1.Short title; table of
contents
(a)This Act may be cited as the Responsible Fatherhood and Healthy Families Act of
2006
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I—Promoting Responsible Fatherhood and Strengthening
Low-Income Families
Sec. 101. Healthy marriage promotion and responsible fatherhood
programs.
Sec. 102. Grants to healthy family partnerships for domestic
violence prevention, for services for families and individuals affected by
domestic violence, and for developing and implementing best
practices.
Sec. 103. Elimination of separate TANF work participation rate
for 2-PARENT families.
Sec. 104. Ban on Recovery of Medicaid Costs for
Births.
Sec. 105. Improved collection and distribution of child
support.
Sec. 106. Grants to States to conduct demonstration projects to
promote economic opportunity for low-income parents.
Sec. 107. State assessments of barriers to employment and
financial support of children.
Sec. 108. Collection of child support under the food stamp
program.
TITLE II—Revenue Provisions
Sec. 201. Modifications to the earned income tax
credit.
Sec. 202. Tax treatment of inverted entities.
Sec. 203. Tax treatment of controlled foreign corporations
established in tax havens.
Sec. 204. Taxation of income of controlled foreign corporations
attributable to imported property.
2.Congress makes the following
findings:
(1)The most
important factor in a child’s upbringing is whether the child is brought up in
a loving, healthy, supportive environment.
(2)Children who grow
up with both parents are more likely to finish high school, be economically
self-sufficient, and to have a healthier lifestyle than their peers who grow up
in single-parent homes.
(3)Father-child
interaction has been shown to promote the positive physical, social, emotional,
and mental development of children.
(4)Children
typically live without both parents when their parents are divorced or did not
marry. More than 1/3 of all first marriages end in
divorce, and 60 percent of divorcing couples have children. More than
1/3 of all births are to unmarried women.
(5)More than 1 in 4
families with children have only 1 parent present, and more than 1 in 3
children live absent their biological father.
(6)Recent studies
demonstrate that most unwed fathers in urban areas are highly involved with the
mother of their child before and after the child's birth, with 80 percent
involved during the mother's pregnancy, and 50 percent living with the child’s
mother at the time of the child's birth. However, the relationship between the
parents often does not last, and fathers do not maintain contact with their
children as the children grow up.
(7)An estimated 40
percent of the children who live in households without their father have not
seen their fathers in at least 1 year.
(8)The inability of
parents to sustain a healthy relationship with their child’s other parent and
remain involved in their child's life can have severe negative consequences for
the parents, the child, their community, and taxpayers.
(9)Single-parent
families are 5 times as likely to be poor as married-couple families.
(10)Children raised
in single-parent families are more likely than children raised in 2-parent
families to do poorly in school, have emotional and behavioral problems, become
teenage parents, commit crimes, smoke cigarettes, abuse drugs and alcohol, and
have poverty-level incomes as adults.
(11)Male
unemployment and low wages are primary reasons why parents do not marry, why
2-parent families break up, and why fathers fail to remain involved with their
children. In 2004, half of African-American young men lacked jobs.
(12)Domestic
violence is also a significant problem leading to the non-formation or break-up
of 2-parent families.
(13)A history of
incarceration is a major barrier to employment. 60 percent of African-American
men who dropped out of high school have served time. When these men leave
prison, they often have difficulty finding a job and supporting their
children.
(14)Over ½ of State
prison inmates are parents. When parents go to prison, their child support
obligations continue, even though they have little ability to pay the support.
When these parents leave prison, they typically owe more than $20,000 in child
support debt. Parents leaving prison often re-enter the underground economy
because of financial pressures or to avoid the child support system, making it
less likely that they will successfully rejoin society and reunite with their
families.
(15)Children should
receive the child support paid by their parents, and the government should not
keep the money to recover welfare costs. Regular child support income appears
to have a greater positive impact on children dollar for dollar than other
types of income. Researchers in Wisconsin found that when monthly child support
was passed through to families receiving assistance under the Temporary
Assistance for Needy Families program established under part A of title IV of
the Social Security Act (TANF) and disregarded 100 percent in determining
assistance for the families, fathers paid more child support, established their
legal relationship with their children more quickly, and worked less in the
underground economy. Moreover, the State costs of a full pass-through and
disregard of child support were fully offset by increased payments by fathers
and decreased public assistance use by families.
(16)Current law
permits States to apply the cost of passing through child support to families
receiving assistance under the TANF program toward their maintenance of effort
(MOE) requirements, but only to the extent that the State disregards the child
support payments in determining the amount and type of TANF assistance.
(17)Programs that
increase employment opportunity and reduce barriers by increasing employment
opportunity and reducing recidivism will benefit children and families.
(18)Transitional
jobs programs have shown promise in reducing unemployment among chronically
unemployed or underemployed population groups, including formerly incarcerated
individuals, the homeless, and young African-American men.
(19)To strengthen
families it is important to improve the upward economic mobility of the
custodial and noncustodial parent wage-earners, as well as youth at risk of
early fatherhood or incarceration, by providing the skills and experience
necessary to access jobs with family-sustaining wages and benefits. In families
in which all the members do not live together, this is important to enable the
prompt and consistent payment of adequate child support.
(20)It is important
and useful to foster local and regional economic development and job
advancement for workers, especially young custodial and noncustodial parents,
by funding local collaborations among business, education, and the community in
the development of pathways for preparing disadvantaged citizens to meet the
workforce needs of the local and regional economy.
(21)Employers
benefit from working with and being supported by the local education,
post-secondary and workforce systems in identifying the academic and
occupational skill sets needed to fill the skilled jobs in the changing
economy. Local economic and community development is enhanced when residents
have access to higher wage employment, thus increasing the tax base, fueling
the economy, and contributing to greater family economic security.
(22)Public-private
career pathways partnerships are an important tool for linking employers and
workers with the workforce education services they need and for integrating
community economic development and workforce education services. Transitional
jobs programs can serve as the first step in a career pathway by giving
unemployed individuals with multiple barriers to employment, valuable work
experience and related services.
(23)The purpose of
child support is to provide necessary income support for and increase the
well-being of children living apart from a parent. To improve the ability of
low-income fathers to provide long-term support and care for their children
throughout their entire childhood, it is important that child support polices
support parental efforts to pursue education and employment and to stay
involved with their children
(24)Responsible
fatherhood includes active participation in financial support and
child-rearing, as well as the formation and maintenance of a positive, healthy,
and nonviolent relationship between father and child and a cooperative,
healthy, and nonviolent relationship between parents.
(25)States should be
encouraged to implement voluntary programs that provide support for responsible
parenting, including by increasing the employment, financial security, and
parental involvement of noncustodial parents.
(26)Promoting
responsible fatherhood saves the government money by reducing the need for
public assistance, increasing the educational attainment of children, juvenile
delinquency and crime, reducing substance abuse, and lowering rates of
unemployment.
(27)Responsible
fatherhood programs should promote and provide support services for—
(A)fostering loving
and healthy relationships between parents and children;
(B)increasing
responsibility of noncustodial parents for the long-term care and financial
well-being of their children;
(C)increasing
employment of low-income, noncustodial parents and improving compliance with
child support obligations; and
(D)reducing barriers
to active 2-parent involvement and cooperative parenting.
(28)The promotion of
responsible fatherhood should not denigrate the standing or parenting efforts
of single mothers or other caregivers, lessen the protection of children from
abusive parents, or compromise the safety or health of the custodial or
noncustodial parent, but should increase the chance that children will have 2
caring parents to help them grow up healthy and secure.
<enum>I</enum><header>Promoting
Responsible Fatherhood and Strengthening Low-Income Families</header>
<section id="id9E8D6B5A88BF4336922125D93844FD31"><enum>101.</enum><header>Healthy
marriage promotion and responsible fatherhood programs</header>
<subsection id="id9F3B032B4D084F14AEC22D1558A5C55B"><enum>(a)</enum><header>Ensuring
funding for responsible fatherhood programs</header><text>Section 403(a)(2)(C)
of the Social Security Act (42 U.S.C. 603(a)(2)(C)) is amended—</text>
<paragraph id="id30390D15DAE54970BC5FFF2B17E38B11"><enum>(1)</enum><text>in the
subparagraph heading, by striking <quote><header-in-text level="subparagraph" style="OLC">Limitation on use of</header-in-text></quote> and inserting
<quote><header-in-text level="subparagraph" style="OLC">Requirement to use
certain</header-in-text></quote>; and</text>
</paragraph><paragraph id="id61C46425714544EA98A07DA722C359F8"><enum>(2)</enum><text>in clause (i), by
striking <quote>may not award more than $50,000,000</quote> and inserting
<quote>shall award at least $100,000,000</quote>.</text>
</paragraph></subsection><subsection id="id5D352825E0B24BFBB1A1B84400341ABB"><enum>(b)</enum><header>Requirements To
ensure procedures To address domestic violence prevention</header>
<paragraph id="id237185A85BC64435A6D339FAEF720A1C"><enum>(1)</enum><header>In
general</header><text>Section 403(a)(2) of the Social Security Act (42 U.S.C.
603(a)(2)) is amended—</text>
<subparagraph id="idF8D1B7EB61DF467AA8CE9F861D363851"><enum>(A)</enum><text>by redesignating
subparagraph (D) as subparagraph (G); and</text>
</subparagraph><subparagraph id="idE5DA8B703EE04A33BEC60C0D0EFBF65B"><enum>(B)</enum><text>by inserting
after subparagraph (C) the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="id94F0609C32594C5FB05A202D1DF36C07" style="OLC">
<subparagraph id="IDEBDCF0465FDA474DAFDD7334D21A8269"><enum>(D)</enum><header>Requirements
for receipt of funds</header><text>An entity may not be awarded a grant under
this paragraph unless the entity, as a condition of receiving funds under such
a grant—</text>
<clause id="IDE589F290F69943CDAA1A4B79A210F611"><enum>(i)</enum><text>consults with
domestic violence organizations that have demonstrated expertise working with
survivors of domestic violence in developing policies, procedures, programs and
training necessary to appropriately address domestic violence in families
served by programs and activities funded under such grant;</text>
</clause><clause id="ID74F186E111E64C3F9DA9E3E52A051A87"><enum>(ii)</enum><text>describes in the
application for a grant under this paragraph—</text>
<subclause id="IDC874F2CB21754DCC9C7B10FE392F0AC1"><enum>(I)</enum><text>how the programs
or activities proposed to be conducted will appropriately address issues of
domestic violence; and</text>
</subclause><subclause id="IDF26C605E3D9149FE996EFE481A79F0C9"><enum>(II)</enum><text>what the entity
will do, to the extent relevant, to ensure that participation in such programs
or activities is voluntary, and to inform potential participants that their
involvement is voluntary;</text>
</subclause></clause><clause id="ID0E60077D22DE42EEAA0F4FB5BC8E7F1D"><enum>(iii)</enum><text>establishes a
written protocol for providers and administrators of programs and activities
relevant to the grant that—</text>
<subclause id="ID4AFF6CD2383D4F05B173101817E36C8C"><enum>(I)</enum><text>provides for
helping identify instances or risks of domestic violence; and</text>
</subclause><subclause id="ID80AC98F70C3045188A5AEEB9F20BED02"><enum>(II)</enum><text>specifies the
procedures for making service referrals and providing protections and
appropriate assistance for identified individuals and families; and</text>
</subclause></clause><clause id="ID38FB359D22DB4D6182106DD92032D99A"><enum>(iv)</enum><text>submits the
annual reports required under subparagraph (E).</text>
</clause></subparagraph><subparagraph id="ID8CECC09912124FE2BA84C52F008025BC"><enum>(E)</enum><header>Annual reports
to the secretary</header><text>Each entity awarded a grant under this paragraph
shall submit to the Secretary an annual report on the programs and activities
funded under the grant that includes the following:</text>
<clause id="ID4EDC644ABEF64C6D8ED9B9D5F4F901DA"><enum>(i)</enum><text>A
description of the written protocols developed in accordance with the
requirements of subparagraph (D)(iii) for each program or activity funded under
the grant and how such protocols are used, including specific policies and
procedures for addressing domestic violence issues within each program or
activity funded under the grant and how confidentiality issues are
addressed.</text>
</clause><clause id="ID3044B43B1FB34789BC7A40B2D28586FD"><enum>(ii)</enum><text>The name of each
individual, organization, or entity that was consulted in the development of
such protocols.</text>
</clause><clause id="ID02EF0B19209542FAA6EDC61A678967C2"><enum>(iii)</enum><text>A description
of each individual, organization, or entity (if any) that provided training on
domestic violence for the entity or for any subgrantees.</text>
</clause><clause id="ID468B62BD147F40F3BFF4D89ACE78A06D"><enum>(iv)</enum><text>A description of
any implementation issues identified with respect to domestic violence and how
such issues were addressed.</text>
</clause></subparagraph><subparagraph id="ID35497C585129419EA1EFF7005EE8A5EE"><enum>(F)</enum><header>Domestic
violence defined</header><text>In this paragraph, the term <term>domestic
violence</term> has the meaning given that term in section
402(a)(7)(B).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id8843E166494A42B0836F5928C9FAA138"><enum>(2)</enum><header>Conforming
amendments</header><text>Section 403(a)(2) of such Act (42 U.S.C. 603(a)(2)) is
amended—</text>
<subparagraph id="id05355D9B628D4E8DAB50FAF68DA6EAD9"><enum>(A)</enum><text>in subparagraph
(A)(i)—</text>
<clause id="id3F15DE34CE184823BF62F012599F7915"><enum>(i)</enum><text>by
striking <quote>(B) and (C)</quote> and inserting <quote>(B), (C), (D), and
(E)</quote>; and</text>
</clause><clause id="id7A3A1A58ECB941AFA2683C110848CFBC"><enum>(ii)</enum><text>by
striking <quote>subparagraph (D)</quote> and inserting <quote>subparagraph
(G)</quote>;</text>
</clause></subparagraph><subparagraph id="id043D855DF3434F6CB348F3D1C3D66E99"><enum>(B)</enum><text>in subparagraphs
(B)(i) and (C)(i), by striking <quote>(D)</quote> each place it appears and
inserting <quote>(G)</quote>; and</text>
</subparagraph><subparagraph id="id62C6375BBC9E4838A934A602FE444065"><enum>(C)</enum><text>in subparagraph
(G) (as redesignated by paragraph (1)(A)), by striking <quote>$150,000,000 for
each of fiscal years 2006 through 2010</quote> and inserting
<quote>$150,000,000 for fiscal year 2006 and $200,000,000 for each of fiscal
years 2007 through 2010</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="idEB2581BD189548F0A7DB990EC0E9DB83"><enum>(c)</enum><header>Assurance of
voluntary participation</header><text>Section 403(a)(2)(A)(ii)(II) of the
Social Security Act (42 U.S.C. 603(a)(2)(A)(ii)(II)) is amended—</text>
<paragraph id="id0BC933F35F8944C4B587F7FB969478A2"><enum>(1)</enum><text>in item (aa), by
striking <quote>and</quote> at the end;</text>
</paragraph><paragraph id="id70F1FF4552B348C783AD68A1CE8EA782"><enum>(2)</enum><text>in item (bb), by
striking the period at the end and inserting a semicolon; and</text>
</paragraph><paragraph id="idDA34F012697F49CFB6688AAB561718C5"><enum>(3)</enum><text>by adding at the
end the following new items:</text>
<quoted-block display-inline="no-display-inline" id="idF2329688E0264ED8A0284F723344217E" style="OLC">
<item id="id426D5925678A41E39C382AB930E38657"><enum>(cc)</enum><text>to
not condition the receipt of assistance under the program funded under this
part, under a program funded with qualified State expenditures (as defined in
section 409(a)(7)(B)(i)), or under any other program funded under this title on
enrollment in any such programs or activities; and</text>
</item><item id="id13B1E631491042CEB8A1440F5215EE11"><enum>(dd)</enum><text>to
permit any individual who has begun to participate in a particular program or
activity funded under this paragraph, including an individual whose
participation is specified in the individual responsibility plan developed for
the individual in accordance with section 408(b), to transfer to another such
program or activity funded under this paragraph upon notification to the entity
and the State agency responsible for administering the State program funded
under this
part.</text>
</item><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="idABAF1313C04341C7B6EE8827B1A58920"><enum>(d)</enum><header>Activities
promoting responsible fatherhood</header><text>Section 403(a)(2)(C)(ii) of the
Social Security Act (42 U.S.C. 603(a)(2)(C)(ii)) is amended—</text>
<paragraph id="idF5A57C38DE444C5DADD1ED3AF71E57BF"><enum>(1)</enum><text>in subclause (I),
by striking <quote>marriage or sustain marriage</quote> and insert
<quote>healthy relationships and marriages or to sustain healthy relationships
or marriages</quote>;</text>
</paragraph><paragraph id="idD0936A1F1499468194332772484D62EE"><enum>(2)</enum><text>in subclause
(II), by inserting <quote>educating youth who are not yet parents about the
economic, social, and family consequences of early parenting, helping
participants in fatherhood programs work with their own children to break the
cycle of early parenthood,</quote> after <quote>child support
payments,</quote>; and</text>
</paragraph><paragraph id="id1F4C235E63D94C01A0C749DFF956D142"><enum>(3)</enum><text>in subclause
(III), by striking <quote>fathers</quote> and inserting <quote>low-income
fathers and other low-income noncustodial parents whom are not eligible for
assistance under the State program funded under this part</quote>.</text>
</paragraph></subsection><subsection id="id7FD59E954A504BEAAB0A26B2AAF4440D"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on
October 1, 2006.</text>
</subsection></section><section id="id9CCA4B484EB44988A37BF39DC4208781"><enum>102.</enum><header>Grants to
healthy family partnerships for domestic violence prevention, for services for
families and individuals affected by domestic violence, and for developing and
implementing best practices</header><text display-inline="no-display-inline">Section 403(a) of the Social Security Act
(42 U.S.C. 603(a)) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id55DE564ADB4041F2A9E84316E4568661" style="OLC">
<paragraph id="id41F837B816B94E8083794FA971D56F3F"><enum>(6)</enum><header>Grants to
healthy family partnerships for domestic violence prevention, for services for
families and individuals affected by domestic violence, and for developing and
implementing best practices</header>
<subparagraph id="idDA6ACAA161DA44C3B868CDB3ED90A65A"><enum>(A)</enum><header>In
general</header><text>The Secretary shall award grants on a competitive basis
to healthy family partnerships to—</text>
<clause id="id659FEAC0B91B476E838AB7DE2AB849AA"><enum>(i)</enum><text>conduct programs
and activities that are designed to prevent domestic violence;</text>
</clause><clause id="id16391C5ADE084565941A21701E85A4FA"><enum>(ii)</enum><text>provide services
for victims of domestic violence; and</text>
</clause><clause id="id6F4743868A3F47B0ABC59874AAF4BF81"><enum>(iii)</enum><text>develop and
implement best practices for preventing domestic violence, particularly as a
barrier to economic security, and for providing services to families and
individuals affected by such violence including through caseworker training and
the provision of technical assistance.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBBD45AE48D0146BAA77AA43212322677"><enum>(B)</enum><header>Education
services</header><text>In awarding grants under subparagraph (A), the Secretary
shall ensure that 10 percent of the funds made available under such grants are
used for high schools and other secondary educational institutions and
institutions of higher education to provide education services on the value of
healthy relationships, responsible parenting, and healthy marriages
characterized by mutual respect and non-violence, and the importance of
building relationships skills such as communication, conflict resolution, and
budgeting.</text>
</subparagraph><subparagraph id="ID5027E0606493410DBA4D514ECEF73B50"><enum>(C)</enum><header>Application</header><text>The
respective entity and organization of a healthy family partnership entered into
for purposes of receiving a grant under this paragraph shall submit a joint
application to the Secretary, at such time and in such manner as the Secretary
shall specify, containing—</text>
<clause id="id801DD2C4E1B3440C9DE2BB2074B79BA7"><enum>(i)</enum><text>a
description of how the partnership intends to carry out the activities
described in subparagraph (A);</text>
</clause><clause id="id1D2ED0F9F4C54A52AEDF674D2C57FC40"><enum>(ii)</enum><text>an assurance
that funds made available under the grant shall be used to supplement, and not
supplant, other funds used by the entity or organization to carry out programs,
activities, or services described in subparagraph (A) or (B); and</text>
</clause><clause id="idA7BBC23541D44AFBBAFA0B2ED1B7600A"><enum>(iii)</enum><text>such other
information as the Secretary may require.</text>
</clause></subparagraph><subparagraph id="ID09AA0DCBA9C345688AAB0E5C2A4FFAA6"><enum>(D)</enum><header>General rules
governing use of funds</header><text>The rules of section 404, other than
subsection (b) of that section, shall not apply to a grant made under this
paragraph.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id856C87B4493E465C8FF45252CFF9F060"><enum>(E)</enum><header>Definitions</header><text>In
this paragraph:</text>
<clause commented="no" display-inline="no-display-inline" id="idAC3DCA36675B475CA3A1BDD34DA61E69"><enum>(i)</enum><header>Domestic
violence</header><text>The term <term>domestic violence</term> has the meaning
given that term in section 402(a)(7)(B).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idA61914DA39F44643A55489E026315B2D"><enum>(ii)</enum><header>Healthy family
partnership</header><text>The term <term>healthy family partnership</term>
means a partnership between—</text>
<subclause commented="no" display-inline="no-display-inline" id="idD1F42B93330F4A33851E0F9F396B1397"><enum>(I)</enum><text>an entity
receiving funds under a grant made under paragraph (2) to promote healthy
marriage or responsible fatherhood; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id57C6AD32A111497FAF3644148734CE8F"><enum>(II)</enum><text>an organization
described in paragraph (2)(D)(i).</text>
</subclause></clause></subparagraph><subparagraph id="ID7AFB24233628450FB386419E25D55C21"><enum>(F)</enum><header>Appropriation</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated for each of fiscal years 2007 through 2010, $25,000,000
for purposes of awarding grants to healthy family partnerships under this
paragraph.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="id7FCCE82F4D0D4233BA155645611DB07F"><enum>103.</enum><header>Elimination of
separate TANF work participation rate for 2-PARENT families</header>
<subsection id="ID57F1F09EF087473CA297E0995C7EE575"><enum>(a)</enum><header>In
General</header><text>Section 407 of the <act-name parsable-cite="SSA">Social
Security Act</act-name> (42 U.S.C. 607) is amended—</text>
<paragraph id="IDFDD87AA84CAB40B6875F2BCD196D3E78"><enum>(1)</enum><text>in subsection
(a)—</text>
<subparagraph id="ID2BC48B69B26949689DED1B2B23ED2FCC"><enum>(A)</enum><text>beginning in the
heading, by striking <quote><header-in-text level="subsection" style="OLC">Participation Rate Requirements</header-in-text></quote> and all
that follows through <quote>A State</quote> in paragraph (1) and inserting
<quote><header-in-text level="subsection" style="OLC">Participation Rate
Requirements</header-in-text>.—A State</quote>; and</text>
</subparagraph><subparagraph id="IDE9FAC7A4E3624380B4765BA53F33A814"><enum>(B)</enum><text>by striking
paragraph (2);</text>
</subparagraph></paragraph><paragraph id="IDF18F10EBA91140D0AC932F220490FAB4"><enum>(2)</enum><text>in subsection
(b)—</text>
<subparagraph id="id1E40348E965C4C74950574C037A737AD"><enum>(A)</enum><text>in paragraph
(1)(A), by striking <quote>subsection (a)(1)</quote> and inserting
<quote>subsection (a)</quote>;</text>
</subparagraph><subparagraph id="IDB1A0C7091C574243B7E244AF1C5A56A4"><enum>(B)</enum><text>in paragraph (2),
by striking the paragraph heading and all that follows through <quote>A
family</quote> and inserting <quote><header-in-text level="paragraph" style="OLC">Special rule</header-in-text>.—A family</quote>;</text>
</subparagraph><subparagraph id="id8F377B267D5D4302803F9B80A993035D"><enum>(C)</enum><text>in paragraph (4),
by striking <quote>paragraphs (1)(B) and (2)(B)</quote> and inserting
<quote>determining monthly participation rates under paragraph (1)(B)</quote>;
and</text>
</subparagraph><subparagraph id="ID997A2B4780854DBB933E531A060E1B32"><enum>(D)</enum><text>in paragraph (5),
by striking <quote>rates</quote> and inserting <quote>rate</quote>; and</text>
</subparagraph></paragraph><paragraph id="ID7D8FD6AC15E44B6F8907CFC8DD656DEC"><enum>(3)</enum><text>in subsection
(c)—</text>
<subparagraph id="id1367186890A048BA8A2CEF48DB5BD763"><enum>(A)</enum><text>in paragraph
(1)(B), in the matter preceding clause (i), by striking <quote>subsection
(b)(2)(B)</quote> and inserting <quote>subsection (b)(1)(B)(i)</quote>;
and</text>
</subparagraph><subparagraph id="id712F8D0683F840448339FA99D49FED6C"><enum>(B)</enum><text>in paragraph
(2)(D)—</text>
<clause id="ID51965309D76C44828C7604E807D2EA85"><enum>(i)</enum><text>by
striking <quote>paragraphs (1)(B)(i) and (2)(B) of subsection (b)</quote> and
inserting <quote>subsection (b)(1)(B)(i)</quote>; and</text>
</clause><clause id="IDA8962E361CCC40A7A2B3E4D8B6FE3DB5"><enum>(ii)</enum><text>by
striking <quote>and in 2-parent families, respectively,</quote>.</text>
</clause></subparagraph></paragraph></subsection><subsection id="ID7BCB6667D02545059B35242916B7A09D"><enum>(b)</enum><header>Effective
Date</header>
<paragraph id="id133EF4FF122D40019A199905DC65AEB5"><enum>(1)</enum><header>In
general</header><text>The amendments made by subsection (a) shall take effect
on the date of enactment of this Act and shall apply to the determination of
minimum participation rates for months beginning on or after that date.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id33D289255EF44B49BCF1CADE356EC2C3"><enum>(2)</enum><header>Limitation on
penalty imposition</header><text>Notwithstanding section 409(a)(3) of the
Social Security Act, the Secretary of Health and Human Services shall not
impose a penalty against a State under that section on the basis of the State's
failure to satisfy the participation rate required for fiscal year 2006 if the
State demonstrates that the State would have met such requirement if, with
respect to those months of fiscal year 2006 that began prior to or on the date
of enactment of this Act, the State were permitted to count 2-parent families
that met the requirements of section 407(c)(1)(A) of the Social Security Act
(42 U.S.C. 607(c)(1)(A)) in the determination of monthly participation rates
under section 407(b)(1)(B)(i) of such Act (42 U.S.C. 607(b)(1)(B)(i)).</text>
</paragraph></subsection></section><section id="IDBB7F66642D2A4B53B84B4DB9775DEAB6"><enum>104.</enum><header>Ban on
Recovery of Medicaid Costs for Births</header>
<subsection id="id03BA33BEC0334BFE81AFC46CF9ED300C"><enum>(a)</enum><header>Ban on
recovery</header>
<paragraph id="id55ADB86698964B6AB8EFB4A607902F6C"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 454 of the
Social Security Act (42 U.S.C. 654), as amended by section 7301(B)(1)(C) of the
Deficit Reduction Act of 2005 (Public Law 109–171), is amended—</text>
<subparagraph id="ID1ED6980838564426825A34A62C9C284E"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of paragraph (33);</text>
</subparagraph><subparagraph id="ID262470C2123B4729824A585387C6AED5"><enum>(B)</enum><text>by striking the
period at the end of paragraph (34) and inserting <quote>; and</quote>;
and</text>
</subparagraph><subparagraph id="IDBA5C8F52491643D49F572AEAF10B72F3"><enum>(C)</enum><text>by inserting
after paragraph (34) the following:</text>
<quoted-block display-inline="no-display-inline" id="id89C3028D24C849BAA288E2901BB7F900" style="OLC">
<paragraph id="id6578D66290E74E099421D55EF6F48BE5"><enum>(35)</enum><text>provide that,
except as provided in section 1902(a)(25)(F)(ii), the State shall not use the
State program operated under this part to collect any amount owed to the State
by reason of costs incurred under the State plan approved under title XIX for
the birth of a child for whom support rights have been assigned pursuant to
section 471(a)(17) or
1912.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="idAFDFF1577EE44598BD7F5D9E3BEDEBA8"><enum>(2)</enum><header>Rule of
construction</header><text>Nothing in section 454(35) of the Social Security
Act (42 U.S.C. 654(35)), as added by paragraph (1), shall be construed as
affecting the application of section 1902(a)(25) of such Act (42 U.S.C.
1396a(a)(25)) with respect to a State (relating to the State Medicaid plan
requirement for the State to take all reasonable measures to ascertain the
legal liability of third parties to pay for care and services available under
the plan).</text>
</paragraph></subsection><subsection id="id551D3DE9330446E0B3EAC9536C501961"><enum>(b)</enum><header>Clarification
that ban on recovery does not apply with respect to insurance of a parent with
an obligation To pay child support</header><text>Section 1902(a)(25)(F) of the
Social Security Act (42 U.S.C. 1396a(a)(25)(F)) is amended—</text>
<paragraph id="idB23DE3F033F747BDB6BC272E3B10D08D"><enum>(1)</enum><text>in clause (i), by
adding <quote>add</quote> after the semicolon; and</text>
</paragraph><paragraph id="id615ADCAFC0374B1AABD9184DB363532B"><enum>(2)</enum><text>in clause (ii),
by inserting <quote>only if such third-party liability is derived through
insurance,</quote> before <quote>seek</quote>.</text>
</paragraph></subsection><subsection id="id94660BAA6716448FAFD3179A9CF10B69"><enum>(c)</enum><header>Effective
date</header>
<paragraph id="id26283A6E5A3D4C1C9454669D3789C58B"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section take effect on October 1, 2006.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id34B4CCCF2ACE4E0E91886DF97DBBCE34"><enum>(2)</enum><header>Extension of
effective date for state law amendment</header><text>In the case of a State
plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) which
the Secretary of Health and Human Services determines requires State
legislation 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 the session is considered to be a separate
regular session of the State legislature.</text>
</paragraph></subsection></section><section id="idF5BCBDEE33564C6D82F8D6993291556E"><enum>105.</enum><header>Improved
collection and distribution of child support</header>
<subsection id="id1363D8F25FCC4533AC8D06E2D0CDE08E"><enum>(a)</enum><header>Distribution of
child support</header>
<paragraph id="id33BCEF5314B34EE2B58CEB406CE80807"><enum>(1)</enum><header>Full
distribution of child support collected; reform of rules for distribution of
child support collected on behalf of children in foster care</header>
<subparagraph id="id21B12BADC4C249AB8BEA1350EA6876B9"><enum>(A)</enum><header>In
general</header><text>Section 457 of the Social Security Act (42 U.S.C. 657) is
amended—</text>
<clause id="id37476D92E00A4765861FBB29DF1DA037"><enum>(i)</enum><text>by
striking subsection (a) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="id533CC37FEBB8446E8007E0CAD1B57DB9" style="OLC">
<subsection id="id46B3D7A595CB4A239CA35803E6BB7372"><enum>(a)</enum><header>Full
distribution of amounts collected on behalf of any family</header><text>Subject
to subsection (c), the entire amount collected on behalf of any family as
support by a State pursuant to a plan approved under this part shall be paid by
the State to the family.</text>
</subsection><after-quoted-block>;
and</after-quoted-block></quoted-block>
</clause><clause id="id38DFD45557A34B5DAF35E8A9BCBB7D81"><enum>(ii)</enum><text>by
striking subsections (c) through (e) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="idE32A0B85A3BE4146820C523AD6BBFECB" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="id9D3B3963945F43EE9DC7408AB9E525D4"><enum>(c)</enum><header>Amounts
collected for child for whom foster care maintenance payments are
made</header><text display-inline="yes-display-inline">Notwithstanding the
preceding provisions of this section, amounts collected by a State as child
support for months in any period on behalf of a child for whom a public agency
is making foster care maintenance payments under part E shall be paid to the
public agency responsible for supervising the placement of the child, which may
use the payments in the manner it determines will serve the best interests of
the child, including setting such payments aside for the child’s future needs,
depositing the funds in a child asset account, or making all or a part thereof
available to the person responsible for meeting the child’s day-to-day
needs.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</clause></subparagraph><subparagraph id="id2E3C2A9E1AD14A4EB342DDE618C1C8A6"><enum>(B)</enum><header>Foster care
state plan amendment</header><text>Section 471(a)(17) of the Social Security
Act (42 U.S.C. 671(a)(17)) is amended—</text>
<clause id="idD10D76C90E824E42892809F6109C0271"><enum>(i)</enum><text>by
inserting <quote>and consistent with the child's case plan</quote> after
<quote>where appropriate</quote>; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idF7B8EACF81CE4CD0A93BFB14133578E0"><enum>(ii)</enum><text>by striking
<quote>secure an assignment to the State of any rights to support</quote> and
inserting <quote>establish and enforce child support
obligations</quote>.</text>
</clause></subparagraph></paragraph><paragraph id="id840EC35BB138409C82A9A17190086D95"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph id="idDA7C330B2C5140A88BCBB12BFEDA51EA"><enum>(A)</enum><text>Section
409(a)(7)(B)(i)(I)(aa) of such Act (42 U.S.C. 609(a)(7)(B)(i)(I)(aa)) is
amended by striking <quote>457(a)(1)(B)</quote> and inserting
<quote>457(a)</quote>.</text>
</subparagraph><subparagraph id="id457A6BFEDDF1458AB2A4B17D82661668"><enum>(B)</enum><text>Section 454(5) of
such Act (42 U.S.C. 654(5)) is amended by striking <quote>(A) in any
case</quote> and all that follows through <quote>(B)</quote>.</text>
</subparagraph><subparagraph id="id09E063A1D6574351B7C8B630D6C7322C"><enum>(C)</enum><text>Paragraphs (1)(B)
and (2)(B) of section 457(b) of such Act (42 U.S.C. 657(b)), as amended by
section 7301(c) of the Deficit Reduction Act of 2005 (Public Law 109–171; 120
Stat. 141), is amended by striking <quote>in accordance with subsection
(a)(4)</quote> each place it appears.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idF5FF27D9ADC34A279B6D091FFE46EEB5"><enum>(D)</enum><text>Section
466(a)(3)(B) of such Act (42 U.S.C. 666(a)(3)(B)) is amended by striking
<quote>408(a)(3) or</quote>.</text>
</subparagraph></paragraph><paragraph id="id54F5425E52C746DE80C172007673A3FA"><enum>(3)</enum><header>Repeal of
certain dra amendments</header><text>Effective on the date of enactment of this
Act, subsections (a) and (b) of section 7301 of the Deficit Reduction Act of
2005 (Public Law 109–171; 120 Stat. 141) are repealed and parts A and D of
title IV of the Social Security Act shall be applied as if the amendments made
by such subsections had not been enacted.</text>
</paragraph></subsection><subsection id="id5A88EF02573E414AB04691B643C6A0EC"><enum>(b)</enum><header>Prohibition on
conditioning receipt of TANF on assignment of support</header><text>Section
408(a)(3) of the Social Security Act (42 U.S.C. 608(a)(3)) is amended—</text>
<paragraph id="id51503B515C9748629FF2455D88E2A8DD"><enum>(1)</enum><text>in the paragraph
heading, by striking <quote><header-in-text level="paragraph" style="OLC">No
assistance for families not</header-in-text></quote> and inserting
<quote><header-in-text level="paragraph" style="OLC">Prohibition on
conditioning assistance for families on</header-in-text></quote>;</text>
</paragraph><paragraph id="id38964582DDF742A09B5A7E7C14B1684F"><enum>(2)</enum><text>by inserting
<quote>not</quote> after <quote>shall</quote>;</text>
</paragraph><paragraph id="id36ECB6EF04C944A5971ADE4BA3915519"><enum>(3)</enum><text>by inserting
<quote>or under a program funded with qualified State expenditures (as defined
in section 409(a)(7)(B)(i))</quote> after <quote>this part</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id9D4FACEBBCCE4F329A0C71EA5593FE8A"><enum>(4)</enum><text>by striking
<quote>, not exceeding the total amount of assistance so paid to the
family,</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idCB87300F755949738CCA744FADEEA1A2"><enum>(c)</enum><header>Requirement To
disregard percentage of child support collected in determining amount and type
of TANF assistance</header><text>Section 408(a) of the Social Security Act (42
U.S.C. 608(a)) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id64213A0DC13C449C867AA4B3764CD140" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id1F94B35CDFD8402DA6CE08D5254D8DBB"><enum>(12)</enum><header>Requirement to
disregard percentage of child support collected in determining amount and type
of TANF assistance</header><text>A State to which a grant is made under section
403 shall disregard at least the same percentage of amounts collected as
support on behalf of a family as the percentage of earned income that the State
disregards in determining the amount or type of assistance provided to the
family 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)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id87AEE349A3C842A2BB22FE6FA95E7931"><enum>(d)</enum><header>Restoration of
Federal funding</header><text>Effective on the date of enactment of this Act,
section 7309 of the Deficit Reduction Act of 2005 (Public Law 109–171; 120
Stat. 147) is repealed and part D of title IV of the Social Security Act shall
be applied as if the amendment made by subsection (a) of that section had not
been enacted.</text>
</subsection><subsection id="idF0AB089093514FB28248B00FD173983E"><enum>(e)</enum><header>Repeal of
mandatory fee for child support collection</header><text>Effective on the date
of enactment of this Act, section 7310 of the Deficit Reduction Act of 2005
(Public Law 109–171; 120 Stat. 147) is repealed and part D of title IV of the
Social Security Act shall be applied as if the amendments made by that section
had not been enacted.</text>
</subsection><subsection id="id6E145836E6C54A71ACD0F3012259C6CC"><enum>(f)</enum><header>Prohibition on
considering a period of incarceration voluntary
unemployment</header><text>Section 466(a) of the Social Security Act (42 U.S.C.
666(a)) is amended by inserting after paragraph (19) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idB7E01345AA4A4514BA3CF197246A280B" style="OLC">
<paragraph id="id1CEF691CC4BB441AAFB839FB8A3795A9"><enum>(20)</enum><header>Procedures
relating to periods of incarceration of noncustodial parents</header>
<subparagraph id="idF82AD85C8D17455C9950368C4141058E"><enum>(A)</enum><header>In
general</header><text>Procedures which require that, in determining or
modifying the amount of, or terms and conditions of, any support obligation of
a noncustodial parent, the State—</text>
<clause id="idEE97E7D0A5724F6BAE8EC8EB36333F7D"><enum>(i)</enum><text>shall not
consider any period of incarceration of such parent as a period of voluntary
employment that disqualifies the parent from obtaining a review and adjustment,
if appropriate, of the support obligation; and</text>
</clause><clause id="idBECA20D2885C4ECDB610E45338354181"><enum>(ii)</enum><text>subject to
subparagraph (B) in the case of an incarcerated parent, shall—</text>
<subclause id="id1799F5F81AF24FB0833D70DAB19D355A"><enum>(I)</enum><text>temporarily
suspend any support obligation on the parent and the enforcement of any support
obligation of the parent existing prior to the period of incarceration;
and</text>
</subclause><subclause id="id2E3D44E49A0F491E8C6CF204EB6760F7"><enum>(II)</enum><text>temporarily
prohibit the accrual of any interest on any support obligation of the parent
existing prior to the period of incarceration during any such period.</text>
</subclause></clause></subparagraph><subparagraph id="idF01FF618CC1F48CFBE12CE0AE670539A"><enum>(B)</enum><header>Notice and
opportunity to challenge suspension</header><text>Such procedures shall require
the State to provide a custodial parent with—</text>
<clause id="idBAE8EC8E43C94968815482942B8C40FF"><enum>(i)</enum><text>notice of any
suspension of review, adjustment, or enforcement of a support obligation and of
any prohibition on interest accrual on such obligation that is imposed in
accordance with subparagraph (A)(ii); and</text>
</clause><clause id="id9647964452E64F8CBCED1B3F64DA192C"><enum>(ii)</enum><text>an opportunity
to request that the suspension or prohibition be terminated or modified on the
basis that the noncustodial parent has sufficient income or resources to
continue payment of the support obligation during the noncustodial parent's
period of
incarceration.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idCA72CCC5565143FB8B95468A31874627"><enum>(g)</enum><header>Forgiving or
other modification of child support arrearages assigned to the
State</header><text>Section 466(a)(9) of the Social Security Act (42 U.S.C.
666(a)(9)) is amended in the flush matter following subparagraph (C), by
inserting the following new sentence at the end: <quote>Nothing in this
paragraph shall be construed as prohibiting a State from forgiving,
compromising, reducing or waiving arrearages permanently assigned to the State
under part A or E of this title or under title XIX.</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id44A5CEEAEC9D4FD68794F7A7404A06B5"><enum>(h)</enum><header>Review and
adjustment of child support arrearages upon request</header><text>Section
466(a)(10) of the Social Security Act (42 U.S.C. 666(a)(10)) is amended by
adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id7319CCB8526F4FB68D67C8F6252F09C4" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="id9E3ED2B668104E18A2CC9EECECEA9709"><enum>(D)</enum><header>Review and
adjustment of arrearages</header><text>Procedures which require the State to
review, and if appropriate, reduce the balance of arrearages permanently
assigned to the State under part A or E of this title, or under title XIX ,
pursuant to standards and procedures established by the State, in cases where
the obligor lacks sufficient ability to pay the arrears, adjustment will
promote timely payment of current support, or barriers, such as incarceration,
may have limited the ability of the obligor to timely seek a modification of
the order, and it is in the best interests of the child to make such reduction.
Nothing in the preceding sentence shall be construed as affecting arrearages
that have not been permanently assigned to the State under such part or
title.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idFAE3896A68CC4A05A636238E103FB27C"><enum>(i)</enum><header>Study and
report</header><text>Not later than October 1, 2007, the Secretary of Health
and Human Services shall study and submit a report to Congress regarding the
following:</text>
<paragraph id="ID30096485526346ac811a60c3167fc075"><enum>(1)</enum><text>The effect of age
eligibility restrictions for the earned income tax credit established under
section 32 of the Internal Revenue Code of 1986 for individuals without
qualifying children on—</text>
<subparagraph id="id088BCCACF19C4BFEB0BE473DC5951D4E"><enum>(A)</enum><text>the ability of
young parents to pay child support;</text>
</subparagraph><subparagraph id="id72F082613015422CBB98923A3F631798"><enum>(B)</enum><text>compliance with
child support orders; and</text>
</subparagraph><subparagraph id="idAD4CCBEE2AFA4BBDB35A98BD45B916DB"><enum>(C)</enum><text>the relationship
between young noncustodial parents and their children.</text>
</subparagraph></paragraph><paragraph id="id1F000F697EDF445991FBFCCA02676668"><enum>(2)</enum><text>The impact of
State earned income tax credit programs, especially such programs with targeted
benefits for noncustodial parents, on—</text>
<subparagraph id="id159AE0B50DFF40209F5631CE7B95144F"><enum>(A)</enum><text>the ability of
noncustodial parents to pay child support;</text>
</subparagraph><subparagraph id="id601321FAB5CA4F51986DD21D078370F2"><enum>(B)</enum><text>compliance with
child support orders; and</text>
</subparagraph><subparagraph id="idAF01B2309D73465DAE1311878746CC1D"><enum>(C)</enum><text>the relationship
between noncustodial parents and their children.</text>
</subparagraph></paragraph><paragraph id="id16A6C285736B4EA1A9D6009CA1416040"><enum>(3)</enum><text>The challenges
faced by legal immigrants and individuals for whom English is not their primary
language in fulfilling child support and other noncustodial parenting
obligations.</text>
</paragraph></subsection><subsection id="id8970BE8ED5B34EB5B72AE8745D7469A6"><enum>(j)</enum><header>Effective
date</header>
<paragraph id="idAB2D89182C8948E587F877FC0904B273"><enum>(1)</enum><header>In
general</header><text>Except as otherwise provided in this section, the
amendments made by this section shall take effect on October 1, 2009, and shall
apply to payments under parts A and D of title IV of the Social Security Act
for calendar quarters beginning on or after that date, and without regard to
whether regulations to implement the amendments are promulgated by such
date.</text>
</paragraph><paragraph id="id47A804F0653845CEA1775370153CE8CB"><enum>(2)</enum><header>State option to
accelerate effective date</header><text>Notwithstanding paragraph (1), a State
may elect to have the amendments made by the preceding provisions of this
section apply to the State and to amounts collected by the State (and to
payments under parts A and D of title IV of such Act), on and after such date
as the State may select that is not earlier than October 1, 2006, and not later
than September 30, 2009.</text>
</paragraph></subsection></section><section id="id36E0291EE0874A928D1405E571F911E0"><enum>106.</enum><header>Grants to
States to conduct demonstration projects to promote economic opportunity for
low-income parents</header>
<subsection id="idFDEA56A42F38439DB8D99326F1FC041D"><enum>(a)</enum><header>Authority To
award grants</header><text>The Secretary of Health and Human Services, in
consultation with the Secretary of Labor, shall award grants to States to
conduct demonstration projects to carry out one or more of the purposes
described in subsection (b).</text>
</subsection><subsection id="id20A7326BE2C94A9BB7845A36AD9D5765"><enum>(b)</enum><header>Purposes
described</header><text>For purposes of subsection (a), the purposes described
in this subsection are the following:</text>
<paragraph id="id1C23BE68DC884BD697C77EBCB3E98A26"><enum>(1)</enum><header>Court-supervised
or IV–D agency-supervised employment programs for noncustodial parents</header>
<subparagraph id="id35FB2E3609A04B649BA051B57DEE35EF"><enum>(A)</enum><header>In
general</header><text>To establish, in coordination with counties and other
local or tribal governments, court-supervised or IV–D agency
supervised-employment programs for noncustodial parents who have barriers to
employment and a history of nonpayment of child support obligations, as
determined by a court or the IV–D agency, and who are determined by the court
or agency to be in need of employment services or placement in order to pay
such child support obligations. A noncustodial parent described in the
preceding sentence who is an ex-offender shall be eligible to participate in a
program established to carry out this purpose.</text>
</subparagraph><subparagraph id="id935C92AAADB049B29C74AC5D31A745DE"><enum>(B)</enum><header>Requirements</header>
<clause id="idD62847EDDB2341B388B1A4866B7F1C1E"><enum>(i)</enum><header>Option to
participate prior to contempt finding</header><text>A State shall not be
eligible to receive a grant under this section to carry out this purpose unless
any program established with funds made available under the grant provides
noncustodial parents described in subparagraph (A) with an option to
participate in the program prior to the court or agency entering a finding that
the noncustodial parent is in contempt for failure to pay a child support
obligation and, potentially subject to criminal penalties.</text>
</clause><clause id="id4210AC1F473A4BED83A1BA74B991C27E"><enum>(ii)</enum><header>Program
goals</header><text>An employment program established with funds made available
under a grant awarded under this section to carry out this purpose shall be
designed to do the following:</text>
<subclause id="id2AEA9131ABA54D68B4E62119E90C8DEF"><enum>(I)</enum><text>To assist
noncustodial parents described in subparagraph (A) obtain and maintain
unsubsidized employment.</text>
</subclause><subclause id="id93433880351F464182794CBDAF199E0F"><enum>(II)</enum><text>To increase the
amount of financial support received by children.</text>
</subclause><subclause id="idD4C252CE684B410BB03660C47681BCBD"><enum>(III)</enum><text>To help
noncustodial parents described in subparagraph (A) improve relationships with
their children and their children's custodial parent.</text>
</subclause></clause><clause id="idF99B1C1B1F2E4AABB2537C2D86456106"><enum>(iii)</enum><header>6 months of
continuous, timely payments</header><text>An employment program established
with funds made available under this section to carry out this purpose shall
not permit a noncustodial parent placed in the program to graduate from the
program and avoid penalties for failure to pay a child support obligation until
the noncustodial parent completes at least 6 months of continuous, timely
payment of the parent’s child support obligations.</text>
</clause><clause id="id71A1D5310152492E960A790A50165CED"><enum>(iv)</enum><header>Use of
funds</header><text>Services provided under an employment program established
with funds made available under a grant made to carry out this purpose may
include one or more of the following:</text>
<subclause id="id586DCA4CEA34407AAA5D6D8CA99822D1"><enum>(I)</enum><text>Job
development.</text>
</subclause><subclause id="idA807086B1F304D9FA951C838F97B03D9"><enum>(II)</enum><text>Supervised job
search.</text>
</subclause><subclause id="id23CEBFA87ADD41EAAB998FC57A92A493"><enum>(III)</enum><text>Job
placement.</text>
</subclause><subclause id="id11D3650F39C54316A1AA568FF9FA7907"><enum>(IV)</enum><text>Case
management.</text>
</subclause><subclause id="idB26032CEC075422F88180D276008CCB5"><enum>(V)</enum><text>Court liaison
services.</text>
</subclause><subclause id="idE07AF586D7EC4A8E93878661DFD85407"><enum>(VI)</enum><text>Educational
assessment.</text>
</subclause><subclause id="id24116431566A42BB91242959893A9689"><enum>(VII)</enum><text>Remedial
education services or educational referral.</text>
</subclause><subclause id="idBC303DDDAD7F4B0CB35D77C7A523CD85"><enum>(VIII)</enum><text>Vocational
assessment or services.</text>
</subclause><subclause id="idC414C11C138548588A7747B9BBE57E72"><enum>(IX)</enum><text>Counseling on
responsible fatherhood.</text>
</subclause><subclause id="id2F97600D84B6498F806B4FEDB62C9F74"><enum>(X)</enum><text>Support funds for
services such as transportation or short-term training.</text>
</subclause><subclause id="id461CF9BC83B744F091F88AFE96BD70DC"><enum>(XI)</enum><text>Referral for
support services.</text>
</subclause><subclause id="idF00FCA643A544005B3A94DE406AAA693"><enum>(XII)</enum><text>Employment
retention services.</text>
</subclause><subclause id="id201C7540A17F4882822007B3D63AB0FC"><enum>(XIII)</enum><text>Transitional
jobs programs.</text>
</subclause><subclause id="id9052559A077A4A3C8D83AC42F4C42719"><enum>(XIV)</enum><text>Public-private
career pathway partnerships established in accordance with paragraph
(3).</text>
</subclause></clause><clause id="id07F40287ABB0440097B8E3F40723E287"><enum>(v)</enum><header>Administration</header><text>A
State that receives a grant under this section to carry out this purpose may
contract with a public or private nonprofit organization, including a
faith-based or community-based organization, to administer (in conjunction with
the court of jurisdiction or the IV–D agency) the court-supervised or IV–D
agency-supervised employment program.</text>
</clause></subparagraph></paragraph><paragraph id="id11A6AE4E4C2247A7855C356D08BB52A0"><enum>(2)</enum><header>Transitional
jobs grants</header>
<subparagraph id="id704E0D2478F64A0B88C7429799F97490"><enum>(A)</enum><header>In
general</header><text>To establish and expand transitional jobs programs for
eligible individuals, including such programs conducted by local governments,
State employment agencies, nonprofit organizations, and faith-based or
community-based organizations or intermediaries, that—</text>
<clause commented="no" id="idCD9CA9AC8CD4400797395C7381E485F5"><enum>(i)</enum><text>combine
time-limited employment in transitional jobs that may be subsidized with public
funds, with activities that promote skill development and remove barriers to
employment, such as case management services and education, training, child
support-related services, and other activities, pursuant to individual plans;
and</text>
</clause><clause commented="no" id="id6E945D87BE824699880262A7336271EE"><enum>(ii)</enum><text>provide such
individuals with—</text>
<subclause commented="no" id="id858503125FC24D939A58509F11EE8F23"><enum>(I)</enum><text>transitional jobs
placements and job placement assistance, to help the individuals make the
transition from subsidized employment in transitional jobs to stable
unsubsidized employment; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idA1AD1EC3A02E46198A4D26902115FAC9"><enum>(II)</enum><text>retention
services after the transition to unsubsidized employment.</text>
</subclause></clause></subparagraph><subparagraph commented="no" id="idFFF17D32B0594F57B441A478C4B5B970"><enum>(B)</enum><header>Eligible
individuals</header><text>For purposes of this paragraph, the term
<term>eligible individuals</term> means individuals within any of the following
categories of disproportionately chronically unemployed individuals:</text>
<clause commented="no" id="id27032F7E7F4E48DEBCA9F4383AE9388E"><enum>(i)</enum><text>Individuals who
have attained age 16, but not attained age 36, and who have documented barriers
to employment, particularly such individuals who are parents or expectant
parents.</text>
</clause><clause commented="no" id="id26D49C02A9964F078CF8CB9644F3712F"><enum>(ii)</enum><text>Formerly
incarcerated individuals.</text>
</clause><clause commented="no" id="idC65EB599E4F44F128D6DD5C37957AAA8"><enum>(iii)</enum><text>Homeless or
formerly homeless individuals.</text>
</clause><clause commented="no" id="id0F2FD8C4EABE46DBB5D046F053D4F348"><enum>(iv)</enum><text>Individuals with
disabilities.</text>
</clause><clause commented="no" id="id3309401653D146CFA1477521C1B4DFDD"><enum>(v)</enum><text>Individuals
designated by a court or the IV–D agency to participate in transitional jobs
programs.</text>
</clause></subparagraph><subparagraph commented="no" id="idAEF194FD458C44668F662C6119AA815D"><enum>(C)</enum><header>Limitations on
use of funds</header>
<clause commented="no" id="id0FF8B10A712C45AF8FEDE57B8B916CD5"><enum>(i)</enum><header>Allowable
activities</header><text>A State that receives a grant to carry out this
purpose (or a subgrantee of such State) (referred to in this paragraph as the
<quote>program operator</quote>) shall use the funds made available under the
grant to operate a transitional jobs program for eligible individuals
consistent with the following requirements:</text>
<subclause commented="no" id="id71A03A05909D4BFD9BE0136818BEF171"><enum>(I)</enum><header>Jobs</header><text>The
program operator shall place eligible individuals in temporary jobs, the
incomes from which may be subsidized in whole or in part with public funds. An
eligible individual placed in such a job (referred to in this paragraph as
<quote>a participant</quote>) shall perform work directly for the program
operator or another public, nonprofit, or private sector organization (which
operator or organization may be referred to in this paragraph as a
<quote>worksite employer</quote>) within the community involved.</text>
</subclause><subclause commented="no" id="id21908CD8FBFE4F7B8111B4D3099A3714"><enum>(II)</enum><header>Hours</header>
<item commented="no" id="id9D7091E769BD4439B01CB7438241540A"><enum>(aa)</enum><header>In
general</header><text>Subject to item (bb), the transitional jobs program shall
provide a participant with not less than 30, and not more than 40, hours per
week of a combination of paid employment and the services described in
subclauses (III), (IV), and (V).</text>
</item><item commented="no" id="idEE26BEBDE50642A59D64D192A5D379E2"><enum>(bb)</enum><header>Accommodation
of special circumstances</header><text>The number of hours per week required
under item (aa) may be adjusted in the case of a participant who requires a
modified work week to accommodate special circumstances.</text>
</item></subclause><subclause commented="no" id="idE1D34981FFD84B5490FC1ECDC34A561D"><enum>(III)</enum><header>Job
preparation and services</header><text>The program operator shall—</text>
<item commented="no" id="id2F31EF440AB74C69AEA89817BDFC8457"><enum>(aa)</enum><text>develop an
individual plan for each participant, which shall contain a goal that focuses
on preparation of the participant for unsubsidized jobs in demand in the local
economy that offer the potential for advancement and growth (including
increases in wages and benefits);</text>
</item><item commented="no" id="idA6031F062EF242B8BC456E6658F8E002"><enum>(bb)</enum><text>develop
transitional jobs placements for participants that will best prepare them for
jobs described in item (aa) or participation in the public-private career
pathway partnerships established in accordance with paragraph (3); and</text>
</item><item commented="no" id="idD1BCC449133741F6A7BFC63C613F019D"><enum>(cc)</enum><text>provide case
management services and ensure that appropriate education, training, and other
activities are available to participants, consistent with each participant’s
individual plan.</text>
</item></subclause><subclause commented="no" id="idF348936DFECD401D9A181A25AE6289DB"><enum>(IV)</enum><header>Job placement
assistance and retention services</header><text>The program operator shall
provide job placement assistance to help participants obtain unsubsidized
employment and shall provide retention services to the participants for a
minimum of 6 months after entry into the unsubsidized employment.</text>
</subclause><subclause commented="no" id="id395ADD5B0E5D4015B6175A8B93CEFA5A"><enum>(V)</enum><header>Education or
training</header><text>In any workweek in which a participant is scheduled to
work at least 30 hours in the program, not less than 20 percent of the
scheduled hours and not more than 50 percent of the scheduled hours shall
involve participation in—</text>
<item commented="no" id="idACB874697D5649A29431F68F73A07BE1"><enum>(aa)</enum><text>education or
training activities designed to improve the participant’s employability and
potential earnings;</text>
</item><item commented="no" id="idD327DD6B762140DDBC66A544842A7324"><enum>(bb)</enum><text>other activities
designed to reduce or eliminate any barriers that may impede the participant’s
ability to secure and advance in unsubsidized employment; or</text>
</item><item commented="no" id="id5CF2C6D3ED21413B8C88386C8B89E41B"><enum>(cc)</enum><text>activities
designed to promote financial literacy and the use of products and services
that increase personal savings and build financial assets for family support,
education, homeownership, and retirement.</text>
</item></subclause><subclause commented="no" id="idC06327F9C48F4A82AEB53D4F8CA3C34E"><enum>(VI)</enum><header>Duration</header>
<item commented="no" id="id626659F77CD74FEC8CCAB8590D68C3AD"><enum>(aa)</enum><header>In
general</header><text>Subject to item (bb), the duration of any placement in
the program shall be for a period of 6 consecutive months.</text>
</item><item commented="no" id="idBB676D42110940A3A5B0C2E6CD0105DD"><enum>(bb)</enum><header>3 month
extension</header><text>A program placement may be extended on a one-time basis
for an additional period of 3 consecutive months upon the conclusion of the
original 6-month placement period if such extension would be consistent with
the individual’s plan for transition to unsubsidized employment.</text>
</item></subclause><subclause commented="no" id="idC249EAA5E43249E2823315FCBAFB1CD2"><enum>(VII)</enum><header>Supervision</header><text>The
worksite employer or program operator shall supervise program participants,
consistent with the goal of addressing the limited work experience and skills
of the participants.</text>
</subclause></clause></subparagraph><subparagraph commented="no" id="idB236C43E912D49728DE1831E957E7127"><enum>(D)</enum><header>Reports</header><text>Not
later than 120 days after the end of the grant period, the program operator
shall submit a report to the Secretary of Health and Human Services and the
Secretary of Labor that contains information on the number of participants in
the program who have entered unsubsidized employment, rates of retention in
such employment for those participants, demographic information regarding the
participants, and information regarding the wages and benefits received by the
participants.</text>
</subparagraph><subparagraph commented="no" id="id7E302A1B682A41A58C9AE7E736CE03BB"><enum>(E)</enum><header>Technical
assistance</header><text>The Secretary of Health and Human Services, in
consultation with the Secretary of Labor, shall enter into contracts with
entities with demonstrated experience in the provision of transitional jobs to
provide technical assistance to the program operators and worksite employers
for the programs assisted under this paragraph.</text>
</subparagraph></paragraph><paragraph id="id25F4236596B6408298B3B698C463C0C3"><enum>(3)</enum><header>Public-private
career pathways partnerships</header>
<subparagraph id="idE6042A15E0A94E7797337B57F4E14D79"><enum>(A)</enum><header>In
general</header><text>To allow workforce education providers representing
career pathway partnerships—</text>
<clause id="idA3902963657141AEAE432CC233BC0D31"><enum>(i)</enum><text>to
create or expand career pathways with specific employers for disadvantaged
workers, which may include any mix of such employers’ existing lower wage
employees, new hires or potential hires; or</text>
</clause><clause id="id311EC698CA7A47D0A076FF624AC4C8C3"><enum>(ii)</enum><text>to
fill in gaps in career pathways in particular localities or regions as needed
to ensure that career pathways are accessible to unemployed disadvantaged
workers and at risk youth who have lower skills or limited English proficiency,
including through the creation of workforce education services, such as
<quote>bridge</quote> programs that contextualize basic skills, English
language, or college remedial education services to specific career pathways,
and efforts to create opportunities for gaining work experience in a career
pathway.</text>
</clause></subparagraph><subparagraph id="id81B5B32F25BF42F0B32D3CDD98CCCCF3"><enum>(B)</enum><header>Use of
funds</header><text>Funds made available under a grant under this section to
carry out this purpose may be used by career pathways partnerships for any
expense reasonably related to the accomplishment of the specific objectives of
the partnership and the purpose described in this paragraph, including any of
the activities described in paragraph (1)(B)(iv).</text>
</subparagraph><subparagraph id="id978279C2925A4A1AA8C66409E826422A"><enum>(C)</enum><header>Limitations</header>
<clause id="id091B489681E24752BBFEEC080D46DD72"><enum>(i)</enum><header>In
general</header><text>Of the funds made available to a career pathway
partnership to carry out the purpose described in this paragraph—</text>
<subclause id="id8B41BC68C11B499A9FE75BC5B14E8C55"><enum>(I)</enum><text>not more than 30
percent of such funds may be used to pay or subsidize wages during a period of
work experience or internship, not to exceed 90 days; and</text>
</subclause><subclause id="id9F6590E220404983879E85CAFEEB50A9"><enum>(II)</enum><text>not more than 10
percent of such funds may be used for administrative purposes.</text>
</subclause></clause><clause id="id0580AB03DDBA4E30AA48ADEE76C255DC"><enum>(ii)</enum><header>Prohibition on
subsidizing wages of current employees</header><text>No funds made available to
carry out this paragraph shall be used to subsidize the wages of any individual
who, as of the date of the establishment of the career pathway partnership, is
an employee of any employer participating in the partnership.</text>
</clause></subparagraph><subparagraph id="id61A768C50B144AB3A35A3B6AEC960D66"><enum>(D)</enum><header>Requirements
for awarding of subgrants</header>
<clause id="id8B8E16C023514367A66B672CBC199CCD"><enum>(i)</enum><header>In
general</header><text>Funds shall be made available to career pathway
partnerships to carry out the purpose described in this paragraph based on a
performance-based accountability system that includes the following measures of
performance:</text>
<subclause id="idA27BF9F37CEF4E429F7E085FED1C7507"><enum>(I)</enum><text>The number of
individuals to be trained.</text>
</subclause><subclause id="idC8DEAA7E0A134D27A3726984F2BA2699"><enum>(II)</enum><text>The percentage
of such individuals who complete the program.</text>
</subclause><subclause id="id1773E630C7FD47869D86A9A80C73C346"><enum>(III)</enum><text>The percentage
of such individuals who enter or advance in employment.</text>
</subclause><subclause id="id1C51E9FA62E245DDB480D4E13C0D1F0D"><enum>(IV)</enum><text>The wage and
benefit gains of individuals who complete the program before and within 6
months after their program completion, including the extent to which the
individuals achieved economic self-sufficiency.</text>
</subclause><subclause id="idE7E19023C97D441B8AD3908BA354CB0C"><enum>(V)</enum><text>The percentage of
individuals who complete the program and are placed in jobs who retain
employment for at least 6 months.</text>
</subclause><subclause id="idCA0C4CD60D95408EBF79BD7CF2C08DDD"><enum>(VI)</enum><text>The percentage
of individuals who owe child support and complete the program who improve in
their payment of child support within 6 months after their program
completion.</text>
</subclause><continuation-text continuation-text-level="clause">In establishing
goals for such measures, due consideration shall be given to the education,
work experience, and job readiness of the individuals expected to participate
in the program; the barriers of such individuals to employment, and the local
job market.</continuation-text></clause><clause id="idB0AED34D5C1D4F1EB808911792843945"><enum>(ii)</enum><header>Considerations
for funding renewals</header><text>A subgrantee's level of success in achieving
employment, advancement, wage, and employment retention goals shall be a
primary consideration for determining whether to renew a grant made to such
entity and the funding level for such grant.</text>
</clause><clause id="id6FD6AAB2DF8E47DBB264AA4C1431A31B"><enum>(iii)</enum><header>Priorities
for awards of subgrants</header><text>In awarding subgrants to carry out this
purpose, a State shall give priority to applications that—</text>
<subclause id="id8344E168708644E1AB4BC256E07B3B69"><enum>(I)</enum><text>propose to serve
areas of high poverty, high youth unemployment, high drop out rates, or high
rates of low-income single-parent families;</text>
</subclause><subclause id="id7A7B9D71B344423E9BBC146A9BD19248"><enum>(II)</enum><text>include a
substantial cash or in-kind match by all employers, including joint
labor-management programs where applicable, in the partnerships, such as paid
release time for employed workforce education participants;</text>
</subclause><subclause id="id34813CF7041849E182FCD5BF19A2FAC6"><enum>(III)</enum><text>use
instructional materials and instructors directly used in the specific business
or industry sectors of the partnership employers;</text>
</subclause><subclause id="idC74E46822CA2459985C76A64FEDD5526"><enum>(IV)</enum><text>link successful
completion of workforce education services to wage increases, promotions or job
hires;</text>
</subclause><subclause id="idFA42B76793C744249C81B2673B1AD3C4"><enum>(V)</enum><text>will result in
attainment of employer-recognized occupational and educational
credentials;</text>
</subclause><subclause id="id2469A1B3A74448BA82A23627D6D16226"><enum>(VI)</enum><text>address career
guidance and adult basic education and English language needs as well as
job-specific skills;</text>
</subclause><subclause id="idCC16E0C3A7E7493DBDDFB2CD0B206C29"><enum>(VII)</enum><text>demonstrate a
blending of resources from partner agencies in the workforce system and other
sectors and Federal programs, including superior procedures for coordinating
responsible fatherhood promotion activities, where appropriate, to support the
development of high quality pathways;</text>
</subclause><subclause id="id376C1499258B47F1BCDEA31A091E165C"><enum>(VIII)</enum><text>identify how
the subgrantee will maximize services to unemployed disadvantaged workers who
also face other barriers in the labor market, such as high school dropout,
offender status, aging out of foster care, low basic skill level, including
limited English proficiency, learning disabilities, physical, emotional or
behavior disabilities, or substance abuse recovery, which may be through direct
relationships with local providers of transitional jobs programs under which in
appropriate circumstances transitional jobs participants may access career
pathways programs upon completion of the transitional jobs program; and</text>
</subclause><subclause id="id1B0DE1945B0C487D97A48FCF1EC75E35"><enum>(IX)</enum><text>support
collaboration, as appropriate, between employers and labor organizations and
other workforce development professionals, including joint labor management
training and education programs where appropriate.</text>
</subclause></clause></subparagraph><subparagraph id="idB6DE73BE9F824679B9E7C844A6043588"><enum>(E)</enum><header>Definitions</header><text>In
this paragraph:</text>
<clause id="idF61E64EBC793446DA1AFA1CF7FFCD72B"><enum>(i)</enum><header>Adult
education</header><text>The term <term>adult education</term> has the meaning
given that term in section 203 of the Workforce Investment Act of 1998 (20
U.S.C. 9202).</text>
</clause><clause id="idF709015306FC4B97B9A68DD33201D1DB"><enum>(ii)</enum><header>Career
pathway</header><text>The term <term>career pathway</term> means a linked set
of workforce education and job opportunities within a specific business or
industry sector, or for an occupational sector that cuts across multiple
business and industry sectors, which begins at the lowest skill and English
language levels, and extends through for-credit college opportunities such as
earning relevant associate or bachelor’s degrees, and prepares individuals for
advancement in jobs in demand in the local or regional labor market.</text>
</clause><clause id="id2941BCC4E54A45BDA258ACAA5F404BDB"><enum>(iii)</enum><header>Community-based
provider</header><text>The term <term>community-based provider</term> means a
not-for-profit organization, with local boards of directors, that directly
provides workforce education services.</text>
</clause><clause id="id3FC81FAFC99B45279F8FF3B18755F29D"><enum>(iv)</enum><header>Institution of
higher education</header><text>The term <term>institution of higher
education</term> has the meaning given that term in section 101 of the Higher
Education Act of 1965 (20 U.S.C. 1001).</text>
</clause><clause id="id43B84253B72C43C9AA944924FDC8BF43"><enum>(v)</enum><header>Charter
school</header><text>The term <term>charter school</term> has the meaning given
that term in section 5210 of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 7221i).</text>
</clause><clause id="id48BB22B29235464796DFC7F2A4A735C8"><enum>(vi)</enum><header>Area
vocational education school</header><text>The term <term>area vocational and
technical education school</term> has the meaning given that term in section 3
of the Carl D. Perkins Vocational and Technical Education Act of 1998 (20
U.S.C. 2302).</text>
</clause><clause id="idA556A1E520BB4093B980A10261DC1208"><enum>(vii)</enum><header>Disadvantaged
workers</header><text>The term <term>disadvantaged workers</term> means
unemployed individuals in households whose income is at or below the lower
living standard or employed individuals with wages at or below
<fraction>2/3</fraction> of the median wage for the State or region applying
for the grant or the partnership applying for a subgrant.</text>
</clause><clause id="idA589FB0B869E4E83B65679002D387A77"><enum>(viii)</enum><header>Career
pathway partnership</header><text>The term <term>career pathway
partnership</term> means collaborations of 1 or more workforce education
providers, 1 or more employers, 1 or more labor organizations, where
applicable, as a result of such organization's representation of employees at
the worksite who have skills in which the training or employment programs are
proposed, and may include optional additional entities as needed to provide a
comprehensive range of workforce education and ancillary support
services.</text>
</clause><clause id="idB7EACC77854D4109B522D20519A7F4F2"><enum>(ix)</enum><header>Workforce
education</header><text>The term <term>workforce education</term> means a set
of career guidance and exploration, adult education, job training, registered
apprenticeship programs, and for-credit postsecondary education services aimed
at preparing individuals to enter and sustain employment in specific
occupations and to have the sufficient skills to respond to shifting employment
opportunities.</text>
</clause><clause id="id80CBD25638F94042ABB1145E401E9E22"><enum>(x)</enum><header>Workforce
education provider</header><text>The term <term>workforce education
provider</term> means community-based providers, institutions of higher
education, area vocational and technical education schools, charter schools,
and other public nonprofit entities that provide workforce education.</text>
</clause></subparagraph></paragraph></subsection><subsection id="idD9D862F4903B444292E34510EADE4D62"><enum>(c)</enum><header>Matching
requirement</header>
<paragraph id="id4576E7B3D35041A497762957896CB162"><enum>(1)</enum><header>In
general</header><text>The Secretary of Health and Human Services may not award
a grant to a State under this section unless the State agrees that, with
respect to the costs to be incurred by the State in conducting a demonstration
project with funds provided under the grant, the State will make available
non-Federal contributions in an amount equal to 10 percent of the amount of
Federal funds paid to the State under such grant.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA1CE82871B12407BB3ABECDD4179BEB3"><enum>(2)</enum><header>Non-federal
contributions</header><text>In this subsection, the term <term>non-Federal
contributions</term> includes contributions by the State and by public and
private entities that may be in cash or in kind, but does not include any
amounts provided by the Federal Government, or services assisted or subsidized
to any significant extent by the Federal Government, or any amount expended by
a State before October 1, 2006.</text>
</paragraph></subsection><subsection commented="no" id="id63F66F39997946DC9548FE954D9354C1"><enum>(d)</enum><header>Worker
protections and labor standards</header>
<paragraph commented="no" id="id6E5BDF543BCB44ACB60B6F8B3CC48854"><enum>(1)</enum><header>Rate of pay;
benefits and working conditions</header>
<subparagraph commented="no" id="id3A2528321BBD47E2BC82DB6259A43552"><enum>(A)</enum><header>In
general</header><text>A worksite employer of a participant in a program or
activity funded under this section shall pay the participant at the rate paid
to employees of the worksite employer who are not participants in such program
or activity and who perform comparable work at the worksite, including periodic
increases where appropriate. If no other employees of the worksite employer
perform comparable work at the worksite, the worksite employer shall pay the
participant not less than the applicable Federal or State minium wage,
whichever is higher.</text>
</subparagraph><subparagraph commented="no" id="id011A2476417F4DA2BD753C5D1FEBA061"><enum>(B)</enum><header>Benefits and
conditions</header><text>An individual employed through participation in a
program or activity funded under this section shall be provided with benefits
and working conditions at the same level and to the same extent as such
benefits and conditions are provided to other employees of the employer of the
individual who have worked a similar length of time and perform the same
work</text>
</subparagraph></paragraph><paragraph commented="no" id="id188610D93BAB4E049336718ACA08BA7B"><enum>(2)</enum><header>Nonduplication</header>
<subparagraph commented="no" id="idB64EB8BB2C5845E1839D932C91275CFC"><enum>(A)</enum><header>In
general</header><text>Funds provided through a grant made under this paragraph
shall be used only for a program or activity that does not duplicate, and is in
addition to, a program or activity otherwise available in the locality of the
program or activity funded under this section.</text>
</subparagraph><subparagraph commented="no" id="idE88E89092B6B4A9A83FB8CF660300EA2"><enum>(B)</enum><header>Private,
nonprofit entity</header><text>Funds provided through a grant made under this
section shall not be provided to a private nonprofit entity to conduct programs
or activities that are the same as or substantially equivalent to activities
provided by a State or local government agency in the area in which such entity
is located, unless the requirements of paragraph (3) are met.</text>
</subparagraph></paragraph><paragraph commented="no" id="id581D616A190E48CDAF2974A59C66800F"><enum>(3)</enum><header>Nondisplacement</header>
<subparagraph commented="no" id="idE8F55AB1848B4A2AA4ABE23DF4E1377F"><enum>(A)</enum><header>In
general</header><text>A worksite employer shall not displace an employee or
position (including partial displacement such as reduction in hours, wages, or
employment benefits) or impair contracts for services or collective bargaining
agreements, as a result of the use by such employer of a participant in a
program or activity funded under this section, and no participant in the
program or activity shall be assigned to fill any established unfilled position
vacancy.</text>
</subparagraph><subparagraph commented="no" id="idB00DB256C618489EB1DB47642075DD75"><enum>(B)</enum><header>Job
opportunities</header><text>A job opportunity shall not be created under this
paragraph that will infringe in any manner on the promotional opportunity of an
employed individual.</text>
</subparagraph><subparagraph commented="no" id="id26429F7F452C4113B78CC0D3D0D3D48C"><enum>(C)</enum><header>Limitation on
services</header>
<clause commented="no" id="id1933CFFFABF740529245D6CC17D2B1CD"><enum>(i)</enum><header>Supplantation
of hiring</header><text>A participant in any program or activity funded under
this section shall not perform any services or duties, or engage in activities,
that will supplant the hiring of employees that are not participants in the
program or activity.</text>
</clause><clause commented="no" id="id2FAACE25CD8A470FAB0EF0A4B80F05B2"><enum>(ii)</enum><header>Duties
formerly performed by another employee</header><text>A participant in any
program or activity funded under this section shall not perform services or
duties, or engage in activities, that are services, duties, or activities that
had been performed by or were assigned to any employee who recently resigned or
was discharged, who is subject to a reduction in force, who has recall rights
pursuant to a collective bargaining agreement or applicable personnel
procedures, who is on leave (such as terminal, temporary, vacation, emergency,
or sick leave), who is on strike, or who is being locked out.</text>
</clause></subparagraph><subparagraph commented="no" id="id31630A0B8F5D450D8D72478B706CC79C"><enum>(D)</enum><header>Concurrence of
local labor organization</header><text>No placement shall be made under a
program or activity funded under this section until the entity conducting the
program or activity has obtained the written concurrence of any local labor
organization representing employees who are engaged in the same or
substantially similar work as that proposed to be carried out for the worksite
employer with whom a participant is to be placed under the program or
activity.</text>
</subparagraph></paragraph><paragraph commented="no" id="id3B602F2E09F142BF9CD27FB366647BA9"><enum>(4)</enum><header>No impact on
union organizing</header><text>A State conducting a demonstration project
funded under this section and any entity conducting a program or activity
funded under this section shall provide the Secretary with a certified
assurance that none of such funds shall be used to assist or deter union
organizing.</text>
</paragraph><paragraph commented="no" id="idB594BD2AEC2C4F1D963B993F0CE4FCAA"><enum>(5)</enum><header>Accountability</header>
<subparagraph commented="no" id="id1C621FF5CB1D44ACBB8F06658C08D233"><enum>(A)</enum><header>In
general</header><text>Funds provided under this section shall not be used to
subsidize training or employment with an employer that has a demonstrable
record of noncompliance with Federal labor, civil rights, workplace safety, or
related laws.</text>
</subparagraph><subparagraph commented="no" id="idC843F60B623341599740F8557D6AA607"><enum>(B)</enum><header>Certified
satisfactory record</header><text>Employers who receive training or wage
subsidies under programs or activities funded under this section shall have a
satisfactory record in labor relations and employment practices, as certified
by the Secretary of Labor.</text>
</subparagraph><subparagraph commented="no" id="idA76190F3DA78446E86CA5C80E12F47F6"><enum>(C)</enum><header>Application of
worker protection laws</header><text>A participant in a program or activity
funded under this section shall be considered to be an employee of any employer
that the participant is placed with for all purposes under Federal and State
law, including laws relating to health and safety, civil rights, and worker’s
compensation.</text>
</subparagraph></paragraph><paragraph commented="no" id="idEC22ABE810CD4E789318CB773DAA35DC"><enum>(6)</enum><header>Grievance
procedure</header><text>An entity conducting a program or activity funded under
this section shall establish and maintain a procedure for the filing and
adjudication of grievances by employees of worksite employers who are not
participants in the program, or such employees’ representatives, or by
participants in such a program or activity alleging a violation of a provision
of this subsection that is similar to the grievance procedure established by a
State for purposes of section 407(f)(3) of the Social Security Act (42 U.S.C.
607(f)(3)).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD06A7019A9A948C68AF0BDFDAE77169D"><enum>(7)</enum><header>Nonpreemption
of state law</header><text>The provisions of this subsection shall not be
construed to preempt any provision of State law that affords greater
protections to employees or participants than are afforded by this
subsection.</text>
</paragraph><paragraph id="idA6FDC28881964311A5C5BB44CF41D0B8"><enum>(8)</enum><header>Treatment of
amounts paid to participants</header><text>Amounts paid to a participant in a
program or activity funded under this section shall be—</text>
<subparagraph id="idAE270EA8F7CE4B22809268A7269FF3AE"><enum>(A)</enum><text>considered earned
income for purpose of determining the participant's eligibility for the child
tax credit established under section 24 of the Internal Revenue Code of 1986,
the earned income tax credit established under section 32 of such Code, and any
other tax benefit established under such Code the eligibility for which is
based on earned income; and</text>
</subparagraph><subparagraph id="id4FCFAF9A521943E0B2047A8168157D73"><enum>(B)</enum><text>disregarded for
purposes of determining the participant's, the participant's family's, or the
participant's household's eligibility for, or amount of, assistance or benefits
provided under any means-tested program funded in whole or in part with Federal
funds.</text>
</subparagraph></paragraph></subsection><subsection id="id3CA0113EABCF4177B1005B8D4A6053F4"><enum>(e)</enum><header>Application</header>
<paragraph id="idFE892151969748BAAABA87B7CBFD9ECF"><enum>(1)</enum><header>Requirements
for all applications</header>
<subparagraph id="id2723242F71994473AA03B05C2AA1DC4D"><enum>(A)</enum><header>In
general</header><text>A State desiring to receive a grant to conduct a
demonstration project under this section to carry out one or more of the
purposes described in subsection (b) shall submit an application to the
Secretary of Health and Human Services at such time, in such manner, and
containing such information or assurances as the Secretary may require.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id0BCA2488CFE94A18803DEC27B37BF66E"><enum>(B)</enum><header>Compliance with
worker protections and labor standards</header><text>The application shall
include an assurance that the State and any entity conducting a program or
activity under the project shall comply with the worker protections and labor
standards established in accordance with such protections under subsection
(d),</text>
</subparagraph><subparagraph id="idA782B43E17AD4250B6007402F1CB5A04"><enum>(C)</enum><header>Nondiscrimination</header><text>The
application shall include an assurance that the State and any entity conducting
a program or activity under the demonstration project shall comply with section
188(a)(2) of the Workforce Investment Act of 1998 (29 U.S.C. 2938(a)(2)) to the
same extent that such section would apply to the entity if the program or
activity conducted under the demonstration project was considered to be funded
or otherwise financially assisted under that Act.</text>
</subparagraph><subparagraph id="idEB24962A6F91453CA20EC3EAC2FA4058"><enum>(D)</enum><header>Assurance grant
will supplement, not supplant, other State funding</header><text>The
application shall include an assurance from the chief executive officer of the
State that funds made available under the grant will supplement, and not
supplant, other funds used by the State to establish or support employment
placements for low-income parents.</text>
</subparagraph></paragraph><paragraph id="id595E60B96C854792BBB742458D501167"><enum>(2)</enum><header>Specific
demonstration project requirements</header>
<subparagraph id="idAF06436615C0420DA1998CE978677348"><enum>(A)</enum><header>Court-supervised
or IV–D agency-supervised employment programs for noncustodial
parents</header><text>In order to conduct a demonstration project described in
paragraph (1) of subsection (b), a State shall include in the application
submitted to the Secretary of Health and Human Services, the following:</text>
<clause id="ID0B6B44C8525E45C38561A4548882B5CC"><enum>(i)</enum><text>Evidence of an
agreement between the State and 1 or more counties to establish an employment
program that meets the requirements of subsection (b)(2).</text>
</clause><clause id="IDCE60FD831F5240EE8390CE90C56B5BB5"><enum>(ii)</enum><text>The number of
potential noncustodial parents to be served by the program.</text>
</clause><clause id="ID0FEB8407A3F74071B0128B30F416B4D4"><enum>(iii)</enum><text>The purposes
specific to that State’s program.</text>
</clause><clause id="ID8599233202F8411EB4E3004DB4B2FD92"><enum>(iv)</enum><text>The median
income of the target population.</text>
</clause></subparagraph><subparagraph id="id5B57B3A829D8430EBB698A2FAE21954F"><enum>(B)</enum><header>Public-private
career pathways partnerships</header><text>In order to conduct a demonstration
project described in paragraph (3) of subsection (b), a State shall include in
the application submitted to the Secretary of Health and Human Services a
description of—</text>
<clause id="id8A862EE12F794EE8BDFEE58A47506B43"><enum>(i)</enum><text>the
number, characteristics, and employment and earnings status of disadvantaged
individuals in the State or applicable region where the program is to be
conducted;</text>
</clause><clause id="id289AF5DA02E249639797042D272ECAA8"><enum>(ii)</enum><text>which business
and industry sectors, or occupational clusters that cut across sectors, will be
targeted by the career pathways partnership, based on overall economic benefit
to the community, the current and future demand for workers, the advancement
opportunities for workers, the wages at each step of the career pathway, and
availability of worker benefits;</text>
</clause><clause id="idB64A15FBFCCC44309F6DBB8142B0EF4F"><enum>(iii)</enum><text>the
interventions that will be put in place to address any educational deficits or
learning disabilities of individuals who participate in the program and to
ensure that such individuals have the academic, technical, communications, and
other job skills to function in the jobs targeted by the partnership;</text>
</clause><clause id="id048725576CBE4CBDA6BCA4DBBB355DDF"><enum>(iv)</enum><text>how the members
of the partnership will collaborate on the development of curriculum and
delivery of training that will provide the necessary occupational, academic and
other work-related skills and credentialing needed for the specific labor
market areas;</text>
</clause><clause id="id9985BF762821431CBE68CF1EAB591B1E"><enum>(v)</enum><text>the
supports that will be used to provide counseling, mentoring or other support to
individuals while in training or to assist them in navigating in complicated
work environments;</text>
</clause><clause id="id64EF30EC166640A385289216BA86C01B"><enum>(vi)</enum><text>the set of
career exposure activities that will be put in place to provide hands-on
experience such as work experience, on the job training, internships, or
work-study;</text>
</clause><clause id="id7435AECF2EF34F129F19825D763D05F4"><enum>(vii)</enum><text>the agreements
that are in place with employers, industry groups, and labor organizations,
where applicable, to ensure access to jobs and advancement opportunities in the
targeted businesses, industry or occupations;</text>
</clause><clause id="idB5FA336EFD314C4B99A0B332C12ADCEC"><enum>(viii)</enum><text>how the
workforce education providers in the partnership will assess the employment
barriers and needs of local disadvantaged individuals who participate in the
program and will identify resources for meeting those needs;</text>
</clause><clause id="id14802AE4C05C4250A044004FA005CF9C"><enum>(ix)</enum><text>how the
workforce education providers will work with partnership employers, business
and industry groups, labor organizations, where applicable, and local economic
development organizations to identify the priority workforce needs of the local
industry;</text>
</clause><clause id="idFD0E8EF1E4BE43FB878AEA1CF48249FC"><enum>(x)</enum><text>how
the partnerships will ensure that the appropriate program delivery models and
formal agreements are in place to ensure maximum benefits to the individuals
receiving career pathway partnership services and to the employers and labor
organizations, where applicable, in the partnership and the industries or
businesses they represent; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id588065BDF8914EF095719A39EBAABC81"><enum>(xi)</enum><text>how partnership
employers and labor organizations, where applicable, will be actively involved
in identifying specific workforce education needs, planning the curriculum,
assisting in training activities, providing job opportunities, and coordinating
job retention for individuals hired after training through the program and
follow-up support.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id59597A83E8F446948700ADE526E47D0B"><enum>(3)</enum><header>Applications by
indian tribes or tribal organizations</header><text>The Secretary of Health and
Human Services may exempt an Indian tribe or tribal organization from any
requirement of this section that the Secretary determines would be
inappropriate to apply to the Indian tribe or tribal organization, taking into
account the resources, needs, and other circumstances of the Indian tribe or
tribal organization.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idF171B719090A4338923963310B422F5E"><enum>(f)</enum><header>Priorities and
requirements for awarding grants</header>
<paragraph commented="no" id="id11F2EBF615CF452081BE09490FBA293B"><enum>(1)</enum><header>In
general</header><text>Subject to paragraphs (2) and (3), the Secretary of
Health and Human Services, in consultation with the Secretary of Labor, shall
give priority to making grants to carry out the purposes described in
subsection (b) to entities that—</text>
<subparagraph id="id545C71FF8E8B44E78DE3A4F3651A4266"><enum>(A)</enum><text>demonstrate a
plan for implementing measures to track their performance with respect to
meeting the goals of quality job placement, long-term unsubsidized job
retention, increasing child support payments, decreasing unpaid child support
arrearages, and increasing the involvement of low-income noncustodial parents
with their children; and</text>
</subparagraph><subparagraph id="idAEEFAD0E025B472DBC22AB19D8DA4111"><enum>(B)</enum><text>coordinate with,
and link individuals to, other public and private benefits and employment
services for low-income, noncustodial parents among the different systems or
programs in which such parents are involved, including the criminal justice
system, the State programs funded under each part of title IV of the Social
Security Act (42 U.S.C. 601 et seq.) (including programs and activities funded
under section 403(a)(2) of the Social Security Act (42 U.S.C. 603(a)(2)),
educational assistance programs, and job training or employment programs,
including State employment agencies.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id9C0AE34F3AF24549AD5E2BF0C89423AC"><enum>(2)</enum><header>Reflective of
target populations</header><text>In making grants to carry out these purposes,
the Secretary of Health and Human Services, in consultation with the Secretary
of Labor, shall give priority to States with proposed demonstration projects
that are designed to target low-income parents, including custodial and
noncustodial parents, and low-income married couples.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idA687690822B544A980F5D7F4A811D6E9"><enum>(3)</enum><header>Substantial
funding for each of the purposes</header><text>In making grants under this
section, the Secretary of Health and Human Services, in consultation with the
Secretary of Labor, shall ensure that a substantial share of the amount
appropriated under subsection (i) for a fiscal year is used for carrying out
each of the purposes described in subsection (b).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id86912EA71D984D0AA6E571C15C25811A"><enum>(g)</enum><header>Evaluation</header><text>The
Secretary of Health and Human Services, in consultation with the Secretary of
Labor, shall provide for an independent and rigorous evaluation of the
demonstration projects conducted under this section that includes, to the
maximum extent feasible, random assignment or other appropriate statistical
techniques, in order to assess the effectiveness of the projects.</text>
</subsection><subsection id="id13E1C950E07748A5AD3AE5A11F305BC5"><enum>(h)</enum><header>General
Definitions</header><text>In this section:</text>
<paragraph id="id25E2F6D00C3D4A098C70D9A4ED6FFD00"><enum>(1)</enum><header>State</header><text>The
term <term>State</term> means each of the 50 States, the District of Columbia,
the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam,
American Samoa, and includes an Indian tribe or tribal organization.</text>
</paragraph><paragraph id="id2D68BCE43C544199B167AA3E00EEAE4B"><enum>(2)</enum><header>IV-D
agency</header><text>The term <term>IV–D agency</term> means the State or local
agency responsible for administering the State program established under part D
of title IV of the Social Security Act (42 U.S.C. 651 et seq.).</text>
</paragraph><paragraph id="idF0CF4730A7294FD9BE16EB7306A7D464"><enum>(3)</enum><header>Indian tribe;
tribal organization</header><text>The terms <term>Indian tribe</term> and
<term>tribal organization</term> have the meaning given such terms in section 4
of the Indian Self-Determination and Education Assistance Act (25 U.S.C.
450b).</text>
</paragraph></subsection><subsection id="IDAB2BBFBFD1974205A0FCB0D599DB8827"><enum>(i)</enum><header>Appropriation</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated to carry out this section, $50,000,000 for each of
fiscal years 2007 through 2009.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id6E634D3EBFC7408A8485F0E89B8026D4"><enum>107.</enum><header>State
assessments of barriers to employment and financial support of
children</header>
<subsection commented="no" display-inline="no-display-inline" id="id352F02E422654CC1A8AB99B147147C46"><enum>(a)</enum><header>State
assessments and reports</header><text>As a condition of the continued approval
of a State plan under part D of title IV of the Social Security Act (42 U.S.C.
651 et. seq.), each State with an approved such plan, acting through the
appropriate State agencies, shall assess the State policies with respect to the
issues described in subsection (b) and submit a report to the Secretary of
Health and Human Services on the results of such assessment not later than
March 15, 2008.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id91B37E1B713D4EC4A63B30A0890149AC"><enum>(b)</enum><header>Issues
described</header><text>For purposes of subsection (a), the issues described in
this subsection are the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="id46A29EA992B9430E8BE734C2C069D66D"><enum>(1)</enum><text>The process of
setting and modifying child support obligations, particularly with respect to
low-income parents, including—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id816490839C22486592DFAB934CF5B466"><enum>(A)</enum><text>the role and
criteria for using imputed income in determining child support
obligations;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE6636107802D4088A3832649B0E77368"><enum>(B)</enum><text>the process of
modifying obligations;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id6306EAA0163A4FD4873A3FD2CF5F451D"><enum>(C)</enum><text>the consideration
of income and employment status, including efforts to identify unreported
income;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idD6987BE52A424A2D8B6280B7FD529979"><enum>(D)</enum><text>the consideration
of incarceration;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id97F25F76AC2B471B8DFAC38552367FE8"><enum>(E)</enum><text>the consideration
of disability;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idEC1C9AAB3457456BBB5FDF14599D550A"><enum>(F)</enum><text>the treatment of
arrearages, including interest charged, and laws or procedures that interfere
with forgiveness, adjustment, waiver, or compromise of arrears owed to the
State by low-income noncustodial parents who lack sufficient ability to pay
such arrearages;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBD97E46DA78943F78ED5838A2D1B18DA"><enum>(G)</enum><text>the procedures
related to retroactive support; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idDE56F5BBB2E746A3844180D1E7CF70B3"><enum>(H)</enum><text>State
pass-through and disregard policies for recipients of means tested public
benefits.</text>
</subparagraph></paragraph><paragraph id="ID0fd2df9b04a5486ab436e9179eeb4b6c"><enum>(2)</enum><text>The impact of
state criminal laws and law enforcement practices on the employment
acquisition, retention, and advancement prospects of individuals following
arrest, conviction, or incarceration, including—</text>
<subparagraph id="id1F1F28413148414D80091001C6870B1F"><enum>(A)</enum><text>any efforts,
including counseling or employment support, to assist ex-prisoners with reentry
to a community and successful reunification with their families; and</text>
</subparagraph><subparagraph id="idF2B6D08FBCBB486384AC1BF1980745BD"><enum>(B)</enum><text>an assessment of
any efforts to seal or expunge arrest and conviction records and any efforts to
grant certificates or other acknowledgments of rehabilitation to ex-prisoners,
and to examine State occupational licensing and certification
procedures.</text>
</subparagraph></paragraph><paragraph id="id83B13D667FB749B3B4566FF802A15B7C"><enum>(3)</enum><text>Identification of
any other barriers to healthy family formation or sustainable economic
opportunity for custodial and noncustodial parents that are created or
exacerbated by Federal or State laws, policies, or procedures, including an
examination of the rules of Federal and State means-tested programs, the
operation of the State workforce system, the availability of financial
education services, and the availability of domestic violence services and
child support procedures to help victims of domestic violence stay safe and
obtain the child support they are owed.</text>
</paragraph></subsection><subsection id="id5F01D6706C204CA6AD1EBBF620E50747"><enum>(c)</enum><header>Grants to
states for commissions on state law improvements in the best interest of
children and families</header><text>The Secretary of Health and Human Services
shall award grants to States to establish or support commissions to review the
State assessment conducted in accordance with subsection (a) and to make
recommendations on ways to improve State law in the best interest of children
and families.</text>
</subsection><subsection id="id4437F12C204C4C6494DC58305B5BF9F4"><enum>(d)</enum><header>Appropriations</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated to the Secretary of Health and Human Services for the
period of fiscal years 2007 through 2008, $3,000,000, to remain available until
expended, for the purpose of making—</text>
<paragraph id="id9D35CF557A4F4E17ACC55947A7CDCC9B"><enum>(1)</enum><text>payments to
States to offset all or a portion of the costs of conducting the State
assessments and reports required under subsection (a); and</text>
</paragraph><paragraph id="id75534328A269479488C355A79226B5F6"><enum>(2)</enum><text>grants to States
under subsection (c).</text>
</paragraph></subsection></section><section id="id2EAB58CFACC94A109D76681CA6F9B0AA"><enum>108.</enum><header>Collection of
child support under the food stamp program</header>
<subsection commented="no" id="ID44cb3a59628d49fc9520c0079bbb0c75"><enum>(a)</enum><header>Encouragement
of collection of child support</header><text>Section 5 of the Food Stamp Act of
1977 (7 U.S.C. 2014) is amended—</text>
<paragraph commented="no" id="id0F52297A186B4B0EA69928128A1FC514"><enum>(1)</enum><text>in subsection
(e)—</text>
<subparagraph commented="no" id="id38CDAD415F3A41959766D3DB0D623414"><enum>(A)</enum><text>by redesignating
paragraphs (5) and (6) as paragraphs (6) and (7), respectively;</text>
</subparagraph><subparagraph commented="no" id="id60B8505D6CFC41768B2E6C34A144B23C"><enum>(B)</enum><text>in paragraph
(4)(B), by striking <quote>paragraph (6)</quote> and inserting <quote>paragraph
(7)</quote>; and</text>
</subparagraph><subparagraph commented="no" id="id52E223E7EBC149329DFF4ED82FE608BB"><enum>(C)</enum><text>by inserting
after paragraph (4) the following:</text>
<quoted-block display-inline="no-display-inline" id="id411E1B21F17A4384BFA00D99983C2FAC" style="OLC">
<paragraph commented="no" id="ID52735f87e4d54d3a93c8ec705e7969cc"><enum>(5)</enum><header>Deduction for
child support received</header>
<subparagraph commented="no" id="id2D68F7C39BD14F0FA2A2C49BD0F33C63"><enum>(A)</enum><header>In
general</header><text>A household shall be allowed a deduction of 20 percent of
all legally obligated child support payments received from an identified or
putative parent of a child in the household if that parent is not a household
member.</text>
</subparagraph><subparagraph commented="no" id="idE96CAAE5940B43F1AF081288989189D0"><enum>(B)</enum><header>Order of
determining deductions</header><text>A deduction under this paragraph shall be
determined before the computation of the excess shelter deduction under
paragraph (7).</text>
</subparagraph></paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" id="id8D4B014F661E4E3D87C21F85A7AEBB96"><enum>(2)</enum><text>in subsection
(k)(4)(B), by striking <quote>subsection (e)(6)</quote> and inserting
<quote>subsection (e)(7)</quote>;</text>
</paragraph></subsection><subsection id="ID4e7ef40937474f43a668687932324fe5"><enum>(b)</enum><header>Simplified
verification of child support payments</header><text>Section 5(n) of the Food
Stamp Act of 1977 (7 U.S.C. 2014(n)) is amended—</text>
<paragraph id="ID693b507c3c84491fb621935be905f14d"><enum>(1)</enum><text>in the subsection
heading, by striking <quote><header-in-text level="subsection" style="OLC">State options to simplify</header-in-text></quote>, and inserting
<quote><header-in-text level="subsection" style="OLC">Simplified</header-in-text></quote>; and</text>
</paragraph><paragraph id="ID476e38de19d1402e895a331b2ec958ce"><enum>(2)</enum><text>by striking
<quote>Regardless of whether</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="idAAC7F827E30C4A399A31EDEE3F5E8B7E" style="OLC">
<paragraph id="IDdf456c468ed746e1852e0084bc8682fe"><enum>(1)</enum><header>In
general</header><text>A household that is paying legally obligated child
support through the program under part D of title IV of the Social Security Act
(42 U.S.C. 651 et seq.) shall receive—</text>
<subparagraph id="id0389A8C0E2294D63930D9F32509792B6"><enum>(A)</enum><text>a deduction under
subsection (e)(4); or</text>
</subparagraph><subparagraph id="idCB32239FD8B144AF956297C3ABBF9394"><enum>(B)</enum><text>an exclusion for
paid child support under subsection (d)(3).</text>
</subparagraph></paragraph><paragraph id="idE0EAFF16B1EF4340922761B008286C00"><enum>(2)</enum><header>State
options</header><text>Regardless of
whether</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID7f9a383d497747b6a26577ed2ae13471"><enum>(c)</enum><header>Inclusion of
economic opportunities programs in definition of work
program</header><text>Section 6(o)(2) of the Food Stamp Act of 1977 (7 U.S.C.
2015(o)(2)) is amended—</text>
<paragraph id="ID600a8601191242a0956f42df61dcdbd7"><enum>(1)</enum><text>in subparagraph
(C), by striking <quote>or </quote> at the end;</text>
</paragraph><paragraph id="id7AF21234F8BB48F6B5FD888A80D37C10"><enum>(2)</enum><text>in subparagraph
(D), by striking the period at the end and inserting <quote>; or</quote>;
and</text>
</paragraph><paragraph id="IDdd6b10654841426b981511f588a6f9da"><enum>(3)</enum><text>by adding at the
end the following:</text>
<quoted-block display-inline="no-display-inline" id="id8571EB25435C42B3A0CB94319213275D" style="OLC">
<subparagraph id="ID25428c7796204e11aefcd48b91d1070b"><enum>(E)</enum><text>participate in
and comply with the requirements of a demonstration project under section 106
of the <short-title>Responsible Fatherhood and Healthy
Families Act of
2006</short-title>;</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID064d6f5dced244479750096a5e34e123"><enum>(d)</enum><header>Effective
date</header>
<paragraph id="idCBAE797977B44E0EAA708ECFF8A30167"><enum>(1)</enum><header>In
general</header><text>This section and the amendments made by this section take
effect on October 1, 2007.</text>
</paragraph><paragraph id="IDf8dc24ef943e4467999538d31a711f37"><enum>(2)</enum><header>State
option</header><text>A State may implement the amendments made by subsections
(a) and (b) for participating households at the first recertification of the
households that occurs on or after October 1, 2007.</text>
</paragraph></subsection></section><enum>II</enum><header>Revenue
Provisions</header>
<section id="id5A343D0C36404991A256F0CCA124F9D3"><enum>201.</enum><header>Modifications
to the earned income tax credit</header>
<subsection id="idE869574094204C06975C8750179064DD"><enum>(a)</enum><header>Increase in
phaseout amount for workers with no qualifying children</header>
<paragraph id="id7329C0789AAC49CAB4E37DDB948FF896"><enum>(1)</enum><header>In
general</header><text>The table under section 32(b)(2)(A) of the Internal
Revenue Code of 1986 is amended by striking <quote>$5,280</quote> and inserting
<quote>$10,712</quote>.</text>
</paragraph><paragraph id="idE935C9339884499A80B269C1CD57888C"><enum>(2)</enum><header>Inflation
adjustment</header>
<subparagraph id="id4CF121BEA937442E80014C9BF12DEA4E"><enum>(A)</enum><header>In
general</header><text>Subsection (j) of section 32 of such Code is amended by
redesignating paragraph (2) as paragraph (3) and by inserting after paragraph
(1) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idE3192BE8C6474B2BA570D2B2F0D766CD" style="OLC">
<paragraph id="id04B09779628C47989CB22FDE2416577F"><enum>(2)</enum><header>Phaseout amount
for individuals with no qualifying children</header><text>In the case of any
taxable year beginning after calendar year 2007, the <quote>$10,712</quote>
dollar amount in section (b)(2)(A) shall be increased by an amount equal
to—</text>
<subparagraph id="id0F294E531AD042E98267717D83230988"><enum>(A)</enum><text>such dollar
amount, multiplied by</text>
</subparagraph><subparagraph id="id6BF6E03150D44FE1BC8E0B431AACEA48"><enum>(B)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins, determined by substituting
<quote>calendar year 2006</quote> for <quote>calendar year 1992</quote> in
subparagraph (B)
thereof.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id5D443A7828BE4C22A0472EDAFAB4FAFB"><enum>(B)</enum><header>Conforming
amendment</header><text>Clause (i) of section 32(j)(1)(B) of such Code is
amended by inserting <quote>(other than the amount described in paragraph
(2))</quote> after <quote>subsections (b)(2)(A)</quote>.</text>
</subparagraph></paragraph><paragraph id="id3708987D99684904B5449EC190CCCC42"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
taxable years ending after December 31, 2005.</text>
</paragraph></subsection><subsection commented="no" id="id65593163B2A74831AFF6EB9848ED0624"><enum>(b)</enum><header>Enhanced credit
for certain workers with no qualifying children</header>
<paragraph commented="no" id="idC611AA853C3F46AE92567BB517D70FD7"><enum>(1)</enum><header>In
general</header><text>Section 32 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id39D5A8DEC18A45EDA66AB686E56D09BF" style="OLC">
<subsection commented="no" id="id2B1FC35C2B8F4B518682576033555055"><enum>(n)</enum><header>Additional
credit for certain workers</header>
<paragraph commented="no" id="idCB26482E832C45CCB2195A7D0838EBFA"><enum>(1)</enum><header> In
general</header><text>In the case of a qualified individual, the credit allowed
under subsection (a) shall be increased by an amount equal to 100 percent of
the amount of the credit allowed under this section (without regard to this
subsection).</text>
</paragraph><paragraph commented="no" id="id8C78BFA4D70346BF882302191CA56334"><enum>(2)</enum><header>Qualified
individual</header><text>For purposes of this subsection, the term
<term>qualified individual</term> means an eligible individual who—</text>
<subparagraph commented="no" id="id927ADBC82E3C43DB9B23AB262293B65B"><enum>(A)</enum><text>is described in
clause (ii) of subsection (c)(1)(A),</text>
</subparagraph><subparagraph commented="no" id="idF24D11D7DBB04A8E8B100E6942680FA3"><enum>(B)</enum><text>is the parent of
a child who meets the age requirements of section 152(c)(3) before the end of
the taxable year of the eligible individual,</text>
</subparagraph><subparagraph commented="no" id="id7195A3D6F58C4390BA759BA23F98D495"><enum>(C)</enum><text>is required to
make child support payments with respect to such child—</text>
<clause commented="no" id="id19325BDAC5CC40E1BFFE477BF857CBCB"><enum>(i)</enum><text>pursuant to an
order which is in effect for not less than one-half of the taxable year of such
individual, and</text>
</clause><clause commented="no" id="id1E8F08F3137B4BC088EE58F35D1A6F82"><enum>(ii)</enum><text>through a State
agency responsible for administering the State plan under part D of title IV of
the Social Security Act, and</text>
</clause></subparagraph><subparagraph id="IDcba6e6a1b07548bda57439bb6df3f5e8"><enum>(D)</enum><text>has paid child
support during the taxable year in an amount not less than the amount of child
support due during the taxable year for every order requiring the individual to
make child support payments.</text>
</subparagraph></paragraph><paragraph id="id5FF8E90BCAAA4683AEB9F240034F68CC"><enum>(3)</enum><header>Regulations</header><text>The
Secretary shall establish regulations to carry out the purposes of this
subsection, including regulations which provide for the verification of the
payment of child support in accordance with paragraph
(2)(D).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="idEBDDE009364A4A978EE258DA501DD5A7"><enum>(2)</enum><header>Verification of
payment</header>
<subparagraph commented="no" id="id970302796C104DEE90B7D519E883100C"><enum>(A)</enum><header>In
general</header><text>The Secretary of Health and Human Services, in
consultation with the Secretary of the Treasury, shall include in the Federal
Case Registry of Child Support Orders established under section 453(h) of the
Social Security Act (42 U.S.C. 653(h)) such information as the Secretary of the
Treasury determines necessary to allow for verification of the status of
individuals as qualified individuals (as defined under section 32(n) of the
Internal Revenue Code of 1986, as added by paragraph (1)).</text>
</subparagraph><subparagraph commented="no" id="id40D10D15916F40988ECD51D53706E12E"><enum>(B)</enum><header>Additional
federal procedures</header><text>In addition to the authority provided under
subparagraph (A), the Secretary of Health and Human Services and the Secretary
of the Treasury may establish such additional procedures as are appropriate to
ensure that the Secretary of the Treasury has the information that the
Secretary of the Treasury needs to verify payment of child support obligations
in a timely fashion.</text>
</subparagraph><subparagraph commented="no" id="idA9B8A41413214ACDB2C25A7F6B1C4080"><enum>(C)</enum><header>State
procedures</header><text>The Secretary of Health and Human States, in
consultation with the States, shall establish procedures for informing a
noncustodial parent in a timely fashion when the parent has paid the amount of
child support owed by the parent for a taxable year so that the parent may
determine the extent to which the parent is a qualified individual for purposes
of qualifying for the additional credit established under section 32(n) of the
Internal Revenue Code of 1986, as added by paragraph (1).</text>
</subparagraph></paragraph><paragraph commented="no" id="idF1B005429F2B49C98FAE94A9CC198369"><enum>(3)</enum><header>Effective
date</header><text>The amendment made by paragraph (1) shall apply to taxable
years beginning after December 31, 2007.</text>
</paragraph></subsection><subsection id="id7DCB269832664DA988B6D3E29F789997"><enum>(c)</enum><header>Marriage
penalty relief</header>
<paragraph id="idCD6C803C32BD4BA7A2475CACD4AFDB79"><enum>(1)</enum><header>In
general</header><text>Subparagraph (B) of section 32(b)(2) of the Internal
Revenue Code of 1986 is amended—</text>
<subparagraph id="id82618B737D4B4C5E83362312A0D8D486"><enum>(A)</enum><text>in clause (ii),
by striking <quote>, 2006, and 2007, and</quote> and inserting <quote>and
2006</quote>,</text>
</subparagraph><subparagraph id="id0773A4EE11A349E3BBA811C4C44A90FD"><enum>(B)</enum><text>in clause (iii)
by striking <quote>after 2007.</quote> and inserting <quote>in 2007,
and</quote>, and</text>
</subparagraph><subparagraph id="id587E6400FFD744268450A965615205B9"><enum>(C)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="id73184B06FA5A4DC3BE77B9A88174277E" style="OLC">
<clause id="id7F5CC9981B5D4D15AD8889791D570825"><enum>(iv)</enum><text>$4,000 in the
case of taxable years beginning after
2007.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" id="id0A5802CCA3FC479FB5070430C068C3BE"><enum>(2)</enum><header>Inflation
adjustment</header><text>Clause (ii) of section 32(j)(1)(B) of such Code is
amended—</text>
<subparagraph commented="no" id="idA9DF21FC777A43F7AC4274FCACF43AD0"><enum>(A)</enum><text>by striking
<quote>$3,000</quote> and inserting <quote>$4,000</quote>, and</text>
</subparagraph><subparagraph commented="no" id="id212CC9D208F74A63A9F95A316119F176"><enum>(B)</enum><text>by striking
<quote>subsection (b)(2)(B)(iii)</quote> and inserting <quote>subsection
(b)(2)(B)(iv)</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id6E0239224ED34FA6B4E208BFABDE5AA2"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
taxable years beginning after December 31, 2005.</text>
</paragraph></subsection></section><section id="id8B2072107ED046AB99AB270BF09460E1"><enum>202.</enum><header>Tax treatment
of inverted entities</header>
<subsection id="idA6961F6F5D5C49C698B6999A775260D8"><enum>(a)</enum><header>In
general</header><text>Section 7874 of the Internal Revenue Code of 1986 is
amended—</text>
<paragraph id="idD849D8C539A244248B0F31BA60A32653"><enum>(1)</enum><text>by striking
<quote>March 4, 2003</quote> in subsection (a)(2)(B)(i) and in the matter
following subsection (a)(2)(B)(iii) and inserting <quote>March 20,
2002</quote>,</text>
</paragraph><paragraph id="id98ED97C6A4AD45438E12DAFB2C07B522"><enum>(2)</enum><text>by striking
<quote>at least 60 percent</quote> in subsection (a)(2)(B)(ii) and inserting
<quote>more than 50 percent</quote>,</text>
</paragraph><paragraph id="id6FCDF1F263D846A8A466915ECE4A20E8"><enum>(3)</enum><text>by striking
<quote>80 percent</quote> in subsection (b) and inserting <quote>at least 80
percent</quote>,</text>
</paragraph><paragraph id="id7F0213634DA5424793F3E0C2F5BAEF06"><enum>(4)</enum><text>by striking
<quote>60 percent</quote> in subsection (b) and inserting <quote>more than 50
percent</quote>,</text>
</paragraph><paragraph id="id213CCFCEB7344F9F85F41510C1FE5FB0"><enum>(5)</enum><text>by adding at the
end of subsection (a)(2) the following new sentence: <quote>Except as provided
in regulations, an acquisition of properties of a domestic corporation shall
not be treated as described in subparagraph (B) if none of the corporation’s
stock was readily tradeable on an established securities market at any time
during the 4-year period ending on the date of the acquisition.</quote>,
and</text>
</paragraph><paragraph id="id5CE282C137CF43CC997FF7544B03D5D4"><enum>(6)</enum><text>by redesignating
subsection (g) as subsection (h) and by inserting after subsection (f) the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id05FEB13B7C844834933A728CB3BB3407" style="OLC">
<subsection id="id68FE0B2590404C27B28DC5997054D6DA"><enum>(g)</enum><header>Special rules
applicable to expatriated entities</header>
<paragraph id="id33CAB7798DCC4238AF51794B2910C374"><enum>(1)</enum><header>Increases in
accuracy-related penalties</header><text>In the case of any underpayment of tax
of an expatriated entity—</text>
<subparagraph id="idA744FE05141248A29206411B5C616A28"><enum>(A)</enum><text>section 6662(a)
shall be applied with respect to such underpayment by substituting <quote>30
percent</quote> for <quote>20 percent</quote>, and</text>
</subparagraph><subparagraph id="id6FE64814495D48EE81231F9BB47A3900"><enum>(B)</enum><text>if such
underpayment is attributable to one or more gross valuation understatements,
the increase in the rate of penalty under section 6662(h) shall be to 50
percent rather than 40 percent.</text>
</subparagraph></paragraph><paragraph id="idDDE1FACDBDE249ED8525C38C1625DADE"><enum>(2)</enum><header>Modifications
of limitation on interest deduction</header><text>In the case of an expatriated
entity, section 163(j) shall be applied—</text>
<subparagraph id="idA2298FD507D748E088D6FAD6F3CA39A7"><enum>(A)</enum><text>without regard to
paragraph (2)(A)(ii) thereof, and</text>
</subparagraph><subparagraph id="idEFAC0E9C957243939FDD01F2BC777BA0"><enum>(B)</enum><text>by substituting
<quote>25 percent</quote> for <quote>50 percent</quote> each place it appears
in paragraph (2)(B)
thereof.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id259E3A500C0D40589AF14422D6BE7075"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years ending after March 20, 2002.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDBB66AD6B9AF9422B9AF12D0455E9F0E1" section-type="subsequent-section"><enum>203.</enum><header>Tax treatment of
controlled foreign corporations established in tax havens</header>
<subsection commented="no" display-inline="no-display-inline" id="ID17D2FCA7C9F842519CF302E292FFC735"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subchapter C of
chapter 80 of the Internal Revenue Code of 1986 (relating to provisions
affecting more than one subtitle) is amended by adding at the end the following
new section:</text>
<quoted-block display-inline="no-display-inline" id="IDA90C9712E87D4613B6E7318477D92EC1" style="OLC">
<section commented="no" display-inline="no-display-inline" id="ID25935219BE9244FE8229C1C28C390EA6" section-type="subsequent-section"><enum>7875.</enum><header>Controlled foreign
corporations in tax havens treated as domestic corporations</header>
<subsection commented="no" display-inline="no-display-inline" id="ID72A9854DAFFF430EAA4F1818F9CB785C"><enum>(a)</enum><header>General
rule</header><text display-inline="yes-display-inline">If a controlled foreign
corporation is a tax-haven CFC, then, notwithstanding section 7701(a)(4), such
corporation shall be treated for purposes of this title as a domestic
corporation.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0909EADA6C714BDB8BB13CCEFA9BD758"><enum>(b)</enum><header>Tax-Haven
CFC</header><text display-inline="yes-display-inline">For purposes of this
section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDB9A9331DB25A4D75BDDABC0D9FDCC61D"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The term
<term>tax-haven CFC</term> means, with respect to any taxable year, a foreign
corporation which—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID6F9CCB9FBAA041ED9AE6C7EA01424E53"><enum>(A)</enum><text display-inline="yes-display-inline">was created or organized under the laws of
a tax-haven country, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2CA6B2860BDC4A9A9704384FEDB0FD3A"><enum>(B)</enum><text display-inline="yes-display-inline">is a controlled foreign corporation
(determined without regard to this section) for an uninterrupted period of 30
days or more during the taxable year.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCD6A56D2458B4B8DAAADFECAFBC2CD79"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">The term <term>tax-haven CFC</term> does
not include a foreign corporation for any taxable year if substantially all of
its income for the taxable year is derived from the active conduct of trades or
businesses within the country under the laws of which the corporation was
created or organized.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID898675AA07CA4D6893CDFBFF99972520"><enum>(c)</enum><header>Tax-Haven
country</header><text display-inline="yes-display-inline">For purposes of this
section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID807092B2AA6E4981B07B5561DE64663B"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The term
<term>tax-haven country</term> means any of the following:</text>
<table blank-lines-after="0" blank-lines-before="0" line-rules="no-gen">
<tgroup cols="3"><colspec coldef="txt-no-ldr-no-spread" colname="col1" colwidth="1.04*" min-data-value="100"></colspec><colspec coldef="txt-no-ldr-no-spread" colname="col2" colwidth="1.00*" min-data-value="100"></colspec><colspec coldef="txt-no-ldr-no-spread" colname="col3" colwidth="1.10*" min-data-value="75"></colspec>
<tbody>
<row><entry colname="col1" leader-modify="clr-ldr" stub-definition="txt-ldr" stub-hierarchy="1">Andorra</entry><entry colname="col2">Guernsey</entry><entry colname="col3">Panama</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Anguilla</entry><entry colname="col2">Isle of
Man</entry><entry colname="col3">Samoa</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Antigua and Barbuda</entry><entry colname="col2">Jersey</entry><entry colname="col3">San Marino</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Aruba</entry><entry colname="col2">Liberia</entry><entry colname="col3">Federation of </entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Commonwealth of the</entry><entry colname="col2">Principality of </entry><entry colname="col3"> Saint Christ-
</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1"> Bahamas</entry><entry colname="col2"> Liechtenstein</entry><entry colname="col3"> opher </entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Bahrain</entry><entry colname="col2">Republic of the
</entry><entry colname="col3"> and Nevis</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Barbados</entry><entry colname="col2"> Maldives</entry><entry colname="col3">Saint Lucia</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Belize</entry><entry colname="col2">Malta</entry><entry colname="col3">Saint Vincent </entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Bermuda</entry><entry colname="col2">Republic of the
</entry><entry colname="col3"> and the</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">British Virgin Islands</entry><entry colname="col2"> Marshall Islands</entry><entry colname="col3"> Grenadines</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Cayman Islands</entry><entry colname="col2">Mauritius</entry><entry colname="col3">Republic of the</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Cook Islands</entry><entry colname="col2">Principality of
Monaco</entry><entry colname="col3"> Seychelles</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Cyprus</entry><entry colname="col2">Montserrat</entry><entry colname="col3">Tonga</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Commonwealth of the</entry><entry colname="col2">Republic of
Nauru</entry><entry colname="col3">Turks and Caicos </entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1"> Dominica</entry><entry colname="col2">Netherlands
</entry><entry colname="col3">Republic of</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Gibraltar</entry><entry colname="col2">Antilles</entry><entry colname="col3"> Vanuatu</entry>
</row>
<row><entry colname="col1" stub-definition="txt-ldr" stub-hierarchy="1">Grenada</entry><entry colname="col2">Niue</entry><entry colname="col3"></entry>
</row>
</tbody>
</tgroup>
</table>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4E6F1CD653824DAD9B5E6B1E70E0A9AB"><enum>(2)</enum><header>Secretarial
authority</header><text display-inline="yes-display-inline">The Secretary may
remove or add a foreign jurisdiction from the list of tax-haven countries under
paragraph (1) if the Secretary determines such removal or addition is
consistent with the purposes of this
section.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID4EB44265E8044C3CA9C21F4A978400B8"><enum>(b)</enum><header>Conforming
amendment</header><text display-inline="yes-display-inline">The table of
sections for subchapter C of chapter 80 of such Code is amended by adding at
the end the following new item:</text>
<quoted-block display-inline="no-display-inline" id="ID3CE1F3D9410F4EF8A5DBBFF7B52A8B37" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 7875. Controlled foreign
corporations in tax havens treated as domestic
corporations.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID329CE1B1A34A4D30BAFA5FA5C8C972F4"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to taxable years beginning after December 31,
2007.</text>
</subsection></section><section id="ID00331865D86647358552C5F1AE2A4FAB" section-type="subsequent-section"><enum>204.</enum><header>Taxation of income
of controlled foreign corporations attributable to imported property</header>
<subsection id="IDA73247555CB7472886862DD21D2A16DE"><enum>(a)</enum><header>General
rule</header><text>Subsection (a) of section 954 of the Internal Revenue Code
of 1986 (defining foreign base company income) is amended by striking
<quote>and</quote> at the end of paragraph (4), by striking the period at the
end of paragraph (5) and inserting <quote>, and</quote>, and by adding at the
end the following new paragraph:</text>
<quoted-block id="ID737E13D9A1424032800B2E89B604D864">
<paragraph id="IDB991B11B5A5249EFB0899FF51FD51A3E"><enum>(6)</enum><text>imported property
income for the taxable year (determined under subsection (j) and reduced as
provided in subsection
(b)(5)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID8EBEF7FB79E64F3EAF1F9DD0301B5EBC"><enum>(b)</enum><header>Definition of
imported property income</header><text>Section 954 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new subsection:</text>
<quoted-block id="IDE185DD4B29AC4527BDCD4FF00E7482AD">
<subsection id="IDD393638D81484C1B9F95D8A4F2657744"><enum>(j)</enum><header>Imported
property income</header>
<paragraph id="ID3C138624C43D43C982A36F9BEF565660"><enum>(1)</enum><header>In
general</header><text>For purposes of subsection (a)(6), the term
<term>imported property income</term> means income (whether in the form of
profits, commissions, fees, or otherwise) derived in connection with—</text>
<subparagraph id="IDAA8F1CDF4D6D45E8A460F9826E1987B5"><enum>(A)</enum><text>manufacturing,
producing, growing, or extracting imported property;</text>
</subparagraph><subparagraph id="IDFCA8708FDF6A4F7F9177836D5FB03A2E"><enum>(B)</enum><text>the sale,
exchange, or other disposition of imported property; or</text>
</subparagraph><subparagraph id="ID8D017D99C35A425FA98DC960375BDBBD"><enum>(C)</enum><text>the lease,
rental, or licensing of imported property.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Such term
shall not include any foreign oil and gas extraction income (within the meaning
of section 907(c)) or any foreign oil related income (within the meaning of
section 907(c)).</continuation-text></paragraph><paragraph id="ID1A96032B717E4A7DBEC1AC306110EDA3"><enum>(2)</enum><header>Imported
property</header><text>For purposes of this subsection—</text>
<subparagraph id="ID79931DDB8B544D04ABFBE4F18558EA55"><enum>(A)</enum><header>In
general</header><text>Except as otherwise provided in this paragraph, the term
<term>imported property</term> means property which is imported into the United
States by the controlled foreign corporation or a related person.</text>
</subparagraph><subparagraph id="IDA2036D9669E043F39E7FF4F9E763EF4F"><enum>(B)</enum><header>Imported
property includes certain property imported by unrelated
persons</header><text>The term <term>imported property</term> includes any
property imported into the United States by an unrelated person if, when such
property was sold to the unrelated person by the controlled foreign corporation
(or a related person), it was reasonable to expect that—</text>
<clause id="IDB48E3743F24D40A483CE9E98C4CC5E4A"><enum>(i)</enum><text>such property
would be imported into the United States; or</text>
</clause><clause id="ID28C5B13B365740A28E841786A1A2516A"><enum>(ii)</enum><text>such property
would be used as a component in other property which would be imported into the
United States.</text>
</clause></subparagraph><subparagraph id="IDA3DD749E1D9C462E863A8144730E90A9"><enum>(C)</enum><header>Exception for
property subsequently exported</header><text>The term <term>imported
property</term> does not include any property which is imported into the United
States and which—</text>
<clause id="IDE293A890B1E948F1AD536BA18D8DAF21"><enum>(i)</enum><text>before
substantial use in the United States, is sold, leased, or rented by the
controlled foreign corporation or a related person for direct use, consumption,
or disposition outside the United States; or</text>
</clause><clause id="ID919AE8A7285C4CB696DCFCA3E8D4C625"><enum>(ii)</enum><text>is used by the
controlled foreign corporation or a related person as a component in other
property which is so sold, leased, or rented.</text>
</clause></subparagraph></paragraph><paragraph id="ID2BB3AE4112FC42FDAA99CD9DBE4FB27A"><enum>(3)</enum><header>Definitions and
special rules</header>
<subparagraph id="ID6E9A54C873DD414D86D62240FEDD91BE"><enum>(A)</enum><header>Import</header><text>For
purposes of this subsection, the term <term>import</term> means entering, or
withdrawal from warehouse, for consumption or use. Such term includes any grant
of the right to use intangible property (as defined in section 936(h)(3)(B)) in
the United States.</text>
</subparagraph><subparagraph id="ID9E5794381AB24CBEBB8602A9C63ED7E2"><enum>(B)</enum><header>United
States</header><text>For purposes of this subsection, the term <term>United
States</term> includes the Commonwealth of Puerto Rico, the Virgin Islands of
the United States, Guam, American Samoa, and the Commonwealth of the Northern
Mariana Islands.</text>
</subparagraph><subparagraph id="ID13C1B5C8DD5C482B825BF1F1C3F16B38"><enum>(C)</enum><header>Unrelated
person</header><text>For purposes of this subsection, the term <term>unrelated
person</term> means any person who is not a related person with respect to the
controlled foreign corporation.</text>
</subparagraph><subparagraph id="IDF10E9F584A7D4E7299B8CC6A4713FAC4"><enum>(D)</enum><header>Coordination
with foreign base company sales income</header><text>For purposes of this
section, the term <term>foreign base company sales income</term> shall not
include any imported property
income.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID87C90ECCCE7444F1AC2B909DE8F55E81"><enum>(c)</enum><header>Separate
application of limitations on foreign tax credit for imported property
income</header>
<paragraph id="ID23560836CF8E40A48A13A54D279B8ABD"><enum>(1)</enum><header>Before
2007</header>
<subparagraph id="IDDFFB6553EC664858B8AFF7510BFD6790"><enum>(A)</enum><header>In
general</header><text>Paragraph (1) of section 904(d) of the Internal Revenue
Code of 1986 (relating to separate application of section with respect to
certain categories of income), as in effect for taxable years beginning before
January 1, 2007, is amended by striking <quote>and</quote> at the end of
subparagraph (H), by redesignating subparagraph (I) as subparagraph (J), and by
inserting after subparagraph (H) the following new subparagraph:</text>
<quoted-block id="ID8746CCF346DB483C840D8B452CFD78E1">
<subparagraph id="ID07ACB56E11354FD0B70D18BA2D7B49B7"><enum>(I)</enum><text>imported property
income,
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="ID52D8CB00A79E44B2928544F4CEB2D79C"><enum>(B)</enum><header>Imported
property income defined</header><text>Paragraph (2) of section 904(d) of such
Code, as so in effect, is amended by redesignating subparagraphs (H) and (I) as
subparagraphs (I) and (J), respectively, and by inserting after subparagraph
(G) the following new subparagraph:</text>
<quoted-block id="ID1693DF57516B454981C4ECF09EF9DF07">
<subparagraph id="ID21287140FD754BD190AE28112EFC5D57"><enum>(H)</enum><header>Imported
property income</header><text>The term <term>imported property income</term>
means any income received or accrued by any person which is of a kind which
would be imported property income (as defined in section
954(j)).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="ID6E371CBF9C0A41FDB2C15CD50C76A645"><enum>(C)</enum><header>Look-thru rules
to apply</header><text>Subparagraph (F) of section 904(d)(3) of such Code, as
so in effect, is amended by striking <quote>or (D)</quote> and inserting
<quote>(D), or (I)</quote>.</text>
</subparagraph></paragraph><paragraph id="IDB9EEBAEA229249EBA6D7E1A0A72F14FA"><enum>(2)</enum><header>After
2006</header>
<subparagraph id="ID47A87BCE578844579AD12C93B7FEAFE0"><enum>(A)</enum><header>In
general</header><text>Paragraph (1) of section 904(d) of the Internal Revenue
Code of 1986 (relating to separate application of section with respect to
certain categories of income), as in effect for taxable years beginning after
December 31, 2006, is amended by striking <quote>and</quote> at the end of
subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by
inserting after subparagraph (A) the following new subparagraph:</text>
<quoted-block id="IDD07D58B2205945F68115DF5E27117E85">
<subparagraph id="ID99A60690652A485DADEC3CD76FDF00BC"><enum>(B)</enum><text>imported property
income,
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="IDACBAF7C737BD4A2A8B87ADE3DC08E1B4"><enum>(B)</enum><header>Imported
property income defined</header><text>Paragraph (2) of section 904(d) of such
Code, as so in effect, is amended by redesignating subparagraphs (J) and (K) as
subparagraphs (K) and (L), respectively, and by inserting after subparagraph
(I) the following new subparagraph:</text>
<quoted-block id="ID70DED931ADD3433A82DA6203302B60D7">
<subparagraph id="ID20A66E377C6C4E9BB257327D26D0D5F8"><enum>(J)</enum><header>Imported
property income</header><text>The term <term>imported property income</term>
means any income received or accrued by any person which is of a kind which
would be imported property income (as defined in section
954(j)).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="ID5387F005E8C5429A9AD41264FA3AF49A"><enum>(C)</enum><header>Conforming
amendment</header><text>Clause (ii) of section 904(d)(2)(A) of such Code, as so
in effect, is amended by inserting <quote>or imported property income</quote>
after <quote>passive category income</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="ID14C66E232C56454FA5C02BF7E5EC3CE8"><enum>(d)</enum><header>Technical
amendments</header>
<paragraph id="ID80C9EC9BDAE04676B70D563501BD4CFC"><enum>(1)</enum><text>Clause (iii) of
section 952(c)(1)(B) of such Code (relating to certain prior year deficits may
be taken into account) is amended—</text>
<subparagraph id="ID6FA884E1B1684081BC019F1D6C5CC26A"><enum>(A)</enum><text>by redesignating
subclauses (II), (III), (IV), and (V) as subclauses (III), (IV), (V), and (VI),
and</text>
</subparagraph><subparagraph id="IDD967E06A2F964739A4AE31E7ABB43162"><enum>(B)</enum><text>by inserting
after subclause (I) the following new subclause:</text>
<quoted-block id="IDCFC65496BAD34A62B62CAF15CB619A3B">
<subclause id="ID6BAFD3A2A29249C8B089152414EA8F8B"><enum>(II)</enum><text>imported
property
income,</text>
</subclause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="ID0EC855D26DE04D5EB5D098BBCD182B89"><enum>(2)</enum><text>Paragraph (5) of
section 954(b) of such Code (relating to deductions to be taken into account)
is amended by striking <quote>and the foreign base company oil related
income</quote> and inserting <quote>the foreign base company oil related
income, and the imported property income</quote>.</text>
</paragraph></subsection><subsection id="IDEC0CD05E70EE45E4839E60B3045FCD5A"><enum>(e)</enum><header>Effective
dates</header>
<paragraph id="ID8C521C259EC74A66A27AB0CCD48F6D99"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section shall apply to taxable years of foreign corporations beginning
after the date of the enactment of this Act, and to taxable years of United
States shareholders within which or with which such taxable years of such
foreign corporations end.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCA9721B15CB140E381FE3290F106E574"><enum>(2)</enum><header>Subsection
<enum-in-header>(c)</enum-in-header></header><text>The amendments made by
subsection (c)(1) shall apply to taxable years beginning after the date of the
enactment of this Act and before January 1, 2007, and the amendments made by
subsection (c)(2) shall apply to taxable years beginning after December 31,
2006.</text>
</paragraph></subsection></section>