant to section 
        408(f) of that Act.''.
    (c) State Authority To Provide State and Local Public Benefits for 
Certain Aliens.--Section 411(d) of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (8 U.S.C. 1621(d)) is amended--
            (1) in the heading, by inserting ``and Other'' before 
        ``Aliens''; and
            (2) by inserting ``or who otherwise is not a qualified 
        alien (as defined in section 431(b))'' after ``United States''.

SEC. 408. AUTHORITY TO TRANSFER TANF FUNDS TO CARRY OUT AN ACCESS TO 
              JOBS PROJECT OR A REVERSE COMMUTE PROJECT.

    Section 404(d)(1) (42 U.S.C. 604(d)(1)) is amended by adding at the 
end the following:
                    ``(C) An access to jobs project or a reverse 
                commute project under a grant made under section 3037 
                of the Transportation Equity Act for the 21st Century 
                (49 U.S.C. 5309 note).''.

                       TITLE V--HEALTHY CHILDREN

SEC. 501. REVISION AND SIMPLIFICATION OF THE TRANSITIONAL MEDICAL 
              ASSISTANCE PROGRAM (TMA).

    (a) Option of Continuous Eligibility for 12 Months; Option of 
Continuing Coverage for Up to an Additional Year.--
            (1) Option of continuous eligibility for 12 months by 
        making reporting requirements optional.--Section 1925(b) (42 
        U.S.C. 1396r-6(b)) is amended--
                    (A) in paragraph (1), by inserting ``, at the 
                option of a State,'' after ``and which'';
                    (B) in paragraph (2)(A), by inserting ``Subject to 
                subparagraph (C):'' after ``(A) Notices.--'';
                    (C) in paragraph (2)(B), by inserting ``Subject to 
                subparagraph (C):'' after ``(B) Reporting 
                requirements.--'';
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(C) State option to waive notice and reporting 
                requirements.--A State may waive some or all of the 
                reporting requirements under clauses (i) and (ii) of 
                subparagraph (B). Insofar as it waives such a reporting 
                requirement, the State need not provide for a notice 
                under subparagraph (A) relating to such requirement.''; 
                and
                    (E) in paragraph (3)(A)(iii), by inserting ``the 
                State has not waived under paragraph (2)(C) the 
                reporting requirement with respect to such month under 
                paragraph (2)(B) and if'' after ``6-month period if''.
            (2) State option to extend eligibility for low-income 
        individuals for up to 12 additional months.--Section 1925 (42 
        U.S.C. 1396r-6) is further amended--
                    (A) by redesignating subsections (c) through (f) as 
                subsections (d) through (g), respectively; and
                    (B) by inserting after subsection (b) the following 
                new subsection:
    ``(c) State Option of Up to 12 Months of Additional Eligibility.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, each State plan approved under this title may 
        provide, at the option of the State, that the State shall offer 
        to each family which received assistance during the entire 6-
        month period under subsection (b) and which meets the 
        applicable requirement of paragraph (2), in the last month of 
        the period the option of extending coverage under this 
        subsection for the succeeding period not to exceed 12 months.
            ``(2) Income restriction.--The option under paragraph (1) 
        shall not be made available to a family for a succeeding period 
        unless the State determines that the family's average gross 
        monthly earnings (less such costs for such child care as is 
        necessary for the employment of the caretaker relative) as of 
        the end of the 6-month period under subsection (b) does not 
        exceed 185 percent of the official poverty line (as defined by 
        the Office of Management and Budget, and revised annually in 
        accordance with section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981) applicable to a family of the size 
        involved.
            ``(3) Application of extension rules.--The provisions of 
        paragraphs (2), (3), (4), and (5) of subsection (b) shall apply 
        to the extension provided under this subsection in the same 
        manner as they apply to the extension provided under subsection 
        (b)(1), except that for purposes of this subsection--
                    ``(A) any reference to a 6-month period under 
                subsection (b)(1) is deemed a reference to the 
                extension period provided under paragraph (1) and any 
                deadlines for any notices or reporting and the premium 
                payment periods shall be modified to correspond to the 
                appropriate calendar quarters of coverage provided 
                under this subsection; and
                    ``(B) any reference to a provision of subsection 
                (a) or (b) is deemed a reference to the corresponding 
                provision of subsection (b) or of this subsection, 
                respectively.''.
    (b) State Option To Waive Receipt of Medicaid for 3 of Previous 6 
Months To Qualify for TMA.--Section 1925(a)(1) (42 U.S.C. 1396r-
6(a)(1)) is amended by adding at the end the following: ``A State may, 
at its option, also apply the previous sentence in the case of a family 
that was receiving such aid for fewer than 3 months, or that had 
applied for and was eligible for such aid for fewer than 3 months, 
during the 6 immediately preceding months described in such 
sentence.''.
    (c) 5-Year Extension of Sunset for TMA.--
            (1) In general.--Subsection (g) of section 1925 (42 U.S.C. 
        1396r-6), as redesignated under subsection (a)(2)(A), is 
        further redesignated as subsection (i) and is amended by 
        striking ``2002'' and inserting ``2008''.
            (2) Conforming amendment.--Section 1902(e)(1)(B) (42 U.S.C. 
        1396a(e)(1)(B)) is amended by striking ``2002'' and inserting 
        ``2008''.
    (d) CMS Report on Enrollment and Participation Rates Under TMA.--
Section 1925 (42 U.S.C. 1396r-6), as amended by subsections (a)(2)(A) 
and (c)(1), is amended by inserting after subsection (f) the following:
    ``(g) Additional Provisions.--
            ``(1) Collection and reporting of participation 
        information.--Each State shall--
                    ``(A) collect and submit to the Secretary, in a 
                format specified by the Secretary, information on 
                average monthly enrollment and average monthly 
                participation rates for adults and children under this 
                section; and
                    ``(B) make such information publicly available.
        Such information shall be submitted under subparagraph (A) at 
        the same time and frequency in which other enrollment 
        information under this title is submitted to the Secretary. 
        Using such information, the Secretary shall submit to Congress 
        annual reports concerning such rates.''.
    (e) Coordination of Work.--Section 1925(g) (42 U.S.C. 1396r-6(g)), 
as added by subsection (d), is amended by adding at the end the 
following new paragraph:
            ``(2) Coordination with administration for children and 
        families.--The Administrator of the Centers for Medicare & 
        Medicaid Services, in carrying out this section, shall work 
        with the Assistant Secretary for the Administration for 
        Children and Families to develop guidance or other technical 
        assistance for States regarding best practices in guaranteeing 
        access to transitional medical assistance under this 
        section.''.
    (f) Elimination of TMA Requirement for States That Extend Coverage 
to Children and Parents Through 185 Percent of Poverty.--
            (1) In general.--Section 1925 (42 U.S.C. 1396r-6), as 
        amended by subsections (a)(2)(A), (c)(1), and (d), is further 
        amended by adding at the end the following:
    ``(h) Provisions Optional for States That Extend Coverage to 
Children and Parents Through 185 Percent of Poverty.--A State may meet 
(but is not required to meet) the requirements of subsections (a) and 
(b) if it provides for medical assistance under section 1931 to 
families (including both children and caretaker relatives) the average 
gross monthly earning of which (less such costs for such child care as 
is necessary for the employment of a caretaker relative) is at or below 
a level that is at least 185 percent of the official poverty line (as 
defined by the Office of Management and Budget, and revised annually in 
accordance with section 673(2) of the Omnibus Budget Reconciliation Act 
of 1981) applicable to a family of the size involved.''.
            (2) Conforming amendments.--Section 1925 (42 U.S.C. 1396r-
        6) is further amended, in subsections (a)(1) and (b)(1), by 
        inserting ``, but subject to subsection (h),'' after 
        ``Notwithstanding any other provision of this title,'' each 
        place it appears.
    (g) Extending Use of Outstationed Workers To Accept Applications 
for Transitional Medical Assistance.--Section 1902(a)(55) (42 U.S.C. 
1396a(a)(55)) is amended by inserting ``and under section 1931'' after 
``(a)(10)(A)(ii)(IX)''.
    (h) Effective Dates.--
            (1) In general.--Except as provided in this subsection, the 
        amendments made by this section shall apply to calendar 
        quarters beginning on or after the date of enactment of this 
        Act, without regard to whether or not final regulations to 
        carry out such amendments have been promulgated by such date.
            (2) Delay permitted for state plan amendment.--In the case 
        of a State plan for medical assistance under title XIX 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 
        this section, the State plan shall not be regarded as failing 
        to comply with the requirements of such title solely on the 
        basis of its failure to meet these 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.

SEC. 502. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID 
              PROGRAM AND TITLE XXI.

    (a) Medicaid Program.--Section 1903(v) (42 U.S.C. 1396b(v)) is 
amended--
            (1) in paragraph (1), by striking ``paragraph (2)'' and 
        inserting ``paragraphs (2) and (4)''; and
            (2) by adding at the end the following:
    ``(4)(A) A State may elect (in a plan amendment under this title) 
to provide medical assistance under this title (including under a 
waiver authorized by the Secretary), notwithstanding sections 401(a), 
402(b), 403, and 421 of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, for aliens who are lawfully 
residing in the United States (including battered aliens described in 
section 431(c) of such Act) and who are otherwise eligible for such 
assistance, within any of the following eligibility categories:
            ``(i) Pregnant women.--Women during pregnancy (and during 
        the 60-day period beginning on the last day of the pregnancy).
            ``(ii) Children.--Children (as defined under such plan), 
        including optional targeted low-income children described in 
        section 1905(u)(2)(B).
    ``(B) Notwithstanding section 421 of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996, in the case of a State 
that has elected to provide medical assistance to a category of aliens 
under subparagraph (A), no debt shall accrue under an affidavit of 
support against any sponsor of such an alien on the basis of provision 
of assistance to such category and the cost of such assistance shall 
not be considered as an unreimbursed cost.''.
    (b) Title XXI.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 
amended by adding at the end the following:
                    ``(E) Section 1903(v)(4) (relating to optional 
                coverage of categories of lawful resident alien 
                pregnant women and children), but only with respect to 
                an eligibility category under this title, if the same 
                eligibility category has been elected under such 
                section for purposes of title XIX.''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2003, and apply to medical assistance and child 
health assistance furnished on or after such date, whether or not 
regulations implementing such amendments have been issued.

SEC. 503. SECOND CHANCE HOMES.

    (a) Authority To Award Grants.--
            (1) In general.--The Secretary of Health and Human Services 
        (referred to in this section as the ``Secretary'') is 
        authorized to award grants to eligible entities to enable such 
        eligible entities to carry out the activities described in 
        subsection (d).
            (2) Process.--The Secretary shall award grants under this 
        section on a competitive basis, after reviewing all 
        applications submitted under subsection (c).
    (b) Eligible Entities.--
            (1) In general.--To be eligible to receive a grant under 
        this section an entity shall be--
                    (A) a State;
                    (B) a unit of local government;
                    (C) an Indian tribe; or
                    (D) a public or private nonprofit agency, 
                organization, or institution, or other nonprofit 
                entity, including a nonprofit urban Indian organization 
                or an Indian group or community that is not an Indian 
                tribe.
            (2) Definitions.--In this section--
                    (A) Indian tribe.--The term ``Indian tribe'' has 
                the meaning given such term in section 4 of the Indian 
                Self-Determination and Education Assistance Act (25 
                U.S.C. 450b).
                    (B) State.--The term ``State'' means each of the 50 
                States, the District of Columbia, the Commonwealth of 
                Puerto Rico, Guam, American Samoa, the United States 
                Virgin Islands, and the Commonwealth of the Northern 
                Mariana Islands.
    (c) Application.--
            (1) In general.--An eligible entity that desires a grant 
        under this section shall submit an application to the Secretary 
        at such time, in such manner, and containing such information 
        as the Secretary shall reasonably require.
            (2) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to an eligible entity that 
        submits an application--
                    (A) proposing to establish a new second chance 
                home, especially in a rural area or tribal community;
                    (B) proposing to collaborate with a non-profit 
                entity in establishing, expanding, or enhancing a 
                second chance home; or
                    (C) demonstrating that the eligible entity will use 
                funds under a State temporary assistance for needy 
                families program under part A of title IV of the Social 
                Security Act (42 U.S.C. 601 et seq.) to support a 
                portion of the operating costs of the applicable second 
                chance home.
    (d) Use of Funds.--
            (1) In general.--An eligible entity that receives a grant 
        under this section shall use such grant funds to establish, 
        expand, or enhance a second chance home.
            (2) Second chance home.--In this section, the term ``second 
        chance home'' means a community-based, adult-supervised group 
        home that provides young mothers and their children with a 
        supportive and supervised living arrangement in which such 
        mothers are required to learn parenting skills, including child 
        development, family budgeting, health and nutrition, and other 
        skills to promote their long-term economic independence and the 
        well-being of their children.
            (3) Requirement.--A second chance home that receives grant 
        funds under this section shall provide services to mothers who 
        are not more than 23 years of age and their children.
    (e) Matching Funds.--The Secretary shall not award a grant to an 
eligible entity under this section unless the eligible entity agrees 
that, with respect to the costs to be incurred in carrying out the 
activities for which the grant was awarded, the eligible entity will 
make available non-Federal contributions in an amount equal to not less 
than 20 percent of the Federal funds provided under the grant. Such 
contributions may be provided in cash or in kind, fairly valued, 
including plant, equipment, or services.
    (f) Duration.--Grants under this section shall be awarded for a 
period of 5 years.
    (g) Contract for Evaluation.--
            (1) In general.--The Secretary shall enter into a contract 
        with a public or private entity for the evaluation of the 
        second chance homes that are supported by grant funds under 
        this section.
            (2) Information.--The evaluation shall include the 
        collection of information about the relevant characteristics of 
        individuals who benefit from second chance homes such as those 
        that are supported by grant funds under this section and what 
        services provided by such second chance homes are most 
beneficial to such individuals.
            (3) Report.--
                    (A) In general.--The entity conducting the 
                evaluation under this subsection shall submit to 
                Congress an interim report and a final report in 
                accordance with subparagraph (B) containing the results 
                of the evaluation.
                    (B) Date.--
                            (i) Interim report.--The interim report 
                        shall be submitted not later than 2 years after 
                        the date on which the entity enters into a 
                        contract.
                            (ii) Final report.--The final report shall 
                        be submitted not later than 5 years after the 
                        date on which the entity enters into a 
                        contract.
    (h) Technical Assistance.--
            (1) In general.--From amounts appropriated under subsection 
        (i)(1), the Secretary may use an amount not to exceed $500,000 
        to enter into a contract, with a public or private entity, for 
        the provision of technical assistance to eligible entities 
        receiving grant funds under this section.
            (2) Conferences.--The technical assistance provided under 
        this section may include conferences for the purpose of 
        disseminating information concerning best practices for second 
        chance homes.
    (i) Authorization of Appropriations.--
            (1) In general.--There is authorized to be appropriated to 
        carry out this Act, other than subsection (g), $32,000,000 for 
        fiscal year 2004.
            (2) Evaluation.--There is authorized to be appropriated to 
        carry out subsection (g), $1,000,000 for fiscal year 2004.
            (3) Availability.--Any amounts authorized under the 
        authority of paragraphs (1) and (2) shall remain available 
        until expended.

                    TITLE VI--PUBLIC ACCOUNTABILITY

SEC. 601. PUBLIC AVAILABILITY OF STATE PROGRAM AND FINANCIAL DATA 
              SUBMISSIONS.

    Section 411(a) (42 U.S.C. 611(a)) is amended by adding at the end 
the following new paragraph:
            ``(8) Public availability of report.--The State shall make 
        publicly available at the time of submission of each report 
        required under paragraph (1) for a fiscal quarter a copy of the 
        report for that fiscal quarter, including by posting of the 
        copy on the Internet website for the State agency administering 
        the State program funded under this part.''.

SEC. 602. STUDY AND GUIDELINES REGARDING COMPLIANCE WITH 
              NONDISCRIMINATION PROVISIONS.

    (a) GAO Study.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study to determine--
                    (A) the extent to which States have complied with 
                the requirement of section 408(d) of the Social 
                Security Act (42 U.S.C. 608(d)) that the provisions of 
                law referred to in that section apply to any program or 
                activity which receives funds provided under part A of 
                title IV of the Social Security Act (42 U.S.C. 601 et 
                seq.); and
                    (B) recommendations for improving such compliance.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General shall submit a 
        report to Congress on the study conducted under paragraph (1).
    (b) Best Practices Guidelines.--Not later than 1 year after the 
date of enactment of this Act, the Secretary of Health and Human 
Services shall issue a best practices guide to States that contains 
methods and procedures for ensuring compliance with section 408(d) of 
such Act (42 U.S.C. 608(d)).

SEC. 603. ENSURING TANF FUNDS ARE NOT USED TO DISPLACE PUBLIC 
              EMPLOYEES; APPLICATION OF WORKPLACE LAWS TO WELFARE 
              RECIPIENTS.

    (a) Welfare-to-Work Worker Protections.--
            (1) In general.--Section 403(a)(5)(I) (42 U.S.C. 
        603(a)(5)(I)) is amended--
                    (A) by striking clauses (i) and (iv);
                    (B) by redesignating clauses (v) and (vi) as 
                clauses (iv) and (v), respectively; and
                    (C) by inserting before clause (ii), the following:
                            ``(i) Nondisplacement.--
                                    ``(I) In general.--An adult in a 
                                family receiving assistance under a 
                                State program funded under this part, 
                                in order to engage in a work activity, 
                                shall not displace any employee or 
                                position (including partial 
                                displacement, such as a reduction in 
                                the hours of nonovertime work, wages, 
                                or employment benefits) or fill any 
                                unfilled vacancy.
                                    ``(II) Prohibitions.--A work 
                                activity engaged in under a program 
                                operated with funds provided under this 
                                paragraph shall not impair any existing 
                                contract for services, be inconsistent 
                                with any existing law, regulation, or 
                                collective bargaining agreement, or 
                                infringe upon the recall rights or 
                                promotional opportunities of any 
                                worker.
                                    ``(III) No supplanting of other 
                                hires.--A work activity engaged in 
                                under a program operated with funds 
                                provided under this paragraph shall be 
                                in addition to any activity that 
                                otherwise would be available and shall 
                                not supplant the hiring of an employed 
                                worker not funded under such program.
                                    ``(IV) Enforcing antidisplacement 
                                protections.--
                                            ``(aa) In general.--The 
                                        State shall establish and 
                                        maintain an impartial grievance 
                                        procedure to resolve any 
                                        complaints alleging violations 
                                        of the requirements of 
                                        subclause (I), (II), or (III) 
                                        within 60 days of receipt of 
                                        the complaint and, if a 
                                        decision is adverse to the 
                                        party who filed such grievance 
                                        or no decision has been 
                                        reached, provide for the 
                                        completion of an arbitration 
                                        procedure within 75 days of 
                                        receipt of the complaint or the 
                                        adverse decision or conclusion 
                                        of the 60-day period, whichever 
                                        is earlier.
                                            ``(bb) Appeals.--Appeals 
                                        may be made to the Secretary 
                                        who shall make a decision 
                                        within 75 days.
                                            ``(cc) Remedies.--Remedies 
                                        for a violation of the 
                                        requirements of subclause (I), 
                                        (II), or (III) shall include 
                                        termination or suspension of 
                                        payments, prohibition of the 
                                        placement of the participant, 
                                        reinstatement of an employee, 
                                        and other relief to make an 
                                        aggrieved employee whole.
                                            ``(dd) Limitation on 
                                        placement.--If a grievance is 
                                        filed regarding a proposed 
                                        placement of a participant, 
                                        such placement shall not be 
                                        made unless such placement is 
                                        consistent with the resolution 
                                        of the grievance pursuant to 
                                        this subclause.''.
            (2) State plan requirement.--Section 402(a)(1)(A) (42 
        U.S.C. 602(a)(1)(A)) is amended by adding at the end the 
        following:
                            ``(vii) In the case of a State that 
                        receives a welfare-to-work grant under section 
                        403(a)(5), ensure compliance with the 
                        nondisplacement requirements of subparagraph 
                        (I)(i) of that section.''.
    (b) Application of Workplace Laws to Welfare Recipients.--
Notwithstanding any other provision of law, workplace laws, including 
the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), the 
Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.), 
title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), 
and the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 
seq.), shall apply to an individual who is a recipient of assistance 
under the temporary assistance to needy families program funded under 
part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) 
in the same manner as such laws apply to other workers. The fact that 
an individual who is a recipient of assistance under the temporary 
assistance to needy families program is participating in, or seeking to 
participate in work activities under that program in satisfaction of 
the work activity requirements of the program, shall not deprive the 
individual of the protection of any Federal, State, or local workplace 
law.

SEC. 604. RESEARCH AND DEVELOPMENT.

    (a) Longitudinal Studies of TANF Recipients.--Section 413 (42 
U.S.C. 613) is amended by striking subsections (d) and (e) and 
inserting the following:
    ``(d) Longitudinal Studies of TANF Applicants and Recipients To 
Determine the Factors That Contribute to Positive Employment and Family 
Outcomes.--
            ``(1) In general.--The Secretary, directly or through 
        grants, contracts, or interagency agreements, shall conduct 
        longitudinal studies in 10 States of a representative sample of 
        families that receive, and applicants for, assistance in a 
        State program funded under this part or under a program funded 
        with qualified State expenditures (as defined in section 
        409(a)(7)(B)(i)).
            ``(2) Requirements.--The studies conducted under this 
        subsection shall follow families that leave assistance, those 
        that receive assistance throughout the study period, and those 
        diverted from assistance programs. The studies shall gather 
        information on--
                    ``(A) family and adult demographics (including 
                race, ethnicity, primary language, barriers to 
                employment, educational status of adults, prior work 
                history, and prior history of welfare receipt);
                    ``(B) family income (including earnings, 
                unemployment compensation, and child support);
                    ``(C) benefit receipt (including benefits under the 
                food stamp program, the medicaid program, the State 
                children's health insurance program, earned income tax 
                credits, and housing assistance);
                    ``(D) reasons for leaving or returning to 
                assistance programs;
                    ``(E) work participation status and activities, 
                including the scope and duration of work activities;
                    ``(F) sanction status (including reasons for 
                sanction);
                    ``(G) time limit status (including months remaining 
                on Federal and State time limits);
                    ``(H) recipient views on program participation; and
                    ``(I) other measures of family well-being over a 5-
                year period.
            ``(3) Comparability.--The Secretary shall to the extent 
        possible ensure that the studies produce comparable results and 
        information.
            ``(4) Reports.--The Secretary shall publish--
                    ``(A) not later than December 31, 2006, interim 
                findings from at least 12 months of longitudinal data; 
                and
                    ``(B) not later than December 31, 2008, findings 
                from at least 36 months of longitudinal data.
    ``(e) Longitudinal Studies of Employment and Earnings of TANF 
Leavers.--
            ``(1) In general.--The Secretary, directly or through 
        grants, contracts, or interagency agreements shall conduct a 
        study in each eligible State of a statistically relevant cohort 
        of individuals who leave the State program funded under this 
        part during fiscal year 2004 and individuals who leave the 
        program during fiscal year 2006, which uses State unemployment 
        insurance data to track the employment and earnings status of 
        the individuals during the 3-year period beginning at the time 
        the individuals leave the program.
            ``(2) Reports.--The Secretary shall annually publish the 
        findings of the studies conducted pursuant to paragraph (1) and 
        shall annually publish the earnings data used in making 
        determinations under section 407(b).''.
    (b) Extension of Funding of Studies and Demonstrations.--Section 
413(h) (42 U.S.C. 613(h)) is amended to read as follows:
    ``(h) Funding of Studies and Demonstrations.--Out of any money in 
the Treasury of the United States not otherwise appropriated, there are 
appropriated $15,000,000 for each fiscal year beginning with 1997 for 
the purpose of paying--
            ``(1) the cost of conducting the research described in 
        subsection (a);
            ``(2) the cost of developing and evaluating innovative 
        approaches for reducing welfare dependency and increasing the 
        well-being of minor children under subsection (b);
            ``(3) the cost of conducting studies described in 
        subsections (d) and (e);
            ``(4) the Federal share of any State-initiated study 
        approved under subsection (f); and
            ``(5) an amount determined by the Secretary to be necessary 
        to operate and evaluate demonstration projects, relating to 
        this part, that are in effect or approved under section 1115 as 
        of August 22, 1996, and are continued after such date.''.
    (c) Inclusion of Disability Status in Information States Report 
About TANF Families.--Section 411(a)(1)(A) (42 U.S.C. 611(a)(1)(A)) is 
amended by adding at the end the following:
                            ``(xviii) Whether the head of the family 
                        has a physical or mental impairment.''.
    (d) Annual Report to Congress To Include Greater Detail About State 
Programs Funded Under TANF.--Section 411(b)(3) (42 U.S.C. 611(b)(3)) is 
amended to read as follows:
            ``(3) the characteristics of each State program funded 
        under this part, including, with respect to each program funded 
        with amounts provided under this part or with amounts the 
        expenditure of which is counted as a qualified State 
        expenditure for purposes of section 409(a)(7)--
                    ``(A) the name of the program;
                    ``(B) whether the program is authorized at a sub-
                State level (such as at the county level);
                    ``(C) the purpose of the program;
                    ``(D) the main activities of the program;
                    ``(E) the total amount received by the program from 
                amounts provided under this part;
                    ``(F) the total of the amounts received by the 
                program that are amounts the expenditure of which are 
                counted as qualified State expenditures for purposes of 
                section 409(a)(7);
                    ``(G) the total funding level of the program;
                    ``(H) the total number of individuals served by the 
                program, and the number of such individuals served 
                specifically with funds provided under this part or 
                with amounts the expenditure of which are counted as 
                qualified State expenditures for purposes of section 
                409(a)(7); and
                    ``(I) the eligibility criteria for participation in 
                the program;''.
    (e) Enhancement of Understanding of the Reasons Individuals Leave 
State TANF Programs.--
            (1) Case closure reasons.--
                    (A) In general.--Section 411(a)(1) (42 U.S.C. 
                611(a)(1)) is amended by adding at the end the 
                following:
                    ``(C) Development of comprehensive list of case 
                closure reasons.--The Secretary shall develop, in 
                consultation with States and policy experts, a 
                comprehensive list of reasons why individuals leave 
                State programs funded under this part. The list shall 
                be aimed at substantially reducing the number of case 
                closures under the programs for which a reason is not 
                known.''.
                    (B) Public comment.--Not later than December 31, 
                2005, the Secretary of Health and Human Services shall 
                publish for public comment regulations that list the 
                new case closure reasons to be used in accordance with 
                section 411(a)(1)(A)(xvi)(VI) of the Social Security 
                Act (42 U.S.C. 611(a)(1)(A)(xvi)(VI) (as amended by 
                paragraph (2)).
            (2) Inclusion in quarterly state reports.--Section 
        411(a)(1)(A)(xvi) (42 U.S.C. 611(a)(1)(A)(xvi)) is amended--
                    (A) in subclause (IV), by striking ``or'' at the 
                end;
                    (B) in subclause (V), by striking the period at the 
                end and inserting ``; or''; and
                    (C) by adding at the end the following:
                                    ``(VI) a reason specified in the 
                                list developed under subparagraph 
                                (C).''.
    (f) Standardized State Plans.--Section 402 (42 U.S.C. 602) is 
amended by adding at the end the following:
    ``(d) Standardized Format.--Not later than February 1, 2004, the 
Secretary, after consulting with the States, shall promulgate 
regulations for public comment that establish a standardized format 
which States shall use to submit plans under subsection (a) for fiscal 
year 2005 and thereafter.''.
    (g) Annual Study and Report on Territory Programs Expenditures and 
Economic Conditions.--
            (1) Annual expenditure reports.--Beginning with fiscal year 
        2004, the Secretary of Health and Human Services annually shall 
        collect and report to Congress expenditure data with respect to 
        a fiscal year for Puerto Rico, the Virgin Islands, Guam, and 
        American Samoa concerning temporary assistance to needy 
        programs funded under part A of title IV of the Social Security 
        Act (42 U.S.C. 601 et seq.) that are conducted by such 
        territories and any related programs conducted by such 
        territories that are designed to provide assistance to needy 
        families.
            (2) Annual report on economic conditions.--Beginning with 
        fiscal year 2004, the Director of the Bureau of the Census 
        shall submit to Congress annual reports on the economic 
        conditions in Puerto Rico, the Virgin Islands, Guam, and 
        American Samoa. Each report shall include information 
        concerning the impact of the economic conditions described in 
        the report on recipients and former recipients of assistance 
        under temporary assistance to needy programs funded under part 
        A of title IV of the Social Security Act (42 U.S.C. 601 et 
        seq.) that are conducted by such territories.

SEC. 605. GAO STUDY ON IMPACT OF BAN ON SSI BENEFITS FOR LEGAL 
              IMMIGRANTS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study to determine the impact of the prohibition under 
section 402 of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (8 U.S.C. 1612) with respect to the 
eligibility of qualified aliens (as defined in section 431 of such Act 
(8 U.S.C. 1641)) for benefits under the supplemental security income 
program under title XVI of the Social Security Act (42 U.S.C. 1381 et 
seq.), including supplementary payments pursuant to an agreement for 
Federal administration under section 1616(a) of such Act (42 U.S.C. 
1382e) and payments pursuant to an agreement entered into under section 
212(b) of Public Law 93-66.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General shall submit a report to Congress on 
the study conducted under subsection (a) that includes such 
recommendations for legislative action as the Comptroller General 
determines appropriate.

SEC. 606. GRANTS TO IMPROVE STATES' POLICIES AND PROCEDURES FOR 
              ASSISTING INDIVIDUALS WITH BARRIERS TO WORK.

    Section 403(a) (42 U.S.C. 603(a)), as amended by section 207, is 
amended by adding at the end the following:
            ``(8) Grants to improve states' policies and procedure for 
        assisting individuals with barriers to work.--
                    ``(A) Authority to make grants.--
                            ``(i) In general.--The Secretary shall make 
                        grants to each State for the period of fiscal 
                        years 2004 through 2007 and to be used in 
                        accordance with the requirements of this 
                        paragraph.
                            ``(ii) Amount of grant.--
                                    ``(I) In general.--Subject to 
                                subclause (II) and clauses (iii) and 
                                (iv), the Secretary shall have 
                                discretion to set the amount of each 
                                State's grant under this paragraph.
                                    ``(II) Minimum and maximum 
                                grants.--No grant made under this 
                                paragraph shall be less than $750,000 
                                or more than $3,000,000.
                            ``(iii) Limitation.--The total amount of 
                        grants provided to States under this paragraph 
                        for the period of fiscal years 2004 through 
                        2007 shall not exceed $75,000,000.
                            ``(iv) Criteria for determining amount of 
                        grant.--In determining the amount of a State's 
                        grant under this paragraph, the Secretary shall 
                        take into account the size of the population of 
                        the State and the extent to which the advisory 
                        review panel established with funds made 
                        available under the grant will need to review 
                        diverse policies among counties or other sub-
                        State entities within the State that have 
                        authority to design and implement programs 
                        under the State TANF program.
                    ``(B) Establishment of advisory review panel.--Each 
                State shall use the funds provided under a grant made 
                under subparagraph (A) to establish an advisory review 
                panel to improve the State's policies and procedures 
                for assisting individuals under the State TANF program 
                who have barriers to work.
                    ``(C) Membership.--
                            ``(i) In general.--A advisory review panel 
                        established under this paragraph shall consist 
                        of the following:
                                    ``(I) Representatives of the State 
                                agency responsible for administering 
                                the State TANF program.
                                    ``(II) Representatives from other 
                                States agencies with expertise in 
                                providing services to individuals with 
                                disabilities or other barriers to work, 
                                such as vocational rehabilitation 
                                services.
                                    ``(III) Parents with barriers to 
                                work who are recipients of cash 
                                assistance or support services under 
                                the State TANF program.
                                    ``(IV) Individuals or 
                                representatives of entities with 
                                expertise in designing and implementing 
                                policies and programs to successfully 
                                serve individuals with barriers to 
                                work.
                            ``(ii) Chair.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the Chair of the panel 
                                shall be appointed by the chief 
                                executive officer of the State.
                                    ``(II) Limitation.--The Chair shall 
                                not be a State employee.
                            ``(iii) Coordination with existing 
                        panels.--A State should coordinate the 
                        establishment of an advisory review panel under 
                        this paragraph with other advisory panels 
                        established as of October 1, 2003, that serve 
                        recipients of assistance under the State TANF 
                        program.
                    ``(D) Duties.--
                            ``(i) In general.--In seeking to improve a 
                        State's policies and procedures for assisting 
                        individuals with barriers to work, an advisory 
                        review panel established under this paragraph 
                        shall hold meetings, hire support staff, enter 
                        into contracts for independent evaluations, and 
                        submit the reports required under subparagraph 
                        (E).
                            ``(ii) Site visits; public hearings.--To 
                        the extent it determines appropriate, an 
                        advisory review panel established under this 
                        paragraph may--
                                    ``(I) conduct site visits to State 
                                or local agencies responsible for 
                                administering the State TANF program; 
                                and
                                    ``(II) hold public hearings.
                            ``(iii) Rule of construction.--Nothing in 
                        this paragraph shall be construed as 
                        authorizing an advisory review panel 
                        established under this paragraph to resolve 
                        complaints filed by individuals or entities 
                        related to possible violations of laws 
                        protecting civil rights.
                    ``(E) Reports.--An advisory review panel 
                established under this paragraph shall submit to the 
                Secretary on the dates described below the following 
                reports:
                            ``(i) On December 31, 2004, a report 
                        identifying areas in the State where 
                        improvement is needed with respect to assisting 
                        individuals with barriers to work and steps the 
                        State is taking or plans to take to make those 
                        improvements.
                            ``(ii) On December 31, 2005, a progress 
                        report on how the improvements identified in 
                        the report described in clause (i) are being 
                        made and regarding whether additional 
                        improvements are needed, and if so, the plans 
                        to make those improvements.
                            ``(iii) On December 31, 2006, a final 
                        report describing how the State's programs 
                        funded with funds made available under the 
                        State TANF program have been improved to assist 
                        individuals with barriers to work and 
                        identifying ongoing efforts that will be needed 
                        to maintain the improvements made.
                    ``(F) Definitions.--In this paragraph:
                            ``(i) Barriers to work.--The term `barriers 
                        to work' includes physical and mental 
                        impairments (including learning disabilities), 
                        domestic and sexual violence, substance abuse, 
                        limited English proficiency, or low literacy 
                        levels. Such term may include transportation, 
                        child care and caring for a family member with 
                        a severe disability if those issues create a 
                        functional barrier to work for a recipient of 
                        assistance under the State TANF program.
                            ``(ii) State tanf program.--The term `State 
                        TANF program' means the State program funded 
under this part and a program funded with qualified State expenditures 
(as defined in section 409(a)(7)(B)(i)).
                    ``(G) Appropriations.--
                            ``(i) In general.--Out of any money in the 
                        Treasury of the United States not otherwise 
                        appropriated, there are appropriated to carry 
                        out this paragraph, $75,000,000 for the period 
                        of fiscal years 2004 through 2007.
                            ``(ii) Technical assistance.--Of the amount 
                        appropriated under clause (i), $7,000,000 shall 
                        be used by the Secretary to provide technical 
                        assistance on barriers to work and related 
                        issues.''.

SEC. 607. ENSURING A PROFESSIONAL TANF PROGRAM STAFF.

    (a) State Plan Requirement.--Section 402(a)(1)(B) (42 U.S.C. 
602(a)(1)(B)) is amended by adding at the end the following:
                            ``(v) The document shall outline how the 
                        State intends to ensure a professional 
                        workforce with the resources, skills, and 
                        expertise necessary to successfully carry out 
                        the program, including an outline of the 
                        State's plans to provide program staff with 
                        training on program information and services 
                        and information on referral of recipients to 
                        appropriate programs and services for which 
                        recipients are eligible.''.
    (b) GAO Survey, Evaluation, and Report.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a thorough survey and evaluation of State 
        activities on workforce development for professional staff 
        delivering benefits or services under the temporary assistance 
        to needy families program under part A of title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.) or services or 
        benefits related to that program.
            (2) Requirements.--The survey and evaluation conducted 
        under paragraph (1) shall be designed to include the following 
        information:
                    (A) Information on the qualifications, education, 
                and training for the staff described in paragraph (1), 
                and the amount of turnover among such staff.
                    (B) An assessment of the range of caseloads such 
                staff is responsible for and the effects of caseloads 
                on family outcomes and satisfaction with the temporary 
                assistance to needy families program.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General shall submit a 
        report to Congress on the survey and evaluation conducted under 
        paragraph (1).

                       TITLE VII--EFFECTIVE DATE

SEC. 701. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act, the 
amendments made by this Act shall take effect on October 1, 2003, and 
shall apply to payments under part A of title IV of the Social Security 
Act for calendar quarters beginning on or after such date, without 
regard to whether regulations to implement the amendments are 
promulgated by such date.
    (b) Delay Permitted if State Legislation Required.--In the case of 
a State plan under section 402(a) 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 this Act, the State plan shall not be regarded as failing to 
comply with the requirements of such section 402(a) solely on the basis 
of the failure of the plan to meet such additional requirements before 
the 1st day of the 1st calendar quarter beginning after the close of 
the 1st 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.
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