[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 6 Introduced in Senate (IS)]

<DOC>






109th CONGRESS
  1st Session
                                  S. 6

To amend the Internal Revenue Code of 1986 to provide permanent family 
 tax relief, to reauthorize and improve the program of block grants to 
   States for temporary assistance for needy families and to improve 
access to quality child care, and to provide incentives for charitable 
  contributions by individuals and businesses, to improve the public 
 disclosure of activities of exempt organizations, and to enhance the 
ability of low-income Americans to gain financial security by building 
                    assets, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 24, 2005

 Mr. Santorum (for himself, Mr. Frist, Mrs. Hutchison, Mr. McConnell, 
and Mr. Hatch) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide permanent family 
 tax relief, to reauthorize and improve the program of block grants to 
   States for temporary assistance for needy families and to improve 
access to quality child care, and to provide incentives for charitable 
  contributions by individuals and businesses, to improve the public 
 disclosure of activities of exempt organizations, and to enhance the 
ability of low-income Americans to gain financial security by building 
                    assets, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Marriage, 
Opportunity, Relief, and Empowerment Act of 2005'' or the ``MORE Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:


                       TITLE I--FAMILY TAX RELIEF

Sec. 101. Tax benefits relating to children made permanent.
Sec. 102. Marriage penalty relief made permanent.
   TITLE II--PERSONAL RESPONSIBILITY AND INDIVIDUAL DEVELOPMENT FOR 
                                EVERYONE

Sec. 201. Short title of title.
Sec. 202. References.
                            Subtitle A--TANF

Sec. 211. State plan.
Sec. 212. Family assistance grants.
Sec. 213. Promotion of family formation and healthy marriage.
Sec. 214. Supplemental grant for population increases in certain 
                            States.
Sec. 215. Bonus to reward employment achievement.
Sec. 216. Contingency fund.
Sec. 217. Use of funds.
Sec. 218. Repeal of Federal loan for State welfare programs.
Sec. 219. Work participation requirements.
Sec. 220. Universal engagement and family self-sufficiency plan 
                            requirements; other prohibitions and 
                            requirements.
Sec. 221. Penalties.
Sec. 222. Data collection and reporting.
Sec. 223. Direct funding and administration by Indian tribes.
Sec. 224. Research, evaluations, and national studies.
Sec. 225. Study by the Census Bureau.
Sec. 226. Funding for child care.
Sec. 227. Definitions.
Sec. 228. Responsible fatherhood program.
Sec. 229. Additional grants.
Sec. 230. Technical corrections.
                    Subtitle B--Abstinence Education

Sec. 241. Extension of abstinence education program.
                       Subtitle C--Child Support

Sec. 251. Distribution of child support collected by States on behalf 
                            of children receiving certain welfare 
                            benefits.
Sec. 252. Mandatory review and adjustment of child support orders for 
                            families receiving TANF.
Sec. 253. Report on undistributed child support payments.
Sec. 254. Use of new hire information to assist in administration of 
                            unemployment compensation programs.
Sec. 255. Decrease in amount of child support arrearage triggering 
                            passport denial.
Sec. 256. Use of tax refund intercept program to collect past-due child 
                            support on behalf of children who are not 
                            minors.
Sec. 257. Garnishment of compensation paid to veterans for service-
                            connected disabilities in order to enforce 
                            obligations.
Sec. 258. Improving Federal debt collection practices.
Sec. 259. Maintenance of technical assistance funding.
Sec. 260. Maintenance of Federal parent locator service funding.
Sec. 261. Identification and seizure of assets held by multistate 
                            financial institutions.
Sec. 262. Information comparisons with insurance data.
Sec. 263. Tribal access to the Federal parent locator service.
Sec. 264. Reimbursement of Secretary's costs of information comparisons 
                            and disclosure for enforcement of 
                            obligations on Higher Education Act loans 
                            and grants.
Sec. 265. Technical amendment relating to cooperative agreements 
                            between States and Indian tribes.
Sec. 266. Claims upon longshore and harbor workers' compensation for 
                            child support.
Sec. 267. State option to use Statewide automated data processing and 
                            information retrieval system for interstate 
                            cases.
Sec. 268. State law requirement concerning the Uniform Interstate 
                            Family Support Act (UIFSA).
Sec. 269. Grants to States for access and visitation programs.
Sec. 270. Timing of corrective action year for State noncompliance with 
                            child support enforcement program 
                            requirements.
                       Subtitle D--Child Welfare

Sec. 275. Extension of authority to approve demonstration projects.
Sec. 276. Removal of Commonwealth of Puerto Rico foster care funds from 
                            limitation on payments.
Sec. 277. Technical correction.
                Subtitle E--Supplemental Security Income

Sec. 281. Review of State agency blindness and disability 
                            determinations.
              Subtitle F--Transitional Medical Assistance

Sec. 285. Extension and simplification of the Transitional Medical 
                            Assistance Program (TMA).
Sec. 286. Prohibition against covering childless adults with SCHIP 
                            funds.
                       Subtitle G--Effective Date

Sec. 291. Effective date.
Sec. 292. Extension through remainder of fiscal year 2005.
                          TITLE III--CARE ACT

Sec. 300. Short title; etc.
                Subtitle A--Charitable Giving Incentives

Sec. 301. Deduction for portion of charitable contributions to be 
                            allowed to individuals who do not itemize 
                            deductions.
Sec. 302. Tax-free distributions from individual retirement accounts 
                            for charitable purposes.
Sec. 303. Charitable deduction for contributions of food inventories.
Sec. 304. Charitable deduction for contributions of book inventories.
Sec. 305. Expansion of charitable contribution allowed for scientific 
                            property used for research and for computer 
                            technology and equipment used for 
                            educational purposes.
Sec. 306. Modifications to encourage contributions of capital gain real 
                            property made for conservation purposes.
Sec. 307. Exclusion of 25 percent of gain on sales or exchanges of land 
                            or water interests to eligible entities for 
                            conservation purposes.
Sec. 308. Tax exclusion for cost-sharing payments under Partners for 
                            Fish and Wildlife Program.
Sec. 309. Adjustment to basis of S corporation stock for certain 
                            charitable contributions.
Sec. 310. Enhanced deduction for charitable contribution of literary, 
                            musical, artistic, and scholarly 
                            compositions.
Sec. 311. Mileage reimbursements to charitable volunteers excluded from 
                            gross income.
Sec. 312. Extension of enhanced deduction for inventory to include 
                            public schools.
Sec. 313. 10-year divestiture period for certain excess business 
                            holdings of private foundations
      Subtitle B--Proposals Improving the Oversight of Tax-Exempt 
                             Organizations

Sec. 321. Disclosure of written determinations.
Sec. 322. Disclosure of Internet web site and name under which 
                            organization does business.
Sec. 323. Modification to reporting capital transactions.
Sec. 324. Disclosure that Form 990 is publicly available.
Sec. 325. Disclosure to State officials of proposed actions related to 
                            section 501(c) organizations.
Sec. 326. Expansion of penalties to preparers of Form 990.
Sec. 327. Notification requirement for entities not currently required 
                            to file.
    Subtitle C--Other Charitable and Exempt Organization Provisions

Sec. 331. Modification of excise tax on unrelated business taxable 
                            income of charitable remainder trusts.
Sec. 332. Modifications to section 512(b)(13).
Sec. 333. Simplification of lobbying expenditure limitation.
Sec. 334. Expedited review process for certain tax-exemption 
                            applications.
Sec. 335. Clarification of definition of church tax inquiry.
Sec. 336. Expansion of declaratory judgment remedy to tax-exempt 
                            organizations.
Sec. 337. Definition of convention or association of churches.
Sec. 338. Payments by charitable organizations to victims of war on 
                            terrorism and families of astronauts killed 
                            in the line of duty.
Sec. 339. Modification of scholarship foundation rules.
Sec. 340. Treatment of certain hospital support organizations as 
                            qualified organizations for purposes of 
                            determining acquisition indebtedness.
Sec. 341. Matching grants to low-income taxpayer clinics for return 
                            preparation.
Sec. 342. Exemption of qualified 501(c)(3) bonds for nursing homes from 
                            Federal guarantee prohibitions.
Sec. 343. Excise taxes exemption for blood collector organizations.
Sec. 344. Pilot project for forest conservation activities.
Sec. 345. Clarification of treatment of Johnny Micheal Spann Patriot 
                            Trusts.
                Subtitle D--Social Services Block Grant

Sec. 351. Restoration of funds for the Social Services Block Grant.
Sec. 352. Requirement to submit annual report on State activities.
              Subtitle E--Individual Development Accounts

Sec. 361. Short title.
Sec. 362. Purposes.
Sec. 363. Definitions.
Sec. 364. Structure and administration of qualified individual 
                            development account programs.
Sec. 365. Procedures for opening and maintaining an individual 
                            development account and qualifying for 
                            matching funds.
Sec. 366. Deposits by qualified individual development account 
                            programs.
Sec. 367. Withdrawal procedures.
Sec. 368. Certification and termination of qualified individual 
                            development account programs.
Sec. 369. Reporting, monitoring, and evaluation.
Sec. 370. Authorization of appropriations.
Sec. 371. Matching funds for individual development accounts provided 
                            through a tax credit for qualified 
                            financial institutions.
Sec. 372. Account funds disregarded for purposes of certain means-
                            tested Federal programs.
             Subtitle F--Management of Exempt Organizations

Sec. 381. Authorization of appropriations.
                  Subtitle G--Compassion Capital Fund

Sec. 391. Support for nonprofit community-based organizations; 
                            Department of Health and Human Services.
Sec. 392. Support for nonprofit community-based organizations; 
                            Corporation for National and Community 
                            Service.
Sec. 393. Support for nonprofit community-based organizations; 
                            Department of Justice.
Sec. 394. Support for nonprofit community-based organizations; 
                            Department of Housing and Urban 
                            Development.
Sec. 395. Coordination.
                   Subtitle H--Maternity Group Homes

Sec. 399. Maternity group homes.

                       TITLE I--FAMILY TAX RELIEF

SEC. 101. TAX BENEFITS RELATING TO CHILDREN MADE PERMANENT.

    Title IX of the Economic Growth and Tax Relief Reconciliation Act 
of 2001 (relating to sunset provisions of such Act) shall not apply to 
title II of such Act (relating to tax benefits for children).

SEC. 102. MARRIAGE PENALTY RELIEF MADE PERMANENT.

    Title IX of the Economic Growth and Tax Relief Reconciliation Act 
of 2001 (relating to sunset provisions of such Act) shall not apply to 
title III of such Act (relating to marriage penalty relief).

   TITLE II--PERSONAL RESPONSIBILITY AND INDIVIDUAL DEVELOPMENT FOR 
                                EVERYONE

SECTION 201. SHORT TITLE OF TITLE.

    This title may be cited as the ``Personal Responsibility and 
Individual Development for Everyone Act'' or the ``PRIDE Act''.

SEC. 202. REFERENCES.

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

                            Subtitle A--TANF

SEC. 211. STATE PLAN.

    (a) Performance Improvement.--Section 402(a) (42 U.S.C. 602(a)) is 
amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) by redesignating clause (vi) as clause 
                        (vii); and
                            (ii) by striking clause (v) and inserting 
                        the following:
                            ``(v) Establish specific measurable 
                        performance objectives for pursuing the 
                        purposes of the program under this part as 
                        described in section 401(a), including by--
                                    ``(I) establishing objectives 
                                consistent (as determined by the State) 
                                with the criteria used by the Secretary 
                                in establishing performance targets 
                                under section 403(a)(4)(C) (including 
                                with respect to workplace attachment 
                                and advancement), and with such 
                                additional criteria related to other 
                                purposes of the program under this part 
                                as described in section 401(a) as the 
                                Secretary, in consultation with the 
                                National Governors' Association and the 
                                American Public Human Services 
                                Association, shall establish; and
                                    ``(II) describing the methodology 
                                that the State will use to measure 
                                State performance in relation to each 
                                such objective.
                            ``(vi) Describe any strategies and programs 
                        the State plans to use to address--
                                    ``(I) employment retention and 
                                advancement for recipients of 
                                assistance under the program, including 
                                placement into high-demand jobs, and 
                                whether the jobs are identified using 
                                labor market information;
                                    ``(II) efforts to reduce teen 
                                pregnancy;
                                    ``(III) services for struggling and 
                                noncompliant families, and for clients 
                                with special problems; and
                                    ``(IV) program integration, 
                                including the extent to which 
                                employment and training services under 
                                the program are provided through the 
                                One-Stop delivery system created under 
                                the Workforce Investment Act of 1998, 
                                and the extent to which former 
                                recipients of such assistance have 
                                access to additional core, intensive, 
                                or training services funded through 
                                such Act.''; and
                    (B) in subparagraph (B)--
                            (i) by striking clauses (i) and (iv);
                            (ii) by redesignating clauses (ii) and 
                        (iii) as clauses (i) and (ii), respectively; 
                        and
                            (iii) by inserting after clause (ii) (as so 
                        redesignated by clause (ii)) the following:
                            ``(iii) If the State is undertaking any 
                        strategies or programs to engage faith-based 
                        organizations in the provision of services 
                        funded under this part, or that otherwise 
                        relate to section 104 of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996, the document shall 
                        describe such strategies and programs.
                            ``(iv) The document shall describe 
                        strategies to improve program management and 
                        performance.
                            ``(v) The document shall include a 
                        performance report which details State progress 
                        toward full engagement for all adult or minor 
                        child head of household recipients of 
                        assistance.'';
            (2) in paragraph (4), by inserting ``and tribal'' after 
        ``that local''; and
            (3) by adding at the end the following:
            ``(8) Certification of consultation on provision of 
        transportation aid.--In the case of a State that provides 
        transportation aid under the State program, a certification by 
        the chief executive officer of the State that State and local 
        transportation agencies and planning bodies have been consulted 
        in the development of the plan.''.
    (b) Procedures for Submitting and Amending State Plans.--
            (1) In general.--Subsection (b) of section 402 (42 U.S.C. 
        602(b)) is amended to read as follows:
    ``(b) Procedures for Submitting and Amending State Plans.--
            ``(1) Standard state plan format.--The Secretary shall, 
        after notice and public comment, develop a proposed Standard 
        State Plan Form to be used by States under subsection (a). Such 
        form shall be finalized by the Secretary for use by States not 
        later than 9 months after the date of enactment of the Personal 
        Responsibility and Individual Development for Everyone Act.
            ``(2) Requirement for completed plan using standard state 
        plan format by fiscal year 2007.--Notwithstanding any other 
        provision of law, each State shall submit a complete State 
        plan, using the Standard State Plan Form developed under 
        paragraph (1), not later than October 1, 2006.
            ``(3) Public notice and comment.--Prior to submitting a 
        State plan to the Secretary under this section, the State 
        shall--
                    ``(A) make the proposed State plan available to the 
                public through an appropriate State maintained Internet 
                website and through other means as the State determines 
                appropriate;
                    ``(B) allow for a reasonable public comment period 
                of not less than 45 days; and
                    ``(C) make comments received concerning such plan 
                or, at the discretion of the State, a summary of the 
                comments received available to the public through such 
                website and through other means as the State determines 
                appropriate.
            ``(4) Public availability of state plan.--A State shall 
        ensure that the State plan that is in effect for any fiscal 
        year is available to the public through an appropriate State 
        maintained Internet website and through other means as the 
        State determines appropriate.
            ``(5) Amending the state plan.--A State shall file an 
        amendment to the State plan with the Secretary if the State 
        determines that there has been a material change in any 
        information required to be included in the State plan or any 
        other information that the State has included in the plan, 
        including substantial changes in the use of funding. Prior to 
        submitting an amendment to the State plan to the Secretary, the 
        State shall--
                    ``(A) make the proposed amendment available to the 
                public as provided for in paragraph (3)(A);
                    ``(B) allow for a reasonable public comment period 
                of not less than 45 days; and
                    ``(C) make the comments available as provided for 
                in paragraph (3)(C).''.
            (2) Conforming amendment.--Section 402 (42 U.S.C. 602) is 
        amended by striking subsection (c).
    (c) Consultation With State Regarding Plan and Design of Tribal 
Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is amended--
            (1) in subparagraph (E), by striking ``and'' at the end;
            (2) in subparagraph (F), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(G) provides an assurance that the State in which 
                the tribe is located has been consulted regarding the 
                plan and its design.''.
    (d) Performance Measures.--Section 413 (42 U.S.C. 613) is amended 
by adding at the end the following:
    ``(k) Performance Improvement.--The Secretary, in consultation with 
the States, shall develop uniform performance measures designed to 
assess the degree of effectiveness, and the degree of improvement, of 
State programs funded under this part in accomplishing the purposes of 
this part.''.
    (e) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C. 
613(d)(1)) is amended to read as follows:
            ``(1) Annual ranking of states.--
                    ``(A) In general.--The Secretary shall rank 
                annually the States to which grants are paid under 
                section 403 in the order of their success in--
                            ``(i) placing recipients of assistance 
                        under the State program funded under this part 
                        into private sector jobs;
                            ``(ii) the success of the recipients in 
                        retaining employment;
                            ``(iii) the ability of the recipients to 
                        increase their wages;
                            ``(iv) the degree to which recipients have 
                        workplace attachment and advancement;
                            ``(v) reducing the overall welfare 
                        caseload; and
                            ``(vi) when a practicable method for 
                        calculating this information becomes available, 
                        diverting individuals from formally applying to 
                        the State program and receiving assistance.
                    ``(B) Consideration of other factors.--In ranking 
                States under this paragraph, the Secretary shall take 
                into account the average number of minor children 
                living at home in families in the State that have 
                incomes below the poverty line and the amount of 
                funding provided each State under this part for such 
                families.''.

SEC. 212. FAMILY ASSISTANCE GRANTS.

    (a) Extension of Authority.--Section 403(a)(1) (42 U.S.C. 
603(a)(1)(A)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``1996, 1997, 1998, 1999, 2000, 
                2001, 2002, and 2003'' and inserting ``2006 through 
                2010''; and
                    (B) by inserting ``payable to the State for the 
                fiscal year'' before the period; and
            (2) in subparagraph (C), by striking ``for fiscal year 
        2003'' and all that follows through the period, and inserting 
        ``for each of fiscal years 2006 through 2010, $16,566,542,000 
        for grants under this paragraph.''.
    (b) Matching Grants for the Territories.--Section 1108(b)(2) (42 
U.S.C. 1308(b)(2)) is amended by striking ``1997 through 2003'' and 
inserting ``2006 through 2010''.

SEC. 213. PROMOTION OF FAMILY FORMATION AND HEALTHY MARRIAGE.

    (a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)), as 
amended by section 211(a), is amended by adding at the end the 
following:
                            ``(viii) Encourage equitable treatment of 
                        healthy 2-parent married families under the 
                        program referred to in clause (i).''.
    (b) Healthy Marriage Promotion Grants; Repeal of Bonus for 
Reduction of Illegitimacy Ratio.--Section 403(a)(2) (42 U.S.C. 
603(a)(2)) is amended to read as follows:
            ``(2) Healthy marriage promotion grants.--
                    ``(A) Authority.--
                            ``(i) In general.--The Secretary shall 
                        award competitive grants to States, 
                        territories, and Indian tribes and tribal 
                        organizations for not more than 50 percent of 
                        the cost of developing and implementing 
                        innovative programs to promote and support 
                        healthy 2-parent married families.
                            ``(ii) Use of other tanf funds.--A State or 
                        Indian tribe with an approved tribal family 
                        assistance plan may use funds provided under 
                        other grants made under this part for all or 
                        part of the expenditures incurred for the 
                        remainder of the costs described in clause (i). 
                        In the case of a State, any such funds expended 
                        shall not be considered qualified State 
                        expenditures for purposes of section 409(a)(7).
                    ``(B) Healthy marriage promotion activities.--Funds 
                provided under subparagraph (A) shall be used to 
                support any of the following programs or activities:
                            ``(i) Public advertising campaigns on the 
                        value of marriage and the skills needed to 
                        increase marital stability and health.
                            ``(ii) Education in high schools on the 
                        value of marriage, relationship skills, and 
                        budgeting.
                            ``(iii) Marriage education, marriage 
                        skills, and relationship skills programs, that 
                        may include parenting skills, financial 
                        management, conflict resolution, and job and 
                        career advancement, for non-married pregnant 
                        women, non-married expectant fathers, and non-
                        married recent parents.
                            ``(iv) Pre-marital education and marriage 
                        skills training for engaged couples and for 
                        couples or individuals interested in marriage.
                            ``(v) Marriage enhancement and marriage 
                        skills training programs for married couples.
                            ``(vi) Divorce reduction programs that 
                        teach relationship skills.
                            ``(vii) Marriage mentoring programs which 
                        use married couples as role models and mentors.
                            ``(viii) Programs to reduce the 
                        disincentives to marriage in means-tested aid 
                        programs, if offered in conjunction with any 
                        activity described in this subparagraph.
                    ``(C) Voluntary participation.--Participation in 
                programs or activities described in any of clauses 
                (iii) through (vii) shall be voluntary.
                    ``(D) General rules governing use of funds.--The 
                rules of section 404, other than subsection (b) of that 
                section, shall not apply to a grant made under this 
                paragraph.
                    ``(E) Requirements for receipt of funds.--A State, 
                territory, or Indian tribe or tribal organization may 
                not be awarded a grant under this paragraph unless the 
                State, territory, Indian tribe or tribal organization, 
                as a condition of receiving funds under such a grant--
                            ``(i) consults with experts in domestic 
                        violence or with relevant community domestic 
                        violence coalitions in developing such programs 
                        or activities; and
                            ``(ii) describes in the application for a 
                        grant under this paragraph--
                                    ``(I) how the programs or 
                                activities proposed to be conducted 
                                will address, as appropriate, issues of 
                                domestic violence; and
                                    ``(II) what the State, territory, 
                                or Indian tribe or tribal organization, 
                                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.
                    ``(F) Appropriation.--
                            ``(i) In general.--Out of any money in the 
                        Treasury of the United States not otherwise 
                        appropriated, there are appropriated for each 
                        of fiscal years 2006 through 2010, $100,000,000 
                        for grants under this paragraph.
                            ``(ii) Extended availability of funds.--
                                    ``(I) In general.--Funds 
                                appropriated under clause (i) for each 
                                of fiscal years 2006 through 2010 shall 
                                remain available to the Secretary until 
                                expended.
                                    ``(II) Authority for grant 
                                recipients.--A State, territory, or 
                                Indian tribe or tribal organization may 
                                use funds made available under a grant 
                                awarded under this paragraph without 
                                fiscal year limitation pursuant to the 
                                terms of the grant.''.
    (c) Counting of Spending on Non-Eligible Families To Prevent and 
Reduce Incidence of Out-of-Wedlock Births, Encourage Formation and 
Maintenance of Healthy 2-Parent Married Families, or Encourage 
Responsible Fatherhood.--Section 409(a)(7)(B)(i) (42 U.S.C. 
609(a)(7)(B)(i)) is amended by adding at the end the following:
                                    ``(V) Counting of spending on non-
                                eligible families to prevent and reduce 
                                incidence of out-of-wedlock births, 
                                encourage formation and maintenance of 
                                healthy 2-parent married families, or 
                                encourage responsible fatherhood.--
                                Subject to subclauses (II) and (III), 
                                the term `qualified State expenditures' 
                                includes the total expenditures by the 
                                State during the fiscal year under all 
                                State programs for a purpose described 
                                in paragraph (3) or (4) of section 
                                401(a).''.
    (d) Purposes.--Section 401(a)(4) (42 U.S.C. 601(a)(4)) is amended 
by striking ``two-parent families'' and inserting ``healthy 2-parent 
married families, and encourage responsible fatherhood''.

SEC. 214. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN CERTAIN 
              STATES.

    Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)) is amended--
            (1) in clause (i), by striking ``2002 and 2003'' and 
        inserting ``2006 through 2009'';
            (2) in clause (ii), by striking ``March 31, 2005'' and 
        inserting ``fiscal year 2009''; and
            (3) in clause (iii), by striking ``2002 and 2003'' and 
        inserting ``2006 through 2009''.

SEC. 215. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

    (a) Bonus To Reward Employment Achievement.--Section 403(a)(4) (42 
U.S.C. 603(a)(4)) is amended to read as follows:
            ``(4) Bonus to reward employment achievement.--
                    ``(A) In general.--The Secretary shall make a grant 
                pursuant to this paragraph to each State for each bonus 
                year for which the State is an employment achievement 
                State.
                    ``(B) Amount of grant.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary shall determine the amount of the 
                        grant payable under this paragraph to an 
                        employment achievement State for a bonus year, 
                        which shall be based on the performance of the 
                        State as determined under subparagraph (D)(i) 
                        for the fiscal year that immediately precedes 
                        the bonus year.
                            ``(ii) Limitation.--The amount payable to a 
                        State under this paragraph for a bonus year 
                        shall not exceed 5 percent of the State family 
                        assistance grant.
                    ``(C) Formula for measuring state performance.--
                            ``(i) In general.--Subject to clause (ii), 
                        not later than October 1, 2006, the Secretary, 
                        in consultation with the States, shall develop 
                        a formula for measuring State performance in 
                        operating the State program funded under this 
                        part so as to achieve the goals of employment 
                        entry, job retention, increased earnings from 
                        employment, and workplace attachment and 
                        advancement for families receiving assistance 
                        under the program, as measured on an absolute 
                        basis and on the basis of improvement in State 
                        performance.
                            ``(ii) Special rule for bonus years 2006 
                        and 2007.--For the purposes of awarding a bonus 
                        under this paragraph for bonus year 2006 or 
                        2007, the Secretary may measure the performance 
                        of a State in fiscal year 2005 or 2006 (as the 
                        case may be) using the job entry rate, job 
                        retention rate, and earnings gain rate 
                        components of the formula developed under 
                        section 403(a)(4)(C) as in effect immediately 
                        before the effective date of this paragraph.
                    ``(D) Determination of state performance.--For each 
                bonus year, the Secretary shall--
                            ``(i) use the formula developed under 
                        subparagraph (C) to determine the performance 
                        of each eligible State for the fiscal year that 
                        precedes the bonus year; and
                            ``(ii) prescribe performance standards in 
                        such a manner so as to ensure that--
                                    ``(I) the average annual total 
                                amount of grants to be made under this 
                                paragraph for each bonus year equals 
                                $100,000,000; and
                                    ``(II) the total amount of grants 
                                to be made under this paragraph for all 
                                bonus years equals $600,000,000.
                    ``(E) Definitions.--In this paragraph:
                            ``(i) Bonus year.--The term `bonus year' 
                        means each of fiscal years 2006 through 2011.
                            ``(ii) Employment achievement state.--The 
                        term `employment achievement State' means, with 
                        respect to a bonus year, an eligible State 
                        whose performance determined pursuant to 
                        subparagraph (D)(i) for the fiscal year 
                        preceding the bonus year equals or exceeds the 
                        performance standards prescribed under 
                        subparagraph (D)(ii) for such preceding fiscal 
                        year.
                    ``(F) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for the period of 
                fiscal years 2006 through 2011, $600,000,000 for grants 
                under this paragraph.
                    ``(G) Grants for tribal organizations.--This 
                paragraph shall apply with respect to tribal 
                organizations in the same manner in which this 
                paragraph applies with respect to States. In 
                determining the criteria under which to make grants to 
                tribal organizations under this paragraph, the 
                Secretary shall consult with tribal organizations.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2005.

SEC. 216. CONTINGENCY FUND.

    (a) Contingency Funding Available to Needy States.--Section 403(b) 
(42 U.S.C. 603(b)) is amended--
            (1) by striking paragraphs (1) through (3) and inserting 
        the following:
            ``(1) Contingency fund grants.--
                    ``(A) Payments.--Subject to subparagraph (C), and 
                out of funds appropriated under subparagraph (E), each 
                State shall receive a contingency fund grant for each 
                eligible month in which the State is a needy State 
                under paragraph (3).
                    ``(B) Monthly contingency fund grant amount.--For 
                each eligible month in which a State is a needy State, 
                the State shall receive a contingency fund grant equal 
                to the product of--
                            ``(i) the applicable percentage (as defined 
                        under subparagraph (D)(i)) of the applicable 
                        benefit level (as defined in subparagraph 
                        (D)(ii)); and
                            ``(ii) the amount by which the total number 
                        of families that received assistance under the 
                        State program funded under this part in the 
                        most recently concluded 3-month period for 
                        which data are available from the State exceeds 
                        a 5-percent increase in the number of such 
                        families in the corresponding 3-month period in 
                        either of the 2 most recent preceding fiscal 
                        years and that was due, in large measure, to 
                        economic conditions rather than State policy 
                        changes.
                    ``(C) Limitation.--The total amount paid to a 
                single State under subparagraph (A) during a fiscal 
                year shall not exceed the amount equal to 10 percent of 
                the State family assistance grant (as defined under 
                subparagraph (B) of subsection (a)(1)).
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Applicable percentage.--The term 
                        `applicable percentage' means the Federal 
                        medical assistance percentage for the State (as 
                        defined in section 1905(b)).
                            ``(ii) Applicable benefit level.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the term `applicable 
                                benefit level' means the amount equal 
                                to the maximum cash assistance grant 
                                for a family consisting of 3 
                                individuals under the State program 
                                funded under this part.
                                    ``(II) Rule for states with more 
                                than 1 maximum level.--In the case of a 
                                State that has more than 1 maximum cash 
                                assistance grant level for families 
                                consisting of 3 individuals, the basic 
                                assistance cost shall be the amount 
                                equal to the maximum cash assistance 
                                grant level applicable to the largest 
                                number of families consisting of 3 
                                individuals receiving assistance under 
                                the State program funded under this 
                                part.
                    ``(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there is appropriated for the period of 
                fiscal years 2006 through 2010, such sums as are 
                necessary for making contingency fund grants under this 
                subsection in a total amount not to exceed 
                $2,000,000,000.'';
            (2) by redesignating paragraph (4) as paragraph (2); and
            (3) in paragraph (2), as so redesignated--
                    (A) by striking ``(3)(A)'' and inserting ``(1)''; 
                and
                    (B) by striking ``2-month period that begins with 
                any'' and inserting ``fiscal year quarter that includes 
                a''.
    (b) Modification of Definition of Needy State.--Section 403(b), as 
amended by subsection (a), (42 U.S.C. 603(b)) is further amended--
            (1) by striking paragraphs (5) and (6);
            (2) by redesignating paragraphs (7) and (8) as paragraphs 
        (5) and (6), respectively; and
            (3) by inserting after paragraph (2) (as redesignated by 
        subsection (a)(2)) the following:
            ``(3) Initial determination of whether a state qualifies as 
        a needy state.--
                    ``(A) In general.--For purposes of paragraph (1), 
                subject to paragraph (4), a State will be initially 
                determined to be a needy State for a month if, as 
                determined by the Secretary--
                            ``(i) the monthly average of the 
                        unduplicated number of families that received 
                        assistance under the State program funded under 
                        this part in the most recently concluded 3-
                        month period for which data are available from 
                        the State increased by at least 5 percent over 
                        the number of such families that received such 
                        benefits in the corresponding 3-month period in 
                        either of the 2 most recent preceding fiscal 
                        years;
                            ``(ii) the increase in the number of such 
                        families for the State was due, in large 
                        measure, to economic conditions rather than 
                        State policy changes; and
                            ``(iii) the State satisfies any of the 
                        following criteria:
                                    ``(I) The average rate of total 
                                unemployment in the State (seasonally 
                                adjusted) for the period consisting of 
                                the most recent 3 months for which data 
                                are available has increased by the 
                                lesser of 1.5 percentage points or by 
                                50 percent over the corresponding 3-
                                month period in either of the 2 most 
                                recent preceding fiscal years.
                                    ``(II) The average insured 
                                unemployment rate for the most recent 
                                13 weeks for which data are available 
                                has increased by 1 percentage point 
                                over the corresponding 13-week period 
                                in either of the 2 most recent 
                                preceding fiscal years.
                                    ``(III) As determined by the 
                                Secretary of Agriculture, the monthly 
                                average number of households (as of the 
                                last day of each month) that 
                                participated in the food stamp program 
                                in the State in the then most recently 
                                concluded 3-month period for which data 
                                are available exceeds by at least 15 
                                percent the monthly average number of 
                                households (as of the last day of each 
                                month) in the State that participated 
                                in the food stamp program in the 
                                corresponding 3-month period in either 
                                of the 2 most recent preceding fiscal 
                                years, but only if the Secretary and 
                                the Secretary of Agriculture concur in 
                                the determination that the State's 
                                increased caseload was due, in large 
                                measure, to economic conditions rather 
                                than changes in Federal or State 
                                policies related to the food stamp 
                                program.
                    ``(B) Duration.--A State that qualifies as a needy 
                State--
                            ``(i) under subclause (I) or (II) of 
                        subparagraph (A)(iii), shall be considered a 
                        needy State until the State's average rate of 
                        total unemployment or the State's insured 
                        unemployment rate, respectively, falls below 
                        the level attained in the applicable period 
                        that was first used to determine that the State 
                        qualified as a needy State under that 
                        subparagraph (and in the case of the insured 
                        unemployment rate, without regard to any 
                        declines in the rate that are the result of 
                        seasonal variation); and
                            ``(ii) under subclause (III) of 
                        subparagraph (A)(iii), shall be considered a 
                        needy State so long as the State meets the 
                        criteria for being considered a needy State 
                        under that subparagraph.
            ``(4) Exceptions.--
                    ``(A) Unexpended balances.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (3), a State that has unexpended TANF 
                        balances in an amount that exceeds 30 percent 
                        of the total amount of grants received by the 
                        State under subsection (a) for the most 
                        recently completed fiscal year (other than 
                        welfare-to-work grants made under paragraph (5) 
                        of that subsection prior to fiscal year 2000), 
                        shall not be a needy State under this 
                        subsection.
                            ``(ii) Definition of unexpended tanf 
                        balances.--In clause (i), the term `unexpended 
                        TANF balances' means the lessor of--
                                    ``(I) the total amount of grants 
                                made to the State (regardless of the 
                                fiscal year in which such funds were 
                                awarded) under subsection (a) (other 
                                than welfare-to-work grants made under 
                                paragraph (5) of that subsection prior 
                                to fiscal year 2000) but not yet 
                                expended as of the end of the fiscal 
                                year preceding the fiscal year for 
                                which the State would, in the absence 
                                of this subparagraph, be considered a 
                                needy State under this subsection; and
                                    ``(II) the total amount of grants 
                                made to the State under subsection (a) 
                                (other than welfare-to-work grants made 
                                under paragraph (5) of that subsection 
                                prior to fiscal year 2000) but not yet 
                                expended as of the end of such 
                                preceding fiscal year, plus the 
                                difference between--
                                            ``(aa) the pro rata share 
                                        of the current fiscal year 
                                        grant to be made under 
                                        subsection (a) to the State; 
                                        and
                                            ``(bb) current year 
                                        expenditures of the total 
                                        amount of grants made to the 
                                        State under subsection (a) 
                                        (regardless of the fiscal year 
                                        in which such funds were 
                                        awarded) (other than such 
                                        welfare-to-work grants) through 
                                        the end of the most recent 
                                        calendar quarter.
                    ``(B) Failure to satisfy maintenance of effort 
                requirement.--Notwithstanding paragraph (3), a State 
                that fails to satisfy the requirement of section 
                409(a)(7) with respect to a fiscal year shall not be a 
                needy State under this subsection for that fiscal 
                year.''.
    (c) Clarification of Reporting Requirements.--Paragraph (6) of 
section 403(b) (42 U.S.C. 603(b)), as redesignated by subsection 
(b)(2), is amended by striking ``on the status of the Fund'' and 
inserting ``on the States that qualified for contingency funds and the 
amount of funding awarded under this subsection''.
    (d) Elimination of Penalty for Failure To Maintain 100 Percent 
Maintenance of Effort.--
            (1) In general.--Section 409(a) (42 U.S.C. 609(a)) is 
        amended--
                    (A) by striking paragraph (10); and
                    (B) by redesignating paragraphs (11) through (14) 
                as paragraphs (10) through (13), respectively.
            (2) Conforming amendments.--Section 409 (42 U.S.C. 609) is 
        amended--
                    (A) in subsection (a)(7)(B)(i)(III), by striking 
                ``(12)'' and inserting ``(11)'';
                    (B) in subsection (b)(2), by striking ``(10), (12), 
                or (13)'' and inserting ``(11), or (12)''; and
                    (C) in subsection (c)(4), by striking ``(10), (12), 
                or (13)'' and inserting ``(11), or (12)''.

SEC. 217. USE OF FUNDS.

    (a) Treatment of Interstate Immigrants.--Section 404 (42 U.S.C. 
604) is amended by striking subsection (c).
    (b) Restoration of Authority To Transfer Up to 10 Percent of TANF 
Funds to the Social Services Block Grant.--Section 404(d)(2) (42 U.S.C. 
604(d)(2)) is amended to read as follows:
            ``(2) Limitation on amount transferable to title xx 
        programs.--A State may use not more than 10 percent of the 
        amount of any grant made to the State under section 403(a) for 
        a fiscal year to carry out State programs pursuant to title 
        XX.''.
    (c) Clarification of Authority of States To Use TANF Funds Carried 
Over From Prior Years To Provide TANF Benefits and Services.--Section 
404(e) (42 U.S.C. 604(e)) is amended to read as follows:
    ``(e) Authority To Carryover or Reserve Certain Amounts for 
Benefits or Services or for Future Contingencies.--
            ``(1) Carryover.--A State or tribe may use a grant made to 
        the State or tribe under this part for any fiscal year to 
        provide, without fiscal year limitation, any benefit or service 
        that may be provided under the State or tribal program funded 
        under this part.
            ``(2) Contingency reserve.--A State or tribe may designate 
        any portion of a grant made to the State or tribe under this 
        part as a contingency reserve for future needs, and may use any 
        amount so designated to provide, without fiscal year 
        limitation, any benefit or service that may be provided under 
        the State or tribal program funded under this part. If a State 
        or tribe so designates a portion of such a grant, the State or 
        tribe shall include in its report under section 411(a) the 
        amount so designated.''.
    (d) State Option To Establish Undergraduate Postsecondary or 
Vocational Educational Program.--
            (1) In general.--Section 404 (42 U.S.C. 604) is amended by 
        adding at the end the following:
    ``(l) Authority To Establish Undergraduate Postsecondary or 
Vocational Educational Program.--
            ``(1) In general.--Subject to the succeeding paragraphs of 
        this subsection, a State to which a grant is made under section 
        403 may use the grant to establish a program under which an 
        eligible participant (as defined in paragraph (5)) may be 
        provided support services described in paragraph (7) and, 
        subject to paragraph (8), may have hours of participation in 
        such program counted as being engaged in work for purposes of 
        determining monthly participation rates under section 
        407(b)(1)(B)(i).
            ``(2) State plan requirement.--In order to establish a 
        program under this subsection, a State shall describe (in an 
        addendum to the State plan submitted under section 402) the 
        applicable eligibility criteria that is designed to limit 
        participation in the program to only those individuals--
                    ``(A) whose past earnings indicate that the 
                individuals cannot qualify for employment that pays 
                enough to allow them to obtain self-sufficiency (as 
                determined by the State); and
                    ``(B) for whom enrollment in the program will 
                prepare the individuals for higher-paying occupations 
                in demand in the State.
            ``(3) Limitation on enrollment.--The number of eligible 
        participants in a program established under this subsection may 
        not exceed 10 percent of the total number of families receiving 
        assistance under the State program funded under this part.
            ``(4) No federal funds for tuition.--A State may not use 
        Federal funds provided under a grant made under section 403 to 
        pay tuition for an eligible participant.
            ``(5) Definition of eligible participant.--In this 
        subsection, the term `eligible participant' means an individual 
        who receives assistance under the State program funded under 
        this part and satisfies the following requirements:
                            ``(i) The individual is enrolled in a 
                        postsecondary 2- or 4-year degree program or in 
                        a vocational educational training program.
                            ``(ii) During the period the individual 
                        participates in the program, the individual 
                        maintains satisfactory academic progress, as 
                        defined by the institution operating the 
                        undergraduate postsecondary or vocational 
                        educational program in which the individual is 
                        enrolled.
            ``(6) Required time periods for completion of degree or 
        vocational educational training program.--
                    ``(A) In general.--Subject to subparagraph (B), an 
                eligible participant participating in a program 
                established under this subsection shall be required to 
                complete the requirements of a degree or vocational 
                educational training program within the normal 
                timeframe for full-time students seeking the particular 
                degree or completing the vocational educational 
                training program.
                    ``(B) Exception.--For good cause, the State may 
                allow an eligible participant to complete their degree 
                requirements or vocational educational training program 
                within a period not to exceed 1\1/2\ times the normal 
                timeframe established under subparagraph (A) (unless 
                further modification is required by the Americans with 
                Disabilities Act of 1990 (42 U.S.C. 12101 et seq.), or 
                section 504 of the Rehabilitation Act of 1973 (29 
                U.S.C. 794)) and may modify the requirements applicable 
                to an individual participating in the program. For 
                purposes of the preceding sentence, good cause includes 
                the case of an eligible participant with 1 or more 
                significant barriers to normal participation, as 
                determined by the State, such as the need to care for a 
                family member with special needs.
            ``(7) Support services described.--For purposes of 
        paragraph (1), the support services described in this paragraph 
        include any or all of the following during the period the 
        eligible participant is in the program established under this 
        subsection:
                    ``(A) Child care.
                    ``(B) Transportation services.
                    ``(C) Payment for books and supplies.
                    ``(D) Other services provided under policies 
                determined by the State to ensure coordination and lack 
                of duplication with other programs available to provide 
                support services.
            ``(8) Rules for inclusion in monthly work participation 
        rates.--
                    ``(A) Families counted as participating if they 
                meet the requirements of subparagraphs (b) or (c).--For 
                each eligible participant, a State may elect, for 
                purposes of determining monthly participation rates 
                under section 407(b)(1)(B)(i), to include such 
                participant in the determination of such rates in 
                accordance with subparagraph (B) or (C).
                    ``(B) Full or partial credit for hours of 
                participation in educational or related activities.--
                            ``(i) In general.--Subject to clause (iv), 
                        an eligible participant who participates in 
                        educational or related activities (as 
                        determined by the State) under a program 
                        established under this subsection shall be 
                        given credit for the number of hours of such 
                        participation to the extent that an adult 
                        recipient or minor child head of household 
                        would be given credit under section 407(c) for 
                        being engaged in the same number of hours of 
                        work activities described in paragraph (1), 
                        (2), (3), (4), (5), (6), (7), (8), or (12) of 
                        section 407(d).
                            ``(ii) Related activities.--For purposes of 
                        clause (i), related activities shall include--
                                    ``(I) work activities described in 
                                paragraph (1), (2), (3), (4), (5), (6), 
                                (7), (8), or (12) of section 407(d);
                                    ``(II) work study, practicums, 
                                internships, clinical placements, 
                                laboratory or field work, or such other 
                                activities as will enhance the eligible 
                                participant's employability in the 
                                participant's field of study, as 
                                determined by the State; or
                                    ``(III) subject to clause (iii), 
                                study time.
                            ``(iii) Limitation on inclusion of study 
                        time.--For purposes of determining hours per 
                        week of participation by an eligible 
                        participant under a program established under 
                        this subsection, a State may not count study 
                        time of less than 1 hour for every hour of 
                        class time or more than 2 hours for every hour 
                        of class time.
                            ``(iv) Total number of hours limited to 
                        being counted as 1 family.--In no event may 
                        hours per week of participation by an eligible 
                        participant under a program established under 
                        this subsection be counted as more than 1 
                        family for purposes of determining monthly 
                        participation rates under section 
                        407(b)(1)(B)(i).
                    ``(C) Full credit for being engaged in direct work 
                activities for certain hours per week.--
                            ``(i) In general.--A family that includes 
                        an eligible participant who, in addition to 
                        complying with the full-time educational 
                        participation requirements of the degree or 
                        vocational educational training program they 
                        are enrolled in, participates in an activity 
                        described in subclause (I), (II), or (III) of 
                        subparagraph (B)(ii) for not less than the 
                        number of hours required per week under clause 
                        (ii) shall be counted as 1 family.
                            ``(ii) Required hours per week.--For 
                        purposes of clause (i), subject to clause 
                        (iii), the number of hours per week are--
                                    ``(I) 6 hours per week during the 
                                first 12-month period that an eligible 
                                participant participates in a program 
                                established under this subsection;
                                    ``(II) 8 hours per week during the 
                                second 12-month period of such 
                                participation;
                                    ``(II) 10 hours per week during the 
                                third 12-month period of such 
                                participation; and
                                    ``(II) 12 hours per week during the 
                                fourth or any other succeeding 12- 
                                month period of such participation.
                            ``(iii) Modification of requirements for 
                        good cause.--A State may modify the number of 
                        hours per week required under clause (ii) for 
                        good cause. For purposes of the preceding 
                        sentence, good cause includes the case of an 
                        eligible participant with 1 or more significant 
                        barriers to normal participation, as determined 
                        by the State, such as the need to care for a 
                        family member with special needs.''.
            (2) Conforming amendment.--Section 407(d)(8) (42 U.S.C. 
        607(d)(8)) is amended by inserting ``other than an individual 
        participating in a program established under section 404(l)'' 
        after ``individual''.

SEC. 218. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.

    (a) Repeal.--Section 406 (42 U.S.C. 606) is repealed.
    (b) Conforming Amendments.--
            (1) Section 409 (42 U.S.C. 609), as amended by section 
        216(d)(2), is amended--
                    (A) in subsection (a), by striking paragraph (6);
                    (B) in subsection (b)(2), by striking ``(6),''; and
                    (C) in subsection (c)(4), by striking ``(6),''.
            (2) Section 412 (42 U.S.C. 612) is amended by striking 
        subsection (f) and redesignating subsections (g) through (i) as 
        subsections (f) through (h), respectively.
            (3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by 
        striking ``406,''.

SEC. 219. WORK PARTICIPATION REQUIREMENTS.

    (a) Elimination of Separate Work Participation Rate for 2-Parent 
Families Beginning With Fiscal Year 2003.--
            (1) In general.--Section 407 (42 U.S.C. 607) is amended--
                    (A) in subsection (a)--
                            (i) in the heading, by striking  
                        ``Participation Rate Requirements'' and all 
                        that follows through ``A State'' and inserting 
                        ``Participation Rate Requirements.--A State''; 
                        and
                            (ii) by striking paragraph (2);
                    (B) in subsection (b)--
                            (i) by striking paragraph (2);
                            (ii) in paragraph (4), by striking 
                        ``paragraphs (1)(B) and (2)(B)'' and inserting 
                        ``determining monthly participation rates under 
                        paragraph (1)(B)''; and
                            (iii) in paragraph (5), by striking 
                        ``rates'' and inserting ``rate''; and
                    (C) in subsection (c)--
                            (i) in paragraph (1)--
                                    (I) by striking ``General rules.--
                                '' and all that follows through ``For 
                                purposes'' in subparagraph (A) and 
                                inserting ``General rule.--For 
                                purposes''; and
                                    (II) by striking subparagraph (B); 
                                and
                            (ii) in paragraph (2)(D)--
                                    (I) by striking ``paragraphs 
                                (1)(B)(i) and (2)(B) of subsection 
                                (b)'' and inserting ``subsection 
                                (b)(1)(B)(i)''; and
                                    (II) by striking ``and in 2-parent 
                                families, respectively,''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as if enacted on October 1, 2002.
    (b) Minimum Participation Rates.--Section 407(a) (42 U.S.C. 
607(a)), as amended by subsection (a)(1)(A), is amended to read as 
follows:
    ``(a) Participation Rate Requirements.--
            ``(1) In general.--A State to which a grant is made under 
        section 403 for a fiscal year shall achieve a minimum 
        participation rate with respect to all families receiving 
        assistance under the State program funded under this part that 
        is equal to not less than--
                    ``(A) 50 percent for fiscal year 2006;
                    ``(B) 55 percent for fiscal year 2007;
                    ``(C) 60 percent for fiscal year 2008;
                    ``(D) 65 percent for fiscal year 2009; and
                    ``(E) 70 percent for fiscal year 2010 and each 
                succeeding fiscal year.''.
    (c) Limitation on Reduction of Participation Rate Through 
Application of Credits.--Section 407(a) (42 U.S.C. 607(b)), as amended 
by subsection (b), is amended by adding at the end the following:
            ``(2) Limitation on reduction of participation rate through 
        application of credits.--Notwithstanding any other provision of 
        this part, the net effect of any percentage reduction in the 
        minimum participation rate otherwise required under this 
        section with respect to families receiving assistance under the 
        State program funded under this part as a result of the 
        application of any employment credit, caseload reduction 
        credit, or other credit against such rate for a fiscal year, 
        shall not exceed--
                    ``(A) 40 percentage points, in the case of fiscal 
                year 2006;
                    ``(B) 35 percentage points, in the case of fiscal 
                year 2007;
                    ``(C) 30 percentage points, in the case of fiscal 
                year 2008;
                    ``(D) 25 percentage points, in the case of fiscal 
                year 2009; or
                    ``(E) 20 percentage points, in the case of fiscal 
                year 2010 or any fiscal year thereafter.''.
    (d) Replacement of Caseload Reduction Credit With Employment 
Credit.--
            (1) Employment credit to reward states in which families 
        leave welfare for work; additional credit for families with 
        higher earnings.--
                    (A) In general.--Section 407(b) (42 U.S.C. 607(b)), 
                as amended by subsection (a)(1)(B)(i), is amended by 
                inserting after paragraph (1) the following:
            ``(2) Employment credit.--
                    ``(A) In general.--Subject to subsection (a)(2), 
                the Secretary shall, by regulation, reduce the minimum 
                participation rate otherwise applicable to a State 
                under this subsection for a fiscal year by the number 
                of percentage points in the employment credit for the 
                State for the fiscal year, as determined by the 
                Secretary--
                            ``(i) using information in the National 
                        Directory of New Hires;
                            ``(ii) with respect to a recipient of 
                        assistance or former recipient of assistance 
                        under the State program funded under this part 
                        who is placed with an employer whose hiring 
                        information is not reported to the National 
                        Directory of New Hires, using quarterly wage 
                        information submitted by the State to the 
                        Secretary not later than such date as the 
                        Secretary shall prescribe in regulations; or
                            ``(iii) with respect to families described 
                        in subclause (II) or (III) of subparagraph 
                        (B)(ii), using such other data as the Secretary 
                        may require in order to determine the 
                        employment credit for a State under this 
                        paragraph.
                    ``(B) Calculation of credit.--
                            ``(i) In general.--The employment credit 
                        for a State for a fiscal year is an amount 
                        equal to the sum of the amounts determined 
                        under clause (ii), divided by the amount 
                        determined under clause (iii).
                            ``(ii) Numerator.--For purposes of clause 
                        (i), the amounts determined under this clause 
                        are the following:
                                    ``(I) Twice the quarterly average 
                                unduplicated number of families that 
                                include an adult or minor child head of 
                                household recipient of assistance under 
                                the State program funded under this 
                                part, that ceased to receive such 
                                assistance for at least 2 consecutive 
                                months following the date of the case 
                                closure for the family during the 
                                applicable period (as defined in clause 
                                (v)), that did not receive assistance 
                                under a separate State-funded program 
                                during such 2-month period, and that 
                                were employed during the calendar 
                                quarter immediately succeeding the 
                                quarter in which the assistance under 
                                the State program funded under this 
                                part ceased.
                                    ``(II) At the option of the State, 
                                twice the quarterly average number of 
                                families that received a nonrecurring 
                                short-term benefit under the State 
                                program funded under this part during 
                                the applicable period (as so defined), 
                                that were employed during the calendar 
                                quarter immediately succeeding the 
                                quarter in which the nonrecurring 
                                short-term benefit was so received, and 
                                that earned at least $1,000 during the 
                                applicable period (as so defined).
                                    ``(III) At the option of the State, 
                                twice the quarterly average number of 
                                families that includes an adult who is 
                                receiving substantial child care or 
                                transportation assistance (as defined 
                                by the Secretary, in consultation with 
                                directors of State programs funded 
                                under this part, which definition shall 
                                specify for each type of assistance a 
                                threshold which is a dollar value or a 
                                length of time over which the 
                                assistance is received, and which takes 
                                account of large one-time transition 
                                payments)) during the applicable period 
                                (as so defined).
                            ``(iii) Denominator.--For purposes of 
                        clause (i), the amount determined under this 
                        clause is the amount equal to the sum of the 
                        following:
                                    ``(I) The average monthly number of 
                                families that include an adult or minor 
                                child head of household who received 
                                assistance under the State program 
                                funded under this part during the 
                                applicable period (as defined under 
                                clause (v)).
                                    ``(II) If the State elected the 
                                option under clause (ii)(II), twice the 
                                quarterly average number of families 
                                that received a nonrecurring short-term 
                                benefit under the State program funded 
                                under this part during the applicable 
                                period (as so defined).
                                    ``(III) If the State elected the 
                                option under clause (ii)(III), twice 
                                the quarterly average number of 
                                families that includes an adult who is 
                                receiving substantial child care or 
                                transportation assistance during the 
                                applicable period (as so defined).
                            ``(iv) Special rule for former recipients 
                        with higher earnings.--In calculating the 
                        employment credit for a State for a fiscal 
                        year, in the case of a family that includes an 
                        adult or a minor child head of household that 
                        is to be included in the amount determined 
                        under clause (ii)(I) and that, with respect to 
                        the quarter in which the family's earnings was 
                        examined during the applicable period, earned 
                        at least 33 percent of the average quarterly 
                        earnings in the State (determined on the basis 
                        of State unemployment data), the family shall 
                        be considered to be 1.5 families.
                            ``(v) Definition of applicable period.--For 
                        purposes of this paragraph, the term 
                        `applicable period' means, with respect to a 
                        fiscal year, the most recent 4 quarters for 
                        which data are available to the Secretary 
                        providing information on the work status of--
                                    ``(I) individuals in the quarter 
                                after the individuals ceased receiving 
                                assistance under the State program 
                                funded under this part;
                                    ``(II) at State option, individuals 
                                in the quarter after the individuals 
                                received a short-term, nonrecurring 
                                benefit; and
                                    ``(III) at State option, 
                                individuals in the quarter after the 
                                individuals ceased receiving 
                                substantial child care or 
                                transportation assistance.
                    ``(C) Notification to state.--Not later than August 
                30 of each fiscal year, the Secretary shall--
                            ``(i) determine, on the basis of the 
                        applicable period, the amount of the employment 
                        credit that will be used in determining the 
                        minimum participation rate for a State under 
                        subsection (a) for the immediately succeeding 
                        fiscal year; and
                            ``(ii) notify each State conducting a State 
                        program funded under this part of the amount of 
                        the employment credit for such program for the 
                        succeeding fiscal year.''.
                    (B) Authority of secretary to use information in 
                national directory of new hires.--Section 453(i) (42 
                U.S.C. 653(i)) is amended by adding at the end the 
                following:
            ``(5) Calculation of employment credit for purposes of 
        determining state work participation rates under tanf.--The 
        Secretary may use the information in the National Directory of 
        New Hires for purposes of calculating State employment credits 
        pursuant to section 407(b)(2).''.
            (2) Elimination of caseload reduction credit.--Section 
        407(b) (42 U.S.C. 607(b)) is amended by striking paragraph (3) 
        and redesignating paragraphs (4) and (5) as paragraphs (3) and 
        (4), respectively.
            (3) Effective dates.--
                    (A) In general.--Except as provided in 
                subparagraphs (B) and (C), the amendments made by this 
                subsection shall take effect on October 1, 2007.
                    (B) State option to phase-in replacement of 
                caseload reduction credit with employment credit and 
                delay applicability of other provisions.--A State may 
                elect to have the amendments made by this subsection 
                not apply to the State program funded under part A of 
                title IV of the Social Security Act until October 1, 
                2008, and if the State makes the election, then, in 
                determining the participation rate of the State for 
                purposes of section 407 of the Social Security Act for 
                fiscal year 2008, the State shall be credited with \1/
                2\ of the reduction in the rate that would otherwise 
                result from applying section 407(b)(2) of the Social 
                Security Act (as added by paragraph (1)(A)) to the 
                State for fiscal year 2008 and \1/2\ of the reduction 
                in the rate that would otherwise result from applying 
                section 407(b)(3) of the Social Security Act (as in 
                effect with respect to fiscal year 2005) to the State 
                for fiscal year 2008.
                    (C) Authority to use information in the national 
                directory of new hires.--The amendment made by 
                paragraph (1)(B) shall take effect on October 1, 2005.
    (e) State Options for Participation Requirement Exemptions.--
Section 407(b)(4) (42 U.S.C. 607(b)(4)), as amended by subsection 
(a)(1)(B)(iii) and redesignated by subsection (d)(2), is amended to 
read as follows:
            ``(4) State options for participation requirement 
        exemptions.--At the option of a State, a State may, on a case-
        by-case basis--
                    ``(A) not include a family in the determination of 
                the monthly participation rate for the State in the 
                first month for which the family receives assistance 
                from the State program funded under this part on the 
                basis of the most recent application for such 
                assistance; or
                    ``(B) not require a family in which the youngest 
                child has not attained 12 months of age to engage in 
                work, and may disregard that family in determining the 
                minimum participation rate under subsection (a) for the 
                State for not more than 12 months.''.
    (f) Determination of Countable Hours Engaged in Work.--
            (1) In general.--Section 407(c) (42 U.S.C. 607(c)) is 
        amended to read as follows:
    ``(c) Determination of Countable Hours Engaged in Work.--
            ``(1) Single parent or relative with a child over age 6.--
                    ``(A) Minimum average number of hours per week.--
                Subject to the succeeding paragraphs of this 
                subsection, a family in which an adult recipient or 
                minor child head of household in the family is 
                participating in work activities described in 
                subsection (d) shall be treated as engaged in work for 
                purposes of determining monthly participation rates 
                under subsection (b)(1)(B)(i) as follows:
                            ``(i) In the case of a family in which the 
                        total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 20, but 
                        less than 24, hours per week in a month, as 
                        0.675 of a family.
                            ``(ii) In the case of a family in which the 
                        total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 24, but 
                        less than 30, hours per week in a month, as 
                        0.75 of a family.
                            ``(iii) In the case of a family in which 
                        the total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 30, but 
                        less than 34, hours per week in a month, as 
                        0.875 of a family.
                            ``(iv) In the case of a family in which the 
                        total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 34, but 
                        less than 35, hours per week in a month, as 1 
                        family.
                            ``(v) In the case of a family in which the 
                        total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 35, but 
                        less than 38, hours per week in a month, as 
                        1.05 families.
                            ``(vi) In the case of a family in which the 
                        total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 38 hours 
                        per week in a month, as 1.08 families.
                    ``(B) Direct work activities required for an 
                average of 24 hours per week.--Except as provided in 
                subparagraph (C)(i), a State may not count any hours of 
                participation in work activities specified in paragraph 
                (9), (10), or (11) of subsection (d) of any adult 
                recipient or minor child head of household in a family 
                before the total number of hours of participation by 
                any adult recipient or minor child head of household in 
                the family in work activities described in paragraph 
                (1), (2), (3), (4), (5), (6), (7), (8), or (12) of 
                subsection (d) for the family for the month averages at 
                least 24 hours per week.
                    ``(C) State flexibility to count participation in 
                certain activities.--
                            ``(i) Qualified activities for 3-months in 
                        any 24-month period.--
                                    ``(I) 24-hours per week required.--
                                Subject to subclauses (III) and (IV), 
                                for purposes of determining hours under 
                                subparagraph (A), a State may count the 
                                total number of hours any adult 
                                recipient or minor child head of 
                                household in a family engages in 
                                qualified activities described in 
                                subclause (II) as a work activity 
                                described in subsection (d), without 
                                regard to whether the recipient has 
                                satisfied the requirement of 
                                subparagraph (B), but only if--
                                            ``(aa) the total number of 
                                        hours of participation in such 
                                        qualified activities for the 
                                        family for the month average at 
                                        least 24 hours per week; and
                                            ``(bb) engaging in such 
                                        qualified activities is a 
                                        requirement of the family self-
                                        sufficiency plan.
                                    ``(II) Qualified activities 
                                described.--For purposes of subclause 
                                (I), qualified activities described in 
                                this subclause are any of the 
                                following:
                                            ``(aa) Postsecondary 
                                        education.
                                            ``(bb) Adult literacy 
                                        programs or activities.
                                            ``(cc) Substance abuse 
                                        counseling or treatment.
                                            ``(dd) Programs or 
                                        activities designed to remove 
                                        barriers to work, as defined by 
                                        the State.
                                            ``(ee) Work activities 
                                        authorized under any waiver for 
                                        any State that was continued 
                                        under section 415 before the 
                                        date of enactment of the 
                                        Personal Responsibility and 
                                        Individual Development for 
                                        Everyone Act.
                                    ``(III) Limitation.--Except as 
                                provided in clause (ii), subclause (I) 
                                shall not apply to a family for more 
                                than 3 months in any period of 24 
                                consecutive months.
                                    ``(IV) Certain activities.--The 
                                Secretary may allow a State to count 
                                the total hours of participation in 
                                qualified activities described in 
                                subclause (II) for an adult recipient 
                                or minor child head of household 
                                without regard to the minimum 24 hour 
                                average per week of participation 
                                requirement under subclause (I) if the 
                                State has demonstrated conclusively 
                                that such activity is part of a 
                                substantial and supervised program 
                                whose effectiveness in moving families 
                                to self-sufficiency is superior to any 
                                alternative activity and the 
                                effectiveness of the program in moving 
                                families to self-sufficiency would be 
                                substantially impaired if participating 
                                individuals participated in additional, 
                                concurrent qualified activities that 
                                enabled the individuals to achieve an 
                                average of at least 24 hours per week 
                                of participation.
                            ``(ii) Additional 3-month period permitted 
                        for certain activities.--
                                    ``(I) Self-sufficiency plan 
                                requirement combined with minimum 
                                number of hours.--A State may extend 
                                the 3-month period under clause (i) for 
                                an additional 3 months in the same 
                                period of 24 consecutive months in the 
                                case of an adult recipient or minor 
                                child head of household who is 
                                receiving qualified rehabilitative 
                                services described in subclause (II) 
                                if--
                                            ``(aa) the total number of 
                                        hours that the adult recipient 
                                        or minor child head of 
                                        household engages in such 
                                        qualified rehabilitative 
                                        services and, subject to 
                                        subclause (III), a work 
                                        activity described in paragraph 
                                        (1), (2), (3), (4), (5), (6), 
                                        (7), (8), or (12) of subsection 
                                        (d) for the month average at 
                                        least 24 hours per week; and
                                            ``(bb) engaging in such 
                                        qualified rehabilitative 
                                        services is a requirement of 
                                        the family self-sufficiency 
                                        plan.
                                    ``(II) Qualified rehabilitative 
                                services described.--For purposes of 
                                subclause (I), qualified rehabilitative 
                                services described in this subclause 
                                are any of the following:
                                            ``(aa) Adult literacy 
                                        programs or activities.
                                            ``(bb) Participation in a 
                                        program designed to increase 
                                        proficiency in the English 
                                        language.
                                            ``(cc) In the case of an 
                                        adult recipient or minor child 
                                        head of household who has been 
                                        certified by a qualified 
                                        medical, mental health, or 
                                        social services professional 
                                        (as defined by the State) as 
                                        having a physical or mental 
                                        disability, substance abuse 
                                        problem, or other problem that 
                                        requires a rehabilitative 
                                        service, substance abuse 
                                        treatment, or mental health 
                                        treatment, the service or 
                                        treatment determined necessary 
                                        by the professional.
                                    ``(III) Nonapplication of 
                                limitations on job search and 
                                vocational educational training.--An 
                                adult recipient or minor child head of 
                                household who is receiving qualified 
                                rehabilitative services described in 
                                subclause (II) may engage in a work 
                                activity described in paragraph (6) or 
                                (8) of subsection (d) for purposes of 
                                satisfying the minimum 24 hour average 
                                per week of participation requirement 
                                under subclause (I)(aa) without regard 
                                to any limit that otherwise applies to 
                                the activity (including the 30 percent 
                                limitation on participation in 
                                vocational educational training under 
                                paragraph (6)(C)).
                            ``(iii) Hours in excess of an average of 24 
                        work activity hours per week.--If the total 
                        number of hours that any adult recipient or 
                        minor child head of household in a family has 
                        participated in a work activity described in 
                        paragraph (1), (2), (3), (4), (5), (6), (7), 
                        (8), or (12) of subsection (d) averages at 
                        least 24 hours per week in a month, a State, 
                        for purposes of determining hours under 
                        subparagraph (A), may count any hours an adult 
                        recipient or minor child head of household in 
                        the family engages in--
                                    ``(I) any work activity described 
                                in subsection (d), without regard to 
                                any limit that otherwise applies to the 
                                activity (including the 30 percent 
                                limitation on participation in 
                                vocational educational training under 
                                paragraph (6)(C)); and
                                    ``(II) any qualified activity 
                                described in clause (i)(II), as a work 
                                activity described in subsection (d).
            ``(2) Single parent or relative with a child under age 6.--
                    ``(A) In general.--A family in which an adult 
                recipient or minor child head of household in the 
                family is the only parent or caretaker relative in the 
                family of a child who has not attained 6 years of age 
                and who is participating in work activities described 
                in subsection (d) shall be treated as engaged in work 
                for purposes of determining monthly participation rates 
                under subsection (b)(1)(B)(i) as follows:
                            ``(i) In the case of such a family in which 
                        the total number of hours in which the adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 20, but 
                        less than 24, hours per week in a month, as 
                        0.675 of a family.
                            ``(ii) In the case of such a family in 
                        which the total number of hours in which the 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        24, but less than 35, hours per week in a 
                        month, as 1 family.
                            ``(iii) In the case of such a family in 
                        which the total number of hours in which the 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        35, but less than 38, hours per week in a 
                        month, as 1.05 families.
                            ``(iv) In the case of such a family in 
                        which the total number of hours in which the 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        38 hours per week in a month, as 1.08 families.
                    ``(B) Application of rules regarding direct work 
                activities and state flexibility to count participation 
                in certain activities.--Subparagraphs (B) and (C) of 
                paragraph (1) apply to a family described in 
                subparagraph (A) in the same manner as such 
                subparagraphs apply to a family described in paragraph 
                (1)(A).
            ``(3) 2-parent families.--
                    ``(A) In general.--Subject to paragraph (6)(A), a 
                2-parent family in which an adult recipient or minor 
                child head of household in the family is participating 
                in work activities described in subsection (d) shall be 
                treated as engaged in work for purposes of determining 
                monthly participation rates under subsection 
                (b)(1)(B)(i) as follows:
                            ``(i) In the case of such a family in which 
                        the total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 26, but 
                        less than 30, hours per week in a month, as 
                        0.675 of a family.
                            ``(ii) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        30, but less than 35, hours per week in a 
                        month, as 0.75 of a family.
                            ``(iii) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        35, but less than 39, hours per week in a 
                        month, as 0.875 of a family.
                            ``(iv) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        39, but less than 40, hours per week in a 
                        month, as 1 family.
                            ``(v) In the case of such a family in which 
                        the total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 40, but 
                        less than 43, hours per week in a month, as 
                        1.05 families.
                            ``(vi) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        43 hours per week in a month, as 1.08 families.
                    ``(B) Application of rules regarding direct work 
                activities and state flexibility to count participation 
                in certain activities.--Subparagraphs (B) and (C) of 
                paragraph (1) apply to a 2-parent family described in 
                subparagraph (A) in the same manner as such 
                subparagraphs apply to a family described in paragraph 
                (1)(A), except that subparagraph (B) of paragraph (1) 
                shall be applied to a such a 2-parent family by 
                substituting `34' for `24' each place it appears.
            ``(4) 2-parent families that receive federally funded child 
        care.--
                    ``(A) In general.--Subject to paragraph (6)(A), if 
                a 2-parent family receives federally funded child care 
                assistance, an adult recipient or minor child head of 
                household in the family participating in work 
                activities described in subsection (d) shall be treated 
                as engaged in work for purposes of determining monthly 
                participation rates under subsection (b)(1)(B)(i) as 
                follows:
                            ``(i) In the case of such a family in which 
                        the total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 40, but 
                        less than 45, hours per week in a month, as 
                        0.675 of a family.
                            ``(ii) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        45, but less than 51, hours per week in a 
                        month, as 0.75 of a family.
                            ``(iii) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        51, but less than 55, hours per week in a 
                        month, as 0.875 of a family.
                            ``(iv) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        55, but less than 56, hours per week in a 
                        month, as 1 family.
                            ``(v) In the case of such a family in which 
                        the total number of hours in which any adult 
                        recipient or minor child head of household in 
                        the family is participating in such work 
                        activities for an average of at least 56, but 
                        less than 59, hours per week in a month, as 
                        1.05 families.
                            ``(vi) In the case of such a family in 
                        which the total number of hours in which any 
                        adult recipient or minor child head of 
                        household in the family is participating in 
                        such work activities for an average of at least 
                        59 hours per week in a month, as 1.08 families.
                    ``(B) Application of rules regarding direct work 
                activities and state flexibility to count participation 
                in certain activities.--Subparagraphs (B) and (C) of 
                paragraph (1) apply to a 2-parent family described in 
                subparagraph (A) in the same manner as such 
                subparagraphs apply to a family described in paragraph 
                (1)(A), except that subparagraph (B) of paragraph (1) 
                shall be applied to a such a 2-parent family by 
                substituting `50' for `24' each place it appears.
            ``(5) Calculation of hours per week.--The number of hours 
        per week that a family is engaged in work is the quotient of--
                    ``(A) the total number of hours per month that the 
                family is engaged in work; divided by
                    ``(B) 4.
            ``(6) Special rules.--
                    ``(A) Family with a disabled parent not treated as 
                a 2-parent family.--A family that includes a disabled 
                parent shall not be considered a 2-parent family for 
                purposes of paragraph (3) or (4).
                    ``(B) Number of weeks for which job search counts 
                as work.--An individual shall not be considered to be 
                engaged in work for a month by virtue of participation 
                in an activity described in subsection (d)(6) of a 
                State program funded under this part, after the 
                individual has participated in such an activity for 6 
                weeks (or, if the unemployment rate of the State is at 
                least 50 percent greater than the unemployment rate of 
                the United States, or the State meets the criteria of 
                subclause (I), (II), or (III) of section 
                403(b)(3)(A)(iii) or satisfies the applicable duration 
                requirement of section 403(b)(3)(B)), 12 weeks).
                    ``(C) Single teen head of household or married teen 
                who maintains satisfactory school attendance deemed to 
                count as 1 family.--For purposes of determining hours 
                under the preceding paragraphs of this subsection, with 
                respect to a month, a State shall count a recipient who 
                is married or a head of household and who has not 
                attained 20 years of age as 1 family if the recipient--
                            ``(i) maintains satisfactory attendance at 
                        secondary school or the equivalent during the 
                        month; or
                            ``(ii) participates in education directly 
                        related to employment for an average of at 
                        least 20 hours per week during the month.
                    ``(D) Limitation on number of persons who may be 
                treated as engaged in work by reason of participation 
                in educational activities.--Except as provided in 
                paragraph (1)(C)(ii)(I), for purposes of subsection 
                (b)(1)(B)(i), not more than 30 percent of the number of 
                individuals in all families in a State who are treated 
                as engaged in work for a month may consist of 
                individuals who are--
                            ``(i) determined (without regard to 
                        individuals participating in a program 
                        established under section 404(l)) to be engaged 
                        in work for the month by reason of 
                        participation in vocational educational 
                        training (but only with respect to such 
                        training that does not exceed 12 months with 
                        respect to any individual); or
                            ``(ii) deemed to be engaged in work for the 
                        month by reason of subparagraph (C) of this 
                        paragraph.
                    ``(E) State option to deem single parent caring for 
                a child or adult dependent for care with a physical or 
                mental impairment to be meeting all or part of a 
                family's work participation requirements for a month.--
                            ``(i) In general.--A State may count the 
                        number of hours per week that an adult 
                        recipient or minor child head of household who 
                        is the only parent or caretaker relative for a 
                        child or adult dependent for care with a 
                        physical or mental impairment engages in 
                        providing substantial ongoing care for such 
                        child or adult dependent for care if the State 
                        determines that--
                                    ``(I) the child or adult dependent 
                                for care has been verified through a 
                                medically acceptable clinical or 
                                diagnostic technique as having a 
                                significant physical or mental 
                                impairment or combination of 
                                impairments that require substantial 
                                ongoing care;
                                    ``(II) the adult recipient or minor 
                                child head of household providing such 
                                care is the most appropriate means, as 
                                determined by the State, by which such 
                                care can be provided to the child or 
                                adult dependent for care;
                                    ``(III) for each month in which 
                                this subparagraph applies to the adult 
                                recipient or minor child head of 
                                household, the adult recipient or minor 
                                child head of household is in 
                                compliance with the requirements of the 
                                family's self-sufficiency plan; and
                                    ``(IV) the recipient is unable to 
                                participate fully in work activities, 
                                after consideration of whether there 
                                are supports accessible and available 
                                to the family for the care of the child 
                                or adult dependent for care.
                            ``(ii) Total number of hours limited to 
                        being counted as 1 family.--In no event may a 
                        family that includes a recipient to which 
                        clause (i) applies be counted as more than 1 
                        family for purposes of determining monthly 
                        participation rates under subsection 
                        (b)(1)(B)(i).
                            ``(iii) State requirements.--In the case of 
                        a recipient to which clause (i) applies, the 
                        State shall--
                                    ``(I) conduct regular, periodic 
                                evaluations of the family of the adult 
                                recipient or minor child head of 
                                household; and
                                    ``(II) include as part of the 
                                family's self-sufficiency plan, regular 
                                updates on what special needs of the 
                                child or the adult dependent for care, 
                                including substantial ongoing care, 
                                could be accommodated either by 
                                individuals other than the adult 
                                recipient or minor child head of 
                                household outside of the home.
                            ``(iv) Rule of construction.--Nothing in 
                        this subparagraph shall be construed as 
                        prohibiting a State from including in a 
                        recipient's self-sufficiency plan a requirement 
                        to engage in work activities described in 
                        subsection (d).
                    ``(F) Optional modification of work requirements 
                for recipients residing in areas of indian country or 
                an alaskan native village with high joblessness.--If a 
                State has included in the State plan a description of 
                the State's policies in areas of Indian country or an 
                Alaskan Native village described in section 
                408(a)(7)(D), the State may define the activities that 
                the State will treat as being work activities described 
                in subsection (d) that a recipient who resides in such 
                an area and who is participating in such activities in 
                accordance with a self-sufficiency plan under section 
                408(b) may engage in for purposes of satisfying work 
                requirements under the State program and for purposes 
                of determining monthly participation rates under 
                subsection (b)(1)(B)(i).''.
            (2) Conforming amendment relating to authority to deem 
        single parent of a child or adult dependent for care with a 
        physical or mental impairment deemed to be meeting all or part 
        of a family's work participation requirements for a month.--
        Section 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)), as amended by 
        section 211(a)(1)(B), is amended by adding at the end the 
        following:
                            ``(vi) The document shall set forth the 
                        criteria for applying section 407(c)(6)(E) to 
                        an adult recipient or minor child head of 
                        household who is the only parent or caretaker 
                        relative for a child or adult dependent for 
                        care.''.

SEC. 220. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY PLAN 
              REQUIREMENTS; OTHER PROHIBITIONS AND REQUIREMENTS.

    (a) Universal Engagement and Family Self-Sufficiency Plan 
Requirements.--
            (1) Modification of state plan requirements.--Section 
        402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by striking 
        clauses (ii) and (iii) and inserting the following:
                            ``(ii) Require a parent or caretaker 
                        receiving assistance under the program to 
                        engage in work or alternative self-sufficiency 
                        activities (as defined by the State), 
                        consistent with section 407(e)(2).
                            ``(iii) Require families receiving 
                        assistance under the program to engage in 
                        activities in accordance with family self-
                        sufficiency plans developed pursuant to section 
                        408(b).''.
            (2) Establishment of family self-sufficiency plans.--
                    (A) In general.--Section 408(b) (42 U.S.C. 608(b)) 
                is amended to read as follows:
    ``(b) Family Self-Sufficiency Plans.--
            ``(1) In general.--A State to which a grant is made under 
        section 403 shall--
                    ``(A) make an initial screening and assessment, in 
                the manner deemed appropriate by the State, of the 
                skills, prior work experience, education obtained, work 
                readiness, barriers to work, and employability of each 
                adult or minor child head of household recipient of 
                assistance in the family who--
                            ``(i) has attained age 18; or
                            ``(ii) has not completed high school or 
                        obtained a certificate of high school 
                        equivalency and is not attending secondary 
                        school;
                    ``(B) assess, in the manner deemed appropriate by 
                the State, the work support and other assistance and 
                family support services for which each family receiving 
                assistance is eligible; and
                    ``(C) assess, in the manner deemed appropriate by 
                the State, the well-being of the children in the 
                family, and, where appropriate, activities or resources 
                to improve the well-being of the children.
            ``(2) Contents of plans.--The State shall, in the manner 
        deemed appropriate by the State--
                    ``(A) establish for each family that includes an 
                individual described in paragraph (1)(A), in 
                consultation as the State deems appropriate with the 
                individual, a self-sufficiency plan that--
                            ``(i) specifies activities described in the 
                        State plan submitted pursuant to section 402, 
                        including work activities described in 
                        paragraph (1), (2), (3), (4), (5), (6), (7), 
                        (8), or (12) of section 407(d), as appropriate;
                            ``(ii) is designed to assist the family in 
                        achieving their maximum degree of self-
                        sufficiency, and
                            ``(iii) provides for the ongoing 
                        participation of the individual in the 
                        activities specified in the plan;
                    ``(B) requires, at a minimum, each such individual 
                to participate in activities in accordance with the 
                self-sufficiency plan;
                    ``(C) sets forth the appropriate supportive 
                services the State intends to provide for the family;
                    ``(D) establishes for the family a plan that 
                addresses the issue of child well-being and, when 
                appropriate, adolescent well-being, and that may 
                include services such as domestic violence counseling, 
                mental health referrals, and parenting courses; and
                    ``(E) includes a section designed to assist the 
                family by informing the family, in such manner as 
                deemed appropriate by the State, of the work support 
                and other assistance for which the family may be 
                eligible including (but not limited to)--
                            ``(i) the food stamp program established 
                        under the Food Stamp Act of 1977 (7 U.S.C. 2011 
                        et seq.);
                            ``(ii) the medicaid program funded under 
                        title XIX;
                            ``(iii) the State children's health 
                        insurance program funded under title XXI;
                            ``(iv) Federal or State funded child care, 
                        including child care funded under the Child 
                        Care Development Block Grant Act of 1990 (42 
                        U.S.C. 9858 et seq.) and funds made available 
                        under this title or title XX;
                            ``(v) the earned income tax credit under 
                        section 32 of the Internal Revenue Code of 
                        1986;
                            ``(vi) the low-income home energy 
                        assistance program established under the Low-
                        Income Home Energy Assistance Act of 1981 (42 
                        U.S.C. 8621 et seq.);
                            ``(vii) the special supplemental nutrition 
                        program for women, infants, and children 
                        established under section 17 of the Child 
                        Nutrition Act of 1966 (42 U.S.C. 1786);
                            ``(viii) programs conducted under the 
                        Workforce Investment Act of 1998 (29 U.S.C. 
                        2801 et seq.); and
                            ``(ix) low-income housing assistance 
                        programs.
            ``(3) Review.--
                    ``(A) Regular review.--A State to which a grant is 
                made under section 403 shall--
                            ``(i) monitor the participation of each 
                        adult recipient or minor child head of 
                        household in the activities specified in the 
                        self-sufficiency plan, and regularly review the 
                        progress of the family toward self-sufficiency; 
                        and
                            ``(ii) upon such a review, revise the plan 
                        and activities required under the plan as the 
                        State deems appropriate in consultation with 
                        the family.
                    ``(B) Prior to the imposition of a sanction.--Prior 
                to imposing a sanction against an adult recipient, 
                minor child head of household, or a family for failure 
                to comply with a requirement of the self-sufficiency 
                plan or the State program funded under this part, the 
                State shall, to the extent determined appropriate by 
                the State--
                            ``(i) review the self-sufficiency plan; and
                            ``(ii) make a good faith effort (as defined 
                        by the State) to consult with the family.
            ``(4) State discretion.--A State shall have sole 
        discretion, consistent with section 407, to define and design 
        activities for families for purposes of this subsection, to 
        develop methods for monitoring and reviewing progress pursuant 
        to this subsection, and to make modifications to the plan as 
        the State deems appropriate to assist the individual in 
        increasing their degree of self-sufficiency.
            ``(5) Application to partially-sanctioned families.--The 
        requirements of this subsection shall apply in the case of a 
        family that includes an adult or minor child head of household 
        recipient of assistance who is subject to a partial sanction.
            ``(6) Timing.--The State shall initiate screening and 
        assessment and the establishment of a family self-sufficiency 
        plan in accordance with the requirements of this subsection--
                    ``(A) in the case of a family that, as of the date 
                of enactment of the Personal Responsibility and 
                Individual Development for Everyone Act, is not 
                receiving assistance from the State program funded 
                under this part, not later than the later of--
                            ``(i) 1 year after such date of enactment; 
                        or
                            ``(ii) 60 days after the family first 
                        receives assistance on the basis of the most 
                        recent application for assistance; and
                    ``(B) in the case of a family that, as of such 
                date, is receiving assistance under the State program 
                funded under this part, not later than 1 year after 
                such date of enactment.
            ``(7) Rule of interpretation.--Nothing in this subsection 
        shall preclude a State from--
                    ``(A) requiring participation in work and any other 
                activities the State deems appropriate for helping 
                families achieve self-sufficiency and improving child 
                well-being; or
                    ``(B) using job search or other appropriate job 
                readiness or work activities to assess the 
                employability of individuals and to determine 
                appropriate future engagement activities.''.
                    (B) Penalty for failure to comply with family self-
                sufficiency plan requirements.--
                            (i) In general.--Section 409(a)(3) (42 
                        U.S.C. 609(a)(3)) is amended--
                                    (I) in the paragraph heading, by 
                                inserting ``or comply with family self-
                                sufficiency plan requirements'' after 
                                ``rates'';
                                    (II) in subparagraph (A), by 
                                inserting ``or 408(b)'' after 
                                ``407(a)''; and
                                    (III) by striking subparagraph (C) 
                                and inserting the following:
                    ``(C) Penalty based on severity of failure.--
                            ``(i) Failure to satisfy minimum 
                        participation rate.--If, with respect to fiscal 
                        year 2007 or any fiscal year thereafter, the 
                        Secretary finds that a State has failed or is 
                        failing to substantially comply with the 
                        requirements of section 407(a) for that fiscal 
                        year, the Secretary shall impose reductions 
                        under subparagraph (A) with respect to the 
                        immediately succeeding fiscal year based on the 
                        degree of substantial noncompliance. In 
                        assessing the degree of substantial 
                        noncompliance under section 407(a) for a fiscal 
                        year, the Secretary shall take into account 
                        factors such as--
                                    ``(I) the degree to which the State 
                                missed the minimum participation rate 
                                for that fiscal year;
                                    ``(II) the change in the number of 
                                individuals who are engaged in work in 
                                the State since the prior fiscal year; 
                                and
                                    ``(III) the number of consecutive 
                                fiscal years in which the State failed 
                                to reach the minimum participation 
                                rate.
                            ``(ii) Failure to comply with self-
                        sufficiency plan requirements.--If, with 
                        respect to fiscal year 2007 or any fiscal year 
                        thereafter, the Secretary finds that a State 
                        has failed or is failing to substantially 
                        comply with the requirements of section 408(b) 
                        for that fiscal year, the Secretary shall 
                        impose reductions under subparagraph (A) with 
                        respect to the immediately succeeding fiscal 
                        year based on the degree of substantial 
                        noncompliance. In assessing the degree of 
                        substantial noncompliance under section 408(b), 
                        the Secretary shall take into account factors 
                        such as--
                                    ``(I) the number or percentage of 
                                families for which a self-sufficiency 
                                plan is not established in a timely 
                                fashion for that fiscal year;
                                    ``(II) the duration of the delays 
                                in establishing a self-sufficiency plan 
                                during that fiscal year;
                                    ``(III) whether the failures are 
                                isolated and nonrecurring; and
                                    ``(IV) the existence of systems 
                                designed to ensure that self-
                                sufficiency plans are established for 
                                all families in a timely fashion and 
                                that families' progress under such 
                                plans is monitored.
                            ``(iii) Authority to reduce the penalty.--
                        The Secretary may reduce the penalty that would 
                        otherwise apply under this paragraph if the 
                        substantial noncompliance is due to 
                        circumstances that caused the State to meet the 
                        criteria of subclause (I), (II), or (III) of 
                        section 403(b)(3)(A)(iii) or to satisfy the 
                        applicable duration requirement of section 
                        403(b)(3)(B) during the fiscal year, or if the 
                        noncompliance is due to extraordinary 
                        circumstances such as a natural disaster or 
                        regional recession. The Secretary shall provide 
                        a written report to Congress to justify any 
                        waiver or penalty reduction due to such 
                        extraordinary circumstances.''.
                            (ii) Effective date.--The amendments made 
                        by this subparagraph take effect on October 1, 
                        2006.
            (3) GAO evaluation and report.--Not later than September 
        30, 2007, the Comptroller General of the United States shall 
        submit a report to the Committee on Ways and Means of the House 
        of Representatives and the Committee on Finance of the Senate 
        evaluating the implementation of the universal engagement 
        provisions under the temporary assistance to needy families 
        program under part A of title IV of the Social Security Act (42 
        U.S.C. 601 et seq.), as added by the amendments made by this 
        subsection.
            (4) Rules of construction.--Nothing in this subsection or 
        the amendments made by this subsection shall be construed--
                    (A) as establishing a private right or cause of 
                action against a State for failure to comply with the 
                requirements imposed under this subsection or the 
                amendments made by this subsection; or
                    (B) as limiting claims that may be available under 
                other Federal or State laws.
    (b) Transitional Compliance for Teen Parents.--
            (1) In general.--Section 408(a)(5) (42 U.S.C. 608(a)(5)) is 
        amended--
                    (A) in subparagraph (A)(i), by striking 
                ``subparagraph (B)'' and inserting ``subparagraphs (B) 
                and (C)''; and
                    (B) by adding at the end the following:
                    ``(C) Authority to provide temporary assistance.--A 
                State may use any part of a grant made under section 
                403 to provide assistance to an individual described in 
                clause (ii) of subparagraph (A) who would otherwise be 
                prohibited from receiving such assistance under clause 
                (i) of that subparagraph, subparagraph (B), or section 
                408(a)(4) for not more than a single 60-day period in 
                order to assist the individual in meeting the 
                requirement of clause (i) of subparagraph (A), 
                subparagraph (B), or section 408(a)(4) for receipt of 
                such assistance.''.
            (2) Inclusion of transitional living youth projects as a 
        form of adult-supervised setting.--Clause (i) of section 
        408(a)(5)(A) (42 U.S.C. 608(a)(5)(A)(i)), as amended by 
        paragraph (1), is amended--
                    (A) by striking ``do not reside in a place of'' and 
                inserting ``do not reside in a--
                                    ``(I) place of'';
                    (B) by striking the period and inserting ``; or''; 
                and
                    (C) by adding at the end the following:
                                    ``(II) transitional living youth 
                                project funded under a grant made under 
                                section 321 of the Runaway and Homeless 
                                Youth Act (42 U.S.C. 5714-1).''.

SEC. 221. PENALTIES.

    Section 409(a)(7) (42 U.S.C. 609(a)(7)) is amended--
            (1) in subparagraph (A) by striking ``or 2006'' and 
        inserting ``2006, 2007, 2008, 2009, 2010, or 2011''; and
            (2) in subparagraph (B)(ii)--
                    (A) by inserting ``preceding'' before ``fiscal 
                year''; and
                    (B) by striking ``for fiscal years 1997 through 
                2005,''.

SEC. 222. DATA COLLECTION AND REPORTING.

    (a) Contents of Report.--Section 411(a)(1)(A) (42 U.S.C. 
611(a)(1)(A)) is amended--
            (1) in the matter preceding clause (i), by inserting ``and 
        on families receiving assistance under State programs funded 
        with other qualified State expenditures (as defined in section 
        409(a)(7)(B)(i))'' before the colon;
            (2) in clause (vii), by inserting ``and minor parent'' 
        after ``of each adult'';
            (3) in clause (viii), by striking ``and educational 
        level'';
            (4) in clause (ix), by striking ``, and if the latter 2, 
        the amount received'';
            (5) in clause (x)--
                    (A) by striking ``each type of''; and
                    (B) by inserting before the period ``and, if 
                applicable, the reason for receipt of the assistance 
                for a total of more than 60 months'';
            (6) in clause (xi), by striking subclauses (I) through 
        (VII) and inserting the following:
                                    ``(I) Subsidized private sector 
                                employment.
                                    ``(II) Unsubsidized employment.
                                    ``(III) Public sector employment, 
                                supervised work experience, or 
                                supervised community service.
                                    ``(IV) On-the-job training.
                                    ``(V) Job search and placement.
                                    ``(VI) Training.
                                    ``(VII) Education.
                                    ``(VIII) Other activities directed 
                                at the purposes of this part, as 
                                specified in the State plan submitted 
                                pursuant to section 402.'';
            (7) in clause (xii), by inserting ``and progress toward 
        universal engagement'' after ``participation rates'';
            (8) in clause (xiii), by striking ``type and'' before 
        ``amount of assistance'';
            (9) in clause (xvi), by striking subclause (II) and 
        redesignating subclauses (III) through (V) as subclauses (II) 
        through (IV), respectively; and
            (10) by adding at the end the following:
                            ``(xviii) The date the family first 
                        received assistance from the State program on 
                        the basis of the most recent application for 
                        such assistance.
                            ``(xix) Whether a self-sufficiency plan is 
                        established for the family in accordance with 
                        section 408(b).
                            ``(xx) With respect to any child in the 
                        family, the marital status of the parents at 
                        the birth of the child, and if the parents were 
                        not then married, whether the paternity of the 
                        child has been established.''.
    (b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 611(a)(1)(B)) 
is amended--
            (1) in clause (i)--
                    (A) by striking ``a sample'' and inserting 
                ``samples''; and
                    (B) by inserting before the period ``, except that 
                the Secretary may designate core data elements that 
                must be reported on all families''; and
            (2) in clause (ii), by striking ``funded under this part'' 
        and inserting ``described in subparagraph (A)''.
    (c) Report on Families That Become Ineligible To Receive 
Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
            (1) by striking paragraph (5);
            (2) by redesignating paragraph (6) as paragraph (5); and
            (3) by inserting after paragraph (5) (as so redesignated) 
        the following:
            ``(6) Report on families that become ineligible to receive 
        assistance.--The report required by paragraph (1) for a fiscal 
        quarter shall include for each month in the quarter the number 
        of families and total number of individuals that, during the 
        month, became ineligible to receive assistance under the State 
        program funded under this part (broken down by the number of 
        families that become so ineligible due to earnings, changes in 
        family composition that result in increased earnings, 
        sanctions, time limits, or other specified reasons).''.
    (d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) is 
amended--
            (1) by inserting ``and to collect the necessary data'' 
        before ``with respect to which reports'';
            (2) by striking ``subsection'' and inserting ``section''; 
        and
            (3) by striking ``in defining the data elements'' and all 
        that follows and inserting ``, the National Governors' 
        Association, the American Public Human Services Association, 
        the National Conference of State Legislatures, and others in 
        defining the data elements.''.
    (e) Additional Reports by States.--Section 411 (42 U.S.C. 611) is 
amended--
            (1) by redesignating subsection (b) as subsection (e); and
            (2) by inserting after subsection (a) the following:
    ``(b) Annual Reports on Program Characteristics.--Not later than 90 
days after the end of fiscal year 2006 and each succeeding fiscal year, 
each eligible State shall submit to the Secretary a report on the 
characteristics of the State program funded under this part and other 
State programs funded with qualified State expenditures (as defined in 
section 409(a)(7)(B)(i)). The report shall include, with respect to 
each such program, the program name, a description of program 
activities, the program purpose, the program eligibility criteria, the 
sources of program funding, the number of program beneficiaries, 
sanction policies, and any program work requirements.
    ``(c) Monthly Reports on Caseload.--Not later than 3 months after 
the end of each calendar month that begins 1 year or more after the 
date of enactment of this subsection, each eligible State shall submit 
to the Secretary a report on the number of families and total number of 
individuals receiving assistance in the calendar month under the State 
program funded under this part and under other State programs funded 
with qualified State expenditures (as defined in section 
409(a)(7)(B)(i)).
    ``(d) Annual Report on Performance Improvement.--Beginning with 
fiscal year 2007, not later than January 1 of each fiscal year, each 
eligible State shall submit to the Secretary a report on achievement 
and improvement during the preceding fiscal year under the performance 
goals and measures under the State program funded under this part with 
respect to each of the matters described in section 402(a)(1)(A)(v).''.
    (f) Annual Reports to Congress by the Secretary.--Section 411(e) 
(42 U.S.C. 611(e)), as so redesignated by subsection (e) of this 
section, is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``and each fiscal year thereafter'' and inserting ``and not 
        later than July 1 of each fiscal year thereafter'';
            (2) in paragraph (2), by striking ``families applying for 
        assistance,'' and by striking the last comma; and
            (3) in paragraph (3), by inserting ``and other programs 
        funded with qualified State expenditures (as defined in section 
        409(a)(7)(B)(i))'' before the semicolon.

SEC. 223. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

    (a) Funding for Tribal TANF programs.--
            (1) Reauthorization of tribal family assistance grants.--
        Section 412(a)(1)(A) (42 U.S.C. 612(a)(1)(A)) is amended by 
        striking ``1997, 1998, 1999, 2000, 2001, 2002, and 2003'' and 
        inserting ``2006 through 2010''.
            (2) Grants for indian tribes that received jobs funds.--
        Section 412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by 
        striking ``1997, 1998, 1999, 2000, 2001, 2002, and 2003'' and 
        inserting ``2006 through 2010''.
    (b) Tribal TANF Improvement Fund.--Section 412(a) (42 U.S.C. 
612(a)) is amended by adding at the end the following:
            ``(4) Tribal tanf improvement fund.--
                    ``(A) Establishment.--The Secretary shall establish 
                a fund for purposes of carrying out any of the 
                following activities:
                            ``(i) Providing technical assistance to 
                        Indian tribes considering applying to carry 
                        out, or that are carrying out, a tribal family 
                        assistance plan under this section in order to 
                        help such tribes establish and operate strong 
                        and effective tribal family assistance plans 
                        under this section that will allow families 
                        receiving assistance under such plans achieve 
                        the highest measure of self-sufficiency.
                            ``(ii) Awarding competitive grants directly 
                        to Indian tribes carrying out a tribal family 
                        assistance plan under this section for purposes 
                        of conducting programs and activities that 
                        would substantially improve the operation and 
                        effectiveness of such plans and the ability of 
                        such tribes to achieve the purposes of the 
                        program under this part as described in section 
                        401(a).
                            ``(iii) Awarding competitive grants 
                        directly to Indian tribes carrying out a tribal 
                        family assistance plan under this section to 
                        support tribal economic development activities 
                        that would significantly assist families 
                        receiving assistance under the State program 
                        funded under this part or a tribal family 
                        assistance plan obtain employment and achieve 
                        self-sufficiency.
                            ``(iv) Conducting, directly or through 
                        grants, contracts, or interagency agreements, 
                        research and development to improve knowledge 
                        about tribal family assistance programs 
                        conducted under this section and challenges 
                        faced by such programs in order to improve the 
                        effectiveness of such programs.
                    ``(B) Authorization of appropriations.--There are 
                authorized to be appropriated to the Secretary to carry 
                out this paragraph, $100,000,000 for each of fiscal 
                years 2006 through 2010.''.

SEC. 224. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

    (a) Secretary's Fund for Research, Demonstrations, and Technical 
Assistance.--Section 413 (42 U.S.C. 613), as amended by section 211(d), 
is further amended by adding at the end the following:
    ``(l) Funding for Research, Demonstrations, and Technical 
Assistance.--
            ``(1) Appropriation.--
                    ``(A) In general.--Out of any money in the Treasury 
                of the United States not otherwise appropriated, there 
                are appropriated $100,000,000 for each of fiscal years 
                2006 through 2010, which shall remain available to the 
                Secretary until expended.
                    ``(B) Use of funds.--
                            ``(i) In general.--Funds appropriated under 
                        subparagraph (A) shall be used for the purpose 
                        of--
                                    ``(I) conducting or supporting 
                                research and demonstration projects by 
                                public or private entities; or
                                    ``(II) providing technical 
                                assistance in connection with a purpose 
                                of the program funded under this part, 
                                as described in section 401(a), to 
                                States, Indian tribal organizations, 
                                sub-State entities, and such other 
                                entities as the Secretary may specify.
                            ``(ii) Requirement.--Not less than 80 
                        percent of the funds appropriated under 
                        subparagraph (A) for a fiscal year shall be 
                        expended for the purpose of conducting or 
                        supporting research and demonstration projects, 
                        or for providing technical assistance, in 
                        connection with activities described in section 
                        403(a)(2)(B). Funds appropriated under 
                        subparagraph (A) and expended in accordance 
                        with this clause shall be in addition to any 
                        other funds made available under this part for 
                        activities described in section 403(a)(2)(B).
            ``(2) Secretary's authority.--The Secretary may conduct 
        activities authorized by this subsection directly or through 
        grants, contracts, or interagency agreements with public or 
        private entities.
            ``(3) Requirement for use of funds.--The Secretary shall 
        not pay any funds appropriated under paragraph (1)(A) to an 
        entity for the purpose of conducting or supporting research and 
        demonstration projects involving activities described in 
        section 403(a)(2)(B) unless the entity complies with the 
        requirements of section 403(a)(2)(E).''.
    (b) Funding of Studies and Demonstrations.--Section 413(h)(1) (42 
U.S.C. 613(h)(1)) is amended in the matter preceding subparagraph (A) 
by striking ``1997 through 2002'' and inserting ``2006 through 2010''.
    (c) Program Coordination Demonstration Projects.--
            (1) Purpose.--The purpose of this subsection is to 
        establish a program of demonstration projects in a State or 
        portion of a State to coordinate assistance provided under 
        qualified programs for the purpose of supporting working 
        individuals and families, helping families escape welfare 
        dependency, promoting child well-being, or helping build 
        stronger families, using innovative approaches to strengthen 
        service systems and provide more coordinated and effective 
        service delivery.
            (2) Definitions.--In this subsection:
                    (A) Qualified program.--The term ``qualified 
                program'' means--
                            (i) a program under part A of title IV of 
                        the Social Security Act (42 U.S.C. 601 et 
                        seq.);
                            (ii) the program under title XX of the 
                        Social Security Act (42 U.S.C. 1397 et seq.); 
                        and
                            (iii) child care assistance funded under 
                        section 418 of the Social Security Act (42 
                        U.S.C. 618).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
            (3) Application requirements.--The head of a State entity 
        or of a sub-State entity administering 2 or more qualified 
        programs proposed to be included in a demonstration project 
        under this subsection shall (or, if the project is proposed to 
        include qualified programs administered by 2 or more such 
        entities, the heads of the administering entities (each of whom 
        shall be considered an applicant for purposes of this 
        subsection) shall jointly) submit to the Secretary an 
        application that contains the following:
                    (A) Programs included.--A statement identifying 
                each qualified program to be included in the project, 
                and describing how the purposes of each such program 
                will be achieved by the project.
                    (B) Population served.--A statement identifying the 
                population to be served by the project and specifying 
                the eligibility criteria to be used.
                    (C) Description and justification.--A detailed 
                description of the project, including--
                            (i) a description of how the project is 
                        expected to improve or enhance achievement of 
                        the purposes of the programs to be included in 
                        the project, from the standpoint of quality, of 
                        cost-effectiveness, or of both; and
                            (ii) a description of the performance 
                        objectives for the project, including any 
                        proposed modifications to the performance 
                        measures and reporting requirements used in the 
                        programs.
                    (D) Waivers requested.--A description of the 
                statutory and regulatory requirements with respect to 
                which a waiver is requested in order to carry out the 
                project, and a justification of the need for each such 
                waiver.
                    (E) Cost neutrality.--Such information and 
                assurances as necessary to establish to the 
                satisfaction of the Secretary, in consultation with the 
                Director of the Office of Management and Budget, that 
                the proposed project is reasonably expected to meet the 
                applicable cost neutrality requirements of paragraph 
                (4)(E).
                    (F) Evaluation and reports.--An assurance that the 
                applicant will--
                            (i) obtain an evaluation by an independent 
                        contractor of the effectiveness of the project 
                        using an evaluation design that, to the maximum 
                        extent feasible, includes random assignment of 
                        clients (or entities serving such clients) to 
                        service delivery and control groups; and
                            (ii) make interim and final reports to the 
                        Secretary, at such times and in such manner as 
                        the Secretary may require.
                    (G) Other information and assurances.--Such other 
                information and assurances as the Secretary may 
                require.
            (4) Approval of applications.--
                    (A) In general.--The Secretary with respect to a 
                qualified program that is identified in an application 
                submitted pursuant to subsection (c) may approve the 
                application and, except as provided in subparagraph 
                (B), waive any requirement applicable to the program, 
                to the extent consistent with this subsection and 
                necessary and appropriate for the conduct of the 
                demonstration project proposed in the application, if 
                the Secretary determines that the project--
                            (i) has a reasonable likelihood of 
                        achieving the objectives of the programs to be 
                        included in the project;
                            (ii) may reasonably be expected to meet the 
                        applicable cost neutrality requirements of 
                        subparagraph (E), as determined by the Director 
                        of the Office of Management and Budget;
                            (iii) includes the coordination of 2 or 
                        more qualified programs; and
                            (iv) provides for an independent evaluation 
                        that includes random assignment to the maximum 
                        extent feasible, as described in paragraph 
                        (3)(F), and which the Secretary determines to 
                        be appropriate for assessing the effectiveness 
                        of the project.
                    (B) Provisions excluded from waiver authority.--A 
                waiver shall not be granted under subparagraph (A)--
                            (i) with respect to any provision of law 
                        relating to--
                                    (I) civil rights or prohibition of 
                                discrimination;
                                    (II) purposes or goals of any 
                                program;
                                    (III) maintenance of effort 
                                requirements;
                                    (IV) health or safety;
                                    (V) labor standards under the Fair 
                                Labor Standards Act of 1938; or
                                    (VI) environmental protection;
                            (ii) in the case of child care assistance 
                        funded under section 418 of the Social Security 
                        Act (42 U.S.C. 618), with respect to the 
                        requirement under the first sentence of 
                        subsection (b)(1) of that section that funds 
                        received by a State under that section shall 
                        only be used to provide child care assistance;
                            (iii) with respect to any requirement that 
                        a State pass through to a sub-State entity part 
                        or all of an amount paid to the State;
                            (iv) if the waiver would waive any funding 
                        restriction or limitation provided in an 
                        appropriations Act, or would have the effect of 
                        transferring appropriated funds from 1 
                        appropriations account to another; or
                            (v) except as otherwise provided by 
                        statute, if the waiver would waive any funding 
                        restriction applicable to a program authorized 
                        under an Act which is not an appropriations Act 
                        (but not including program requirements such as 
                        application procedures, performance standards, 
                        reporting requirements, or eligibility 
                        standards), or would have the effect of 
                        transferring funds from a program for which 
                        there is direct spending (as defined in section 
                        250(c)(8) of the Balanced Budget and Emergency 
                        Deficit Control Act of 1985) to another 
                        program.
                    (C) 10 state limitation.--The Director of the 
                Office of Management and Budget shall establish a 
                procedure for ensuring that not more than 10 States 
                (including any portion of a State) conduct a 
                demonstration project under this subsection.
                    (D) Agreement of secretary required.--
                            (i) In general.--An applicant may not 
                        conduct a demonstration project under this 
                        subsection unless the Secretary, with respect 
                        to each qualified program proposed to be 
                        included in the project, has approved the 
                        application to conduct the project.
                            (ii) Agreement with respect to funding and 
                        implementation.--Before approving an 
                        application to conduct a demonstration project 
                        under this subsection, the Secretary shall have 
                        in place an agreement with the applicant with 
                        respect to the payment of funds and 
                        responsibilities required of the Secretary with 
                        respect to the project.
                    (E) Cost-neutrality requirement.--
                            (i) General rule.--Notwithstanding any 
                        other provision of law (except as provided in 
                        clause (ii)), the total of the amounts that may 
                        be paid by the Federal Government for a fiscal 
                        year with respect to the programs in the State 
                        in which an entity conducting a demonstration 
                        project under this subsection is located that 
                        are affected by the project shall not exceed 
                        the estimated total amount that the Federal 
                        Government would have paid for the fiscal year 
                        with respect to the programs if the project had 
                        not been conducted, as determined by the 
                        Director of the Office of Management and 
                        Budget.
                            (ii) Special rule.--If an applicant submits 
                        to the Director of the Office of Management and 
                        Budget a request to apply the rules of this 
                        clause to the programs in the State in which 
                        the applicant is located that are affected by a 
                        demonstration project proposed in an 
                        application submitted by the applicant pursuant 
                        to this section, during such period of not more 
                        than 5 consecutive fiscal years in which the 
                        project is in effect, and the Director 
                        determines, on the basis of supporting 
                        information provided by the applicant, to grant 
                        the request, then, notwithstanding any other 
                        provision of law, the total of the amounts that 
                        may be paid by the Federal Government for the 
                        period with respect to the programs shall not 
                        exceed the estimated total amount that the 
                        Federal Government would have paid for the 
                        period with respect to the programs if the 
                        project had not been conducted.
                    (F) 90-day approval deadline.--
                            (i) In general.--If the Secretary receives 
                        an application to conduct a demonstration 
                        project under this subsection and does not 
                        disapprove the application within 90 days after 
                        the receipt, then, subject to the 10 State 
                        limitation under paragraph (3)--
                                    (I) the Secretary is deemed to have 
                                approved the application for such 
                                period as is requested in the 
                                application, except to the extent 
                                inconsistent with paragraph (5); and
                                    (II) any waiver requested in the 
                                application which applies to a 
                                qualified program that is identified in 
                                the application and is administered by 
                                the Secretary is deemed to be granted, 
                                except to the extent inconsistent with 
                                subparagraph (B) or (E) of this 
                                paragraph.
                            (ii) Deadline extended if additional 
                        information is sought.--The 90-day period 
                        referred to in clause (i) shall not include any 
                        period that begins with the date the Secretary 
                        requests the applicant to provide additional 
                        information with respect to the application and 
                        ends with the date the additional information 
                        is provided.
            (5) Duration of projects.--A demonstration project under 
        this subsection may be approved for a term of not more than 5 
        years.
            (6) Reports to congress.--
                    (A) Report on disposition of applications.--Within 
                90 days after the date the Secretary receives an 
                application submitted pursuant to this subsection, the 
                Secretary shall submit to the Committee on Finance of 
                the Senate and the Committee on Ways and Means of the 
                House of Representatives notice of the receipt, a 
                description of the decision of the Secretary with 
                respect to the application, and the reasons for 
                approving or disapproving the application.
                    (B) Reports on projects.--The Secretary shall 
                provide annually to Congress a report concerning 
                demonstration projects approved under this subsection, 
                including--
                            (i) the projects approved for each 
                        applicant;
                            (ii) the number of waivers granted under 
                        this subsection, and the specific statutory 
                        provisions waived;
                            (iii) how well each project for which a 
                        waiver is granted is improving or enhancing 
                        program achievement from the standpoint of 
                        quality, cost-effectiveness, or both;
                            (iv) how well each project for which a 
                        waiver is granted is meeting the performance 
                        objectives specified in paragraph (3)(C)(ii);
                            (v) how each project for which a waiver is 
                        granted is conforming with the cost-neutrality 
                        requirements of paragraph (4)(E); and
                            (vi) to the extent the Secretary deems 
                        appropriate, recommendations for modification 
                        of programs based on outcomes of the projects.

SEC. 225. STUDY BY THE CENSUS BUREAU.

    (a) In General.--Section 414(a) (42 U.S.C. 614(a)) is amended to 
read as follows:
    ``(a) In General.--The Bureau of the Census shall implement or 
enhance a longitudinal survey of program participation, developed in 
consultation with the Secretary and made available to interested 
parties, to allow for the assessment of the outcomes of continued 
welfare reform on the economic and child well-being of low-income 
families with children, including those who received assistance or 
services from a State program funded under this part, and, to the 
extent possible, shall provide State representative samples. The 
content of the survey should include such information as may be 
necessary to examine the issues of out-of-wedlock childbearing, 
marriage, welfare dependency and compliance with work requirements, the 
beginning and ending of spells of assistance, work, earnings and 
employment stability, and the well-being of children.''.
    (b) Reports on the Well-Being of Children and Families.--Section 
414 (42 U.S.C. 614), as amended by subsection (a), is amended--
            (1) by redesignating subsection (b) as subsection (c); and
            (2) by inserting after subsection (a) the following:
    ``(b) Reports on the Well-Being of Children and Families.--
            ``(1) In general.--Not later than 24 months after the date 
        of enactment of the Personal Responsibility and Individual 
        Development for Everyone Act, the Secretary of Commerce shall 
        prepare and submit to the Committee on Ways and Means of the 
        House of Representatives and the Committee on Finance of the 
        Senate a report on the well-being of children and families 
        using data collected under subsection (a).
            ``(2) Second report.--Not later than 60 months after such 
        date of enactment, the Secretary of Commerce shall submit a 
        second report to the Committee on Ways and Means of the House 
        of Representatives and the Committee on Finance of the Senate 
        on the well-being of children and families using data collected 
        under subsection (a).
            ``(3) Inclusion of comparable measures.--Where comparable 
        measures for data collected under subsection (a) exist in 
        surveys previously administered by the Bureau of the Census, 
        appropriate comparisons shall be made and included in each 
        report required under this subsection on the well-being of 
        children and families to assess changes in such measures.''.
    (c) Appropriation.--Section 414(c) (42 U.S.C. 614(c)), as 
redesignated by subsection (b)(1), is amended by striking ``1996,'' and 
all that follows through the period and inserting ``2006 through 2010 
for payment to the Bureau of the Census to carry out this section. 
Funds appropriated under this subsection for a fiscal year shall remain 
available through fiscal year 2010 to carry out this section.''.

SEC. 226. FUNDING FOR CHILD CARE.

    (a) Increase in Mandatory Funding.--Section 418(a)(3) (42 U.S.C. 
618(a)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(G) $2,917,000,000 for each of fiscal years 2006 
                through 2010.''.
    (b) Inclusion of Commonwealth of Puerto Rico in Reservation of 
Child Care Funds.--
            (1) In general.--Section 418(a)(4) (42 U.S.C. 618(a)(4)) is 
        amended--
                    (A) in the paragraph heading, by striking ``Indian 
                tribes'' and inserting ``Amounts reserved'';
                    (B) by striking ``The Secretary'' and inserting the 
                following:
                    ``(A) Indian tribes.--The Secretary''; and
                    (C) by adding at the end the following:
                    ``(B) Puerto rico.--The Secretary shall reserve 
                $10,000,000 of the amount appropriated under paragraph 
                (3) for each fiscal year for payments to the 
                Commonwealth of Puerto Rico for each such fiscal year 
                for the purpose of providing child care assistance.''.
            (2) Conforming amendment.--Section 1108(a)(2) (42 U.S.C. 
        1308(a)(2)), as amended by section 218(b)(3), is amended by 
        striking ``or 413(f)'' and inserting ``413(f), or 
        418(a)(4)(B)''.

SEC. 227. DEFINITIONS.

    (a) In General.--Section 419 (42 U.S.C. 619) is amended by adding 
at the end the following:
            ``(6) Assistance.--
                    ``(A) In general.--The term `assistance' means 
                payment, by cash, voucher, or other means, to or for an 
                individual or family for the purpose of meeting a 
                subsistence need of the individual or family (including 
                food, clothing, shelter, and related items, but not 
                including costs of transportation or child care).
                    ``(B) Exception.--The term `assistance' does not 
                include a payment described in subparagraph (A) to or 
                for an individual or family on a short-term, 
                nonrecurring basis (as defined by the State in 
                accordance with regulations prescribed by the 
                Secretary).''.
    (b) Conforming Amendments.--
            (1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by 
        striking ``assistance'' and inserting ``aid''.
            (2) Section 404(f) (42 U.S.C. 604(f)) is amended by 
        striking ``assistance'' and inserting ``benefits or services''.
            (3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is 
        amended in the heading by striking ``assistance'' and inserting 
        ``aid''.
            (4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by 
        striking ``assistance'' and inserting ``aid''.
            (5) Section 5(g)(2)(D) of the Food Stamp Act of 1977 (7 
        U.S.C. 2014(g)(2)(D)) is amended--
                    (A) by striking ``If the vehicle allowance'' and 
                inserting the following:
                            ``(i) In general.--If the vehicle 
                        allowance''; and
                    (B) by adding at the end the following:
                            ``(ii) Definition of assistance.--In clause 
                        (i), the term `assistance' shall have the 
                        meaning given such term in section 260.31 of 
                        title 45 of the Code of Federal Regulations, as 
                        in effect on June 1, 2002.''.

SEC. 228. RESPONSIBLE FATHERHOOD PROGRAM.

    (a) Responsible Fatherhood Program.--
            (1) Findings.--Congress makes the following findings:
                    (A) Nearly 24,000,000 children in the United 
                States, or 34 percent of all such children, live apart 
                from their biological father.
                    (B) Sixty percent of couples who divorce have at 
                least 1 child.
                    (C) The number of children living with only a 
                mother increased from just over 5,000,000 in 1960 to 
                17,000,000 in 1999, and between 1981 and 1991 the 
                percentage of children living with only 1 parent 
                increased from 19 percent to 25 percent.
                    (D) Forty percent of children who live in 
                households without a father have not seen their father 
                in at least 1 year and 50 percent of such children have 
                never visited their father's home.
                    (E) The most important factor in a child's 
                upbringing is whether the child is brought up in a 
                loving, healthy, supportive environment.
                    (F) Children who live without contact with their 
                biological father are, in comparison to children who 
                have such contact--
                            (i) 5 times more likely to live in poverty;
                            (ii) more likely to bring weapons and drugs 
                        into the classroom;
                            (iii) twice as likely to commit crime;
                            (iv) twice as likely to drop out of school;
                            (v) more likely to commit suicide;
                            (vi) more than twice as likely to abuse 
                        alcohol or drugs; and
                            (vii) more likely to become pregnant as 
                        teenagers.
                    (G) Violent criminals are overwhelmingly males who 
                grew up without fathers.
                    (H) Between 20 and 30 percent of families in 
                poverty are headed by women who have suffered domestic 
                violence during the past year, and between 40 and 60 
                percent of women with children receiving welfare were 
                abused sometime during their life.
                    (I) Responsible fatherhood includes active 
                participation in financial support and child care, as 
                well as the formation and maintenance of a positive, 
                healthy, and nonviolent relationship between father and 
                child and a cooperative relationship between parents.
                    (J) States should be encouraged to implement 
                programs that provide support for responsible 
                fatherhood, promote marriage, and increase the 
                incidence of marriage, and should not be restricted 
                from implementing such programs.
                    (K) Fatherhood programs should promote and provide 
                support services for--
                            (i) loving and healthy relationships 
                        between parents and children; and
                            (ii) cooperative parenting.
                    (L) There is a social need to reconnect children 
                and fathers.
                    (M) The promotion of responsible fatherhood and 
                encouragement of healthy 2-parent married families 
                should not--
                            (i) denigrate the standing or parenting 
                        efforts of single mothers or other caregivers;
                            (ii) lessen the protection of children from 
                        abusive parents; or
                            (iii) compromise the safety or health of 
                        the custodial parent;
                but should increase the chance that children will have 
                2 caring parents to help them grow up healthy and 
                secure.
                    (N) The promotion of responsible fatherhood must 
                always recognize and promote the values of nonviolence.
                    (O) For the future of the United States and the 
                future of our children, Congress, States, and local 
                communities should assist parents to become more 
                actively involved in their children's lives.
                    (P) Child support is an important means by which a 
                parent can take financial responsibility for a child 
                and emotional support is an important means by which a 
                parent can take social responsibility for a child.
            (2) Fatherhood program.--Title I of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (Public Law 104-193) is amended by adding at the end the 
        following:

``SEC. 117. FATHERHOOD PROGRAM.

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

               `` `PART C--RESPONSIBLE FATHERHOOD PROGRAM

`` `SEC. 441. RESPONSIBLE FATHERHOOD GRANTS.

    `` `(a) Grants to States To Conduct Demonstration Programs.--
            `` `(1) Authority to award grants.--
                    `` `(A) In general.--The Secretary shall award 
                grants to up to 10 eligible States to conduct 
                demonstration programs to carry out the purposes 
                described in paragraph (2).
                    `` `(B) Eligible state.--For purposes of this 
                subsection, an eligible State is a State that submits 
                to the Secretary the following:
                            `` `(i) Application.--An application for a 
                        grant under this subsection, at such time, in 
                        such manner, and containing such information as 
                        the Secretary may require.
                            `` `(ii) State plan.--A State plan that 
                        includes the following:
                                    `` `(I) Project description.--A 
                                description of the programs or 
                                activities the State will fund under 
                                the grant, including a good faith 
                                estimate of the number and 
                                characteristics of clients to be served 
                                under such projects and how the State 
                                intends to achieve at least 2 of the 
                                purposes described in paragraph (2).
                                    `` `(II) Coordination efforts.--A 
                                description of how the State will 
                                coordinate and cooperate with State and 
                                local entities responsible for carrying 
                                out other programs that relate to the 
                                purposes intended to be achieved under 
                                the demonstration program, including as 
                                appropriate, entities responsible for 
                                carrying out jobs programs and programs 
                                serving children and families.
                                    `` `(III) Records, reports, and 
                                audits.--An agreement to maintain such 
                                records, submit such reports, and 
                                cooperate with such reviews and audits 
                                as the Secretary finds necessary for 
                                purposes of oversight of the 
                                demonstration program.
                            `` `(iii) Certifications.--The following 
                        certifications from the chief executive officer 
                        of the State:
                                    `` `(I) A certification that the 
                                State will use funds provided under the 
                                grant to promote at least 2 of the 
                                purposes described in paragraph (2).
                                    `` `(II) A certification that the 
                                State will return any unused funds to 
                                the Secretary in accordance with the 
                                reconciliation process under paragraph 
                                (5).
                                    `` `(III) A certification that the 
                                funds provided under the grant will be 
                                used for programs and activities that 
                                target low-income participants and that 
                                not less than 50 percent of the 
                                participants in each program or 
                                activity funded under the grant shall 
                                be--
                                            `` `(aa) parents of a child 
                                        who is, or within the past 24 
                                        months has been, a recipient of 
                                        assistance or services under a 
                                        State program funded under part 
                                        A, D, or E of this title, title 
                                        XIX, or the Food Stamp Act of 
                                        1977; or
                                            `` `(bb) parents, including 
                                        an expectant parent or a 
                                        married parent, whose income 
                                        (after adjustment for court-
                                        ordered child support paid or 
                                        received) does not exceed 150 
                                        percent of the poverty line.
                                    `` `(IV) A certification that the 
                                State has or will comply with the 
                                requirements of paragraph (4).
                                    `` `(V) A certification that funds 
                                provided to a State under this 
                                subsection shall not be used to 
                                supplement or supplant other Federal, 
                                State, or local funds that are used to 
                                support programs or activities that are 
                                related to the purposes described in 
                                paragraph (2).
                    `` `(C) Preferences and factors of consideration.--
                In awarding grants under this subsection, the Secretary 
                shall take into consideration the following:
                            `` `(i) Diversity of entities used to 
                        conduct programs and activities.--The Secretary 
                        shall, to the extent practicable, achieve a 
                        balance among the eligible States awarded 
                        grants under this subsection with respect to 
                        the size, urban or rural location, and 
                        employment of differing or unique methods of 
                        the entities that the eligible States intend to 
                        use to conduct the programs and activities 
                        funded under the grants.
                            `` `(ii) Priority for certain states.--The 
                        Secretary shall give priority to awarding 
                        grants to eligible States that have--
                                    `` `(I) demonstrated progress in 
                                achieving at least 1 of the purposes 
                                described in paragraph (2) through 
                                previous State initiatives; or
                                    `` `(II) demonstrated need with 
                                respect to reducing the incidence of 
                                out-of-wedlock births or absent fathers 
                                in the State.
            `` `(2) Purposes.--The purposes described in this paragraph 
        are the following:
                    `` `(A) Promoting responsible fatherhood through 
                marriage promotion.--To promote marriage or sustain 
                marriage through activities such as counseling, 
                mentoring, disseminating information about the benefits 
                of marriage and 2-parent involvement for children, 
                enhancing relationship skills, education regarding how 
                to control aggressive behavior, disseminating 
                information on the causes of domestic violence and 
                child abuse, marriage preparation programs, premarital 
                counseling, marital inventories, skills-based marriage 
                education, financial planning seminars, including 
                improving a family's ability to effectively manage 
                family business affairs by means such as education, 
                counseling, or mentoring on matters related to family 
                finances, including household management, budgeting, 
                banking, and handling of financial transactions and 
                home maintenance, and divorce education and reduction 
                programs, including mediation and counseling.
                    `` `(B) Promoting responsible fatherhood through 
                parenting promotion.--To promote responsible parenting 
                through activities such as counseling, mentoring, and 
                mediation, disseminating information about good 
                parenting practices, skills-based parenting education, 
                encouraging child support payments, and other methods.
                    `` `(C) Promoting responsible fatherhood through 
                fostering economic stability of fathers.--To foster 
                economic stability by helping fathers improve their 
                economic status by providing activities such as work 
                first services, job search, job training, subsidized 
                employment, job retention, job enhancement, and 
                encouraging education, including career-advancing 
                education, dissemination of employment materials, 
                coordination with existing employment services such as 
                welfare-to-work programs, referrals to local employment 
                training initiatives, and other methods.
            `` `(3) Restriction on use of funds.--No funds provided 
        under this subsection may be used for costs attributable to 
        court proceedings regarding matters of child visitation or 
        custody, or for legislative advocacy.
            `` `(4) Requirements for receipt of funds.--A State may not 
        be awarded a grant under this section unless the State, as a 
        condition of receiving funds under such a grant--
                    `` `(A) consults with experts in domestic violence 
                or with relevant community domestic violence coalitions 
                in developing such programs or activities; and
                    `` `(B) describes in the application for a grant 
                under this section--
                            `` `(i) how the programs or activities 
                        proposed to be conducted will address, as 
                        appropriate, issues of domestic violence; and
                            `` `(ii) what the State 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.
            `` `(5) Reconciliation process.--
                    `` `(A) 3-year availability of amounts allotted.--
                Each eligible State that receives a grant under this 
                subsection for a fiscal year shall return to the 
                Secretary any unused portion of the grant for such 
                fiscal year not later than the last day of the second 
                succeeding fiscal year, together with any earnings on 
                such unused portion.
                    `` `(B) Procedure for redistribution.--The 
                Secretary shall establish an appropriate procedure for 
                redistributing to eligible States that have expended 
                the entire amount of a grant made under this subsection 
                for a fiscal year any amount that is returned to the 
                Secretary by eligible States under subparagraph (A).
            `` `(6) Amount of grants.--
                    `` `(A) In general.--Subject to subparagraph (B), 
                the amount of each grant awarded under this subsection 
                shall be an amount sufficient to implement the State 
                plan submitted under paragraph (1)(B)(ii).
                    `` `(B) Minimum amounts.--No eligible State shall--
                            `` `(i) in the case of the District of 
                        Columbia or a State other than the Commonwealth 
                        of Puerto Rico, the United States Virgin 
                        Islands, Guam, American Samoa, and the 
                        Commonwealth of the Northern Mariana Islands, 
                        receive a grant for a fiscal year in an amount 
                        that is less than $1,000,000; and
                            `` `(ii) in the case of the Commonwealth of 
                        Puerto Rico, the United States Virgin Islands, 
                        Guam, American Samoa, and the Commonwealth of 
                        the Northern Mariana Islands, receive a grant 
                        for a fiscal year in an amount that is less 
                        than $500,000.
            `` `(7) Definition of state.--In this subsection the term 
        `State' means each of the 50 States, the District of Columbia, 
        the Commonwealth of Puerto Rico, the United States Virgin 
        Islands, Guam, American Samoa, and the Commonwealth of the 
        Northern Mariana Islands.
            `` `(8) Authorization of appropriations.--There is 
        authorized to be appropriated $20,000,000 for each of fiscal 
        years 2006 through 2010 for purposes of making grants to 
        eligible States under this subsection.
    `` `(b) Grants to Eligible Entities To Conduct Demonstration 
Programs.--
            `` `(1) Authority to award grants.--
                    `` `(A) In general.--The Secretary shall award 
                grants to eligible entities to conduct demonstration 
                programs to carry out the purposes described in 
                subsection (a)(2).
                    `` `(B) Eligible entity.--For purposes of this 
                subsection, an eligible entity is a local government, 
                local public agency, community-based or nonprofit 
                organization, or private entity, including any 
                charitable or faith-based organization, or an Indian 
                tribe (as defined in section 419(4)), that submits to 
                the Secretary the following:
                            `` `(i) Application.--An application for a 
                        grant under this subsection, at such time, in 
                        such manner, and containing such information as 
                        the Secretary may require.
                            `` `(ii) Project description.--A 
                        description of the programs or activities the 
                        entity intends to carry out with funds provided 
                        under the grant, including a good faith 
                        estimate of the number and characteristics of 
                        clients to be served under such programs or 
                        activities and how the entity intends to 
                        achieve at least 2 of the purposes described in 
                        subsection (a)(2).
                            `` `(iii) Coordination efforts.--A 
                        description of how the entity will coordinate 
                        and cooperate with State and local entities 
                        responsible for carrying out other programs 
                        that relate to the purposes intended to be 
                        achieved under the demonstration program, 
                        including as appropriate, entities responsible 
                        for carrying out jobs programs and programs 
                        serving children and families.
                            `` `(iv) Records, reports, and audits.--An 
                        agreement to maintain such records, submit such 
                        reports, and cooperate with such reviews and 
                        audits as the Secretary finds necessary for 
                        purposes of oversight of the demonstration 
                        program.
                            `` `(v) Certifications.--The following 
                        certifications:
                                    `` `(I) A certification that the 
                                entity will use funds provided under 
                                the grant to promote at least 2 of the 
                                purposes described in subsection 
                                (a)(2).
                                    `` `(II) A certification that the 
                                entity will return any unused funds to 
                                the Secretary in accordance with the 
                                reconciliation process under paragraph 
                                (3).
                                    `` `(III) A certification that the 
                                funds provided under the grant will be 
                                used for programs and activities that 
                                target low-income participants and that 
                                not less than 50 percent of the 
                                participants in each program or 
                                activity funded under the grant shall 
                                be--
                                            `` `(aa) parents of a child 
                                        who is, or within the past 24 
                                        months has been, a recipient of 
                                        assistance or services under a 
                                        State program funded under part 
                                        A, D, or E of this title, title 
                                        XIX, or the Food Stamp Act of 
                                        1977; or
                                            `` `(bb) parents, including 
                                        an expectant parent or a 
                                        married parent, whose income 
                                        (after adjustment for court-
                                        ordered child support paid or 
                                        received) does not exceed 150 
                                        percent of the poverty line.
                                    `` `(IV) A certification that the 
                                entity has or will comply with the 
                                requirements of paragraph (3).
                                    `` `(V) A certification that funds 
                                provided to an entity under this 
                                subsection shall not be used to 
                                supplement or supplant other Federal, 
                                State, or local funds provided to the 
                                entity that are used to support 
                                programs or activities that are related 
                                to the purposes described in subsection 
                                (a)(2).
                    `` `(C) Preferences and factors of consideration.--
                In awarding grants under this subsection, the Secretary 
                shall, to the extent practicable, achieve a balance 
                among the eligible entities awarded grants under this 
                subsection with respect to the size, urban or rural 
                location, and employment of differing or unique methods 
                of the entities.
            `` `(2) Restriction on use of funds.--No funds provided 
        under this subsection may be used for costs attributable to 
        court proceedings regarding matters of child visitation or 
        custody, or for legislative advocacy.
            `` `(3) Requirements for use of funds.--The Secretary may 
        not award a grant under this subsection to an eligible entity 
        unless the entity, as a condition of receiving funds under such 
        a grant--
                    `` `(A) consults with experts in domestic violence 
                or with relevant community domestic violence coalitions 
                in developing the programs or activities to be 
                conducted with such funds awarded under the grant; and
                    `` `(B) describes in the application for a grant 
                under this section--
                            `` `(i) how the programs or activities 
                        proposed to be conducted will address, as 
                        appropriate, issues of domestic violence; and
                            `` `(ii) 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.
            `` `(4) Reconciliation process.--
                    `` `(A) 3-year availability of amounts allotted.--
                Each eligible entity that receives a grant under this 
                subsection for a fiscal year shall return to the 
                Secretary any unused portion of the grant for such 
                fiscal year not later than the last day of the second 
                succeeding fiscal year, together with any earnings on 
                such unused portion.
                    `` `(B) Procedure for redistribution.--The 
                Secretary shall establish an appropriate procedure for 
                redistributing to eligible entities that have expended 
                the entire amount of a grant made under this subsection 
                for a fiscal year any amount that is returned to the 
                Secretary by eligible entities under subparagraph (A).
            `` `(5) Authorization of appropriations.--There is 
        authorized to be appropriated $30,000,000 for each of fiscal 
        years 2006 through 2010 for purposes of making grants to 
        eligible entities under this subsection.

`` `SEC. 442. NATIONAL CLEARINGHOUSE FOR RESPONSIBLE FATHERHOOD 
              PROGRAMS.

    `` `(a) Media Campaign National Clearinghouse for Responsible 
Fatherhood.--
            `` `(1) In general.--From any funds appropriated under 
        subsection (c), the Secretary shall contract with a nationally 
        recognized, nonprofit fatherhood promotion organization 
        described in subsection (b) to--
                    `` `(A) develop, promote, and distribute to 
                interested States, local governments, public agencies, 
                and private entities a media campaign that encourages 
                the appropriate involvement of parents in the life of 
                any child, with a priority for programs that 
                specifically address the issue of responsible 
                fatherhood; and
                    `` `(B) develop a national clearinghouse to assist 
                States and communities in efforts to promote and 
                support marriage and responsible fatherhood by 
                collecting, evaluating, and making available (through 
                the Internet and by other means) to other States 
                information regarding the media campaigns established 
                under section 443.
            `` `(2) Coordination with domestic violence programs.--The 
        Secretary shall ensure that the nationally recognized nonprofit 
        fatherhood promotion organization with a contract under 
        paragraph (1) coordinates the media campaign developed under 
        subparagraph (A) of such paragraph and the national 
        clearinghouse developed under subparagraph (B) of such 
        paragraph with national, State, or local domestic violence 
        programs.
    `` `(b) Nationally Recognized, Nonprofit Fatherhood Promotion 
Organization Described.--The nationally recognized, nonprofit 
fatherhood promotion organization described in this subsection is an 
organization that has at least 4 years of experience in--
            `` `(1) designing and disseminating a national public 
        education campaign, as evidenced by the production and 
        successful placement of television, radio, and print public 
        service announcements that promote the importance of 
        responsible fatherhood, a track record of service to Spanish-
        speaking populations and historically underserved or minority 
        populations, the capacity to fulfill requests for information 
        and a proven history of fulfilling such requests, and a 
        mechanism through which the public can request additional 
        information about the campaign; and
            `` `(2) providing consultation and training to community-
        based organizations interested in implementing fatherhood 
        outreach, support, or skill development programs with an 
        emphasis on promoting married fatherhood as the ideal.
    `` `(c) Authorization of Appropriations.--There is authorized to be 
appropriated $5,000,000 for each of fiscal years 2006 through 2010 to 
carry out this section.

`` `SEC. 443. BLOCK GRANTS TO STATES TO ENCOURAGE MEDIA CAMPAIGNS.

    `` `(a) Definitions.--In this section:
            `` `(1) Broadcast advertisement.--The term `broadcast 
        advertisement' means a communication intended to be aired by a 
        television or radio broadcast station, including a 
        communication intended to be transmitted through a cable 
        channel.
            `` `(2) Child at risk.--The term `child at risk' means each 
        young child whose family income does not exceed the poverty 
        line.
            `` `(3) Poverty line.--The term `poverty line' has the 
        meaning given such term in section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2)), including any 
        revision required by such section, that is applicable to a 
        family of the size involved.
            `` `(4) Printed or other advertisement.--The term `printed 
        or other advertisement' includes any communication intended to 
        be distributed through a newspaper, magazine, outdoor 
        advertising facility, mailing, or any other type of general 
        public advertising, but does not include any broadcast 
        advertisement.
            `` `(5) State.--The term `State' means each of the 50 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the United States Virgin Islands, Guam, American Samoa, 
        and the Commonwealth of the Northern Mariana Islands.
            `` `(6) Young child.--The term `young child' means an 
        individual under age 5.
    `` `(b) State Certifications.--Not later than October 1 of each of 
fiscal year for which a State desires to receive an allotment under 
this section, the chief executive officer of the State shall submit to 
the Secretary a certification that the State shall--
            `` `(1) use such funds to promote the formation and 
        maintenance of healthy 2-parent married families, strengthen 
        fragile families, and promote responsible fatherhood through 
        media campaigns conducted in accordance with the requirements 
        of subsection (d);
            `` `(2) return any unused funds to the Secretary in 
        accordance with the reconciliation process under subsection 
        (e); and
            `` `(3) comply with the reporting requirements under 
        subsection (f).
    `` `(c) Payments to States.--For each of fiscal years 2006 through 
2010, the Secretary shall pay to each State that submits a 
certification under subsection (b), from any funds appropriated under 
subsection (i), for the fiscal year an amount equal to the amount of 
the allotment determined for the fiscal year under subsection (g).
    `` `(d) Establishment of Media Campaigns.--Each State receiving an 
allotment under this section for a fiscal year shall use the allotment 
to conduct media campaigns as follows:
            `` `(1) Conduct of media campaigns.--
                    `` `(A) Radio and television media campaigns.--
                            `` `(i) Production of broadcast 
                        advertisements.--At the option of the State, to 
                        produce broadcast advertisements that promote 
                        the formation and maintenance of healthy 2-
                        parent married families, strengthen fragile 
                        families, and promote responsible fatherhood.
                            `` `(ii) Airtime challenge program.--At the 
                        option of the State, to establish an airtime 
                        challenge program under which the State may 
                        spend amounts allotted under this section to 
                        purchase time from a broadcast station to air a 
                        broadcast advertisement produced under clause 
                        (i), but only if the State obtains an amount of 
                        time of the same class and during a comparable 
                        period to air the advertisement using non-
                        Federal contributions.
                    `` `(B) Other media campaigns.--At the option of 
                the State, to conduct a media campaign that consists of 
                the production and distribution of printed or other 
                advertisements that promote the formation and 
                maintenance of healthy 2-parent married families, 
                strengthen fragile families, and promote responsible 
                fatherhood.
            `` `(2) Administration of media campaigns.--A State may 
        administer media campaigns funded under this section directly 
        or through grants, contracts, or cooperative agreements with 
        public agencies, local governments, or private entities, 
        including charitable and faith-based organizations.
            `` `(3) Consultation with domestic violence assistance 
        centers.--In developing broadcast and printed advertisements to 
        be used in the media campaigns conducted under paragraph (1), 
        the State or other entity administering the campaign shall 
        consult with representatives of State and local domestic 
        violence centers.
            `` `(4) Non-federal contributions.--In this section, the 
        term `non-Federal contributions' includes contributions by the 
        State and by public and private entities. Such contributions 
        may be in cash or in kind. Such term does not include any 
        amounts provided by the Federal Government, or services 
        assisted or subsidized to any significant extent by the Federal 
        Government, or any amount expended by a State before October 1, 
        2005.
    `` `(e) Reconciliation Process.--
            `` `(1) 3-year availability of amounts allotted.--Each 
        State that receives an allotment under this section shall 
        return to the Secretary any unused portion of the amount 
        allotted to a State for a fiscal year not later than the last 
        day of the second succeeding fiscal year together with any 
        earnings on such unused portion.
            `` `(2) Procedure for redistribution of unused 
        allotments.--The Secretary shall establish an appropriate 
        procedure for redistributing to States that have expended the 
        entire amount allotted under this section any amount that is--
                    `` `(A) returned to the Secretary by States under 
                paragraph (1); or
                    `` `(B) not allotted to a State under this section 
                because the State did not submit a certification under 
                subsection (b) by October 1 of a fiscal year.
    `` `(f) Reporting Requirements.--
            `` `(1) Monitoring and evaluation.--Each State receiving an 
        allotment under this section for a fiscal year shall monitor 
        and evaluate the media campaigns conducted using funds made 
        available under this section in such manner as the Secretary, 
        in consultation with the States, determines appropriate.
            `` `(2) Annual reports.--Not less frequently than annually, 
        each State receiving an allotment under this section for a 
        fiscal year shall submit to the Secretary reports on the media 
        campaigns conducted using funds made available under this 
        section at such time, in such manner, and containing such 
        information as the Secretary may require.
    `` `(g) Amount of Allotments.--
            `` `(1) In general.--Except as provided in paragraph (2), 
        of the amount appropriated for the purpose of making allotments 
        under this section for a fiscal year, the Secretary shall allot 
        to each State that submits a certification under subsection (b) 
        for the fiscal year an amount equal to the sum of--
                    `` `(A) the amount that bears the same ratio to 50 
                percent of such funds as the number of young children 
                in the State (as determined by the Secretary based on 
                the most current reliable data available) bears to the 
                number of such children in all States; and
                    `` `(B) the amount that bears the same ratio to 50 
                percent of such funds as the number of children at risk 
                in the State (as determined by the Secretary based on 
                the most current reliable data available) bears to the 
                number of such children in all States.
            `` `(2) Minimum allotments.--No allotment for a fiscal year 
        under this section shall be less than--
                    `` `(A) in the case of the District of Columbia or 
                a State other than the Commonwealth of Puerto Rico, the 
                United States Virgin Islands, Guam, American Samoa, and 
                the Commonwealth of the Northern Mariana Islands, 1 
                percent of the amount appropriated for the fiscal year 
                under subsection (i); and
                    `` `(B) in the case of the Commonwealth of Puerto 
                Rico, the United States Virgin Islands, Guam, American 
                Samoa, and the Commonwealth of the Northern Mariana 
                Islands, 0.5 percent of such amount.
            `` `(3) Pro rata reductions.--The Secretary shall make such 
        pro rata reductions to the allotments determined under this 
        subsection as are necessary to comply with the requirements of 
        paragraph (2).
    `` `(h) Evaluation.--
            `` `(1) In general.--The Secretary shall conduct an 
        evaluation of the impact of the media campaigns funded under 
        this section.
            `` `(2) Report.--Not later than December 31, 2008, the 
        Secretary shall report to Congress the results of the 
        evaluation under paragraph (1).
            `` `(3) Funding.--Of the amount appropriated under 
        subsection (i) for fiscal year 2006, $1,000,000 of such amount 
        shall be transferred and made available for purposes of 
        conducting the evaluation required under this subsection, and 
        shall remain available until expended.
    `` `(i) Authorization of Appropriations.--There is authorized to be 
appropriated $20,000,000 for each of fiscal years 2006 through 2010 for 
purposes of making allotments to States under this section.'.
    ``(b) Inapplicability of Effective Date Provisions.--Section 116 
shall not apply to the amendment made by subsection (a) of this 
section.''.
    (b) Clerical Amendment.--Section 2 of such Act is amended in the 
table of contents by inserting after the item relating to section 116 
the following new item:

``Sec. 117. Responsible fatherhood program.''.

SEC. 229. ADDITIONAL GRANTS.

    (a) Grants To Capitalize and Develop Sustainable Social Services.--
Section 403(a) (42 U.S.C. 603(a)) is amended by adding at the end the 
following:
            ``(6) Grants to capitalize and develop sustainable social 
        services.--
                    ``(A) Authority to award grants.--The Secretary may 
                award grants to entities for the purpose of 
                capitalizing and developing the role of sustainable 
                social services that are critical to the success of 
                moving recipients of assistance under a State program 
                funded under this part to work.
                    ``(B) Application.--
                            ``(i) In general.--An entity desiring a 
                        grant under this paragraph shall submit an 
                        application to the Secretary, at such time, in 
                        such manner, and, subject to clause (ii), 
                        containing such information as the Secretary 
                        may require.
                            ``(ii) Strategy for generation of 
                        revenue.--An application for a grant under this 
                        paragraph shall include a description of the 
                        capitalization strategy that the entity intends 
                        to follow to develop a program that generates 
                        its own source of ongoing revenue while 
                        assisting recipients of assistance under a 
                        State program funded under this part.
                    ``(C) Use of funds.--
                            ``(i) In general.--Funds made available 
                        under a grant made under this paragraph may be 
                        used for the acquisition, construction, or 
                        renovation of facilities or buildings.
                            ``(ii) General rules governing use of 
                        funds.--The rules of section 404, other than 
                        subsection (b) of that section, shall not apply 
                        to a grant made under this paragraph.
                    ``(D) Evaluation and report.--The Secretary shall, 
                by grant, contract, or interagency agreement, conduct 
                an evaluation of the programs developed with grants 
                awarded under this paragraph and shall submit a report 
                to Congress on the results of such evaluation.
                    ``(E) Authorization of appropriations.--Out of any 
                money in the Treasury of the United States not 
                otherwise appropriated, there is appropriated to the 
                Secretary for the purpose of carrying out this 
                paragraph, $40,000,000 for each of fiscal years 2006 
                through 2010.''.
    (b) Grants for Low-Income Car Ownership Programs.--Section 403(a) 
(42 U.S.C. 603(a)), as amended by subsection (a), is further amended by 
adding at the end the following:
            ``(7) Grants for low-income car ownership programs.--
                    ``(A) Purposes.--The purposes of this paragraph are 
                to--
                            ``(i) assist low-income families with 
                        children obtain dependable, affordable 
                        automobiles to improve their employment 
                        opportunities and access to training; and
                            ``(ii) provide incentives to States, Indian 
                        tribes, localities, and nonprofit entities to 
                        develop and administer programs that provide 
                        assistance with automobile ownership for low-
                        income families.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Locality.--The term `locality' means 
                        a municipality that does not administer a State 
                        program funded under this part.
                            ``(ii) Low-income family with children.--
                        The term `low-income family with children' 
                        means a household that is eligible for benefits 
                        or services funded under the State program 
                        funded under this part or under a program 
                        funded with qualified State expenditures (as 
                        defined in section 409(a)(7)(B)(i)).
                            ``(iii) Nonprofit entity.--The term 
                        `nonprofit entity' means a school, local 
                        agency, organization, or institution owned and 
                        operated by 1 or more nonprofit corporations or 
                        associations, no part of the net earnings of 
                        which inures, or may lawfully inure, to the 
                        benefit of any private shareholder or 
                        individual.
                    ``(C) Authority to award grants.--The Secretary may 
                award grants to States, counties, localities, Indian 
                tribes, and nonprofit entities to promote improving 
                access to dependable, affordable automobiles by low-
                income families with children.
                    ``(D) Grant approval criteria.--The Secretary shall 
                establish criteria for approval of an application for a 
                grant under this paragraph that include consideration 
                of--
                            ``(i) the extent to which the proposal, if 
                        funded, is likely to improve access to training 
                        and employment opportunities and child care 
                        services by low-income families with children 
                        by means of car ownership;
                            ``(ii) the level of innovation in the 
                        applicant's grant proposal; and
                            ``(iii) any partnerships between the public 
                        and private sector in the applicant's grant 
                        proposal.
                    ``(E) Use of funds.--
                            ``(i) In general.--A grant awarded under 
                        this paragraph shall be used to administer 
                        programs that assist low-income families with 
                        children with dependable automobile ownership, 
                        and maintenance of, or insurance for, the 
                        purchased automobile.
                            ``(ii) Supplement not supplant.--Funds 
                        provided to a State, Indian tribe, county, or 
                        locality under a grant awarded under this 
                        paragraph shall be used to supplement and not 
                        supplant other State, county, or local public 
                        funds expended for car ownership programs.
                            ``(iii) General rules governing use of 
                        funds.--The rules of section 404, other than 
                        subsection (b) of that section, shall not apply 
                        to a grant made under this paragraph.
                    ``(F) Application.--Each applicant desiring a grant 
                under this paragraph shall submit an application to the 
                Secretary at such time, in such manner, and accompanied 
                by such information as the Secretary may reasonably 
                require.
                    ``(G) Reversion of funds.--Any funds not expended 
                by a grantee within 3 years after the date the grant is 
                awarded under this paragraph shall be available for 
                redistribution among other grantees in such manner and 
                amount as the Secretary may determine, unless the 
                Secretary extends by regulation the time period to 
                expend such funds.
                    ``(H) Limitation on administrative costs of the 
                secretary.--Not more than an amount equal to 5 percent 
                of the funds appropriated to make grants under this 
                paragraph for a fiscal year shall be expended for 
                administrative costs of the Secretary in carrying out 
                this paragraph.
                    ``(I) Evaluation.--The Secretary shall, by grant, 
                contract, or interagency agreement, conduct an 
                evaluation of the programs administered with grants 
                awarded under this paragraph.
                    ``(J) Authorization of appropriations.--There is 
                authorized to be appropriated to the Secretary to make 
                grants under this paragraph, $25,000,000 for each of 
                fiscal years 2006 through 2010.''.

SEC. 230. TECHNICAL CORRECTIONS.

    (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by inserting 
a comma after ``appropriate''.
    (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 611(a)(1)(A)(ii)(III)) 
is amended by striking the last close parenthesis.
    (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is amended by 
striking ``section'' and inserting ``sections''.
    (d)(1) Section 413 (42 U.S.C. 613) is amended by striking 
subsection (g) and redesignating subsections (h) through (j) and 
subsections (k) and (l) (as added by sections 211(d) and 224(a) of this 
Act, respectively) as subsections (g) through (k), respectively.
    (2) Each of the following provisions is amended by striking 
``413(j)'' and inserting ``413(i)'':
            (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
        603(a)(5)(A)(ii)(III)).
            (B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
            (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
            (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

                    Subtitle B--Abstinence Education

SEC. 241. EXTENSION OF ABSTINENCE EDUCATION PROGRAM.

    (a) Extension of Appropriations.--Section 510(d) (42 U.S.C. 710(d)) 
is amended by striking ``2003'' and inserting ``2010''.
    (b) Allotment of Funds.--Section 510(a) (42 U.S.C. 710(a)) is 
amended--
            (1) in the matter preceding paragraph (1), by striking ``an 
        application for the fiscal year under section 505(a)'' and 
        inserting ``, for the fiscal year, an application under section 
        505(a), and an application under this section (in such form and 
        meeting such terms and conditions as determined appropriate by 
        the Secretary),''; and
            (2) in paragraph (2), to read as follows:
            ``(2) the percentage described in section 502(c)(1)(B)(ii) 
        that would be determined for the State under section 502(c) if 
        such determination took into consideration only those States 
        that transmitted both such applications for such fiscal 
        year.''.
    (c) Reallotment of Funds.--Section 510 (42 U.S.C. 710(a)) is 
amended by adding at the end the following:
    ``(e)(1) With respect to allotments under subsection (a) for fiscal 
year 2006 and subsequent fiscal years, the amount of any allotment to a 
State for a fiscal year that the Secretary determines will not be 
required to carry out a program under this section during such fiscal 
year or the succeeding fiscal year shall be available for reallotment 
from time to time during such fiscal years on such dates as the 
Secretary may fix, to other States that the Secretary determines--
            ``(A) require amounts in excess of amounts previously 
        allotted under subsection (a) to carry out a program under this 
        section; and
            ``(B) will use such excess amounts during such fiscal 
        years.
    ``(2) Reallotments under paragraph (1) shall be made on the basis 
of such States' applications under this section, after taking into 
consideration the population of low-income children in each such State 
as compared with the population of low-income children in all such 
States with respect to which a determination under paragraph (1) has 
been made by the Secretary.
    ``(3) Any amount reallotted under paragraph (1) to a State is 
deemed to be part of its allotment under subsection (a).''.
    (d) Effective Date.--The amendments made by this section shall be 
effective with respect to the program under section 510 for fiscal year 
2006 and succeeding fiscal years.

                       Subtitle C--Child Support

SEC. 251. DISTRIBUTION OF CHILD SUPPORT COLLECTED BY STATES ON BEHALF 
              OF CHILDREN RECEIVING CERTAIN WELFARE BENEFITS.

    (a) Modification of Rule Requiring Assignment of Support Rights as 
a Condition of Receiving TANF.--Section 408(a)(3) (42 U.S.C. 608(a)(3)) 
is amended to read as follows:
            ``(3) No assistance for families not assigning certain 
        support rights to the state.--A State to which a grant is made 
        under section 403 shall require, as a condition of paying 
        assistance to a family under the State program funded under 
        this part, that a member of the family assign to the State any 
        right the family member may have (on behalf of the family 
        member or of any other person for whom the family member has 
        applied for or is receiving such assistance) to support from 
        any other person, not exceeding the total amount of assistance 
        so paid to the family, which accrues during the period that the 
        family receives assistance under the program.''.
    (b) Increasing Child Support Payments to Families and Simplifying 
Child Support Distribution Rules.--
            (1) Distribution rules.--
                    (A) In general.--Section 457(a) (42 U.S.C. 657(a)) 
                is amended to read as follows:
    ``(a) In General.--Subject to subsections (d) and (e), the amounts 
collected on behalf of a family as support by a State pursuant to a 
plan approved under this part shall be distributed as follows:
            ``(1) Families receiving assistance.--In the case of a 
        family receiving assistance from the State, the State shall--
                    ``(A) pay to the Federal Government the Federal 
                share of the amount collected, subject to paragraph 
                (3)(A);
                    ``(B) retain, or pay to the family, the State share 
                of the amount collected, subject to paragraph (3)(B); 
                and
                    ``(C) pay to the family any remaining amount.
            ``(2) Families that formerly received assistance.--In the 
        case of a family that formerly received assistance from the 
        State:
                    ``(A) Current support.--To the extent that the 
                amount collected does not exceed the current support 
                amount, the State shall pay the amount to the family.
                    ``(B) Arrearages.--Except as otherwise provided in 
                an election made under section 454(34), to the extent 
                that the amount collected exceeds the current support 
                amount, the State--
                            ``(i) shall first pay to the family the 
                        excess amount, to the extent necessary to 
                        satisfy support arrearages not assigned 
                        pursuant to section 408(a)(3);
                            ``(ii) if the amount collected exceeds the 
                        amount required to be paid to the family under 
                        clause (i), shall--
                                    ``(I) pay to the Federal Government 
                                the Federal share of the excess amount 
                                described in this clause, subject to 
                                paragraph (3)(A); and
                                    ``(II) retain, or pay to the 
                                family, the State share of the excess 
                                amount described in this clause, 
                                subject to paragraph (3)(B); and
                            ``(iii) shall pay to the family any 
                        remaining amount.
            ``(3) Limitations.--
                    ``(A) Federal reimbursements.--The total of the 
                amounts paid by the State to the Federal Government 
                under paragraphs (1) and (2) of this subsection with 
                respect to a family shall not exceed the Federal share 
                of the amount assigned with respect to the family 
                pursuant to section 408(a)(3).
                    ``(B) State reimbursements.--The total of the 
                amounts retained by the State under paragraphs (1) and 
                (2) of this subsection with respect to a family shall 
                not exceed the State share of the amount assigned with 
                respect to the family pursuant to section 408(a)(3).
            ``(4) Families that never received assistance.--In the case 
        of any other family, the State shall pay the amount collected 
        to the family.
            ``(5) Families under certain agreements.--Notwithstanding 
        paragraphs (1) through (3), in the case of an amount collected 
        for a family in accordance with a cooperative agreement under 
        section 454(33), the State shall distribute the amount 
        collected pursuant to the terms of the agreement.
            ``(6) State financing options.--To the extent that the 
        State's share of the amount payable to a family pursuant to 
        paragraph (2)(B) of this subsection exceeds the amount that the 
        State estimates (under procedures approved by the Secretary) 
        would have been payable to the family pursuant to former 
        section 457(a)(2)(B) (as in effect for the State immediately 
        before the date this subsection first applies to the State) if 
        such former section had remained in effect, the State may elect 
        to have the payment considered a qualified State expenditure 
        for purposes of section 409(a)(7).
            ``(7) State option to pass through additional support with 
        federal financial participation.--
                    ``(A) Families that formerly received assistance.--
                Notwithstanding paragraph (2), a State shall not be 
                required to pay to the Federal Government the Federal 
                share of an amount collected on behalf of a family that 
                formerly received assistance from the State to the 
                extent that the State pays the amount to the family.
                    ``(B) Families that currently receive assistance.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (1), in the case of a family that 
                        receives assistance from the State, a State 
                        shall not be required to pay to the Federal 
                        Government the Federal share of the excepted 
                        portion (as defined in clause (ii)) of any 
                        amount collected on behalf of such family 
                        during a month to the extent that--
                                    ``(I) the State pays the excepted 
                                portion to the family; and
                                    ``(II) the excepted portion is 
                                disregarded in determining the amount 
                                and type of assistance provided to the 
                                family under such program.
                            ``(ii) Excepted portion defined.--For 
                        purposes of this subparagraph, the term 
                        `excepted portion' means that portion of the 
                        amount collected on behalf of a family during a 
                        month that does not exceed $400 per month, or 
                        in the case of a family that includes 2 or more 
                        children, that does not exceed an amount 
                        established by the State that is not more than 
                        $600 per month.
            ``(8) States with demonstration waivers.--Notwithstanding 
        the preceding paragraphs, in the case of a State that, on the 
        date of enactment of this paragraph, has had in effect since 
        October 1, 1997, a waiver under section 1115 permitting 
        passthrough payments of child support collections--
                    ``(A) the State may continue to distribute such 
                payments to families without regard to the expiration 
                date of such waiver; and
                    ``(B) the requirement under paragraph (1) to pay to 
                the Federal Government the Federal share of the amount 
                collected on behalf of a family shall not apply to the 
                extent that--
                            ``(i) the State distributes such amount to 
                        the family; and
                            ``(ii) such amount is disregarded in 
                        determining the amount and type of assistance 
                        paid to the family.''.
                    (B) State plan to include election as to which 
                rules to apply in distributing child support arrearages 
                collected on behalf of families formerly receiving 
                assistance.--Section 454 (42 U.S.C. 654) is amended--
                            (i) by striking ``and'' at the end of 
                        paragraph (32);
                            (ii) by striking the period at the end of 
                        paragraph (33) and inserting ``; and''; and
                            (iii) by inserting after paragraph (33) the 
                        following:
            ``(34) include an election by the State to apply section 
        457(a)(2)(B) of this Act or former section 457(a)(2)(B) of this 
        Act (as in effect for the State immediately before the date 
        this paragraph first applies to the State) to the distribution 
        of the amounts which are the subject of such sections and, for 
        so long as the State elects to so apply such former section, 
        the amendments made by section __51(d)(1) of the Personal 
        Responsibility and Individual Development for Everyone Act 
        shall not apply with respect to the State, notwithstanding 
        section __51(e) of that Act.''.
                    (C) Approval of estimation procedures.--Not later 
                than the date that is 6 months after the date of 
                enactment of this Act, the Secretary of Health and 
                Human Services, in consultation with the States (as 
                defined for purposes of part D of title IV of the 
                Social Security Act (42 U.S.C. 651 et seq.)), shall 
                establish the procedures to be used to make the 
                estimate described in section 457(a)(6) of such Act (42 
                U.S.C. 657(a)(6)).
            (2) Current support amount defined.--Section 457(c) (42 
        U.S.C. 657(c)) is amended by adding at the end the following:
            ``(5) Current support amount.--The term `current support 
        amount' means, with respect to amounts collected as support on 
        behalf of a family, the amount designated as the monthly 
        support obligation of the noncustodial parent in the order 
        requiring the support.''.
    (c) State Option To Discontinue Older Support Assignments.--Section 
457(b) (42 U.S.C. 657(b)) is amended to read as follows:
    ``(b) Continuation of Assignments.--
            ``(1) State option to discontinue pre-1997 support 
        assignments.--
                    ``(A) In general.--Any rights to support 
                obligations assigned to a State as a condition of 
                receiving assistance from the State under part A and in 
                effect on September 30, 1997 (or such earlier date on 
                or after August 22, 1996, as the State may choose), may 
                remain assigned after such date.
                    ``(B) Distribution of amounts after assignment 
                discontinuation.--If a State chooses to discontinue the 
                assignment of a support obligation described in 
                subparagraph (A), the State may treat amounts collected 
                pursuant to such assignment as if such amounts had 
                never been assigned and may distribute such amounts to 
                the family in accordance with subsection (a)(4).
            ``(2) State option to discontinue post-1997 assignments.--
                    ``(A) In general.--Any rights to support 
                obligations accruing before the date on which a family 
                first receives assistance under part A that are 
                assigned to a State under that part and in effect 
                before the implementation date of this section may 
                remain assigned after such date.
                    ``(B) Distribution of amounts after assignment 
                discontinuation.--If a State chooses to discontinue the 
                assignment of a support obligation described in 
                subparagraph (A), the State may treat amounts collected 
                pursuant to such assignment as if such amounts had 
                never been assigned and may distribute such amounts to 
                the family in accordance with subsection (a)(4).''.
    (d) Conforming Amendments.--
            (1) Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)), as 
        amended by section 213(c), is amended--
                    (A) in subclause (I)(aa), by striking 
                ``457(a)(1)(B)'' and inserting ``457(a)(1)''; and
                    (B) by adding at the end the following:
                                    ``(VI) Portions of certain child 
                                support payments collected on behalf of 
                                and distributed to families no longer 
                                receiving assistance.--Any amount paid 
                                by a State pursuant to clause (i) or 
                                (ii) of section 457(a)(2)(B), but only 
                                to the extent that the State properly 
                                elects under section 457(a)(6) to have 
                                the payment considered a qualified 
                                State expenditure.''.
            (2) Section 6402(c) of the Internal Revenue Code of 1986 
        (relating to offset of past-due support against overpayments) 
        is amended--
                    (A) in the first sentence, by striking ``the Social 
                Security Act.'' and inserting ``of such Act.''; and
                    (B) by striking the third sentence and inserting 
                the following: ``The Secretary shall apply a reduction 
                under this subsection first to an amount certified by 
                the State as past due support under section 464 of the 
                Social Security Act before any other reductions allowed 
                by law.''.
    (e) Effective Date.--
            (1) In general.--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 such date, and without 
        regard to whether regulations to implement such amendments (in 
        the case of State programs operated under such part D) are 
        promulgated by such date.
            (2) State option to accelerate effective date.--In 
        addition, a State may elect to have the amendments made by this 
        section apply to the State and to amounts collected by the 
        State (and such payments under parts A and D), on and after 
        such date as the State may select that is after the date of 
        enactment of this Act and before October 1, 2009.

SEC. 252. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS FOR 
              FAMILIES RECEIVING TANF.

    (a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C. 
666(a)(10)(A)(i)) is amended--
            (1) by striking ``parent, or,'' and inserting ``parent 
        or''; and
            (2) by striking ``upon the request of the State agency 
        under the State plan or of either parent,''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2007.

SEC. 253. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

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

SEC. 254. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRATION OF 
              UNEMPLOYMENT COMPENSATION PROGRAMS.

    (a) In General.--Section 453(j) (42 U.S.C. 653(j)) is amended by 
adding at the end the following:
            ``(7) Information comparisons and disclosure to assist in 
        administration of unemployment compensation programs.--
                    ``(A) In general.--If, for purposes of 
                administering an unemployment compensation program 
                under Federal or State law, a State agency responsible 
                for the administration of such program transmits to the 
                Secretary the name and social security account number 
                of an individual, the Secretary shall disclose to the 
                State agency information on the individual and the 
                individual's employer that is maintained in the 
                National Directory of New Hires, subject to the 
                succeeding provisions of this paragraph.
                    ``(B) Condition on disclosure by the secretary.--
                The Secretary shall make a disclosure under 
                subparagraph (A) only to the extent that the Secretary 
                determines that the disclosure would not interfere with 
                the effective operation of the program under this part.
                    ``(C) Use and disclosure of information by state 
                agencies.--
                            ``(i) In general.--A State agency may not 
                        use or disclose information provided under this 
                        paragraph except for purposes of administering 
                        a program referred to in subparagraph (A).
                            ``(ii) Information security.--A State 
                        agency to which information is provided under 
                        this paragraph shall have in effect data 
                        security and control policies that the 
                        Secretary finds adequate to ensure the security 
                        of information obtained under this paragraph 
                        and to ensure that access to such information 
                        is restricted to authorized persons for 
                        purposes of authorized uses and disclosures.
                            ``(iii) Penalty for misuse of 
                        information.--An officer or employee of a State 
                        agency who fails to comply with this 
                        subparagraph shall be subject to the sanctions 
                        under subsection (l)(2) to the same extent as 
                        if such officer or employee was an officer or 
                        employee of the United States.
                    ``(D) Procedural requirements.--A State agency 
                requesting information under this paragraph shall 
                adhere to uniform procedures established by the 
                Secretary governing information requests and data 
                matching under this paragraph.
                    ``(E) Reimbursement of costs.--A State agency shall 
                reimburse the Secretary, in accordance with subsection 
                (k)(3), for the costs incurred by the Secretary in 
                furnishing the information requested under this 
                paragraph.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2006.

SEC. 255. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING 
              PASSPORT DENIAL.

    (a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is amended 
by striking ``$5,000'' and inserting ``$2,500''.
    (b) Conforming Amendment.--Section 454(31) (42 U.S.C. 654(31)) is 
amended by striking ``$5,000'' and inserting ``$2,500''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2006.

SEC. 256. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE CHILD 
              SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

    (a) In General.--Section 464 (42 U.S.C. 664) is amended--
            (1) in subsection (a)(2)(A), by striking ``(as that term is 
        defined for purposes of this paragraph under subsection (c))''; 
        and
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1) Except as provided in 
                        paragraph (2), as used in'' and inserting 
                        ``In''; and
                            (ii) by inserting ``(whether or not a 
                        minor)'' after ``a child'' each place it 
                        appears; and
                    (B) by striking paragraphs (2) and (3).
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2007.

SEC. 257. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-
              CONNECTED DISABILITIES IN ORDER TO ENFORCE OBLIGATIONS.

    (a) In General.--Section 459(h)(1)(A)(ii)(V)) (42 U.S.C. 
659(h)(1)(A)(ii)(V)) is amended by striking all that follows ``Armed 
Forces'' and inserting ``, except that such compensation shall not be 
subject to withholding pursuant to this section for payment of alimony 
unless the former member to whom it is payable is in receipt of retired 
or retainer pay and has waived a portion of such pay in order to 
receive such compensation;''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2007.

SEC. 258. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

    (a) In General.--Section 3716(h)(3) of title 31, United States 
Code, is amended to read as follows:
    ``(3)(A) Except as provided in subparagraph (B), in applying this 
subsection with respect to any debt owed to a State, subsection 
(c)(3)(A) shall not apply.
    ``(B) Subparagraph (A) shall not apply with respect to payments 
owed to an individual under title II of the Social Security Act, for 
purposes of an offset under this section of such payments against past-
due support (as defined in section 464(c) of the Social Security Act, 
without regard to paragraphs (2) and (3) of such section 464(c)) that 
is being enforced by a State agency administering a program under part 
D of title IV of that Act.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2006.

SEC. 259. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

    Section 452(j) (42 U.S.C. 652(j)) is amended by inserting ``or the 
amount appropriated under this paragraph for fiscal year 2005, 
whichever is greater'' before ``, which shall be available''.

SEC. 260. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE FUNDING.

    Section 453(o) (42 U.S.C. 653(o)) is amended--
            (1) in the first sentence, by inserting ``or the amount 
        appropriated under this paragraph for fiscal year 2005, 
        whichever is greater'' before ``, which shall be available''; 
        and
            (2) in the second sentence, by striking ``for each of 
        fiscal years 1997 through 2001''.

SEC. 261. IDENTIFICATION AND SEIZURE OF ASSETS HELD BY MULTISTATE 
              FINANCIAL INSTITUTIONS.

    (a) Duties of the Secretary.--Section 452(l) (42 U.S.C. 652(l)) is 
amended to read as follows:
    ``(l) Identification and seizure of assets held by multistate  
Financial Institutions.--
            ``(1) In general.--The Secretary, through the Federal 
        Parent Locator Service, is authorized--
                    ``(A) to assist State agencies operating programs 
                under this part and financial institutions doing 
                business in 2 or more States in reaching agreements 
                regarding the receipt from such institutions, and the 
                transfer to the State agencies, of information that may 
                be provided pursuant to section 466(a)(17)(A)(i) or 
                469A(a);
                    ``(B) to perform data matches comparing information 
                from such State agencies and financial institutions 
                entering into such Agreements with respect to 
                individuals owing past-due support; and
                    ``(C) to seize assets, held by such financial 
                institutions, of individuals identified through such 
                data matches who owe past-due support, by--
                            ``(i) issuing a notice of lien or levy to 
                        such financial institutions requiring them to 
                        encumber such assets for 30 calendar days and 
                        to subsequently transfer such assets to the 
                        Secretary (except that the Secretary shall 
                        promptly release such lien or levy within such 
                        30-day period upon request of the State 
                        agencies responsible for collecting past-due 
                        support from such individuals); and
                            ``(ii) providing notice to such individuals 
                        of the lien or levy upon their assets and 
                        informing them--
                                    ``(I) of their procedural due 
                                process rights, including the 
                                opportunity to contest such lien or 
                                levy to the appropriate State agency; 
                                and
                                    ``(II) in the case of jointly owned 
                                assets, of the process by which other 
                                owners may secure their respective 
                                share of such assets, according to such 
                                policies and procedures as the 
                                Secretary may specify with respect to 
                                seizure of such assets.
            ``(2) Transfer of funds to states.--Assets seized from 
        individuals under paragraph (1)(C) shall be promptly 
        transferred by the Secretary to the State agencies responsible 
        for collecting past-due support from such individuals for 
        distribution pursuant to section 457.
            ``(3) Relationship to state laws.--Notwithstanding any 
        provision of State law, an individual receiving a notice under 
        paragraph (1)(C) shall have 21 calendar days from the date of 
        such notice to contest the lien or levy imposed under such 
        paragraph by requesting an administrative review by the State 
        agency responsible for collecting past-due support from such 
        individual.
            ``(4) Treatment of disclosures.--For purposes of section 
        1113(d) of the Right to Financial Privacy Act of 1978, a 
        disclosure pursuant to this subsection shall be considered a 
        disclosure pursuant to a Federal statute.''.
    (b) State Duties.--
            (1) Individuals with assets subject to federal seizure.--
        Section 454 (42 U.S.C. 654), as amended by section 
        251(b)(1)(B)(iii), is amended--
                    (A) in paragraph (33), by striking ``and'' at the 
                end;
                    (B) in paragraph (34), by striking the period and 
                inserting ``; and''; and
                    (C) by inserting after paragraph (34), the 
                following:
            ``(35) provide that the State shall--
                    ``(A) upon furnishing the Secretary with 
                information under section 452(l) with respect to 
                individuals owing past-due support, provide notice to 
                such individuals that their assets held in financial 
                institutions shall be subject to seizure to pay such 
                past-due support, and shall--
                            ``(i) instruct such individuals of the 
                        steps which may be taken to contest the State's 
                        determination that past-due support is owed or 
                        the amount of the past-due support; and
                            ``(ii) include, in the case of jointly 
                        owned assets, a description of the process by 
                        which other owners may secure their share of 
                        such assets, in accordance with such policies 
                        and procedures as the Secretary may specify 
                        with respect to seizure of such assets;
                    ``(B) promptly resolve cases in which such 
                individuals contest the State's determination with 
                respect to past-due support, and provide for expedited 
                refund of any assets erroneously seized and transferred 
                to the State under such section 452(l); and
                    ``(C) except as otherwise specified under this 
                paragraph or by the Secretary, ensure that the due 
                process protections afforded under this paragraph to 
                individuals whose assets are subject to seizure under 
                section 452(l) are generally consistent with, and to 
                the extent practicable conform to, the due process 
                protections afforded by the State to individuals 
                subject to offset of tax refunds under section 464.''.
            (2) Reimbursement of federal costs.--Section 453(k)(3) (42 
        U.S.C. 653(k)(3)) is amended--
                    (A) in the paragraph heading, by inserting ``and 
                enforcement services'' after ``information''
                    (B) by inserting ``or enforcement services'' after 
                ``that receives information'';
                    (C) by inserting ``or section 452(l)'' after 
                ``pursuant to this section''; and
                    (D) by striking ``in furnishing the information'' 
                and inserting ``in furnishing such information or 
                enforcement services''.
    (c) Conforming Amendments.--
            (1) State law requirements.--Section 466(a)(17) (42 U.S.C. 
        666(a)(17)) is amended--
                    (A) in subparagraph (A)--
                            (i) in clause (i), by inserting ``pursuant 
                        to section 452(l)'' after ``and the Federal 
                        Parent Locator Service''; and
                            (ii) in clause (ii), by inserting ``issued 
                        by the State agency or by the Secretary under 
                        section 452(l)'' after ``in response to a 
                        notice of lien or levy''; and
                    (B) in subparagraph (C)--
                            (i) in clause (i), by inserting ``or to the 
                        Federal Parent Locator Service'' after ``to the 
                        State agency''; and
                            (ii) in clause (ii), by striking ``issued 
                        by the State agency''.
            (2) Non liability for financial institutions.--Section 
        469A(a) (42 U.S.C. 669a(a)) is amended by inserting ``section 
        452(l) or'' before ``section 466(a)(17)(A)''.

SEC. 262. INFORMATION COMPARISONS WITH INSURANCE DATA.

    (a) Duties of the Secretary.--Section 452 (42 U.S.C. 652) is 
amended by adding at the end the following:
    ``(m) Comparisons With Insurance Information.--
            ``(1) In general.--The Secretary, through the Federal 
        Parent Locator Service, is authorized--
                    ``(A) to compare information concerning individuals 
                owing past-due support with information maintained by 
                insurers (or their agents) concerning insurance claims, 
                settlements, awards, and payments, and
                    ``(B) to furnish information resulting from such 
                data matches to the State agencies responsible for 
                collecting child support from such individuals.
            ``(2) Liability.--No insurer (including any agent of an 
        insurer) shall be liable under any Federal or State law to any 
        person for any disclosure provided for under this subsection, 
        or for any other action taken in good faith in accordance with 
        the provisions of this subsection.''.
    (b) State Reimbursement of Federal Costs.--Section 453(k)(3) (42 
U.S.C. 653(k)(3)), as amended by section 262(b)(2), is amended by 
striking ``section 452(l)'' and inserting ``subsection (l) or (m) of 
section 452''.

SEC. 263. TRIBAL ACCESS TO THE FEDERAL PARENT LOCATOR SERVICE.

    Section 453(c)(1) (42 U.S.C. 653(c)(1)) is amended by inserting 
``or Indian tribe or tribal organization'' after ``any agent or 
attorney of any State''.

SEC. 264. REIMBURSEMENT OF SECRETARY'S COSTS OF INFORMATION COMPARISONS 
              AND DISCLOSURE FOR ENFORCEMENT OF OBLIGATIONS ON HIGHER 
              EDUCATION ACT LOANS AND GRANTS.

    Section 453(j)(6)(F) (42 U.S.C. 653(j)(6)(F)) is amended by 
striking ``additional''.

SEC. 265. TECHNICAL AMENDMENT RELATING TO COOPERATIVE AGREEMENTS 
              BETWEEN STATES AND INDIAN TRIBES.

    Section 454(33) (42 U.S.C. 654(33)) is amended by striking ``that 
receives funding pursuant to section 428 and''.

SEC. 266. CLAIMS UPON LONGSHORE AND HARBOR WORKERS' COMPENSATION FOR 
              CHILD SUPPORT.

    (a) In General.--Section 17 of the Longshore and Harbor Workers' 
Compensation Act (33 U.S.C. 917) is amended to read as follows:

           ``liens on compensation; child support enforcement

    ``Sec. 17.  (a) Liens.--Where a trust fund which complies with 
section 302(c) of the Labor Management Relations Act, 1947 (29 U.S.C. 
186(c)) established pursuant to a collective-bargaining agreement in 
effect between an employer and an employee covered under this Act has 
paid disability benefits to an employee which the employee is legally 
obligated to repay by reason of the employee's entitlement to 
compensation under this Act or under a settlement, the Secretary shall 
authorize a lien on such compensation in favor of the trust fund for 
the amount of such payments.
    ``(b) Child Support.--Compensation or benefits due or payable to an 
individual under this Act (other than medical benefits) shall be 
subject, in like manner and to the same extent as similar compensation 
or benefits under a workers' compensation program if established under 
State law--
            ``(1) to withholding in accordance with State law enacted 
        pursuant to subsections (a)(1) and (b) of section 466 of the 
        Social Security Act and regulations under such subsections; and
            ``(2) to any other legal process brought, by a State agency 
        administering a program under a State plan approved under part 
        D of title IV of the Social Security Act or by an individual 
        obligee, to enforce the legal obligation of the individual to 
        provide child support or alimony.''.
    (b) Conforming Amendment.--Section 16 of the Longshore and Harbor 
Workers' Compensation Act (33 U.S.C. 916) is amended--
            (1) by striking ``No'' and inserting ``Except as provided 
        by this Act, no''; and
            (2) by striking ``, except as provided by this Act,'' after 
        ``under this Act''.

SEC. 267. STATE OPTION TO USE STATEWIDE AUTOMATED DATA PROCESSING AND 
              INFORMATION RETRIEVAL SYSTEM FOR INTERSTATE CASES.

    Section 466(a)(14)(A)(iii) (42 U.S.C. 666(a)(14)(A)(iii)) is 
amended by inserting before the semicolon the following: ``(but the 
assisting State may establish a corresponding case based on such other 
State's request for assistance)''.

SEC. 268. STATE LAW REQUIREMENT CONCERNING THE UNIFORM INTERSTATE 
              FAMILY SUPPORT ACT (UIFSA).

    (a) In General.--Section 466(f) (42 U.S.C. 666(f)) is amended--
            (1) by striking ``and as in effect on August 22, 1996,''; 
        and
            (2) by striking ``adopted as of such date'' and inserting 
        ``adopted as of August, 2001''.
    (b) Full Faith and Credit for Child Support Orders.--Section 1738B 
of title 28, United States Code, is amended--
            (1) by striking subsection (d) and inserting the following:
    ``(d) Continuing Exclusive Jurisdiction.--
            ``(1) In general.--Subject to paragraph (2), a court of a 
        State that has made a child support order consistent with this 
        section has continuing, exclusive jurisdiction to modify its 
        order if the order is the controlling order and--
                    ``(A) the State is the child's State or the 
                residence of any individual contestant; or
                    ``(B) if the State is not the residence of the 
                child or an individual contestant, the contestants 
                consent in a record or in open court that the court may 
                continue to exercise jurisdiction to modify its order.
            ``(2) Requirement.--A court may not exercise its 
        continuing, exclusive jurisdiction to modify the order if the 
        court of another State, acting in accordance with subsections 
        (e) and (f), has made a modification of the order.'';
            (2) in subsection (e)(2)--
                    (A) in subparagraph (A), by striking ``because'' 
                and all that follows through the semicolon and 
                inserting ``pursuant to paragraph (1) or (2) of 
                subsection (d);'' and
                    (B) in subparagraph (B), by inserting ``with 
                jurisdiction over at least 1 of the individual 
                contestants or that is located in the child's State'' 
                after ``another State'';
            (3) in subsection (f)--
                    (A) in the subsection heading, by striking 
                ``Recognition of'' and inserting ``Determination of 
                Controlling'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``shall apply'' and all that follows through 
                the colon and inserting ``having personal jurisdiction 
                over both individual contestants shall apply the 
                following rules and by order shall determine which 
                order controls:''
                    (C) in paragraph (1), by striking ``must be'' and 
                inserting ``controls and must be so'';
                    (D) in paragraph (2), by striking ``must be 
                recognized'' and inserting ``controls'';
                    (E) in paragraph (3), by striking ``must be 
                recognized'' each place it appears and inserting 
                ``controls'';
                    (F) in paragraph (4)--
                            (i) by striking ``may'' and inserting 
                        ``shall''; and
                            (ii) by striking ``must be recognized'' and 
                        inserting ``controls''; and
                    (G) by striking paragraph (5);
            (4) by striking subsection (g) and inserting the following:
    ``(g) Enforcement of Modified Orders.--If a child support order 
issued by a court of a State is modified by a court of another State 
which properly assumed jurisdiction, the issuing court--
            ``(1) may enforce its order that was modified only as to 
        arrears and interest accruing before the modification;
            ``(2) may provide appropriate relief for violations of its 
        order which occurred before the effective date of the 
        modification; and
            ``(3) shall recognize the modifying order of the other 
        State for the purpose of enforcement.'';
            (5) in subsection (h)--
                    (A) in paragraph (1), by striking ``and (3)'' and 
                inserting ``, (3), and (4)'';
                    (B) in paragraph (2), by inserting ``the 
                computation and payment of arrearages, and the accrual 
                of interest on the arrearages,'' after ``obligations of 
                support,''; and
                    (C) by adding at the end the following:
            ``(4) Prospective application.--After a court determines 
        which is the controlling order and issues an order 
        consolidating arrears, if any, a court shall prospectively 
        apply the law of the State issuing the controlling order, 
        including that State's law with respect to interest on arrears, 
        current and future support, and consolidated arrears.''; and
            (6) in subsection (i), by inserting ``and subsection (d)(2) 
        does not apply'' after ``issuing State''.

SEC. 269. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    (a) Authority To Make Grants to Indian Tribes.--Section 469B (42 
U.S.C. 669b) is amended--
            (1) in the section heading, by inserting ``and indian 
        tribes'' after ``states''; and
            (2) in subsection (a), by inserting ``and Indian tribes or 
        tribal organizations'' after ``to enable States''.
    (b) Amount of Grants.--Section 469B(b) (42 U.S.C. 669b(b)) is 
amended to read as follows:
    ``(b) Amount of Grants.--
            ``(1) Grants to states.--The amount of the grant to be made 
        to a State under this section for a fiscal year shall be an 
        amount equal to the lesser of--
                    ``(A) 90 percent of State expenditures during the 
                fiscal year for activities described in subsection (a); 
                or
                    ``(B) the allotment of the State under subsection 
                (c) for the fiscal year.
            ``(2) Grants to indian tribes.--An Indian tribe or tribal 
        organization operating a program under section 455 that has 
        operated such program throughout the preceding fiscal year and 
        has an application under this section approved by the Secretary 
        shall receive a grant under this section for a fiscal year in 
        an amount equal to the allotment of such Indian tribe or tribal 
        organization under subsection (c)(2) for the fiscal year.''.
    (c) Allotments.--Section 469B(c) (42 U.S.C. 669b(c)) is amended to 
read as follows:
    ``(c) Allotments.--
            ``(1) Allotments to states.--
                    ``(A) In general.--Subject to the subparagraph (C), 
                the allotment of a State for a fiscal year is the 
                amount that bears the same ratio to the amount 
                specified in subparagraph (B) for such fiscal year as 
                the number of children in the State living with only 1 
                parent bears to the total number of such children in 
                all States.
                    ``(B) Amount available for allotment.--For purposes 
                of subparagraph (A), the amount specified in this 
                subparagraph is the following amount, reduced by the 
                total allotments to Indian tribes or tribal 
                organizations in accordance with paragraph (2):
                            ``(i) $12,000,000 for fiscal year 2006.
                            ``(ii) $14,000,000 for fiscal year 2007.
                            ``(iii) $16,000,000 for fiscal year 2008.
                            ``(iv) $20,000,000 for fiscal year 2009 and 
                        each succeeding fiscal year.
                    ``(C) Minimum state allotment.--The Secretary shall 
                adjust allotments to States under subparagraph (A) as 
                necessary to ensure that no State is allotted less 
                than--
                            ``(i) $120,000 for fiscal year 2006;
                            ``(ii) $140,000 for fiscal year 2007;
                            ``(iii) $160,000 for fiscal year 2008; and
                            ``(iv) $180,000 for fiscal year 2009 and 
                        each succeeding fiscal year.
            ``(2) Allotments to indian tribes.--
                    ``(A) In general.--Subject to subparagraph (C), the 
                allotment of an Indian tribe or tribal organization 
                described in subsection (b)(2) for a fiscal year is an 
                amount that bears the same ratio to the amount 
                specified in subparagraph (B) for such fiscal year as 
                the number of children in the Indian tribe or tribal 
                organization living with only 1 parent bears to the 
                total number of such children in all Indian tribes and 
                tribal organizations eligible to receive grants under 
                this section for such year.
                    ``(B) Amount available for allotment.--For purposes 
                of subparagraph (A), the amount available under this 
                subparagraph is an amount, deducted from the amount 
                specified in paragraph (1)(B), not to exceed--
                            ``(i) $250,000 for fiscal year 2006;
                            ``(ii) $600,000 for fiscal year 2007;
                            ``(iii) $800,000 for fiscal year 2008; and
                            ``(iv) $1,670,000 for fiscal year 2009 and 
                        each succeeding year.
                    ``(C) Minimum and maximum tribal allotment.--The 
                Secretary shall adjust allotments to Indian tribes and 
                tribal organizations under subparagraph (A) as 
                necessary to ensure that no Indian tribe or tribal 
                organization is allotted, for a fiscal year, an amount 
                which is less than $10,000 or more than the minimum 
                State allotment for such fiscal year.''.
    (d) Administration.--Section 469B(e) (42 U.S.C. 669b(e)) is amended 
to read as follows:
    ``(e) Administration.--
            ``(1) Grants to states.--Each State to which a grant is 
        made under this section--
                    ``(A) may administer State programs funded with the 
                grant, directly or through grants to or contracts with 
                courts, local public agencies, or nonprofit private 
                entities; and
                    ``(B) shall not be required to operate such 
                programs on a statewide basis.
            ``(2) Grants to states or indian tribes.--Each State or 
        Indian tribe or tribal organization to which a grant is made 
        under this section shall monitor, evaluate, and report on such 
        programs in accordance with regulations prescribed by the 
        Secretary.''.

SEC. 270. TIMING OF CORRECTIVE ACTION YEAR FOR STATE NONCOMPLIANCE WITH 
              CHILD SUPPORT ENFORCEMENT PROGRAM REQUIREMENTS.

    (a) In General.--Section 409(a)(8) (42 U.S.C. 609(a)(8)) is 
amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i)(I), by 
                striking ``in a fiscal year'' and inserting ``for a 
                fiscal year''; and
                    (B) in clause (ii)--
                            (i) in the matter preceding subclause (I), 
                        by striking ``that, with respect to the 
                        succeeding fiscal year--'' and inserting 
                        ``that, with respect to the period described in 
                        subparagraph (D)''; and
                            (ii) in the matter following subclause 
                        (II), by striking ``the end of such succeeding 
                        fiscal year'' and inserting ``the end of the 
                        period described in subparagraph (D)''; and
            (2) by adding at the end the following:
                    ``(D) Period described.--Subject to subparagraph 
                (E), for purposes of this paragraph, the period 
                described in this subparagraph is the period that 
                begins with the date on which the Secretary makes a 
                finding described in subparagraph (A)(i) with respect 
                to State performance in a fiscal year and ends on 
                September 30 of the fiscal year following the fiscal 
                year in which the Secretary makes such a finding.
                    ``(E) No penalty if state corrects noncompliance in 
                finding year.--The Secretary shall not take a reduction 
                described in subparagraph (A) with respect to a 
                noncompliance described in clause (i) of that 
                subparagraph if the Secretary determines that the State 
                has corrected the noncompliance in the fiscal year in 
                which the Secretary makes the finding of the 
                noncompliance.''.
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective with respect to determinations of State compliance for fiscal 
year 2002 and succeeding fiscal years.
    (c) Special Rule for Fiscal Year 2001.--Notwithstanding any other 
provision of law, the Secretary shall not take against amounts 
otherwise payable to a State, a reduction described in section 
409(a)(8)(A) of the Social Security Act (42 U.S.C. 609(a)(8)(A)) with 
respect to a noncompliance described in such section occurring in 
fiscal year 2001 if the Secretary determines that the State has 
corrected such noncompliance in fiscal year 2002 or 2003.

                       Subtitle D--Child Welfare

SEC. 275. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION PROJECTS.

    Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking 
``2003'' and inserting ``2010''.

SEC. 276. REMOVAL OF COMMONWEALTH OF PUERTO RICO FOSTER CARE FUNDS FROM 
              LIMITATION ON PAYMENTS.

    Section 1108(a)(2) (42 U.S.C. 1308(a)(2)), as amended by section 
226(b)(2), is amended--
            (1) by striking ``Paragraph (1)'' and inserting the 
        following:
                    ``(A) In general.--Paragraph (1)'';
            (2) in subparagraph (A) (as added by paragraph (1)), by 
        striking ``or 418(a)(4)(B)'' and inserting ``418(a)(4)(B), or, 
        subject to clause (ii) of subparagraph (B), payments to Puerto 
        Rico described in clause (i) of that subparagraph'' before the 
        period; and
            (3) by adding at the end the following:
                    ``(B) Certain payments to puerto rico.--
                            ``(i) Payments described.--For purposes of 
                        subparagraph (A), payments described in this 
                        subparagraph are payments made to Puerto Rico 
                        under part E of title IV with respect to the 
                        portion of foster care payments made to Puerto 
                        Rico for fiscal year 2007 or any fiscal year 
                        thereafter that exceed the total amount of such 
                        payments for fiscal year 2004.
                            ``(ii) Limitation.--The total amount of 
                        payments to Puerto Rico described in clause (i) 
                        that are disregarded under subparagraph (A) may 
                        not exceed $6,250,000 for each of fiscal years 
                        2007 through 2010.''.

SEC. 277. TECHNICAL CORRECTION.

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

                Subtitle E--Supplemental Security Income

SEC. 281. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY 
              DETERMINATIONS.

    Section 1633 (42 U.S.C. 1383b) is amended by adding at the end the 
following:
    ``(e)(1) The Commissioner of Social Security shall review 
determinations, made by State agencies pursuant to subsection (a) in 
connection with applications for benefits under this title on the basis 
of blindness or disability, that individuals who have attained 18 years 
of age are blind or disabled. Any review by the Commissioner of Social 
Security of a State agency determination under this paragraph shall be 
made before any action is taken to implement the determination.
    ``(2)(A) In carrying out paragraph (1), the Commissioner of Social 
Security shall review--
            ``(i) with respect to fiscal year 2006, at least 25 percent 
        of all determinations referred to in paragraph (1) that are 
        made in such fiscal year; and
            ``(ii) with respect to fiscal years after fiscal year 2006, 
        at least 50 percent of all such determinations that are made in 
        each such fiscal year.
    ``(B) In conducting reviews pursuant to subparagraph (A), the 
Commissioner of Social Security shall, to the extent feasible, select 
for review those determinations which the Commissioner of Social 
Security identifies as being the most likely to be incorrect.''.

              Subtitle F--Transitional Medical Assistance

SEC. 285. EXTENSION AND SIMPLIFICATION OF THE TRANSITIONAL MEDICAL 
              ASSISTANCE PROGRAM (TMA).

    (a) Option of Continuous Eligibility for 12 Months; Option of 
Continuing Coverage for Up To an Additional Year.--
            (1) Option of continuous eligibility for 12 months by 
        making reporting requirements optional.--Section 1925(b) (42 
        U.S.C. 1396r-6(b)) is amended--
                    (A) in paragraph (1), by inserting ``, at the 
                option of a State,'' after ``and which'';
                    (B) in paragraph (2)(A), by inserting ``Subject to 
                subparagraph (C):'' after ``(A) Notices.--'';
                    (C) in paragraph (2)(B), by inserting ``Subject to 
                subparagraph (C):'' after ``(B) Reporting 
                requirements.--'';
                    (D) by adding at the end the following:
                    ``(C) State option to waive notice and reporting 
                requirements.--A State may waive some or all of the 
                reporting requirements under clauses (i) and (ii) of 
                subparagraph (B). Insofar as it waives such a reporting 
                requirement, the State need not provide for a notice 
                under subparagraph (A) relating to such requirement.''; 
                and
                    (E) in paragraph (3)(A)(iii), by inserting ``the 
                State has not waived under paragraph (2)(C) the 
                reporting requirement with respect to such month under 
                paragraph (2)(B) and if'' after ``6-month period if''.
            (2) State option to extend eligibility for low-income 
        individuals for up to 12 additional months.--Section 1925 (42 
        U.S.C. 1396r-6) is further amended--
                    (A) by redesignating subsections (c) through (f) as 
                subsections (d) through (g), respectively; and
                    (B) by inserting after subsection (b) the 
                following:
    ``(c) State Option of Up To 12 Months of Additional Eligibility.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, each State plan approved under this title may 
        provide, at the option of the State, that the State shall offer 
        to each family which received assistance during the entire 6-
        month period under subsection (b) and which meets the 
        applicable requirement of paragraph (2), in the last month of 
        the period the option of extending coverage under this 
        subsection for the succeeding period not to exceed 12 months.
            ``(2) Income restriction.--The option under paragraph (1) 
        shall not be made available to a family for a succeeding period 
        unless the State determines that the family's average gross 
        monthly earnings (less such costs for such child care as is 
        necessary for the employment of the caretaker relative) as of 
        the end of the 6-month period under subsection (b) does not 
        exceed 185 percent of the official poverty line (as defined by 
        the Office of Management and Budget, and revised annually in 
        accordance with section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981) applicable to a family of the size 
        involved.
            ``(3) Application of extension rules.--The provisions of 
        paragraphs (2), (3), (4), and (5) of subsection (b) shall apply 
        to the extension provided under this subsection in the same 
        manner as they apply to the extension provided under subsection 
        (b)(1), except that for purposes of this subsection--
                    ``(A) any reference to a 6-month period under 
                subsection (b)(1) is deemed a reference to the 
                extension period provided under paragraph (1) and any 
                deadlines for any notices or reporting and the premium 
                payment periods shall be modified to correspond to the 
                appropriate calendar quarters of coverage provided 
                under this subsection; and
                    ``(B) any reference to a provision of subsection 
                (a) or (b) is deemed a reference to the corresponding 
                provision of subsection (b) or of this subsection, 
                respectively.''.
    (b) State Option To Waive Receipt of Medicaid for 3 of Previous 6 
Months To Qualify for TMA.--Section 1925(a)(1) (42 U.S.C. 1396r-
6(a)(1)) is amended by adding at the end the following: ``A State may, 
at its option, also apply the previous sentence in the case of a family 
that was receiving such aid for fewer than 3 months, or that had 
applied for and was eligible for such aid for fewer than 3 months, 
during the 6 immediately preceding months described in such 
sentence.''.
    (c) Extension of Sunset for TMA.--
            (1) In general.--Subsection (g) of section 1925 (42 U.S.C. 
        1396r-6), as so redesignated under subsection (a)(2)(A), is 
        further redesignated as subsection (i) and is amended by 
        striking ``2003'' and inserting ``2010''.
            (2) Conforming amendment.--Section 1902(e)(1)(B) (42 U.S.C. 
        1396a(e)(1)(B)), as so amended, is amended by striking 
        ``September 30, 2003'' and inserting ``the last date (if any) 
        on which section 1925 applies under subsection (i) of that 
        section''.
    (d) CMS Report on Enrollment and Participation Rates Under TMA.--
Section 1925 (42 U.S.C. 1396r-6), as amended by subsections (a)(2)(A) 
and (c)(1), is amended by inserting after subsection (f) the following:
    ``(g) Additional Provisions.--
            ``(1) Collection and reporting of participation 
        information.--Each State shall--
                    ``(A) collect and submit to the Secretary, in a 
                format specified by the Secretary, information on 
                average monthly enrollment and average monthly 
                participation rates for adults and children under this 
                section; and
                    ``(B) make such information publicly available.
        Such information shall be submitted under subparagraph (A) at 
        the same time and frequency in which other enrollment 
        information under this title is submitted to the Secretary. 
        Using such information, the Secretary shall submit to Congress 
        annual reports concerning such rates.''.
    (e) Coordination of Work.--Section 1925(g) (42 U.S.C. 1396r-6(g)), 
as added by subsection (d), is amended by adding at the end the 
following:
            ``(2) Coordination with administration for children and 
        families.--The Administrator of the Centers for Medicare & 
        Medicaid Services, in carrying out this section, shall work 
        with the Assistant Secretary for the Administration for 
        Children and Families to develop guidance or other technical 
        assistance for States regarding best practices in guaranteeing 
        access to transitional medical assistance under this 
        section.''.
    (f) Elimination of TMA Requirement for States That Extend Coverage 
to Children and Parents Through 185 Percent of Poverty.--
            (1) In general.--Section 1925 (42 U.S.C. 1396r-6) is 
        amended by inserting after subsection (g), as added by 
        subsection (d), the following:
    ``(h) Provisions Optional for States That Extend Coverage to 
Children and Parents Through 185 Percent of Poverty.--A State may meet 
(but is not required to meet) the requirements of subsections (a) and 
(b) if it provides for medical assistance under section 1931 to 
families (including both children and caretaker relatives) the average 
gross monthly earning of which (less such costs for such child care as 
is necessary for the employment of a caretaker relative) is at or below 
a level that is at least 185 percent of the official poverty line (as 
defined by the Office of Management and Budget, and revised annually in 
accordance with section 673(2) of the Omnibus Budget Reconciliation Act 
of 1981) applicable to a family of the size involved.''.
            (2) Conforming amendments.--Section 1925 (42 U.S.C. 1396r-
        6) is amended, in subsections (a)(1) and (b)(1), by inserting 
        ``, but subject to subsection (h),'' after ``Notwithstanding 
        any other provision of this title,'' each place it appears.
    (g) Requirement of Notice for All Families Losing TANF.--Subsection 
(a)(2) of section 1925 (42 U.S.C. 1396r-6) is amended by adding at the 
end the following flush sentences:
            ``Each State shall provide, to families whose aid under 
        part A or E of title IV has terminated but whose eligibility 
        for medical assistance under this title continues, written 
        notice of their ongoing eligibility for such medical 
        assistance. If a State makes a determination that any member of 
        a family whose aid under part A or E of title IV is being 
        terminated is also no longer eligible for medical assistance 
        under this title, the notice of such determination shall be 
        supplemented by a 1-page notification form describing the 
        different ways in which individuals and families may qualify 
        for such medical assistance and explaining that individuals and 
        families do not have to be receiving aid under part A or E of 
        title IV in order to qualify for such medical assistance. Such 
        notice shall further be supplemented by information on how to 
        apply for child health assistance under the State children's 
        health insurance program under title XXI and how to apply for 
        medical assistance under this title.''.
    (h) Extending Use of Outstationed Workers To Accept Applications 
for Transitional Medical Assistance.--Section 1902(a)(55) (42 U.S.C. 
1396a(a)(55)) is amended by inserting ``and under section 1931'' after 
``(a)(10)(A)(ii)(IX)''.
    (i) Effective Dates.--
            (1) In general.--Except as provided in this subsection, the 
        amendments made by this section shall apply to calendar 
        quarters beginning on or after October 1, 2005, without regard 
        to whether or not final regulations to carry out such 
        amendments have been promulgated by such date.
            (2) Notice.--The amendment made by subsection (g) shall 
        take effect 6 months after the date of enactment of this Act.
            (3) Delay permitted for state plan amendment.--In the case 
        of a State plan for medical assistance under title XIX of the 
        Social Security Act which the Secretary of Health and Human 
        Services determines requires State legislation (other than 
        legislation appropriating funds) in order for the plan to meet 
        the additional requirements imposed by the amendments made by 
        this section, the State plan shall not be regarded as failing 
        to comply with the requirements of such title solely on the 
        basis of its failure to meet these additional requirements 
        before the first day of the first calendar quarter beginning 
        after the close of the first regular session of the State 
        legislature that begins after the date of enactment of this 
        Act. For purposes of the previous sentence, in the case of a 
        State that has a 2-year legislative session, each year of such 
        session shall be deemed to be a separate regular session of the 
        State legislature.

SEC. 286. PROHIBITION AGAINST COVERING CHILDLESS ADULTS WITH SCHIP 
              FUNDS.

    (a) Prohibition on Use of SCHIP Funds.--
            (1) In general.--Section 2107 (42 U.S.C. 1397gg) is amended 
        by adding at the end the following:
    ``(f) Limitation on Waiver Authority.--Notwithstanding subsection 
(e)(2)(A) and section 1115(a), the Secretary may not approve a waiver, 
experimental, pilot, or demonstration project, or an amendment to such 
a project that has been approved as of the date of enactment of this 
subsection, that would allow funds made available under this title to 
be used to provide child health assistance or other health benefits 
coverage to childless adults. For purposes of the preceding sentence, a 
caretaker relative (as such term is defined for purposes of carrying 
out section 1931) shall not be considered a childless adult.''.
            (2) Conforming amendment.--Section 2105(c)(1) (42 U.S.C. 
        1397ee(c)(1)) is amended by inserting before the period the 
        following: ``and may not include coverage of childless adults. 
        For purposes of the preceding sentence, a caretaker relative 
        (as such term is defined for purposes of carrying out section 
        1931) shall not be considered a childless adult.''.
    (b) Rule of Construction.--Nothing in this section or the 
amendments made by this section shall be construed to--
            (1) authorize the waiver of any provision of title XIX or 
        XXI of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa 
        et seq.) that is not otherwise authorized to be waived under 
        such titles or under title XI of such Act (42 U.S.C. 1301 et 
        seq.) as of the date of enactment of this Act; or
            (2) imply congressional approval of any waiver, 
        experimental, pilot, or demonstration project affecting the 
        medicaid program under title XIX of the Social Security Act or 
        the State children's health insurance program under title XXI 
        of such Act that has been approved as of such date of 
        enactment.
    (c) Effective Date.--This section and the amendments made by this 
section take effect on the date of enactment of this Act and apply to 
proposals to conduct a waiver, experimental, pilot, or demonstration 
project affecting the medicaid program under title XIX of the Social 
Security Act or the State children's health insurance program under 
title XXI of such Act, and to any proposals to amend such projects, 
that are approved or extended on or after such date of enactment.

                       Subtitle G--Effective Date

SEC. 291. EFFECTIVE DATE.

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

SEC. 292. EXTENSION THROUGH REMAINDER OF FISCAL YEAR 2005.

    Except as otherwise provided in this Act and the amendments made by 
this Act, activities authorized by part A of title IV of the Social 
Security Act, and by sections 429A, 510, 1108(b), and 1925 of such Act, 
shall continue through September 30, 2005, in the manner authorized for 
fiscal year 2004, notwithstanding section 1902(e)(1)(A) of such Act, 
and out of any money in the Treasury of the United States not otherwise 
appropriated, there are hereby appropriated such sums as may be 
necessary for such purpose. Grants and payments may be made pursuant to 
this authority through the fourth quarter of fiscal year 2005 at the 
level provided for such activities through the fourth quarter of fiscal 
year 2004.

                          TITLE III--CARE ACT

SEC. 300. SHORT TITLE; ETC.

    (a) Short Title.--This title may be cited as the ``CARE Act of 
2005''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this title an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

                Subtitle A--Charitable Giving Incentives

SEC. 301. DEDUCTION FOR PORTION OF CHARITABLE CONTRIBUTIONS TO BE 
              ALLOWED TO INDIVIDUALS WHO DO NOT ITEMIZE DEDUCTIONS.

    (a) In General.--Section 170 (relating to charitable, etc., 
contributions and gifts) is amended by redesignating subsection (o) as 
subsection (p) and by inserting after subsection (n) the following new 
subsection:
    ``(o) Deduction for Individuals Not Itemizing Deductions.--In the 
case of an individual who does not itemize deductions for any taxable 
year, there shall be taken into account as a direct charitable 
deduction under section 63 an amount equal to the amount allowable 
under subsection (a) for the taxable year for cash contributions, to 
the extent that such contributions exceed $250 ($500 in the case of a 
joint return) but do not exceed $500 ($1,000 in the case of a joint 
return).''.
    (b) Direct Charitable Deduction.--
            (1) In general.--Subsection (b) of section 63 (defining 
        taxable income) is amended by striking ``and'' at the end of 
        paragraph (1), by striking the period at the end of paragraph 
        (2) and inserting ``, and'', and by adding at the end the 
        following new paragraph:
            ``(3) the direct charitable deduction.''.
            (2) Definition.--Section 63 is amended by redesignating 
        subsection (g) as subsection (h) and by inserting after 
        subsection (f) the following new subsection:
    ``(g) Direct Charitable Deduction.--For purposes of this section, 
the term `direct charitable deduction' means that portion of the amount 
allowable under section 170(a) which is taken as a direct charitable 
deduction for the taxable year under section 170(o).''.
            (3) Conforming amendment.--Subsection (d) of section 63 is 
        amended by striking ``and'' at the end of paragraph (1), by 
        striking the period at the end of paragraph (2) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(3) the direct charitable deduction.''.
    (c) Study.--
            (1) In general.--The Secretary of the Treasury shall study 
        the effect of the amendments made by this section on increased 
        charitable giving and taxpayer compliance, including a 
        comparison of taxpayer compliance between taxpayers who itemize 
        their charitable contributions and taxpayers who claim a direct 
        charitable deduction.
            (2) Report.--By not later than December 31, 2006, the 
        Secretary of the Treasury shall report on the study required 
        under paragraph (1) to the Committee on Finance of the Senate 
        and the Committee on Ways and Means of the House of 
        Representatives.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004, and before 
January 1, 2007.

SEC. 302. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS 
              FOR CHARITABLE PURPOSES.

    (a) In General.--Subsection (d) of section 408 (relating to 
individual retirement accounts) is amended by adding at the end the 
following new paragraph:
            ``(8) Distributions for charitable purposes.--
                    ``(A) In general.--No amount shall be includible in 
                gross income by reason of a qualified charitable 
                distribution.
                    ``(B) Qualified charitable distribution.--For 
                purposes of this paragraph, the term `qualified 
                charitable distribution' means any distribution from an 
                individual retirement account--
                            ``(i) which is made directly by the 
                        trustee--
                                    ``(I) to an organization described 
                                in section 170(c), or
                                    ``(II) to a split-interest entity, 
                                and
                            ``(ii) which is made on or after--
                                    ``(I) in the case of any 
                                distribution described in clause 
                                (i)(I), the date that the individual 
                                for whose benefit the account is 
                                maintained has attained age 70\1/2\, 
                                and
                                    ``(II) in the case of any 
                                distribution described in clause 
                                (i)(II), the date that such individual 
                                has attained age 59\1/2\.
                A distribution shall be treated as a qualified 
                charitable distribution only to the extent that the 
                distribution would be includible in gross income 
                without regard to subparagraph (A) and, in the case of 
                a distribution to a split-interest entity, only if no 
                person holds an income interest in the amounts in the 
                split-interest entity attributable to such distribution 
                other than one or more of the following: the individual 
                for whose benefit such account is maintained, the 
                spouse of such individual, or any organization 
                described in section 170(c).
                    ``(C) Contributions must be otherwise deductible.--
                For purposes of this paragraph--
                            ``(i) Direct contributions.--A distribution 
                        to an organization described in section 170(c) 
                        shall be treated as a qualified charitable 
                        distribution only if a deduction for the entire 
                        distribution would be allowable under section 
                        170 (determined without regard to subsection 
                        (b) thereof and this paragraph).
                            ``(ii) Split-interest gifts.--A 
                        distribution to a split-interest entity shall 
                        be treated as a qualified charitable 
                        distribution only if a deduction for the entire 
                        value of the interest in the distribution for 
                        the use of an organization described in section 
                        170(c) would be allowable under section 170 
                        (determined without regard to subsection (b) 
                        thereof and this paragraph).
                    ``(D) Application of section 72.--Notwithstanding 
                section 72, in determining the extent to which a 
                distribution is a qualified charitable distribution, 
                the entire amount of the distribution shall be treated 
                as includible in gross income without regard to 
                subparagraph (A) to the extent that such amount does 
                not exceed the aggregate amount which would have been 
                so includible if all amounts were distributed from all 
                individual retirement accounts treated as 1 contract 
                under paragraph (2)(A) for purposes of determining the 
                inclusion on such distribution under section 72. Proper 
                adjustments shall be made in applying section 72 to 
                other distributions in such taxable year and subsequent 
                taxable years.
                    ``(E) Special rules for split-interest entities.--
                            ``(i) Charitable remainder trusts.--
                        Notwithstanding section 664(b), distributions 
                        made from a trust described in subparagraph 
                        (G)(i) shall be treated as ordinary income in 
                        the hands of the beneficiary to whom is paid 
                        the annuity described in section 664(d)(1)(A) 
                        or the payment described in section 
                        664(d)(2)(A).
                            ``(ii) Pooled income funds.--No amount 
                        shall be includible in the gross income of a 
                        pooled income fund (as defined in subparagraph 
                        (G)(ii)) by reason of a qualified charitable 
                        distribution to such fund, and all 
                        distributions from the fund which are 
                        attributable to qualified charitable 
                        distributions shall be treated as ordinary 
                        income to the beneficiary.
                            ``(iii) Charitable gift annuities.--
                        Qualified charitable distributions made for a 
                        charitable gift annuity shall not be treated as 
                        an investment in the contract.
                    ``(F) Denial of deduction.--Qualified charitable 
                distributions shall not be taken into account in 
                determining the deduction under section 170.
                    ``(G) Split-interest entity defined.--For purposes 
                of this paragraph, the term `split-interest entity' 
                means--
                            ``(i) a charitable remainder annuity trust 
                        or a charitable remainder unitrust (as such 
                        terms are defined in section 664(d)) which must 
                        be funded exclusively by qualified charitable 
                        distributions,
                            ``(ii) a pooled income fund (as defined in 
                        section 642(c)(5)), but only if the fund 
                        accounts separately for amounts attributable to 
                        qualified charitable distributions, and
                            ``(iii) a charitable gift annuity (as 
                        defined in section 501(m)(5)).''.
    (b) Modifications Relating to Information Returns by Certain 
Trusts.--
            (1) Returns.--Section 6034 (relating to returns by trusts 
        described in section 4947(a)(2) or claiming charitable 
        deductions under section 642(c)) is amended to read as follows:

``SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION 4947(A)(2) OR 
              CLAIMING CHARITABLE DEDUCTIONS UNDER SECTION 642(C).

    ``(a) Trusts Described in Section 4947(a)(2).--Every trust 
described in section 4947(a)(2) shall furnish such information with 
respect to the taxable year as the Secretary may by forms or 
regulations require.
    ``(b) Trusts Claiming a Charitable Deduction Under Section 
642(c).--
            ``(1) In general.--Every trust not required to file a 
        return under subsection (a) but claiming a deduction under 
        section 642(c) for the taxable year shall furnish such 
        information with respect to such taxable year as the Secretary 
        may by forms or regulations prescribe, including--
                    ``(A) the amount of the deduction taken under 
                section 642(c) within such year,
                    ``(B) the amount paid out within such year which 
                represents amounts for which deductions under section 
                642(c) have been taken in prior years,
                    ``(C) the amount for which such deductions have 
                been taken in prior years but which has not been paid 
                out at the beginning of such year,
                    ``(D) the amount paid out of principal in the 
                current and prior years for the purposes described in 
                section 642(c),
                    ``(E) the total income of the trust within such 
                year and the expenses attributable thereto, and
                    ``(F) a balance sheet showing the assets, 
                liabilities, and net worth of the trust as of the 
                beginning of such year.
            ``(2) Exceptions.--Paragraph (1) shall not apply to a trust 
        for any taxable year if--
                    ``(A) all the net income for such year, determined 
                under the applicable principles of the law of trusts, 
                is required to be distributed currently to the 
                beneficiaries, or
                    ``(B) the trust is described in section 
                4947(a)(1).''.
            (2) Increase in penalty relating to filing of information 
        return by split-interest trusts.--Paragraph (2) of section 
        6652(c) (relating to returns by exempt organizations and by 
        certain trusts) is amended by adding at the end the following 
        new subparagraph:
                    ``(C) Split-interest trusts.--In the case of a 
                trust which is required to file a return under section 
                6034(a), subparagraphs (A) and (B) of this paragraph 
                shall not apply and paragraph (1) shall apply in the 
                same manner as if such return were required under 
                section 6033, except that--
                            ``(i) the 5 percent limitation in the 
                        second sentence of paragraph (1)(A) shall not 
                        apply,
                            ``(ii) in the case of any trust with gross 
                        income in excess of $250,000, the first 
                        sentence of paragraph (1)(A) shall be applied 
                        by substituting `$100' for `$20', and the 
                        second sentence thereof shall be applied by 
                        substituting `$50,000' for `$10,000', and
                            ``(iii) the third sentence of paragraph 
                        (1)(A) shall be disregarded.
                In addition to any penalty imposed on the trust 
                pursuant to this subparagraph, if the person required 
                to file such return knowingly fails to file the return, 
                such penalty shall also be imposed on such person who 
                shall be personally liable for such penalty.''.
            (3) Confidentiality of noncharitable beneficiaries.--
        Subsection (b) of section 6104 (relating to inspection of 
        annual information returns) is amended by adding at the end the 
        following new sentence: ``In the case of a trust which is 
        required to file a return under section 6034(a), this 
        subsection shall not apply to information regarding 
        beneficiaries which are not organizations described in section 
        170(c).''.
    (c) Effective Dates.--
            (1) Subsection (a).--The amendment made by subsection (a) 
        shall apply to distributions--
                    (A) described in section 408(d)(8)(B)(i)(I) of the 
                Internal Revenue Code of 1986, as added by this 
                section, made after the date of the enactment of this 
                Act, and
                    (B) described in section 408(d)(8)(B)(i)(II) of 
                such Code, as so added, made after December 31, 2004.
            (2) Subsection (b).--The amendments made by subsection (b) 
        shall apply to returns for taxable years beginning after 
        December 31, 2004.

SEC. 303. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD INVENTORIES.

    (a) In General.--Subsection (e) of section 170 (relating to certain 
contributions of ordinary income and capital gain property) is amended 
by adding at the end the following new paragraph:
            ``(7) Application of paragraph (3) to certain contributions 
        of food inventory.--For purposes of this section--
                    ``(A) Extension to individuals.--In the case of a 
                charitable contribution of apparently wholesome food--
                            ``(i) paragraph (3)(A) shall be applied 
                        without regard to whether the contribution is 
                        made by a C corporation, and
                            ``(ii) in the case of a taxpayer other than 
                        a C corporation, the aggregate amount of such 
                        contributions from any trade or business (or 
                        interest therein) of the taxpayer for any 
                        taxable year which may be taken into account 
                        under this section shall not exceed 10 percent 
                        of the taxpayer's net income from any such 
                        trade or business, computed without regard to 
                        this section, for such taxable year.
                    ``(B) Limitation on reduction.--In the case of a 
                charitable contribution of apparently wholesome food, 
                notwithstanding paragraph (3)(B), the amount of the 
                reduction determined under paragraph (1)(A) shall not 
                exceed the amount by which the fair market value of 
                such property exceeds twice the basis of such property.
                    ``(C) Determination of basis.--If a taxpayer--
                            ``(i) does not account for inventories 
                        under section 471, and
                            ``(ii) is not required to capitalize 
                        indirect costs under section 263A,
                the taxpayer may elect, solely for purposes of 
                paragraph (3)(B), to treat the basis of any apparently 
                wholesome food as being equal to 25 percent of the fair 
                market value of such food.
                    ``(D) Determination of fair market value.--In the 
                case of a charitable contribution of apparently 
                wholesome food which is a qualified contribution 
                (within the meaning of paragraph (3), as modified by 
                subparagraph (A) of this paragraph) and which, solely 
                by reason of internal standards of the taxpayer or lack 
                of market, cannot or will not be sold, the fair market 
                value of such contribution shall be determined--
                            ``(i) without regard to such internal 
                        standards or such lack of market and
                            ``(ii) by taking into account the price at 
                        which the same or substantially the same food 
                        items (as to both type and quality) are sold by 
                        the taxpayer at the time of the contribution 
                        (or, if not so sold at such time, in the recent 
                        past).
                    ``(E) Apparently wholesome food.--For purposes of 
                this paragraph, the term `apparently wholesome food' 
                has the meaning given such term by section 22(b)(2) of 
                the Bill Emerson Good Samaritan Food Donation Act (42 
                U.S.C. 1791(b)(2)), as in effect on the date of the 
                enactment of this paragraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after the date of the enactment of this Act.

SEC. 304. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK INVENTORIES.

    (a) In General.--Section 170(e)(3) (relating to certain 
contributions of ordinary income and capital gain property) is amended 
by redesignating subparagraph (C) as subparagraph (D) and by inserting 
after subparagraph (B) the following new subparagraph:
                    ``(C) Special rule for contributions of book 
                inventory for educational purposes.--
                            ``(i) Contributions of book inventory.--In 
                        determining whether a qualified book 
                        contribution is a qualified contribution, 
                        subparagraph (A) shall be applied without 
                        regard to whether--
                                    ``(I) the donee is an organization 
                                described in the matter preceding 
                                clause (i) of subparagraph (A), and
                                    ``(II) the property is to be used 
                                by the donee solely for the care of the 
                                ill, the needy, or infants.
                            ``(ii) Amount of reduction.--
                        Notwithstanding subparagraph (B), the amount of 
                        the reduction determined under paragraph (1)(A) 
                        shall not exceed the amount by which the fair 
                        market value of the contributed property (as 
                        determined by the taxpayer using a bona fide 
                        published market price for such book) exceeds 
                        twice the basis of such property.
                            ``(iii) Qualified book contribution.--For 
                        purposes of this paragraph, the term `qualified 
                        book contribution' means a charitable 
                        contribution of books, but only if the 
                        requirements of clauses (iv) and (v) are met.
                            ``(iv) Identity of donee.--The requirement 
                        of this clause is met if the contribution is to 
                        an organization--
                                    ``(I) described in subclause (I) or 
                                (III) of paragraph (6)(B)(i), or
                                    ``(II) described in section 
                                501(c)(3) and exempt from tax under 
                                section 501(a) (other than a private 
                                foundation, as defined in section 
                                509(a), which is not an operating 
                                foundation, as defined in section 
                                4942(j)(3)), which is organized 
                                primarily to make books available to 
                                the general public at no cost or to 
                                operate a literacy program.
                            ``(v) Certification by donee.--The 
                        requirement of this clause is met if, in 
                        addition to the certifications required by 
                        subparagraph (A) (as modified by this 
                        subparagraph), the donee certifies in writing 
                        that--
                                    ``(I) the books are suitable, in 
                                terms of currency, content, and 
                                quantity, for use in the donee's 
                                educational programs, and
                                    ``(II) the donee will use the books 
                                in its educational programs.
                            ``(vi) Bona fide published market price.--
                        For purposes of this subparagraph, the term 
                        `bona fide published market price' means, with 
                        respect to any book, a price--
                                    ``(I) determined using the same 
                                printing and edition,
                                    ``(II) determined in the usual 
                                market in which such a book has been 
                                customarily sold by the taxpayer, and
                                    ``(III) for which the taxpayer can 
                                demonstrate to the satisfaction of the 
                                Secretary that the taxpayer customarily 
                                sold such books in arm's length 
                                transactions within 7 years preceding 
                                the contribution of such a book.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to contributions made after the date of the enactment of this Act

SEC. 305. EXPANSION OF CHARITABLE CONTRIBUTION ALLOWED FOR SCIENTIFIC 
              PROPERTY USED FOR RESEARCH AND FOR COMPUTER TECHNOLOGY 
              AND EQUIPMENT USED FOR EDUCATIONAL PURPOSES.

    (a) Scientific Property Used for Research.--
            (1) In general.--Clause (ii) of section 170(e)(4)(B) 
        (defining qualified research contributions) is amended by 
        inserting ``or assembled'' after ``constructed''.
            (2) Conforming amendment.--Clause (iii) of section 
        170(e)(4)(B) is amended by inserting ``or assembling'' after 
        ``construction''.
    (b) Computer Technology and Equipment for Educational Purposes.--
            (1) In general.--Clause (ii) of section 170(e)(6)(B) is 
        amended by inserting ``or assembled'' after ``constructed'' and 
        ``or assembling'' after ``construction''.
            (2) Conforming amendments.--Subparagraph (D) of section 
        170(e)(6) is amended by inserting ``or assembled'' after 
        ``constructed'' and ``or assembling'' after ``construction''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 306. MODIFICATIONS TO ENCOURAGE CONTRIBUTIONS OF CAPITAL GAIN REAL 
              PROPERTY MADE FOR CONSERVATION PURPOSES.

    (a) In General.--Section 170(h) (relating to qualified conservation 
contribution) is amended by adding at the end the following new 
paragraph:
            ``(7) Additional incentives for qualified conservation 
        contributions.--
                    ``(A) In general.--In the case of any qualified 
                conservation contribution (as defined in paragraph (1)) 
                made by an individual--
                            ``(i) subparagraph (C) of subsection (b)(1) 
                        shall not apply,
                            ``(ii) except as provided in subparagraph 
                        (B)(i), subsections (b)(1)(A) and (d)(1) shall 
                        be applied separately with respect to such 
                        contributions by treating references to 50 
                        percent of the taxpayer's contribution base as 
                        references to the amount of such base reduced 
                        by the amount of other contributions allowable 
                        under subsection (b)(1)(A), and
                            ``(iii) subparagraph (A) of subsection 
                        (d)(1) shall be applied--
                                    ``(I) by substituting `15 
                                succeeding taxable years' for `5 
                                succeeding taxable years', and
                                    ``(II) by applying clause (ii) to 
                                each of the 15 succeeding taxable 
                                years.
                    ``(B) Special rules for eligible farmers and 
                ranchers.--
                            ``(i) In general.--In the case of any such 
                        contributions by a taxpayer who is an eligible 
                        farmer or rancher for the taxable year in which 
                        such contributions are made--
                                    ``(I) if the taxpayer is an 
                                individual, subsections (b)(1)(A) and 
                                (d)(1) shall be applied separately with 
                                respect to such contributions by 
                                substituting `the taxpayer's 
                                contribution base reduced by the amount 
                                of other contributions allowable under 
                                subsection (b)(1)(A)' for `50 percent 
                                of the taxpayer's contribution base' 
                                each place it appears, and
                                    ``(II) if the taxpayer is a 
                                corporation, subsections (b)(2) and 
                                (d)(2) shall be applied separately with 
                                respect to such contributions, 
                                subsection (b)(2) shall be applied with 
                                respect to such contributions as if 
                                such subsection did not contain the 
                                words `10 percent of' and as if 
                                subparagraph (A) thereof read `the 
                                deduction under this section for 
                                qualified conservation contributions', 
                                and rules similar to the rules of 
                                subparagraph (A)(iii) shall apply for 
                                purposes of subsection (d)(2).
                            ``(ii) Definition.--For purposes of clause 
                        (i), the term `eligible farmer or rancher' 
                        means a taxpayer whose gross income from the 
                        trade or business of farming (within the 
                        meaning of section 2032A(e)(5)) is at least 51 
                        percent of the taxpayer's gross income for the 
                        taxable year, and, in the case of a C 
                        corporation, the stock of which is not publicly 
                        traded on a recognized exchange.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after the date of the enactment of this Act.

SEC. 307. EXCLUSION OF 25 PERCENT OF GAIN ON SALES OR EXCHANGES OF LAND 
              OR WATER INTERESTS TO ELIGIBLE ENTITIES FOR CONSERVATION 
              PURPOSES.

    (a) In General.--Part III of subchapter B of chapter 1 (relating to 
items specifically excluded from gross income) is amended by inserting 
after section 121 the following new section:

``SEC. 121A. 25-PERCENT EXCLUSION OF GAIN ON SALES OR EXCHANGES OF LAND 
              OR WATER INTERESTS TO ELIGIBLE ENTITIES FOR CONSERVATION 
              PURPOSES.

    ``(a) Exclusion.--Gross income shall not include 25 percent of the 
qualifying gain from a conservation sale of a long-held qualifying land 
or water interest.
    ``(b) Qualifying Gain.--For purposes of this section--
            ``(1) In general.--The term `qualifying gain' means any 
        gain which would be recognized as long-term capital gain, 
        reduced by the amount of any long-term capital gain 
        attributable to disqualified improvements.
            ``(2) Disqualified improvement.--For purposes of paragraph 
        (1), the term `disqualified improvement' means any building, 
        structure, or other improvement, other than--
                    ``(A) any improvement which is described in section 
                175(c)(1), determined--
                            ``(i) without regard to the requirements 
                        that the taxpayer be engaged in farming, and
                            ``(ii) without taking into account 
                        subparagraphs (A) and (B) thereof, or
                    ``(B) any improvement which the Secretary 
                determines directly furthers conservation purposes.
            ``(3) Special rule for sales of stock.--If the long-held 
        qualifying land or water interest is 1 or more shares of stock 
        in a qualifying land or water corporation, the qualifying gain 
        is equal to the lesser of--
                    ``(A) the qualifying gain determined under 
                paragraph (1), or
                    ``(B) the product of--
                            ``(i) the percentage of such corporation's 
                        stock which is transferred by the taxpayer, 
                        times
                            ``(ii) the amount which would have been the 
                        qualifying gain (determined under paragraph 
                        (1)) if there had been a conservation sale by 
                        such corporation of all of its interests in the 
                        land and water for a price equal to the product 
                        of the fair market value of such interests 
                        times the ratio of--
                                    ``(I) the proceeds of the 
                                conservation sale of the stock, to
                                    ``(II) the fair market value of the 
                                stock which was the subject of the 
                                conservation sale.
    ``(c) Conservation Sale.--For purposes of this section, the term 
`conservation sale' means a sale or exchange which meets the following 
requirements:
            ``(1) Transferee is an eligible entity.--The transferee of 
        the long-held qualifying land or water interest is an eligible 
        entity.
            ``(2) Qualifying letter of intent required.--At the time of 
        the sale or exchange, such transferee provides the taxpayer 
        with a qualifying letter of intent.
            ``(3) Nonapplication to certain sales.--The sale or 
        exchange is not made pursuant to an order of condemnation or 
        eminent domain.
            ``(4) Controlling interest in stock sale required.--In the 
        case of the sale or exchange of stock in a qualifying land or 
        water corporation, at the end of the taxpayer's taxable year in 
        which such sale or exchange occurs, the transferee's ownership 
        of stock in such corporation meets the requirements of section 
        1504(a)(2) (determined by substituting `90 percent' for `80 
        percent' each place it appears).
    ``(d) Long-Held Qualifying Land or Water Interest.--For purposes of 
this section--
            ``(1) In general.--The term `long-held qualifying land or 
        water interest' means any qualifying land or water interest 
        owned by the taxpayer or a member of the taxpayer's family (as 
        defined in section 2032A(e)(2)) at all times during the 5-year 
        period ending on the date of the sale.
            ``(2) Qualifying land or water interest.--
                    ``(A) In general.--The term `qualifying land or 
                water interest' means a real property interest which 
                constitutes--
                            ``(i) a taxpayer's entire interest in land,
                            ``(ii) a taxpayer's entire interest in 
                        water rights,
                            ``(iii) a qualified real property interest 
                        (as defined in section 170(h)(2)), or
                            ``(iv) stock in a qualifying land or water 
                        corporation.
                    ``(B) Entire interest.--For purposes of clause (i) 
                or (ii) of subparagraph (A)--
                            ``(i) a partial interest in land or water 
                        is not a taxpayer's entire interest if an 
                        interest in land or water was divided in order 
                        to create such partial interest in order to 
                        avoid the requirements of such clause or 
                        section 170(f)(3)(A), and
                            ``(ii) a taxpayer's entire interest in 
                        certain land does not fail to satisfy 
                        subparagraph (A)(i) solely because the taxpayer 
                        has retained an interest in other land, even if 
                        the other land is contiguous with such certain 
                        land and was acquired by the taxpayer along 
                        with such certain land in a single conveyance.
    ``(e) Other Definitions.--For purposes of this section--
            ``(1) Eligible entity.--The term `eligible entity' means--
                    ``(A) a governmental unit referred to in section 
                170(c)(1), or an agency or department thereof operated 
                primarily for 1 or more of the conservation purposes 
                specified in clause (i), (ii), or (iii) of section 
                170(h)(4)(A), or
                    ``(B) an entity which is--
                            ``(i) described in section 170(b)(1)(A)(vi) 
                        or section 170(h)(3)(B), and
                            ``(ii) organized and at all times operated 
                        primarily for 1 or more of the conservation 
                        purposes specified in clause (i), (ii), or 
                        (iii) of section 170(h)(4)(A).
            ``(2) Qualifying letter of intent.--The term `qualifying 
        letter of intent' means a written letter of intent which 
        includes the following statement: `The transferee's intent is 
        that this acquisition will serve 1 or more of the conservation 
        purposes specified in clause (i), (ii), or (iii) of section 
        170(h)(4)(A) of the Internal Revenue Code of 1986, that the 
        transferee's use of the property so acquired will be consistent 
        with section 170(h)(5) of such Code, and that the use of the 
        property will continue to be consistent with such section, even 
        if ownership or possession of such property is subsequently 
        transferred to another person.'
            ``(3) Qualifying land or water corporation.--The term 
        `qualifying land or water corporation' means a C corporation 
        (as defined in section 1361(a)(2)) if, as of the date of the 
        conservation sale--
                    ``(A) the fair market value of the corporation's 
                interests in land or water held by the corporation at 
                all times during the preceding 5 years equals or 
                exceeds 90 percent of the fair market value of all of 
                such corporation's assets, and
                    ``(B) not more than 50 percent of the total fair 
                market value of such corporation's assets consists of 
                water rights or infrastructure related to the delivery 
                of water, or both.
    ``(f) Tax on Subsequent Transfers or Removals of Conservation 
Restrictions.--
            ``(1) In general.--A tax is hereby imposed on any 
        subsequent--
                    ``(A) transfer by an eligible entity of ownership 
                or possession, whether by sale, exchange, or lease, of 
                property acquired directly or indirectly in--
                            ``(i) a conservation sale described in 
                        subsection (a), or
                            ``(ii) a transfer described in clause (i), 
                        (ii), or (iii) of paragraph (4)(A), or
                    ``(B) removal of a conservation restriction 
                contained in an instrument of conveyance of such 
                property.
            ``(2) Amount of tax.--The amount of tax imposed by 
        paragraph (1) on any transfer or removal shall be equal to the 
        sum of--
                    ``(A) either--
                            ``(i) 20 percent of the fair market value 
                        (determined at the time of the transfer) of the 
                        property the ownership or possession of which 
                        is transferred, or
                            ``(ii) 20 percent of the fair market value 
                        (determined at the time immediately after the 
                        removal) of the property upon which the 
                        conservation restriction was removed, plus
                    ``(B) the product of--
                            ``(i) the highest rate of tax specified in 
                        section 11, times
                            ``(ii) any gain or income realized by the 
                        transferor or person removing such restriction 
                        as a result of the transfer or removal.
            ``(3) Liability.--The tax imposed by paragraph (1) shall be 
        paid--
                    ``(A) on any transfer, by the transferor, and
                    ``(B) on any removal of a conservation restriction 
                contained in an instrument of conveyance, by the person 
                removing such restriction.
            ``(4) Relief from liability.--The person (otherwise liable 
        for any tax imposed by paragraph (1)) shall be relieved of 
        liability for the tax imposed by paragraph (1)--
                    ``(A) with respect to any transfer if--
                            ``(i) the transferee is an eligible entity 
                        which provides such person, at the time of 
                        transfer, a qualifying letter of intent,
                            ``(ii) in any case where the transferee is 
                        not an eligible entity, it is established to 
                        the satisfaction of the Secretary, that the 
                        transfer of ownership or possession, as the 
                        case may be, will be consistent with section 
                        170(h)(5), and the transferee provides such 
                        person, at the time of transfer, a qualifying 
                        letter of intent, or
                            ``(iii) tax has previously been paid under 
                        this subsection as a result of a prior transfer 
                        of ownership or possession of the same 
                        property, or
                    ``(B) with respect to any removal of a conservation 
                restriction contained in an instrument of conveyance, 
                if it is established to the satisfaction of the 
                Secretary that the retention of the restriction was 
                impracticable or impossible and the proceeds continue 
                to be used in a manner consistent with 1 or more of the 
                conservation purposes specified in clause (i), (ii), or 
                (iii) of section 170(h)(4)(A).
            ``(5) Administrative provisions.--For purposes of subtitle 
        F, the taxes imposed by this subsection shall be treated as 
        excise taxes with respect to which the deficiency procedures of 
        such subtitle apply.
            ``(6) Reporting.--The Secretary may require such reporting 
        as may be necessary or appropriate to further the purpose under 
        this section that any conservation use be in perpetuity.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 is amended by inserting after the item 
relating to section 121 the following new item:


                ``Sec. 121A.    25-percent exclusion of gain on sales or
                                 exchanges of land or water interests to
                                 eligible entities for conservation
                                 purposes.''.
 

    (c) Effective Date.--The amendments made by this section shall 
apply to sales or exchanges occurring after the date of the enactment 
of this Act.

SEC. 308. TAX EXCLUSION FOR COST-SHARING PAYMENTS UNDER PARTNERS FOR 
              FISH AND WILDLIFE PROGRAM.

    (a) In General.--Section 126(a) (relating to certain cost-sharing 
payments) is amended by redesignating paragraph (10) as paragraph (11) 
and by inserting after paragraph (9) the following:
            ``(10) The Partners for Fish and Wildlife Program 
        authorized by the Fish and Wildlife Act of 1956 (16 U.S.C. 742a 
        et seq.).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to payments received after the date of the enactment of this Act.

SEC. 309. ADJUSTMENT TO BASIS OF S CORPORATION STOCK FOR CERTAIN 
              CHARITABLE CONTRIBUTIONS.

    (a) In General.--Paragraph (2) of section 1367(a) (relating to 
adjustments to basis of stock of shareholders, etc.) is amended by 
adding at the end the following new flush sentence:
        ``The decrease under subparagraph (B) by reason of a charitable 
        contribution (as defined in section 170(c)) of property shall 
        be the amount equal to the shareholder's pro rata share of the 
        adjusted basis of such property.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after the date of the enactment of this Act.

SEC. 310. ENHANCED DEDUCTION FOR CHARITABLE CONTRIBUTION OF LITERARY, 
              MUSICAL, ARTISTIC, AND SCHOLARLY COMPOSITIONS.

    (a) In General.--Subsection (e) of section 170 (relating to certain 
contributions of ordinary income and capital gain property), as amended 
by this Act, is amended by adding at the end the following new 
paragraph:
            ``(8) Special rule for certain contributions of literary, 
        musical, artistic, or scholarly compositions.--
                    ``(A) In general.--In the case of a qualified 
                artistic charitable contribution--
                            ``(i) the amount of such contribution taken 
                        into account under this section shall be the 
                        fair market value of the property contributed 
                        (determined at the time of such contribution), 
                        and
                            ``(ii) no reduction in the amount of such 
                        contribution shall be made under paragraph (1).
                    ``(B) Qualified artistic charitable contribution.--
                For purposes of this paragraph, the term `qualified 
                artistic charitable contribution' means a charitable 
                contribution of any literary, musical, artistic, or 
                scholarly composition, or similar property, or the 
                copyright thereon (or both), but only if--
                            ``(i) such property was created by the 
                        personal efforts of the taxpayer making such 
                        contribution no less than 18 months prior to 
                        such contribution,
                            ``(ii) the taxpayer--
                                    ``(I) has received a qualified 
                                appraisal of the fair market value of 
                                such property in accordance with the 
                                regulations under this section, and
                                    ``(II) attaches to the taxpayer's 
                                income tax return for the taxable year 
                                in which such contribution was made a 
                                copy of such appraisal,
                            ``(iii) the donee is an organization 
                        described in subsection (b)(1)(A),
                            ``(iv) the use of such property by the 
                        donee is related to the purpose or function 
                        constituting the basis for the donee's 
                        exemption under section 501 (or, in the case of 
                        a governmental unit, to any purpose or function 
                        described under section 501(c)),
                            ``(v) the taxpayer receives from the donee 
                        a written statement representing that the 
                        donee's use of the property will be in 
                        accordance with the provisions of clause (iv), 
                        and
                            ``(vi) the written appraisal referred to in 
                        clause (ii) includes evidence of the extent (if 
                        any) to which property created by the personal 
                        efforts of the taxpayer and of the same type as 
                        the donated property is or has been--
                                    ``(I) owned, maintained, and 
                                displayed by organizations described in 
                                subsection (b)(1)(A), and
                                    ``(II) sold to or exchanged by 
                                persons other than the taxpayer, donee, 
                                or any related person (as defined in 
                                section 465(b)(3)(C)).
                    ``(C) Maximum dollar limitation; no carryover of 
                increased deduction.--The increase in the deduction 
                under this section by reason of this paragraph for any 
                taxable year--
                            ``(i) shall not exceed the artistic 
                        adjusted gross income of the taxpayer for such 
                        taxable year, and
                            ``(ii) shall not be taken into account in 
                        determining the amount which may be carried 
                        from such taxable year under subsection (d).
                    ``(D) Artistic adjusted gross income.--For purposes 
                of this paragraph, the term `artistic adjusted gross 
                income' means that portion of the adjusted gross income 
                of the taxpayer for the taxable year attributable to--
                            ``(i) income from the sale or use of 
                        property created by the personal efforts of the 
                        taxpayer which is of the same type as the 
                        donated property, and
                            ``(ii) income from teaching, lecturing, 
                        performing, or similar activity with respect to 
                        property described in clause (i).
                    ``(E) Paragraph not to apply to certain 
                contributions.--Subparagraph (A) shall not apply to any 
                charitable contribution of any letter, memorandum, or 
                similar property which was written, prepared, or 
                produced by or for an individual while the individual 
                is an officer or employee of any person (including any 
                government agency or instrumentality) unless such 
                letter, memorandum, or similar property is entirely 
                personal.
                    ``(F) Copyright treated as separate property for 
                partial interest rule.--In the case of a qualified 
                artistic charitable contribution, the tangible 
                literary, musical, artistic, or scholarly composition, 
                or similar property and the copyright on such work 
                shall be treated as separate properties for purposes of 
                this paragraph and subsection (f)(3).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after the date of the enactment of this Act.

SEC. 311. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS EXCLUDED FROM 
              GROSS INCOME.

    (a) In General.--Part III of subchapter B of chapter 1 is amended 
by inserting after section 139A the following new section:

``SEC. 139B. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS.

    ``(a) In General.--Gross income of an individual does not include 
amounts received, from an organization described in section 170(c), as 
reimbursement of operating expenses with respect to use of a passenger 
automobile for the benefit of such organization. The preceding sentence 
shall apply only to the extent that the expenses which are reimbursed 
would be deductible under this chapter if section 274(d) were applied--
            ``(1) by using the standard business mileage rate 
        established under such section, and
            ``(2) as if the individual were an employee of an 
        organization not described in section 170(c).
    ``(b) Application to Volunteer Services Only.--Subsection (a) shall 
not apply with respect to any expenses relating to the performance of 
services for compensation.
    ``(c) No Double Benefit.--A taxpayer may not claim a deduction or 
credit under any other provision of this title with respect to the 
expenses under subsection (a).
    ``(d) Exemption From Reporting Requirements.--Section 6041 shall 
not apply with respect to reimbursements excluded from income under 
subsection (a).''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 is amended by inserting after the item 
relating to section 139A the following new item:

                    ``Sec.  Mileage reimbursements to charitable
                     139B.   volunteers.''.
 

    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 312. EXTENSION OF ENHANCED DEDUCTION FOR INVENTORY TO INCLUDE 
              PUBLIC SCHOOLS.

    (a) In General.--Subparagraph (A) of section 170(e)(3) (relating to 
special rule for certain contributions of inventory and other property) 
is amended by striking ``to an organization which is described in'' and 
all that follows through the end of clause (i) and inserting ``to a 
qualified organization, but only if--
                            ``(i) the property is to be used by the 
                        donee solely for the care of the ill, the 
                        needy, or infants and, in the case of--
                                    ``(I) an organization described in 
                                section 501(c)(3) (other than an 
                                organization described in subclause 
                                (II)), the use of the property by the 
                                donee is related to the purpose or 
                                function constituting the basis for its 
                                exemption under section 501, and
                                    ``(II) an organization described in 
                                subsection (b)(1)(A)(ii), the use of 
                                the property by the donee is related to 
                                educational purposes and such property 
                                is not computer technology or equipment 
                                (as defined in paragraph (6)(F)(i));''.
    (b) Qualified Organization.--Paragraph (3) of section 170(e) of 
such Code, as amended by this Act, is amended by redesignating 
subparagraph (D) as subparagraph (E) and by inserting after 
subparagraph (C) the following new subparagraph:
                    ``(D) Qualified organization.--For purposes of this 
                paragraph, the term `qualified organization' means--
                            ``(i) an organization which is described in 
                        section 501(c)(3) and is exempt under section 
                        501(a) (other than a private foundation, as 
                        defined in section 509(a), which is not an 
                        operating foundation, as defined in section 
                        4942(j)(3)), and
                            ``(ii) an educational organization 
                        described in subsection (b)(1)(A)(ii).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions made after December 31, 2004.

SEC. 313. 10-YEAR DIVESTITURE PERIOD FOR CERTAIN EXCESS BUSINESS 
              HOLDINGS OF PRIVATE FOUNDATIONS.

    (a) In General.--Section 4943(c) (relating to excess business 
holdings) is amended by redesignating paragraph (7) as paragraph (8) 
and by inserting after paragraph (6) the following new paragraph:
            ``(7) 10-year period to dispose of certain large gifts and 
        bequests.--
                    ``(A) In General.--Paragraph (6) shall be applied 
                by substituting `10-year period' for `5-year period' 
                if--
                            ``(i) upon the election of a private 
                        foundation, it is established to the 
                        satisfaction of the Secretary that--
                                    ``(I) the excess business holdings 
                                (or increase in excess business 
                                holdings) in a business enterprise by 
                                the private foundation in an amount 
                                which is not less than $1,000,000,000 
                                is the result of a gift or bequest the 
                                fair market value of which is not less 
                                than $1,000,000,000, and
                                    ``(II) after such gift or bequest, 
                                the private foundation does not have 
                                effective control of such business 
                                enterprise to which such gift or 
                                bequest relates,
                            ``(ii) subject to subparagraph (C), the 
                        private foundation submits to the Secretary 
                        with such election a reasonable plan for 
                        disposing of all of the excess business 
                        holdings related to such gift or bequest, and
                            ``(iii) the private foundation certifies 
                        annually to the Secretary that the private 
                        foundation is complying with the plan submitted 
                        under this paragraph, the requirement under 
                        clause (i)(II), and the rules under 
                        subparagraph (D).
                    ``(B) Election.--Any election under subparagraph 
                (A)(i) shall be made not later than 6 months after the 
                date of such gift or bequest and shall--
                            ``(i) establish the fair market value of 
                        such gift or bequest, and
                            ``(ii) include a certification that the 
                        requirement of subparagraph (A)(i)(II) is met.
                    ``(C) Reasonableness of plan.--
                            ``(i) In general.--Any plan submitted under 
                        subparagraph (A)(ii) shall be presumed 
                        reasonable unless the Secretary notifies the 
                        private foundation to the contrary not later 
                        than 6 months after the submission of such 
                        plan.
                            ``(ii) Resubmission.--Upon notice by the 
                        Secretary under clause (i), the private 
                        foundation may resubmit a plan and shall have 
                        the burden of establishing the reasonableness 
                        of such plan to the Secretary.
                    ``(D) Special rules.--During any period in which an 
                election under this paragraph is in effect--
                            ``(i) section 4941(d)(2) (other than 
                        subparagraph (A) thereof) shall apply only with 
                        respect to any disqualified person described in 
                        section 4941(a)(1)(B),
                            ``(ii) section 4942(a) shall be applied by 
                        substituting `third' for `second' both places 
                        it appears,
                            ``(iii) section 4942(e)(1) shall be applied 
                        by substituting `12 percent' for `5 percent', 
                        and
                            ``(iv) section 4942(g)(1)(A) shall be 
                        applied without regard to any portion of 
                        reasonable and necessary administrative 
                        expenses.
                    ``(E) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2004, 
                the $1,000,000,000 amount under subparagraph (A)(i)(I) 
                shall be increased by an amount equal to such dollar 
                amount, multiplied by the cost-of-living adjustment 
                determined under section 1(f)(3) for such calendar 
                year, determined by substituting `2003' for `1992' in 
                subparagraph (B) thereof. If the $1,000,000,000 amount 
                as increased under this subparagraph is not a multiple 
                of $100,000,000, such amount shall be rounded to the 
                next lowest multiple of $100,000,000.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to gifts and bequests made after the date of the enactment of 
this Act.

      Subtitle B--Proposals Improving the Oversight of Tax-Exempt 
                             Organizations

SEC. 321. DISCLOSURE OF WRITTEN DETERMINATIONS.

    (a) In General.--Section 6110(l) (relating to section not to apply) 
is amended by striking all matter before subparagraph (A) of paragraph 
(2) and inserting the following:
    ``(l) Section Not To Apply.--
            ``(1) In general.--This section shall not apply to any 
        matter to which section 6104 or 6105 applies, except that this 
        section shall apply to any written determination and related 
        background file document relating to an organization described 
        under subsection (c) or (d) of section 501 (including any 
        written determination denying an organization tax-exempt status 
        under such subsection) or a political organization described in 
        section 527 which is not required to be disclosed by section 
        6104(a)(1)(A).
            ``(2) Additional matters.--This section shall not apply to 
        any--''.
    (b) Effective Date.--The amendment made by this section shall apply 
to written determinations issued after the date of the enactment of 
this Act.

SEC. 322. DISCLOSURE OF INTERNET WEB SITE AND NAME UNDER WHICH 
              ORGANIZATION DOES BUSINESS.

    (a) In General.--Section 6033 (relating to returns by exempt 
organizations) is amended by redesignating subsection (h) as subsection 
(i) and by inserting after subsection (g) the following new subsection:
    ``(h) Disclosure of Name Under Which Organization Does Business and 
Its Internet Web Site.--Any organization which is subject to the 
requirements of subsection (a) shall include on the return required 
under subsection (a)--
            ``(1) any name under which such organization operates or 
        does business, and
            ``(2) the Internet web site address (if any) of such 
        organization.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to returns filed after December 31, 2004.

SEC. 323. MODIFICATION TO REPORTING CAPITAL TRANSACTIONS.

    (a) Requirement of Summary Report.--Section 6033(c) (relating to 
additional provisions relating to private foundations) is amended by 
adding at the end the following new sentence: ``Any information 
included in an annual return regarding the gain or loss from the sale 
or other disposition of stock or securities which are listed on an 
established securities market which is required to be furnished in 
order to calculate the tax on net investment income shall also be 
reported in summary form with a notice that detailed information is 
available upon request by the public.''.
    (b) Disclosure Requirement.--Section 6104(b) (relating to 
inspection of annual information returns), as amended by this Act, is 
amended by adding at the end the following new sentence: ``With respect 
to any private foundation (as defined in section 509(a)), any 
information regarding the gain or loss from the sale or other 
disposition of stock or securities which are listed on an established 
securities market which is required to be furnished in order to 
calculate the tax on net investment income but which is not in summary 
form is not required to be made available to the public under this 
subsection except upon the explicit request by a member of the public 
to the Secretary.''.
    (c) Public Inspection Requirement.--Section 6104(d) (relating to 
public inspection of certain annual returns, applications for 
exemptions, and notices of status) is amended--
            (1) by redesignating paragraph (6) (relating to disclosure 
        of reports by Internal Revenue Service) as paragraph (7),
            (2) by redesignating paragraph (6) (relating to application 
        to nonexempt charitable trusts and nonexempt private 
        foundations) as paragraph (8), and
            (3) by adding at the end the following new paragraph:
            ``(9) Application to private foundation capital transaction 
        information.--With respect to any private foundation (as 
        defined in section 509(a)), any information regarding the gain 
        or loss from the sale or other disposition of stock or 
        securities which are listed on an established securities market 
        which is required to be furnished in order to calculate the tax 
        on net investment income but which is not in summary form is 
        not required to be made available to the public under this 
        subsection except upon the explicit request by a member of the 
        public to the private foundation in the form and manner of a 
        request described in paragraph (1)(B).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to returns filed after December 31, 2004.

SEC. 324. DISCLOSURE THAT FORM 990 IS PUBLICLY AVAILABLE.

    (a) In General.--The Commissioner of the Internal Revenue shall 
notify the public in appropriate publications or other materials of the 
extent to which an exempt organization's Form 990, Form 990-EZ, or Form 
990-PF is publicly available.
    (b) Effective Date.--The amendments made by this section shall 
apply to publications or other materials issued or revised after the 
date of the enactment of this Act.

SEC. 325. DISCLOSURE TO STATE OFFICIALS OF PROPOSED ACTIONS RELATED TO 
              SECTION 501(C) ORGANIZATIONS.

    (a) In General.--Subsection (c) of section 6104 is amended by 
striking paragraph (2) and inserting the following new paragraphs:
            ``(2) Disclosure of proposed actions related to charitable 
        organizations.--
                    ``(A) Specific notifications.--In the case of an 
                organization to which paragraph (1) applies, the 
                Secretary may disclose to the appropriate State 
                officer--
                            ``(i) a notice of proposed refusal to 
                        recognize such organization as an organization 
                        described in section 501(c)(3) or a notice of 
                        proposed revocation of such organization's 
                        recognition as an organization exempt from 
                        taxation,
                            ``(ii) the issuance of a letter of proposed 
                        deficiency of tax imposed under section 507 or 
                        chapter 41 or 42, and
                            ``(iii) the names, addresses, and taxpayer 
                        identification numbers of organizations which 
                        have applied for recognition as organizations 
                        described in section 501(c)(3).
                    ``(B) Additional disclosures.--Returns and return 
                information of organizations with respect to which 
                information is disclosed under subparagraph (A) may be 
                made available for inspection by or disclosed to an 
                appropriate State officer.
                    ``(C) Procedures for disclosure.--Information may 
                be inspected or disclosed under subparagraph (A) or (B) 
                only--
                            ``(i) upon written request by an 
                        appropriate State officer, and
                            ``(ii) for the purpose of, and only to the 
                        extent necessary in, the administration of 
                        State laws regulating such organizations.
                Such information may only be inspected by or disclosed 
                to representatives of the appropriate State officer 
                designated as the individuals who are to inspect or to 
                receive the returns or return information under this 
                paragraph on behalf of such officer. Such 
                representatives shall not include any contractor or 
                agent.
                    ``(D) Disclosures other than by request.--The 
                Secretary may make available for inspection or disclose 
                returns and return information of an organization to 
                which paragraph (1) applies to an appropriate State 
                officer of any State if the Secretary determines that 
                such inspection or disclosure may facilitate the 
                resolution of Federal or State issues relating to the 
                tax-exempt status of such organization.
            ``(3) Disclosure with respect to certain other exempt 
        organizations.--Upon written request by an appropriate State 
        officer, the Secretary may make available for inspection or 
        disclosure returns and return information of an organization 
        described in paragraph (2), (4), (6), (7), (8), (10), or (13) 
        of section 501(c) for the purpose of, and to the extent 
        necessary in, the administration of State laws regulating the 
        solicitation or administration of the charitable funds or 
        charitable assets of such organizations. Such information may 
        be inspected only by or disclosed only to representatives of 
        the appropriate State officer designated as the individuals who 
        are to inspect or to receive the returns or return information 
        under this paragraph on behalf of such officer. Such 
        representatives shall not include any contractor or agent.
            ``(4) Use in civil judicial and administrative 
        proceedings.--Returns and return information disclosed pursuant 
        to this subsection may be disclosed in civil administrative and 
        civil judicial proceedings pertaining to the enforcement of 
        State laws regulating such organizations in a manner prescribed 
        by the Secretary similar to that for tax administration 
        proceedings under section 6103(h)(4).
            ``(5) No disclosure if impairment.--Returns and return 
        information shall not be disclosed under this subsection, or in 
        any proceeding described in paragraph (4), to the extent that 
        the Secretary determines that such disclosure would seriously 
        impair Federal tax administration.
            ``(6) Definitions.--For purposes of this subsection--
                    ``(A) Return and return information.--The terms 
                `return' and `return information' have the respective 
                meanings given to such terms by section 6103(b).
                    ``(B) Appropriate state officer.--The term 
                `appropriate State officer' means--
                            ``(i) the State attorney general,
                            ``(ii) in the case of an organization to 
                        which paragraph (1) applies, any other State 
                        official charged with overseeing organizations 
                        of the type described in section 501(c)(3), and
                            ``(iii) in the case of an organization to 
                        which paragraph (3) applies, the head of an 
                        agency designated by the State attorney general 
                        as having primary responsibility for overseeing 
                        the solicitation of funds for charitable 
                        purposes.''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 6103 is amended--
                    (A) by inserting ``or any appropriate State officer 
                who has or had access to returns or return information 
                under section 6104(c)'' after ``this section'' in 
                paragraph (2), and
                    (B) by striking ``or subsection (n)'' in paragraph 
                (3) and inserting ``subsection (n), or section 
                6104(c)''.
            (2) Subparagraph (A) of section 6103(p)(3) is amended by 
        inserting ``and section 6104(c)'' after ``section'' in the 
        first sentence.
            (3)(A) Paragraph (4) of section 6103(p) is amended by 
        striking ``(l)(16), (17), (19), or (20)'' each place it appears 
        and inserting ``(l)(16), (18), (19), or (20) or any appropriate 
        State officer (as defined in section 6104(c))''.
            (B) The Internal Revenue Code of 1986 shall be applied and 
        administered as if the amendments made by section 408(a)(24) of 
        the Working Families Tax Relief Act of 2004 had never been 
        enacted.
            (4) The heading for paragraph (1) of section 6104(c) is 
        amended by inserting ``for charitable organizations'' after 
        ``rule''.
            (5) Paragraph (2) of section 7213(a) is amended by 
        inserting ``or under section 6104(c)'' after ``6103''.
            (6) Paragraph (2) of section 7213A(a) is amended by 
        inserting ``or 6104(c)'' after ``6103''.
            (7) Paragraph (2) of section 7431(a) is amended by 
        inserting ``(including any disclosure in violation of section 
        6104(c))'' after ``6103''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act but shall not apply to 
requests made before such date.

SEC. 326. EXPANSION OF PENALTIES TO PREPARERS OF FORM 990.

    (a) In General.--Section 6695 (relating to other assessable 
penalties with respect to the preparation of income tax returns for 
other persons) is amended by adding at the end the following new 
subsections:
    ``(h) Certain Omissions and Misrepresentations.--
            ``(1) In general.--Any person who prepares for compensation 
        any return under section 6033 who omits or misrepresents any 
        information with respect to such return which was known or 
        should have been known by such person shall pay a penalty of 
        $250 with respect to such return.
            ``(2) Exception for minor, inadvertent omissions.--
        Paragraph (1) shall not apply to minor, inadvertent omissions.
            ``(3) Rules for determining return preparer.--For purposes 
        of this subsection and subsection (i), any reference to a 
        person who prepares for compensation a return under section 
        6033--
                    ``(A) shall include any person who employs 1 or 
                more persons to prepare for compensation a return under 
                section 6033, and
                    ``(B) shall not include any person who would be 
                described in clause (i), (ii), (iii), or (iv) of 
                section 7701(a)(36)(B) if such section referred to a 
                return under section 6033.
    ``(i) Willful or Reckless Conduct.--
            ``(1) In general.--Any person who prepares for compensation 
        any return under section 6033 who recklessly or intentionally 
        misrepresents any information or recklessly or intentionally 
        disregards any rule or regulation with respect to such return 
        shall pay a penalty of $1,000 with respect to such return.
            ``(2) Coordination with other penalties.--With respect to 
        any return, the amount of the penalty payable by any person by 
        reason of paragraph (1) shall be reduced by the amount of the 
        penalty paid by such person by reason of subsection (h) or 
        section 6694.''.
    (b) Conforming Amendments.--
            (1) The heading for section 6695 is amended by inserting 
        ``and other'' after ``income tax''.
            (2) The item relating to section 6695 in the table of 
        sections for part I of subchapter B of chapter 68 is amended by 
        inserting ``and other'' after ``income tax''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to documents prepared after the date of the 
enactment of this Act.

SEC. 327. NOTIFICATION REQUIREMENT FOR ENTITIES NOT CURRENTLY REQUIRED 
              TO FILE.

    (a) In General.--Section 6033 (relating to returns by exempt 
organizations), as amended by this Act, is amended by redesignating 
subsection (i) as subsection (j) and by inserting after subsection (h) 
the following new subsection:
    ``(i) Additional Notification Requirements.--Any organization the 
gross receipts of which in any taxable year result in such organization 
being referred to in subsection (a)(2)(A)(ii) or (a)(2)(B)--
            ``(1) shall furnish annually, at such time and in such 
        manner as the Secretary may by forms or regulations prescribe, 
        information setting forth--
                    ``(A) the legal name of the organization,
                    ``(B) any name under which such organization 
                operates or does business,
                    ``(C) the organization's mailing address and 
                Internet web site address (if any),
                    ``(D) the organization's taxpayer identification 
                number,
                    ``(E) the name and address of a principal officer, 
                and
                    ``(F) evidence of the continuing basis for the 
                organization's exemption from the filing requirements 
                under subsection (a)(1), and
            ``(2) upon the termination of the existence of the 
        organization, shall furnish notice of such termination.''.
    (b) Loss of Exempt Status for Failure To File Return or Notice.--
Section 6033 (relating to returns by exempt organizations), as amended 
by subsection (a), is amended by redesignating subsection (j) as 
subsection (k) and by inserting after subsection (i) the following new 
subsection:
    ``(j) Loss of Exempt Status for Failure To File Return or Notice.--
            ``(1) In general.--If an organization described in 
        subsection (a)(1) or (i) fails to file an annual return or 
        notice required under either subsection for 3 consecutive 
        years, such organization's status as an organization exempt 
        from tax under section 501(a) shall be considered revoked on 
        and after the date set by the Secretary for the filing of the 
        third annual return or notice. The Secretary shall publish and 
        maintain a list of any organization the status of which is so 
        revoked.
            ``(2) Application necessary for reinstatement.--Any 
        organization the tax-exempt status of which is revoked under 
        paragraph (1) must apply in order to obtain reinstatement of 
        such status regardless of whether such organization was 
        originally required to make such an application.
            ``(3) Retroactive reinstatement if reasonable cause shown 
        for failure.--If upon application for reinstatement of status 
        as an organization exempt from tax under section 501(a), an 
        organization described in paragraph (1) can show to the 
        satisfaction of the Secretary evidence of reasonable cause for 
        the failure described in such paragraph, the organization's 
        exempt status may, in the discretion of the Secretary, be 
        reinstated effective from the date of the revocation under such 
        paragraph.''.
    (c) No Declaratory Judgment Relief.--Section 7428(b) (relating to 
limitations) is amended by adding at the end the following new 
paragraph:
            ``(4) Nonapplication for certain revocations.--No action 
        may be brought under this section with respect to any 
        revocation of status described in section 6033(j)(1).''.
    (d) No Inspection Requirement.--Section 6104(b) (relating to 
inspection of annual information returns) is amended by inserting 
``(other than subsection (i) thereof)'' after ``6033''.
    (e) No Disclosure Requirement.--Section 6104(d)(3) (relating to 
exceptions from disclosure requirements) is amended by redesignating 
subparagraph (B) as subparagraph (C) and by inserting after 
subparagraph (A) the following new subparagraph:
                    ``(B) Nondisclosure of annual notices.--Paragraph 
                (1) shall not require the disclosure of any notice 
                required under section 6033(i).''.
    (f) No Monetary Penalty for Failure To Notify.--Section 6652(c)(1) 
(relating to annual returns under section 6033 or 6012(a)(6)) is 
amended by adding at the end the following new subparagraph:
                    ``(E) No penalty for certain annual notices.--This 
                paragraph shall not apply with respect to any notice 
                required under section 6033(i).''.
    (g) Secretarial Outreach Requirements.--
            (1) Notice requirement.--The Secretary of the Treasury 
        shall notify in a timely manner every organization described in 
        section 6033(i) of the Internal Revenue Code of 1986 (as added 
        by this section) of the requirement under such section 6033(i) 
        and of the penalty established under section 6033(j)--
                    (A) by mail, in the case of any organization the 
                identity and address of which is included in the list 
                of exempt organizations maintained by the Secretary, 
                and
                    (B) by Internet or other means of outreach, in the 
                case of any other organization.
            (2) Loss of status penalty for failure to file return.--The 
        Secretary of the Treasury shall publicize in a timely manner in 
        appropriate forms and instructions and through other 
        appropriate means, the penalty established under section 
        6033(j) of such Code for the failure to file a return under 
        section 6033(a)(1) of such Code.
    (h) Effective Date.--The amendments made by this section shall 
apply to notices and returns with respect to annual periods beginning 
after 2004.

    Subtitle C--Other Charitable and Exempt Organization Provisions

SEC. 331. MODIFICATION OF EXCISE TAX ON UNRELATED BUSINESS TAXABLE 
              INCOME OF CHARITABLE REMAINDER TRUSTS.

    (a) In General.--Subsection (c) of section 664 (relating to 
exemption from income taxes) is amended to read as follows:
    ``(c) Taxation of Trusts.--
            ``(1) Income tax.--A charitable remainder annuity trust and 
        a charitable remainder unitrust shall, for any taxable year, 
        not be subject to any tax imposed by this subtitle.
            ``(2) Excise tax.--
                    ``(A) In general.--In the case of a charitable 
                remainder annuity trust or a charitable remainder 
                unitrust which has unrelated business taxable income 
                (within the meaning of section 512, determined as if 
                part III of subchapter F applied to such trust) for a 
                taxable year, there is hereby imposed on such trust or 
                unitrust an excise tax equal to the amount of such 
                unrelated business taxable income.
                    ``(B) Certain rules to apply.--The tax imposed by 
                subparagraph (A) shall be treated as imposed by chapter 
                42 for purposes of this title other than subchapter E 
                of chapter 42.
                    ``(C) Tax court proceedings.--For purposes of this 
                paragraph, the references in section 6212(c)(1) to 
                section 4940 shall be deemed to include references to 
                this paragraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2004.

SEC. 332. MODIFICATIONS TO SECTION 512(B)(13).

    (a) In General.--Paragraph (13) of section 512(b) (relating to 
special rules for certain amounts received from controlled entities) is 
amended by redesignating subparagraph (E) as subparagraph (F) and by 
inserting after subparagraph (D) the following new subparagraph:
                    ``(E) Paragraph to apply only to excess payments.--
                            ``(i) In general.--Subparagraph (A) shall 
                        apply only to the portion of a specified 
                        payment received or accrued by the controlling 
                        organization that exceeds the amount which 
                        would have been paid or accrued if such payment 
                        met the requirements prescribed under section 
                        482.
                            ``(ii) Addition to tax for valuation 
                        misstatements.--The tax imposed by this chapter 
                        on the controlling organization shall be 
                        increased by an amount equal to 20 percent of 
                        the larger of--
                                    ``(I) such excess determined 
                                without regard to any amendment or 
                                supplement to a return of tax, or
                                    ``(II) such excess determined with 
                                regard to all such amendments and 
                                supplements.''.
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to payments received or accrued after December 31, 2000.
            (2) Payments subject to binding contract transition rule.--
        If the amendments made by section 1041 of the Taxpayer Relief 
        Act of 1997 did not apply to any amount received or accrued in 
        the first 2 taxable years beginning on or after the date of the 
        enactment of the Taxpayer Relief Act of 1997 under any contract 
        described in subsection (b)(2) of such section, such amendments 
        also shall not apply to amounts received or accrued under such 
        contract before January 1, 2001.

SEC. 333. SIMPLIFICATION OF LOBBYING EXPENDITURE LIMITATION.

    (a) Repeal of Grassroots Expenditure Limit.--Paragraph (1) of 
section 501(h) (relating to expenditures by public charities to 
influence legislation) is amended to read as follows:
            ``(1) General rule.--In the case of an organization to 
        which this subsection applies, exemption from taxation under 
        subsection (a) shall be denied because a substantial part of 
        the activities of such organization consists of carrying on 
        propaganda, or otherwise attempting, to influence legislation, 
        but only if such organization normally makes lobbying 
        expenditures in excess of the lobbying ceiling amount for such 
        organization for each taxable year.''.
    (b) Excess Lobbying Expenditures.--Section 4911(b) is amended to 
read as follows:
    ``(b) Excess Lobbying Expenditures.--For purposes of this section, 
the term `excess lobbying expenditures' means, for a taxable year, the 
amount by which the lobbying expenditures made by the organization 
during the taxable year exceed the lobbying nontaxable amount for such 
organization for such taxable year.''.
    (c) Conforming Amendments.--
            (1) Section 501(h)(2) is amended by striking subparagraphs 
        (C) and (D).
            (2) Section 4911(c) is amended by striking paragraphs (3) 
        and (4).
            (3) Paragraph (1)(A) of section 4911(f) is amended by 
        striking ``limits of section 501(h)(1) have'' and inserting 
        ``limit of section 501(h)(1) has''.
            (4) Paragraph (1)(C) of section 4911(f) is amended by 
        striking ``limits of section 501(h)(1) are'' and inserting 
        ``limit of section 501(h)(1) is''.
            (5) Paragraphs (4)(A) and (4)(B) of section 4911(f) are 
        each amended by striking ``limits of section 501(h)(1)'' and 
        inserting ``limit of section 501(h)(1)''.
            (6) Paragraph (8) of section 6033(b) (relating to certain 
        organizations described in section 501(c)(3)) is amended by 
        inserting ``and'' at the end of subparagraph (A) and by 
        striking subparagraphs (C) and (D).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.

SEC. 334. EXPEDITED REVIEW PROCESS FOR CERTAIN TAX-EXEMPTION 
              APPLICATIONS.

    (a) In General.--The Secretary of the Treasury or the Secretary's 
delegate (in this section, referred to as the ``Secretary'') shall 
adopt procedures to expedite the consideration of applications for 
exempt status under section 501(c)(3) of the Internal Revenue Code of 
1986 filed after December 31, 2004, by any organization that--
            (1) is organized and operated for the primary purpose of 
        providing social services;
            (2) is seeking a contract or grant under a Federal, State, 
        or local program that provides funding for social services 
        programs;
            (3) establishes that, under the terms and conditions of the 
        contract or grant program, an organization is required to 
        obtain such exempt status before the organization is eligible 
        to apply for a contract or grant;
            (4) includes with its exemption application a copy of its 
        completed Federal, State, or local contract or grant 
        application; and
            (5) meets such other criteria as the Secretary deems 
        appropriate for expedited consideration.
The Secretary may prescribe other similar circumstances in which such 
organizations may be entitled to expedited consideration.
    (b) Waiver of Application Fee for Exempt Status.--Any organization 
that meets the conditions described in subsection (a) (without regard 
to paragraph (3) of that subsection) is entitled to a waiver of any fee 
for an application for exempt status under section 501(c)(3) of the 
Internal Revenue Code of 1986 if the organization certifies that the 
organization has had (or expects to have) average annual gross receipts 
of not more than $50,000 during the preceding 4 years (or, in the case 
of an organization not in existence throughout the preceding 4 years, 
during such organization's first 4 years).
    (c) Social Services Defined.--For purposes of this section--
            (1) In general.--The term ``social services'' means 
        services directed at helping people in need, reducing poverty, 
        improving outcomes of low-income children, revitalizing low-
        income communities, and empowering low-income families and low-
        income individuals to become self-sufficient, including--
                    (A) child care services, protective services for 
                children and adults, services for children and adults 
                in foster care, adoption services, services related to 
                the management and maintenance of the home, day care 
                services for adults, and services to meet the special 
                needs of children, older individuals, and individuals 
                with disabilities (including physical, mental, or 
                emotional disabilities);
                    (B) transportation services;
                    (C) job training and related services, and 
                employment services;
                    (D) information, referral, and counseling services;
                    (E) the preparation and delivery of meals, and 
                services related to soup kitchens or food banks;
                    (F) health support services;
                    (G) literacy and mentoring programs;
                    (H) services for the prevention and treatment of 
                juvenile delinquency and substance abuse, services for 
                the prevention of crime and the provision of assistance 
                to the victims and the families of criminal offenders, 
                and services related to the intervention in, and 
                prevention of, domestic violence; and
                    (I) services related to the provision of assistance 
                for housing under Federal law.
            (2) Exclusions.--The term does not include a program having 
        the purpose of delivering educational assistance under the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 
        et seq.) or under the Higher Education Act of 1965 (20 U.S.C. 
        1001 et seq.).

SEC. 335. CLARIFICATION OF DEFINITION OF CHURCH TAX INQUIRY.

    Subsection (i) of section 7611 (relating to section not to apply to 
criminal investigations, etc.) is amended by striking ``or'' at the end 
of paragraph (4), by striking the period at the end of paragraph (5) 
and inserting ``, or'', and by inserting after paragraph (5) the 
following:
            ``(6) information provided by the Secretary related to the 
        standards for exemption from tax under this title and the 
        requirements under this title relating to unrelated business 
        taxable income.''.

SEC. 336. EXPANSION OF DECLARATORY JUDGMENT REMEDY TO TAX-EXEMPT 
              ORGANIZATIONS.

    (a) In General.--Paragraph (1) of section 7428(a) (relating to 
creation of remedy) is amended--
            (1) in subparagraph (B) by inserting after ``509(a))'' the 
        following: ``or as a private operating foundation (as defined 
        in section 4942(j)(3))''; and
            (2) by amending subparagraph (C) to read as follows:
                    ``(C) with respect to the initial qualification or 
                continuing qualification of an organization as an 
                organization described in section 501(c) (other than 
                paragraph (3)) or 501(d) which is exempt from tax under 
                section 501(a), or''.
    (b) Court Jurisdiction.--Subsection (a) of section 7428 is amended 
in the material following paragraph (2) by striking ``United States Tax 
Court, the United States Claims Court, or the district court of the 
United States for the District of Columbia'' and inserting the 
following: ``United States Tax Court (in the case of any such 
determination or failure) or the United States Claims Court or the 
district court of the United States for the District of Columbia (in 
the case of a determination or failure with respect to an issue 
referred to in subparagraph (A) or (B) of paragraph (1)),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to pleadings filed with respect to determinations (or requests 
for determinations) made after December 31, 2004.

SEC. 337. DEFINITION OF CONVENTION OR ASSOCIATION OF CHURCHES.

    Section 7701 (relating to definitions) is amended by redesignating 
subsection (o) as subsection (p) and by inserting after subsection (n) 
the following new subsection:
    ``(o) Convention or association of churches.--For purposes of this 
title, any organization which is otherwise a convention or association 
of churches shall not fail to so qualify merely because the membership 
of such organization includes individuals as well as churches or 
because individuals have voting rights in such organization.''.

SEC. 338. PAYMENTS BY CHARITABLE ORGANIZATIONS TO VICTIMS OF WAR ON 
              TERRORISM AND FAMILIES OF ASTRONAUTS KILLED IN THE LINE 
              OF DUTY.

    (a) In General.--For purposes of the Internal Revenue Code of 
1986--
            (1) any payment made by an organization described in 
        section 501(c)(3) of such Code to--
                    (A) a member of the Armed Forces of the United 
                States, or to an individual of such member's immediate 
                family, by reason of the death, injury, wounding, or 
                illness of such member incurred as the result of the 
                military response of the United States to the terrorist 
                attacks against the United States on September 11, 
                2001, or
                    (B) an individual of an astronaut's immediate 
                family by reason of the death of such astronaut 
                occurring in the line of duty after December 31, 2002,
        shall be treated as related to the purpose or function 
        constituting the basis for such organization's exemption under 
        section 501 of such Code if such payment is made using an 
        objective formula which is consistently applied, and
            (2) in the case of a private foundation (as defined in 
        section 509 of such Code), any payment described in paragraph 
        (1) shall not be treated as made to a disqualified person for 
        purposes of section 4941 of such Code.
    (b) Effective Dates.--This section shall apply to--
            (1) payments described in subsection (a)(1)(A) made after 
        the date of the enactment of this Act and before September 11, 
        2005, and
            (2) payments described in subsection (a)(1)(B) made after 
        December 31, 2002.

SEC. 339. MODIFICATION OF SCHOLARSHIP FOUNDATION RULES.

    In applying the limitations on the percentage of scholarship grants 
which may be awarded after the date of the enactment of this Act, to 
children of current or former employees under Revenue Procedure 76-47, 
such percentage shall be increased to 35 percent of the eligible 
applicants to be considered by the selection committee and to 20 
percent of individuals eligible for the grants, but only if the 
foundation awarding the grants demonstrates that, in addition to 
meeting the other requirements of Revenue Procedure 76-47, it provides 
a comparable number and aggregate amount of grants during the same 
program year to individuals who are not such employees, children or 
dependents of such employees, or affiliated with the employer of such 
employees.

SEC. 340. TREATMENT OF CERTAIN HOSPITAL SUPPORT ORGANIZATIONS AS 
              QUALIFIED ORGANIZATIONS FOR PURPOSES OF DETERMINING 
              ACQUISITION INDEBTEDNESS.

    (a) In General.--Subparagraph (C) of section 514(c)(9) (relating to 
real property acquired by a qualified organization) is amended by 
striking ``or'' at the end of clause (ii), by striking the period at 
the end of clause (iii) and inserting ``; or'', and by adding at the 
end the following new clause:
                                    ``(iv) a qualified hospital support 
                                organization (as defined in 
                                subparagraph (I)).''.
    (b) Qualified Hospital Support Organizations.--Paragraph (9) of 
section 514(c) is amended by adding at the end the following new 
subparagraph:
                    ``(I) Qualified hospital support organizations.--
                For purposes of subparagraph (C)(iv), the term 
                `qualified hospital support organization' means, with 
                respect to any eligible indebtedness (including any 
                qualified refinancing of such eligible indebtedness), a 
                support organization (as defined in section 509(a)(3)) 
                which supports a hospital described in section 
                119(d)(4)(B) and with respect to which--
                                    ``(i) more than half of the 
                                organization's assets (by value) at any 
                                time since its organization--
                                            ``(I) were acquired, 
                                        directly or indirectly, by 
                                        testamentary gift or devise, 
                                        and
                                            ``(II) consisted of real 
                                        property, and
                                    ``(ii) the fair market value of the 
                                organization's real estate acquired, 
                                directly or indirectly, by gift or 
                                devise, exceeded 25 percent of the fair 
                                market value of all investment assets 
                                held by the organization immediately 
                                prior to the time that the eligible 
                                indebtedness was incurred.
                For purposes of this subparagraph, the term `eligible 
                indebtedness' means indebtedness secured by real 
                property acquired by the organization, directly or 
                indirectly, by gift or devise, the proceeds of which 
                are used exclusively to acquire any leasehold interest 
                in such real property or for improvements on, or 
                repairs to, such real property. A determination under 
                clauses (i) and (ii) of this subparagraph shall be made 
                each time such an eligible indebtedness (or the 
                qualified refinancing of such an eligible indebtedness) 
                is incurred. For purposes of this subparagraph, a 
                refinancing of such an eligible indebtedness shall be 
                considered qualified if such refinancing does not 
                exceed the amount of the refinanced eligible 
                indebtedness immediately before the refinancing.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to indebtedness incurred after December 31, 2004.

SEC. 341. MATCHING GRANTS TO LOW-INCOME TAXPAYER CLINICS FOR RETURN 
              PREPARATION.

    (a) In General.--Chapter 77 (relating to miscellaneous provisions) 
is amended by inserting after section 7526 the following new section:

``SEC. 7526A. RETURN PREPARATION CLINICS FOR LOW-INCOME TAXPAYERS.

    ``(a) In General.--The Secretary may, subject to the availability 
of appropriated funds, make grants to provide matching funds for the 
development, expansion, or continuation of qualified return preparation 
clinics.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified return preparation clinic.--
                    ``(A) In general.--The term `qualified return 
                preparation clinic' means a clinic which--
                            ``(i) does not charge more than a nominal 
                        fee for its services (except for reimbursement 
                        of actual costs incurred), and
                            ``(ii) operates programs which assist low-
                        income taxpayers in preparing and filing their 
                        Federal income tax returns, including schedules 
                        reporting sole proprietorship or farm income.
                    ``(B) Assistance to low-income taxpayers.--A clinic 
                is treated as assisting low-income taxpayers under 
                subparagraph (A)(ii) if at least 90 percent of the 
                taxpayers assisted by the clinic have incomes which do 
                not exceed 250 percent of the poverty level, as 
                determined in accordance with criteria established by 
                the Director of the Office of Management and Budget.
            ``(2) Clinic.--The term `clinic' includes--
                    ``(A) a clinical program at an eligible educational 
                institution (as defined in section 529(e)(5)) which 
                satisfies the requirements of paragraph (1) through 
                student assistance of taxpayers in return preparation 
                and filing, and
                    ``(B) an organization described in section 501(c) 
                and exempt from tax under section 501(a) which 
                satisfies the requirements of paragraph (1).
    ``(c) Special Rules and Limitations.--
            ``(1) Aggregate limitation.--Unless otherwise provided by 
        specific appropriation, the Secretary shall not allocate more 
        than $10,000,000 per year (exclusive of costs of administering 
        the program) to grants under this section.
            ``(2) Other applicable rules.--Rules similar to the rules 
        under paragraphs (2) through (5) of section 7526(c) shall apply 
        with respect to the awarding of grants to qualified return 
        preparation clinics.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by inserting after the item relating to section 7526 the 
following new item:


                ``Sec. 7526A.        Return preparation clinics for low-
                                   income taxpayers.''.
 

    (c) Effective Date.--The amendments made by this section shall 
apply to grants made after the date of the enactment of this Act.

SEC. 342. EXEMPTION OF QUALIFIED 501(C)(3) BONDS FOR NURSING HOMES FROM 
              FEDERAL GUARANTEE PROHIBITIONS.

    (a) In General.--Section 149(b)(3) (relating to exceptions) is 
amended by adding at the end the following new subparagraph:
                    ``(E) Exception for qualified 501(c)(3) bonds for 
                nursing homes.--
                            ``(i) In general.--Paragraph (1) shall not 
                        apply to any qualified 501(c)(3) bond issued 
                        before the date which is 1 year after the date 
                        of the enactment of this subparagraph for the 
                        benefit of an organization described in section 
                        501(c)(3), if such bond is part of an issue the 
                        proceeds of which are used to finance 1 or more 
                        of the following facilities primarily for the 
                        benefit of the elderly:
                                    ``(I) Licensed nursing home 
                                facility.
                                    ``(II) Licensed or certified 
                                assisted living facility.
                                    ``(III) Licensed personal care 
                                facility.
                                    ``(IV) Continuing care retirement 
                                community.
                            ``(ii) Limitation.--With respect to any 
                        calendar year, clause (i) shall not apply to 
                        any bond described in such clause if the 
                        aggregate authorized face amount of the issue 
                        of which such bond is a part when increased by 
                        the outstanding amount of such bonds issued by 
                        the issuer for such calendar year exceeds 
                        $15,000,000.
                            ``(iii) Continuing care retirement 
                        community.--For purposes of this subparagraph, 
                        the term `continuing care retirement community' 
                        means a community which provides, on the same 
                        campus, a continuum of residential living 
                        options and support services to persons at 
                        least 60 years of age under a written 
                        agreement. For purposes of the preceding 
                        sentence, the residential living options shall 
                        include independent living units, nursing home 
                        beds, and either assisted living units or 
                        personal care beds.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to bonds issued after the date of the enactment of this Act.

SEC. 343. EXCISE TAXES EXEMPTION FOR BLOOD COLLECTOR ORGANIZATIONS.

    (a) Exemption From Imposition of Special Fuels Tax.--Section 
4041(g) (relating to other exemptions) is amended by striking ``and'' 
at the end of paragraph (3), by striking the period in paragraph (4) 
and inserting ``; and'', and by inserting after paragraph (4) the 
following new paragraph:
            ``(5) with respect to the sale of any liquid to a qualified 
        blood collector organization (as defined in section 
        7701(a)(49)) for such organization's exclusive use, or with 
        respect to the use by a qualified blood collector organization 
        of any liquid as a fuel.''.
    (b) Exemption from  Manufacturers Excise Tax.--
            (1) In general.--Section 4221(a) (relating to certain tax-
        free sales) is amended by striking ``or'' at the end of 
        paragraph (4), by adding ``or'' at the end of paragraph (5), 
        and by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) to a qualified blood collector organization (as 
        defined in section 7701(a)(49)) for such organization's 
        exclusive use,''.
            (2) Conforming amendments.--
                    (A) The second sentence of section 4221(a) is 
                amended by striking ``Paragraphs (4) and (5)'' and 
                inserting ``Paragraphs (4), (5), and (6)''.
                    (B) Section 6421(c) is amended by striking ``or 
                (5)'' and inserting ``(5), or (6)''.
    (c) Exemption From Communication Excise Tax.--
            (1) In general.--Section 4253 (relating to exemptions) is 
        amended by redesignating subsection (k) as subsection (l) and 
        inserting after subsection (j) the following new subsection:
    ``(k) Exemption for Qualified Blood Collector Organizations.--Under 
regulations provided by the Secretary, no tax shall be imposed under 
section 4251 on any amount paid by a qualified blood collector 
organization (as defined in section 7701(a)) for services or facilities 
furnished to such organization.''.
            (2) Conforming amendment.--Section 4253(l), as redesignated 
        by paragraph (1), is amended by striking ``or (j)'' and 
        inserting ``(j), or (k)''.
    (d) Credit for Refund for Certain Taxes on Sales and Services.--
            (1) Deemed overpayment.--
                    (A) In general.--Section 6416(b)(2) is amended by 
                redesignating subparagraphs (E) and (F) as 
                subparagraphs (F) and (G), respectively, and by 
                inserting after subparagraph (D) the following new 
                subparagraph:
                    ``(E) sold to a qualified blood collector 
                organization's (as defined in section 7701(a)(49)) for 
                such organization's exclusive use;''.
                    (B) Conforming amendments.--Section 6416(b)(2) is 
                amended--
                            (i) by striking ``Subparagraphs (C) and 
                        (D)'' and inserting ``Subparagraphs (C), (D), 
                        and (E)'', and
                            (ii) by striking ``(C), and (D)'' and 
                        inserting ``(C), (D), and (E)''.
            (2) Sales of tires.--Clause (ii) of section 6416(b)(4)(B) 
        is amended by inserting ``sold to a qualified blood collector 
        organization (as defined in section 7701(a)(49)),'' after ``for 
        its exclusive use,''.
    (e) Definition of Qualified Blood Collector Organization.--Section 
7701(a) is amended by inserting at the end the following new paragraph:
            ``(49) Qualified blood collector organization.--For 
        purposes of this title, the term `qualified blood collector 
        organization' means an organization which is--
                    ``(A) described in section 501(c)(3) and exempt 
                from tax under section 501(a),
                    ``(B) registered by the Food and Drug 
                Administration to collect blood, and
                    ``(C) primarily engaged in the activity of the 
                collection of blood.''.
    (f) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply with respect to 
        excise taxes imposed on sales or uses occurring on or after 
        October 1, 2004.
            (2) Refund of gasoline tax.--For purposes of section 
        6421(c) of the Internal Revenue Code of 1986 and any other 
        provision that allows for a refund or a payment in respect of 
        an excise tax payable at a level before the sale to a qualified 
        blood collector organization, the amendments made by this 
        section shall apply with respect to sales to a qualified 
        collector organization on or after October 1, 2004.

SEC. 344. PILOT PROJECT FOR FOREST CONSERVATION ACTIVITIES.

    (a) Tax-Exempt Bond Financing.--
            (1) In general.--For purposes of the Internal Revenue Code 
        of 1986, any qualified forest conservation bond shall be 
        treated as an exempt facility bond under section 142 of such 
        Code.
            (2) Qualified forest conservation bond.--For purposes of 
        this section, the term ``qualified forest conservation bond'' 
        means any bond issued as part of an issue if--
                    (A) 95 percent or more of the net proceeds (as 
                defined in section 150(a)(3) of such Code) of such 
                issue are to be used for qualified project costs,
                    (B) such bond is issued for a qualified 
                organization, and
                    (C) such bond is issued before December 31, 2008.
            (3) Limitation on aggregate amount issued.--
                    (A) In general.--The maximum aggregate face amount 
                of bonds which may be issued under this subsection 
                shall not exceed $2,000,000,000 for all projects 
                (excluding refunding bonds).
                    (B) Allocation of limitation.--The limitation 
                described in subparagraph (A) shall be allocated by the 
                Secretary of the Treasury among qualified organizations 
                based on criteria established by the Secretary not 
                later than 180 days after the date of the enactment of 
                this section, after consultation with the Chief of the 
                Forest Service.
            (4) Qualified project costs.--For purposes of this 
        subsection, the term ``qualified project costs'' means the sum 
        of--
                    (A) the cost of acquisition by the qualified 
                organization from an unrelated person of forests and 
                forest land which at the time of acquisition or 
                immediately thereafter are subject to a conservation 
                restriction described in subsection (c)(2),
                    (B) capitalized interest on the qualified forest 
                conservation bonds for the 3-year period beginning on 
                the date of issuance of such bonds, and
                    (C) credit enhancement fees which constitute 
                qualified guarantee fees (within the meaning of section 
                148 of such Code).
            (5) Special rules.--In applying the Internal Revenue Code 
        of 1986 to any qualified forest conservation bond, the 
        following modifications shall apply:
                    (A) Section 146 of such Code (relating to volume 
                cap) shall not apply.
                    (B) For purposes of section 147(b) of such Code 
                (relating to maturity may not exceed 120 percent of 
                economic life), the land and standing timber acquired 
                with proceeds of qualified forest conservation bonds 
                shall have an economic life of 35 years.
                    (C) Subsections (c) and (d) of section 147 of such 
                Code (relating to limitations on acquisition of land 
                and existing property) shall not apply.
                    (D) Section 57(a)(5) of such Code (relating to tax-
                exempt interest) shall not apply to interest on 
                qualified forest conservation bonds.
            (6) Treatment of current refunding bonds.--Paragraphs 
        (2)(C) and (3) shall not apply to any bond (or series of bonds) 
        issued to refund a qualified forest conservation bond issued 
        before December 31, 2008, if--
                    (A) the average maturity date of the issue of which 
                the refunding bond is a part is not later than the 
                average maturity date of the bonds to be refunded by 
                such issue,
                    (B) the amount of the refunding bond does not 
                exceed the outstanding amount of the refunded bond, and
                    (C) the net proceeds of the refunding bond are used 
                to redeem the refunded bond not later than 90 days 
                after the date of the issuance of the refunding bond.
        For purposes of subparagraph (A), average maturity shall be 
        determined in accordance with section 147(b)(2)(A) of such 
        Code.
            (7) Effective date.--This subsection shall apply to 
        obligations issued on or after the date which is 180 days after 
        the enactment of this Act.
    (b) Items From Qualified Harvesting Activities Not Subject to Tax 
or Taken Into Account.--
            (1) In general.--Income, gains, deductions, losses, or 
        credits from a qualified harvesting activity conducted by a 
        qualified organization shall not be subject to tax or taken 
        into account under subtitle A of the Internal Revenue Code of 
        1986.
            (2) Limitation.--The amount of income excluded from gross 
        income under paragraph (1) for any taxable year shall not 
        exceed the amount used by the qualified organization to make 
        debt service payments during such taxable year for qualified 
        forest conservation bonds.
            (3) Qualified harvesting activity.--For purposes of 
        paragraph (1)--
                    (A) In general.--The term ``qualified harvesting 
                activity'' means the sale, lease, or harvesting, of 
                standing timber--
                            (i) on land owned by a qualified 
                        organization which was acquired with proceeds 
                        of qualified forest conservation bonds,
                            (ii) with respect to which a written 
                        acknowledgement has been obtained by the 
                        qualified organization from the State or local 
                        governments with jurisdiction over such land 
                        that the acquisition lessens the burdens of 
                        such government with respect to such land, and
                            (iii) pursuant to a qualified conservation 
                        plan adopted by the qualified organization.
                    (B) Exceptions.--
                            (i) Cessation as qualified organization.--
                        The term ``qualified harvesting activity'' 
                        shall not include any sale, lease, or 
                        harvesting for any period during which the 
                        organization ceases to qualify as a qualified 
                        organization.
                            (ii) Exceeding limits on harvesting.--The 
                        term ``qualified harvesting activity'' shall 
                        not include any sale, lease, or harvesting of 
                        standing timber on land acquired with proceeds 
                        of qualified forest conservation bonds to the 
                        extent that--
                                    (I) the average annual area of 
                                timber harvested from such land exceeds 
                                2.5 percent of the total area of such 
                                land or,
                                    (II) the quantity of timber removed 
                                from such land exceeds the quantity 
                                which can be removed from such land 
                                annually in perpetuity on a sustained-
                                yield basis with respect to such land.
                        The limitations under subclauses (I) and (II) 
                        shall not apply to post-fire restoration and 
                        rehabilitation or sanitation harvesting of 
                        timber stands which are substantially damaged 
                        by fire, windthrow, or other catastrophes, or 
                        which are in imminent danger from insect or 
                        disease attack.
            (4) Termination.--This subsection shall not apply to any 
        qualified harvesting activity of a qualified organization 
        occurring after the date on which there is no outstanding 
        qualified forest conservation bond with respect to such 
        qualified organization or any such bond ceases to be a tax-
        exempt bond.
            (5) Partial recapture of benefits if harvesting limit 
        exceeded.--If, as of the date that this subsection ceases to 
        apply under paragraph (3), the average annual area of timber 
        harvested from the land exceeds the requirement of paragraph 
        (3)(B)(ii)(I), the tax imposed by chapter 1 of the Internal 
        Revenue Code of 1986 shall be increased, under rules prescribed 
        by the Secretary of the Treasury, by the sum of the tax 
        benefits attributable to such excess and interest at the 
        underpayment rate under section 6621 of such Code for the 
        period of the underpayment.
    (c) Definitions.--For purposes of this section--
            (1) Qualified conservation plan.--The term ``qualified 
        conservation plan'' means a multiple land use program or plan 
        which--
                    (A) is designed and administered primarily for the 
                purposes of protecting and enhancing wildlife and fish, 
                timber, scenic attributes, recreation, and soil and 
                water quality of the forest and forest land,
                    (B) mandates that conservation of forest and forest 
                land is the single-most significant use of the forest 
                and forest land, and
                    (C) requires that timber harvesting be consistent 
                with--
                            (i) restoring and maintaining reference 
                        conditions for the region's ecotype,
                            (ii) restoring and maintaining a 
                        representative sample of young, mid, and late 
                        successional forest age classes,
                            (iii) maintaining or restoring the 
                        resources' ecological health for purposes of 
                        preventing damage from fire, insect, or 
                        disease,
                            (iv) maintaining or enhancing wildlife or 
                        fish habitat, or
                            (v) enhancing research opportunities in 
                        sustainable renewable resource uses.
            (2) Conservation restriction.--The conservation restriction 
        described in this paragraph is a restriction which--
                    (A) is granted in perpetuity to an unrelated person 
                which is described in section 170(h)(3) of such Code 
                and which, in the case of a nongovernmental unit, is 
                organized and operated for conservation purposes,
                    (B) meets the requirements of clause (ii) or 
                (iii)(II) of section 170(h)(4)(A) of such Code,
                    (C) obligates the qualified organization to pay the 
                costs incurred by the holder of the conservation 
                restriction in monitoring compliance with such 
                restriction, and
                    (D) requires an increasing level of conservation 
                benefits to be provided whenever circumstances allow 
                it.
            (3) Qualified organization.--The term ``qualified 
        organization'' means an organization--
                    (A) which is a nonprofit organization substantially 
                all the activities of which are charitable, scientific, 
                or educational, including acquiring, protecting, 
                restoring, managing, and developing forest lands and 
                other renewable resources for the long-term charitable, 
                educational, scientific and public benefit,
                    (B) more than half of the value of the property of 
                which consists of forests and forest land acquired with 
                the proceeds from qualified forest conservation bonds,
                    (C) which periodically conducts educational 
                programs designed to inform the public of 
                environmentally sensitive forestry management and 
                conservation techniques,
                    (D) which has at all times a board of directors--
                            (i) at least 20 percent of the members of 
                        which represent the holders of the conservation 
                        restriction described in paragraph (2),
                            (ii) at least 20 percent of the members of 
                        which are public officials, and
                            (iii) not more than one-third of the 
                        members of which are individuals who are or 
                        were at any time within 5 years before the 
                        beginning of a term of membership on the board, 
                        an employee of, independent contractor with 
                        respect to, officer of, director of, or held a 
                        material financial interest in, a commercial 
                        forest products enterprise with which the 
                        qualified organization has a contractual or 
                        other financial arrangement,
                    (E) the bylaws of which require at least two-thirds 
                of the members of the board of directors to vote 
                affirmatively to approve the qualified conservation 
                plan and any change thereto, and
                    (F) upon dissolution, is required to dedicate its 
                assets to--
                            (i) an organization described in section 
                        501(c)(3) of such Code which is organized and 
                        operated for conservation purposes, or
                            (ii) a governmental unit described in 
                        section 170(c)(1) of such Code.
            (4) Unrelated person.--The term ``unrelated person'' means 
        a person who is not a related person.
            (5) Related person.--A person shall be treated as related 
        to another person if--
                    (A) such person bears a relationship to such other 
                person described in section 267(b) (determined without 
                regard to paragraph (9) thereof), or 707(b)(1), of such 
                Code, determined by substituting ``25 percent'' for 
                ``50 percent'' each place it appears therein, and
                    (B) in the case such other person is a non-profit 
                organization, if such person controls directly or 
                indirectly more than 25 percent of the governing body 
                of such organization.

SEC. 345. CLARIFICATION OF TREATMENT OF JOHNNY MICHEAL SPANN PATRIOT 
              TRUSTS.

    (a) Clarification of Tax-Exempt Status of Trusts.--
            (1) In general.--Subsection (b) of section 601 of the 
        Homeland Security Act of 2002 is amended to read as follows:
    ``(b) Designation of Johnny Micheal Spann Patriot Trusts.--Any 
charitable corporation, fund, foundation, or trust (or separate fund or 
account thereof) which is described in section 501(c)(3) of the 
Internal Revenue Code of 1986 and exempt from tax under section 501(a) 
of such Code and meets the requirements described in subsection (c) 
shall be eligible to designate itself as a `Johnny Micheal Spann 
Patriot trust'.''.
            (2) Conforming amendment.--Section 601(c)(3) of such Act is 
        amended by striking ``based'' and all that follows through 
        ``Trust''.
    (b) Publicly Available Audits.--Section 601(c)(7) of the Homeland 
Security Act of 2002 is amended by striking ``shall be filed with the 
Internal Revenue Service, and shall be open to public inspection'' and 
inserting ``shall be open to public inspection consistent with section 
6104(d)(1) of the Internal Revenue Code of 1986''.
    (c) Clarification of Required Distributions to Private 
Foundation.--
            (1) In general.--Section 601(c)(8) of the Homeland Security 
        Act of 2002 is amended by striking ``not placed'' and all that 
        follows and inserting ``not so distributed shall be contributed 
        to a private foundation which is described in section 509(a) of 
        the Internal Revenue Code of 1986 and exempt from tax under 
        section 501(a) of such Code and which is dedicated to such 
        beneficiaries not later than 36 months after the end of the 
        fiscal year in which such funds, donations, or earnings are 
        received.''.
            (2) Conforming amendments.--Section 601(c) of such Act is 
        amended--
                    (A) by striking ``(or, if placed in a private 
                foundation, held in trust for)'' in paragraph (1) and 
                inserting ``(or contributed to a private foundation 
                described in paragraph (8) for the benefit of)'', and
                    (B) by striking ``invested in a private 
                foundation'' in paragraph (2) and inserting 
                ``contributed to a private foundation described in 
                paragraph (8)''.
    (d) Requirements for Distributions From Trusts.--Section 
601(c)(9)(A) of the Homeland Security Act of 2002 is amended by 
striking ``should'' and inserting ``shall''.
    (e) Regulations Regarding Notification of Trust Beneficiaries.--
Section 601(f) of the Homeland Security Act of 2002 is amended by 
striking ``this section'' and inserting ``subsection (e)''.
    (f) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 601 of the Homeland 
Security Act of 2002.

                Subtitle D--Social Services Block Grant

SEC. 351. RESTORATION OF FUNDS FOR THE SOCIAL SERVICES BLOCK GRANT.

    (a) Findings.--Congress makes the following findings:
            (1) On August 22, 1996, the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (Public Law 104-
        193; 110 Stat. 2105) was signed into law.
            (2) In enacting that law, Congress authorized 
        $2,800,000,000 for fiscal year 2003 and each fiscal year 
        thereafter to carry out the Social Services Block Grant program 
        established under title XX of the Social Security Act (42 
        U.S.C. 1397 et seq.).
    (b) Restoration of Funds.--Section 2003(c)(11) of the Social 
Security Act (42 U.S.C. 1397b(c)(11)) is amended by inserting ``, 
except that, with respect to fiscal year 2006, the amount shall be 
$1,975,000,000, and with respect to fiscal year 2007, the amount shall 
be $2,800,000,000'' after ``thereafter''.

SEC. 352. REQUIREMENT TO SUBMIT ANNUAL REPORT ON STATE ACTIVITIES.

    (a) In General.--Section 2006(c) of the Social Security Act (42 
U.S.C. 1397e(c)) is amended by adding at the end the following: ``The 
Secretary shall compile the information submitted by the States and 
submit that information to Congress on an annual basis.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to information submitted by States under section 2006 of the Social 
Security Act (42 U.S.C. 1397e) with respect to fiscal year 2005 and 
each fiscal year thereafter.

              Subtitle E--Individual Development Accounts

SEC. 361. SHORT TITLE.

    This subtitle may be cited as the ``Savings for Working Families 
Act of 2005''.

SEC. 362. PURPOSES.

    The purposes of this subtitle are to provide for the establishment 
of individual development account programs that will--
            (1) provide individuals and families with limited means an 
        opportunity to accumulate assets and to enter the financial 
        mainstream,
            (2) promote education, homeownership, and the development 
        of small businesses,
            (3) stabilize families and build communities, and
            (4) support continued United States economic expansion.

SEC. 363. DEFINITIONS.

    As used in this subtitle:
            (1) Eligible individual.--
                    (A) In general.--The term ``eligible individual'' 
                means, with respect to any taxable year, an individual 
                who--
                            (i) has attained the age of 18 but not the 
                        age of 61 as of the last day of such taxable 
                        year,
                            (ii) is a citizen or lawful permanent 
                        resident (within the meaning of section 
                        7701(b)(6) of the Internal Revenue Code of 
                        1986) of the United States as of the last day 
                        of such taxable year,
                            (iii) was not a student (as defined in 
                        section 151(c)(4) of such Code) for the 
                        immediately preceding taxable year,
                            (iv) is not an individual with respect to 
                        whom a deduction under section 151 of such Code 
                        is allowable to another taxpayer for a taxable 
                        year of the other taxpayer ending during the 
                        immediately preceding taxable year of the 
                        individual,
                            (v) is not a taxpayer described in 
                        subsection (c), (d), or (e) of section 6402 of 
                        such Code for the immediately preceding taxable 
                        year,
                            (vi) is not a taxpayer described in section 
                        1(d) of such Code for the immediately preceding 
                        taxable year, and
                            (vii) is a taxpayer the modified adjusted 
                        gross income of whom for the immediately 
                        preceding taxable year does not exceed--
                                    (I) $18,000, in the case of a 
                                taxpayer described in section 1(c) of 
                                such Code,
                                    (II) $30,000, in the case of a 
                                taxpayer described in section 1(b) of 
                                such Code, and
                                    (III) $38,000, in the case of a 
                                taxpayer described in section 1(a) of 
                                such Code.
                    (B) Inflation adjustment.--
                            (i) In general.--In the case of any taxable 
                        year beginning after 2005, each dollar amount 
                        referred to in subparagraph (A)(vii) shall be 
                        increased by an amount equal to--
                                    (I) such dollar amount, multiplied 
                                by
                                    (II) the cost-of-living adjustment 
                                determined under section (1)(f)(3) of 
                                the Internal Revenue Code of 1986 for 
                                the calendar year in which the taxable 
                                year begins, by substituting ``2004'' 
                                for ``1992''.
                            (ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the nearest multiple 
                        of $50.
                    (C) Modified adjusted gross income.--For purposes 
                of subparagraph (A)(v), the term ``modified adjusted 
                gross income'' means adjusted gross income--
                            (i) determined without regard to sections 
                        86, 893, 911, 931, and 933 of the Internal 
                        Revenue Code of 1986, and
                            (ii) increased by the amount of interest 
                        received or accrued by the taxpayer during the 
                        taxable year which is exempt from tax.
            (2) Individual development account.--The term ``Individual 
        Development Account'' means an account established for an 
        eligible individual as part of a qualified individual 
        development account program, but only if the written governing 
        instrument creating the account meets the following 
        requirements:
                    (A) The owner of the account is the individual for 
                whom the account was established.
                    (B) No contribution will be accepted unless it is 
                in cash, and, except in the case of any qualified 
                rollover, contributions will not be accepted for the 
                taxable year in excess of $1,500 on behalf of any 
                individual.
                    (C) The trustee of the account is a qualified 
                financial institution.
                    (D) The assets of the account will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
                    (E) Except as provided in section 367(b), any 
                amount in the account may be paid out only for the 
                purpose of paying the qualified expenses of the account 
                owner.
            (3) Parallel account.--The term ``parallel account'' means 
        a separate, parallel individual or pooled account for all 
        matching funds and earnings dedicated to an Individual 
        Development Account owner as part of a qualified individual 
        development account program, the trustee of which is a 
        qualified financial institution.
            (4) Qualified financial institution.--The term ``qualified 
        financial institution'' means any person authorized to be a 
        trustee of any individual retirement account under section 
        408(a)(2) of the Internal Revenue Code of 1986.
            (5) Qualified individual development account program.--The 
        term ``qualified individual development account program'' means 
        a program established upon approval of the Secretary under 
        section 364 after December 31, 2004, under which--
                    (A) Individual Development Accounts and parallel 
                accounts are held in trust by a qualified financial 
                institution, and
                    (B) additional activities determined by the 
                Secretary, in consultation with the Secretary of Health 
                and Human Services, as necessary to responsibly develop 
                and administer accounts, including recruiting, 
                providing financial education and other training to 
                Account owners, and regular program monitoring, are 
                carried out by the qualified financial institution.
            (6) Qualified expense distribution.--
                    (A) In general.--The term ``qualified expense 
                distribution'' means any amount paid (including through 
                electronic payments) or distributed out of an 
                Individual Development Account or a parallel account 
                established for an eligible individual if such amount--
                            (i) is used exclusively to pay the 
                        qualified expenses of the Individual 
                        Development Account owner or such owner's 
                        spouse or dependents,
                            (ii) is paid by the qualified financial 
                        institution--
                                    (I) except as otherwise provided in 
                                this clause, directly to the unrelated 
                                third party to whom the amount is due,
                                    (II) in the case of any qualified 
                                rollover, directly to another 
                                Individual Development Account and 
                                parallel account, or
                                    (III) in the case of a qualified 
                                final distribution, directly to the 
                                spouse, dependent, or other named 
                                beneficiary of the deceased Account 
                                owner, and
                            (iii) is paid after the Account owner has 
                        completed a financial education course if 
                        required under section 365(b).
                    (B) Qualified expenses.--
                            (i) In general.--The term ``qualified 
                        expenses'' means any of the following expenses 
                        approved by the qualified financial 
                        institution:
                                    (I) Qualified higher education 
                                expenses.
                                    (II) Qualified first-time homebuyer 
                                costs.
                                    (III) Qualified business 
                                capitalization or expansion costs.
                                    (IV) Qualified rollovers.
                                    (V) Qualified final distribution.
                            (ii) Qualified higher education expenses.--
                                    (I) In general.--The term 
                                ``qualified higher education expenses'' 
                                has the meaning given such term by 
                                section 529(e)(3) of the Internal 
                                Revenue Code of 1986, determined by 
                                treating the Account owner, the owner's 
                                spouse, or one or more of the owner's 
                                dependents as a designated beneficiary, 
                                and reduced as provided in section 
                                25A(g)(2) of such Code.
                                    (II) Coordination with other 
                                benefits.--The amount of expenses which 
                                may be taken into account for purposes 
                                of section 135, 529, or 530 of such 
                                Code for any taxable year shall be 
                                reduced by the amount of any qualified 
                                higher education expenses taken into 
                                account as qualified expense 
                                distributions during such taxable year.
                            (iii) Qualified first-time homebuyer 
                        costs.--The term ``qualified first-time 
                        homebuyer costs'' means qualified acquisition 
                        costs (as defined in section 72(t)(8)(C) of the 
                        Internal Revenue Code of 1986) with respect to 
                        a principal residence (within the meaning of 
                        section 121 of such Code) for a qualified 
                        first-time homebuyer (as defined in section 
                        72(t)(8)(D)(i) of such Code).
                            (iv) Qualified business capitalization or 
                        expansion costs.--
                                    (I) In general.--The term 
                                ``qualified business capitalization or 
                                expansion costs'' means qualified 
                                expenditures for the capitalization or 
                                expansion of a qualified business 
                                pursuant to a qualified business plan.
                                    (II) Qualified expenditures.--The 
                                term ``qualified expenditures'' means 
                                expenditures normally associated with 
                                starting or expanding a business and 
                                included in a qualified business plan, 
                                including costs for capital, plant, and 
                                equipment, inventory expenses, and 
                                attorney and accounting fees.
                                    (III) Qualified business.--The term 
                                ``qualified business'' means any 
                                business that does not contravene any 
                                law.
                                    (IV) Qualified business plan.--The 
                                term ``qualified business plan'' means 
                                a business plan which has been approved 
                                by the qualified financial institution 
                                and which meets such requirements as 
                                the Secretary may specify.
                            (v) Qualified rollovers.--The term 
                        ``qualified rollover'' means the complete 
                        distribution of the amounts in an Individual 
                        Development Account and parallel account to 
                        another Individual Development Account and 
                        parallel account established in another 
                        qualified financial institution for the benefit 
                        of the Account owner.
                            (vi) Qualified final distribution.--The 
                        term ``qualified final distribution'' means, in 
                        the case of a deceased Account owner, the 
                        complete distribution of the amounts in the 
                        Individual Development Account and parallel 
                        account directly to the spouse, any dependent, 
                        or other named beneficiary of the deceased.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 364. STRUCTURE AND ADMINISTRATION OF QUALIFIED INDIVIDUAL 
              DEVELOPMENT ACCOUNT PROGRAMS.

    (a) Establishment of Qualified Individual Development Account 
Programs.--Any qualified financial institution may apply to the 
Secretary for approval to establish 1 or more qualified individual 
development account programs which meet the requirements of this 
subtitle and for an allocation of the Individual Development Account 
limitation under section 45G(i)(3) of the Internal Revenue Code of 1986 
with respect to such programs.
    (b) Basic Program Structure.--
            (1) In general.--All qualified individual development 
        account programs shall consist of the following 2 components 
        for each participant:
                    (A) An Individual Development Account to which an 
                eligible individual may contribute cash in accordance 
                with section 365.
                    (B) A parallel account to which all matching funds 
                shall be deposited in accordance with section 366.
            (2) Tailored ida programs.--A qualified financial 
        institution may tailor its qualified individual development 
        account program to allow matching funds to be spent on 1 or 
        more of the categories of qualified expenses.
            (3) No fees may be charged to idas.--A qualified financial 
        institution may not charge any fees to any Individual 
        Development Account or parallel account under a qualified 
        individual development account program.
    (c) Coordination With Public Housing Agency Individual Savings 
Accounts.--Section 3(e)(2) of the United States Housing Act of 1937 (42 
U.S.C. 1437a(e)(2)) is amended by inserting ``or in any Individual 
Development Account established under the Savings for Working Families 
Act of 2005'' after ``subsection''.
    (d) Tax Treatment of Parallel Accounts.--
            (1) In general.--Chapter 77 (relating to miscellaneous 
        provisions) is amended by adding at the end the following new 
        section:

``SEC. 7529. TAX INCENTIVES FOR INDIVIDUAL DEVELOPMENT PARALLEL 
              ACCOUNTS.

    ``For purposes of this title--
            ``(1) any account described in section 364(b)(1)(B) of the 
        Savings for Working Families Act of 2005 shall be exempt from 
        taxation,
            ``(2) except as provided in section 45G, no item of income, 
        expense, basis, gain, or loss with respect to such an account 
        may be taken into account, and
            ``(3) any amount withdrawn from such an account shall not 
        be includible in gross income.''.
            (2) Conforming amendment.--The table of sections for 
        chapter 77 is amended by adding at the end the following new 
        item:


                   ``Sec.  Tax incentives for individual development
                    7529.   parallel accounts.''.
 

    (e) Coordination of certain expenses.--Section 25A(g)(2) is amended 
by striking ``and'' at the end of subparagraph (C), by striking the 
period at the end of subparagraph (D) and inserting ``, and'', and by 
adding at the end the following new subparagraph:
                    ``(D) a qualified expense distribution with respect 
                to qualified higher education expenses from an 
                Individual Development Account or a parallel account 
                under section 367(a) of the Savings for Working 
                Families Act of 2005.''.

SEC. 365. PROCEDURES FOR OPENING AND MAINTAINING AN INDIVIDUAL 
              DEVELOPMENT ACCOUNT AND QUALIFYING FOR MATCHING FUNDS.

    (a) Opening an Account.--An eligible individual may open an 
Individual Development Account with a qualified financial institution 
upon certification that such individual has never maintained any other 
Individual Development Account (other than an Individual Development 
Account to be terminated by a qualified rollover).
    (b) Required Completion of Financial Education Course.--
            (1) In general.--Before becoming eligible to withdraw funds 
        to pay for qualified expenses, owners of Individual Development 
        Accounts must complete 1 or more financial education courses 
        specified in the qualified individual development account 
        program.
            (2) Standard and applicability of course.--The Secretary, 
        in consultation with representatives of qualified individual 
        development account programs and financial educators, shall not 
        later than January 1, 2006, establish minimum quality standards 
        for the contents of financial education courses and providers 
        of such courses described in paragraph (1) and a protocol to 
        exempt individuals from the requirement under paragraph (1) in 
        the case of hardship, lack of need, the attainment of age 65, 
        or a qualified final distribution.
    (c) Proof of Status as an Eligible Individual.--Federal income tax 
forms for the immediately preceding taxable year and any other evidence 
of eligibility which may be required by a qualified financial 
institution shall be presented to such institution at the time of the 
establishment of the Individual Development Account and in any taxable 
year in which contributions are made to the Account to qualify for 
matching funds under section 366(b)(1)(A).
    (d) Special Rule in the Case of Married Individuals.--For purposes 
of this subtitle, if, with respect to any taxable year, 2 married 
individuals file a Federal joint income tax return, then not more than 
1 of such individuals may be treated as an eligible individual with 
respect to the succeeding taxable year.

SEC. 366. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT 
              PROGRAMS.

    (a) Parallel Accounts.--The qualified financial institution shall 
deposit all matching funds for each Individual Development Account into 
a parallel account at a qualified financial institution.
    (b) Regular Deposits of Matching Funds.--
            (1) In general.--Subject to paragraph (2), the qualified 
        financial institution shall deposit into the parallel account 
        with respect to each eligible individual the following amounts:
                    (A) A dollar-for-dollar match for the first $500 
                contributed by the eligible individual into an 
                Individual Development Account with respect to any 
                taxable year of such individual.
                    (B) Any matching funds provided by State, local, or 
                private sources in accordance with the matching ratio 
                set by those sources.
            (2) Timing of deposits.--A deposit of the amounts described 
        in paragraph (1) shall be made into a parallel account--
                    (A) in the case of amounts described in paragraph 
                (1)(A), not later than 30 days after the end of the 
                calendar quarter during which the contribution 
                described in such paragraph was made, and
                    (B) in the case of amounts described in paragraph 
                (1)(B), not later than 2 business days after such 
                amounts were provided.
            (3) Cross reference.--


                                 For allowance of tax credit for
                              Individual Development Account subsidies,
                              including matching funds, see section 45J
                              of the Internal Revenue Code of 1986.
 

    (c) Deposit of Matching Funds Into Individual Development Account 
of Individual Who Has Attained Age 65.--In the case of an Individual 
Development Account owner who attains the age of 65, the qualified 
financial institution shall deposit the funds in the parallel account 
with respect to such individual into the Individual Development Account 
of such individual on the later of--
            (1) the day which is the 1-year anniversary of the deposit 
        of such funds in the parallel account, or
            (2) the first business day of the taxable year of such 
        individual following the taxable year in which such individual 
        attained age 65.
    (d) Uniform Accounting Regulations.--To ensure proper recordkeeping 
and determination of the tax credit under section 45J of the Internal 
Revenue Code of 1986, the Secretary shall prescribe regulations with 
respect to accounting for matching funds in the parallel accounts.
    (e) Regular Reporting of Accounts.--Any qualified financial 
institution shall report the balances in any Individual Development 
Account and parallel account of an individual on not less than an 
annual basis to such individual.

SEC. 367. WITHDRAWAL PROCEDURES.

    (a) Withdrawals for Qualified Expenses.--
            (1) In general.--An Individual Development Account owner 
        may withdraw funds in order to pay qualified expense 
        distributions from such individual's--
                    (A) Individual Development Account, but only from 
                funds which have been on deposit in such Account for at 
                least 1 year, and
                    (B) parallel account, but only--
                            (i) from matching funds which have been on 
                        deposit in such parallel account for at least 1 
                        year,
                            (ii) from earnings in such parallel 
                        account, after all matching funds described in 
                        clause (i) have been withdrawn, and
                            (iii) to the extent such withdrawal does 
                        not result in a remaining balance in such 
                        parallel account which is less than the 
                        remaining balance in the Individual Development 
                        Account after such withdrawal.
            (2) Procedure.--Upon receipt of a withdrawal request which 
        meets the requirements of paragraph (1), the qualified 
        financial institution shall directly transfer the funds 
        electronically to the distributees described in section 
        363(6)(A)(ii). If a distributee is not equipped to receive 
        funds electronically, the qualified financial institution may 
        issue such funds by paper check to the distributee.
    (b) Withdrawals for Nonqualified Expenses.--An Individual 
Development Account owner may withdraw any amount of funds from the 
Individual Development Account for purposes other than to pay qualified 
expense distributions, but if, after such withdrawal, the amount in the 
parallel account of such owner (excluding earnings on matching funds) 
exceeds the amount remaining in such Individual Development Account, 
then such owner shall forfeit from the parallel account the lesser of 
such excess or the amount withdrawn.
    (c) Withdrawals From Accounts of Noneligible Individuals.--If the 
individual for whose benefit an Individual Development Account is 
established ceases to be an eligible individual, such account shall 
remain an Individual Development Account, but such individual shall not 
be eligible for any further matching funds under section 366(b)(1)(A) 
for contributions which are made to the Account during any taxable year 
when such individual is not an eligible individual.
    (d) Effect of Pledging Account as Security.--If, during any taxable 
year of the individual for whose benefit an Individual Development 
Account is established, that individual uses the Account, the 
individual's parallel account, or any portion thereof as security for a 
loan, the portion so used shall be treated as a withdrawal of such 
portion from the Individual Development Account for purposes other than 
to pay qualified expenses.

SEC. 368. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL 
              DEVELOPMENT ACCOUNT PROGRAMS.

    (a) Certification Procedures.--Upon establishing a qualified 
individual development account program under section 364, a qualified 
financial institution shall certify to the Secretary at such time and 
in such manner as may be prescribed by the Secretary and accompanied by 
any documentation required by the Secretary, that--
            (1) the accounts described in subparagraphs (A) and (B) of 
        section 364(b)(1) are operating pursuant to all the provisions 
        of this subtitle, and
            (2) the qualified financial institution agrees to implement 
        an information system necessary to monitor the cost and 
        outcomes of the qualified individual development account 
        program.
    (b) Authority To Terminate Qualified IDA Program.--If the Secretary 
determines that a qualified financial institution under this subtitle 
is not operating a qualified individual development account program in 
accordance with the requirements of this subtitle (and has not 
implemented any corrective recommendations directed by the Secretary), 
the Secretary shall terminate such institution's authority to conduct 
the program. If the Secretary is unable to identify a qualified 
financial institution to assume the authority to conduct such program, 
then any funds in a parallel account established for the benefit of any 
individual under such program shall be deposited into the Individual 
Development Account of such individual as of the first day of such 
termination.

SEC. 369. REPORTING, MONITORING, AND EVALUATION.

    (a) Responsibilities of Qualified Financial Institutions.--
            (1) In general.--Each qualified financial institution that 
        operates a qualified individual development account program 
        under section 364 shall report annually to the Secretary within 
        90 days after the end of each calendar year on--
                    (A) the number of individuals making contributions 
                into Individual Development Accounts and the amounts 
                contributed,
                    (B) the amounts contributed into Individual 
                Development Accounts by eligible individuals and the 
                amounts deposited into parallel accounts for matching 
                funds,
                    (C) the amounts withdrawn from Individual 
                Development Accounts and parallel accounts, and the 
                purposes for which such amounts were withdrawn,
                    (D) the balances remaining in Individual 
                Development Accounts and parallel accounts, and
                    (E) such other information needed to help the 
                Secretary monitor the effectiveness of the qualified 
                individual development account program (provided in a 
                non-individually-identifiable manner).
            (2) Additional reporting requirements.--Each qualified 
        financial institution that operates a qualified individual 
        development account program under section 364 shall report at 
        such time and in such manner as the Secretary may prescribe any 
        additional information that the Secretary requires to be 
        provided for purposes of administering and supervising the 
        qualified individual development account program. This 
        additional data may include, without limitation, identifying 
        information about Individual Development Account owners, their 
        Accounts, additions to the Accounts, and withdrawals from the 
        Accounts.
    (b) Responsibilities of the Secretary.--
            (1) Monitoring protocol.--Not later than 12 months after 
        the date of the enactment of this Act, the Secretary, in 
        consultation with the Secretary of Health and Human Services, 
        shall develop and implement a protocol and process to monitor 
        the cost and outcomes of the qualified individual development 
        account programs established under section 364.
            (2) Annual reports.--For each year after 2005, the 
        Secretary shall submit a progress report to Congress on the 
        status of such qualified individual development account 
        programs. Such report shall, to the extent data are available, 
        include from a representative sample of qualified individual 
        development account programs information on--
                    (A) the characteristics of participants, including 
                age, gender, race or ethnicity, marital status, number 
                of children, employment status, and monthly income,
                    (B) deposits, withdrawals, balances, uses of 
                Individual Development Accounts, and participant 
                characteristics,
                    (C) the characteristics of qualified individual 
                development account programs, including match rate, 
                economic education requirements, permissible uses of 
                accounts, staffing of programs in full time employees, 
                and the total costs of programs, and
                    (D) process information on program implementation 
                and administration, especially on problems encountered 
                and how problems were solved.
            (3) Reauthorization report on cost and outcomes of idas.--
                    (A) In general.--Not later than July 1, 2008, the 
                Secretary of the Treasury shall submit a report to 
                Congress and the chairmen and ranking members of the 
                Committee on Finance, the Committee on Banking, 
                Housing, and Urban Affairs, and the Committee on 
                Health, Education, Labor, and Pensions of the Senate 
                and the Committee on Ways and Means, the Committee on 
                Banking and Financial Services, and the Committee on 
                Education and the Workforce of the House of 
                Representatives, in which the Secretary shall--
                            (i) summarize the previously submitted 
                        annual reports required under paragraph (2),
                            (ii) from a representative sample of 
                        qualified individual development account 
                        programs, include an analysis of--
                                    (I) the economic, social, and 
                                behavioral outcomes,
                                    (II) the changes in savings rates, 
                                asset holdings, and household debt, and 
                                overall changes in economic stability,
                                    (III) the changes in outlooks, 
                                attitudes, and behavior regarding 
                                savings strategies, investment, 
                                education, and family,
                                    (IV) the integration into the 
                                financial mainstream, including 
                                decreased reliance on alternative 
                                financial services, and increase in 
                                acquisition of mainstream financial 
                                products, and
                                    (V) the involvement in civic 
                                affairs, including neighborhood schools 
                                and associations,
                        associated with participation in qualified 
                        individual development account programs,
                            (iii) from a representative sample of 
                        qualified individual development account 
                        programs, include a comparison of outcomes 
                        associated with such programs with outcomes 
                        associated with other Federal Government social 
                        and economic development programs, including 
                        asset building programs, and
                            (iv) make recommendations regarding the 
                        reauthorization of the qualified individual 
                        development account programs, including--
                                    (I) recommendations regarding 
                                reforms that will improve the cost and 
                                outcomes of the such programs, 
                                including the ability to help low 
                                income families save and accumulate 
                                productive assets,
                                    (II) recommendations regarding the 
                                appropriate levels of subsidies to 
                                provide effective incentives to 
                                financial institutions and Account 
                                owners under such programs, and
                                    (III) recommendations regarding how 
                                such programs should be integrated into 
                                other Federal poverty reduction, asset 
                                building, and community development 
                                policies and programs.
                    (B) Authorization.--There is authorized to be 
                appropriated $2,500,000, for carrying out the purposes 
                of this paragraph.
            (4) Use of accounts in rural areas encouraged.--The 
        Secretary shall develop methods to encourage the use of 
        Individual Development Accounts in rural areas.

SEC. 370. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to the Secretary $1,000,000 
for fiscal year 2005 and for each fiscal year through 2013, for the 
purposes of implementing this subtitle, including the reporting, 
monitoring, and evaluation required under section 369, to remain 
available until expended.

SEC. 371. MATCHING FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS PROVIDED 
              THROUGH A TAX CREDIT FOR QUALIFIED FINANCIAL 
              INSTITUTIONS.

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

``SEC. 45J. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT.

    ``(a) Determination of Amount.--For purposes of section 38, the 
individual development account investment credit determined under this 
section with respect to any eligible entity for any taxable year is an 
amount equal to the individual development account investment provided 
by such eligible entity during the taxable year under an individual 
development account program established under section 364 of the 
Savings for Working Families Act of 2005.
    ``(b) Applicable Tax.--For the purposes of this section, the term 
`applicable tax' means the excess (if any) of--
            ``(1) the tax imposed under this chapter (other than the 
        taxes imposed under the provisions described in subparagraphs 
        (C) through (Q) of section 26(b)(2)), over
            ``(2) the credits allowable under subpart B (other than 
        this section) and subpart D of this part.
    ``(c) Individual Development Account Investment.--For purposes of 
this section, the term `individual development account investment' 
means, with respect to an individual development account program in any 
taxable year, an amount equal to the sum of--
            ``(1) the aggregate amount of dollar-for-dollar matches 
        under such program under section 366(b)(1)(A) of the Savings 
        for Working Families Act of 2005 for such taxable year, plus
            ``(2) $50 with respect to each Individual Development 
        Account maintained--
                    ``(A) as of the end of such taxable year, but only 
                if such taxable year is within the 7-taxable-year 
                period beginning with the taxable year in which such 
                Account is opened, and
                    ``(B) with a balance of not less than $100 (other 
                than the taxable year in which such Account is opened).
    ``(d) Eligible Entity.--For purposes of this section, except as 
provided in regulations, the term `eligible entity' means a qualified 
financial institution.
    ``(e) Other Definitions.--For purposes of this section, any term 
used in this section and also in the Savings for Working Families Act 
of 2005 shall have the meaning given such term by such Act.
    ``(f) Denial of Double Benefit.--
            ``(1) In general.--No deduction or credit (other than under 
        this section) shall be allowed under this chapter with respect 
        to any expense which--
                    ``(A) is taken into account under subsection 
                (c)(1)(A) in determining the credit under this section, 
                or
                    ``(B) is attributable to the maintenance of an 
                Individual Development Account.
            ``(2) Determination of amount.--Solely for purposes of 
        paragraph (1)(B), the amount attributable to the maintenance of 
        an Individual Development Account shall be deemed to be the 
        dollar amount of the credit allowed under subsection (c)(l)(B) 
        for each taxable year such Individual Development Account is 
        maintained.
    ``(g) Credit May Be Transferred.--
            ``(1) In general.--An eligible entity may transfer any 
        credit allowable to the eligible entity under subsection (a) to 
        any person other than to another eligible entity which is 
        exempt from tax under this title. The determination as to 
        whether a credit is allowable shall be made without regard to 
        the tax-exempt status of the eligible entity.
            ``(2) Consent required for revocation.--Any transfer under 
        paragraph (1) may be revoked only with the consent of the 
        Secretary.
    ``(h) Regulations.--The Secretary may prescribe such regulations as 
may be necessary or appropriate to carry out this section, including
            ``(1) such regulations as necessary to insure that any 
        credit described in subsection (g)(1) is claimed once and not 
        retransferred by a transferee, and
            ``(2) regulations providing for a recapture of the credit 
        allowed under this section (notwithstanding any termination 
        date described in subsection (i)) in cases where there is a 
        forfeiture under section 367(b) of the Savings for Working 
        Families Act of 2005 in a subsequent taxable year of any amount 
        which was taken into account in determining the amount of such 
        credit.
    ``(i) Application of Section.--
            ``(1) In general.--This section shall apply to any 
        expenditure made in any taxable year ending after December 31, 
        2005, and beginning on or before January 1, 2013, with respect 
        to any Individual Development Account which--
                    ``(A) is opened before January 1, 2013, and
                    ``(B) as determined by the Secretary, when added to 
                all of the previously opened Individual Development 
                Accounts, does not exceed--
                            ``(i) 100,000 Accounts if opened after 
                        December 31, 2005, and before January 1, 2007,
                            ``(ii) an additional 100,000 Accounts if 
                        opened after December 31, 2006, and before 
                        January 1, 2009, but only if, except as 
                        provided in paragraph (4), the total number of 
                        Accounts described in clause (i) are opened and 
                        the Secretary determines that such Accounts are 
                        being reasonably and responsibly administered, 
                        and
                            ``(iii) an additional 100,000 Accounts if 
                        opened after December 31, 2008, and before 
                        January 1, 2013, but only if the total number 
                        of Accounts described in clauses (i) and (ii) 
                        are opened and the Secretary makes a 
                        determination described in paragraph (2).
        Notwithstanding the preceding sentence, this section shall 
        apply to amounts which are described in subsection (c)(1)(A) 
        and which are timely deposited into a parallel account during 
        the 30-day period following the end of last taxable year 
        beginning before January 1, 2013.
            ``(2) Determination with respect to third group of 
        accounts.--A determination is described in this paragraph if 
        the Secretary determines that--
                    ``(A) substantially all of the previously opened 
                Accounts have been reasonably and responsibly 
                administered prior to the date of the determination,
                    ``(B) the individual development account programs 
                have increased net savings of participants in the 
                programs,
                    ``(C) participants in the individual development 
                account programs have increased Federal income tax 
                liability and decreased utilization of Federal 
                assistance programs relative to similarly situated 
                individuals that did not participate in the individual 
                development account programs, and
                    ``(D) the sum of the estimated increased Federal 
                tax liability and reduction of Federal assistance 
                program benefits to participants in the individual 
                development account programs is greater than the cost 
                of the individual development account programs to the 
                Federal government.
            ``(3) Determination of limitation.--The limitation on the 
        number of Individual Development Accounts under paragraph 
        (1)(B) shall be allocated by the Secretary among qualified 
        individual development account programs selected by the 
        Secretary and, in the case of the limitation under clause (iii) 
        of such paragraph, shall be equally divided among the States.
            ``(4) Special rule if smaller number of accounts are 
        opened.--For purposes of paragraph (1)(B)(ii)--
                            ``(i) In general.--If less than 100,000 
                        Accounts are opened before January 1, 2007, 
                        such paragraph shall be applied by substituting 
                        ``applicable number of Accounts' for `100,000 
                        Accounts'.
                            ``(ii) Applicable number.--For purposes of 
                        clause (i), the applicable number equals the 
                        lesser of--
                                    ``(I) 75,000, or
                                    ``(II) 3 times the number of 
                                Accounts opened before January 1, 
                                2007.''.
    (b) Credit Treated as Business Credit.--Section 38(b) (relating to 
current year business credit) is amended by striking ``plus'' at the 
end of paragraph (18), by striking the period at the end of paragraph 
(19) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(20) the individual development account investment credit 
        determined under section 45J(a).''.
    (c) Conforming Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

        ``Sec. 45J. Individual development account investment 
                            credit.''.
    (d) Report Regarding Account Maintenance Fees.--The Secretary of 
the Treasury shall study the adequacy of the amount specified in 
section 45J(c)(2) of the Internal Revenue Code of 1986 (as added by 
this section). Not later than December 31, 2009, the Secretary of the 
Treasury shall report the findings of the study described in the 
preceding sentence to Congress.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2004.

SEC. 372. ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN MEANS-
              TESTED FEDERAL PROGRAMS.

    Notwithstanding any other provision of Federal law (other than the 
Internal Revenue Code of 1986) that requires consideration of 1 or more 
financial circumstances of an individual, for the purpose of 
determining eligibility to receive, or the amount of, any assistance or 
benefit authorized by such provision to be provided to or for the 
benefit of such individual, any amount (including earnings thereon) in 
any Individual Development Account of such individual and any matching 
deposit made on behalf of such individual (including earnings thereon) 
in any parallel account shall be disregarded for such purpose with 
respect to any period during which such individual maintains or makes 
contributions into such Individual Development Account.

             Subtitle F--Management of Exempt Organizations

SEC. 381. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There is authorized to be appropriated to the 
Secretary of the Treasury $80,000,000 for each fiscal year to carry out 
the administration of exempt organizations by the Internal Revenue 
Service.
    (b) Implementation of Section 527.--There is authorized to be 
appropriated to the Secretary of the Treasury $3,000,000 to carry out 
the provisions of Public Laws 106-230 and 107-276 relating to section 
527 of the Internal Revenue Code of 1986.

                  Subtitle G--Compassion Capital Fund

SEC. 391. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              DEPARTMENT OF HEALTH AND HUMAN SERVICES.

    (a) Support for Nongovernmental Organizations.--The Secretary of 
Health and Human Services (referred to in this section as ``the 
Secretary'') may award grants to and enter into cooperative agreements 
with nongovernmental organizations, to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of nonprofit community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Support for States.--The Secretary--
            (1) may award grants to and enter into cooperative 
        agreements with States and political subdivisions of States to 
        provide seed money to establish State and local offices of 
        faith-based and community initiatives; and
            (2) shall provide technical assistance to States and 
        political subdivisions of States in administering the 
        provisions of this Act.
    (c) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State, or political subdivision shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require.
    (d) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Secretary) may receive more than 1 
grant or cooperative agreement under this section for the same purpose.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $85,000,000 for fiscal year 
2006, and such sums as may be necessary for each of fiscal years 2007 
through 2009.
    (f) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 392. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              CORPORATION FOR NATIONAL AND COMMUNITY SERVICE.

    (a) Support for Nongovernmental Organizations.--The Corporation for 
National and Community Service (referred to in this section as ``the 
Corporation'') may award grants to and enter into cooperative 
agreements with nongovernmental organizations and State Commissions on 
National and Community Service established under section 178 of the 
National and Community Service Act of 1990 (42 U.S.C. 12638), to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State Commission, State, or political subdivision shall 
submit an application to the Corporation at such time, in such manner, 
and containing such information as the Corporation may require.
    (c) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Secretary) may receive more than 1 
grant or cooperative agreement under this section for the same purpose.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $15,000,000 for fiscal year 
2006, and such sums as may be necessary for each of fiscal years 2007 
through 2009.
    (e) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 393. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              DEPARTMENT OF JUSTICE.

    (a) Support for Nongovernmental Organizations.--The Attorney 
General may award grants to and enter into cooperative agreements with 
nongovernmental organizations, to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of nonprofit community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State, or political subdivision shall submit an 
application to the Attorney General at such time, in such manner, and 
containing such information as the Attorney General may require.
    (c) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Attorney General) may receive more 
than 1 grant or cooperative agreement under this section for the same 
purpose.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $35,000,000 for fiscal year 
2006, and such sums as may be necessary for each of fiscal years 2007 
through 2009.
    (e) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 394. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.

    (a) Support for Nongovernmental Organizations.--The Secretary of 
Housing and Urban Development (referred to in this section ``the 
Secretary'') may award grants to and enter into cooperative agreements 
with nongovernmental organizations, to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State, or political subdivision shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require.
    (c) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Secretary) may receive more than 1 
grant or cooperative agreement under this section for the same purpose.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $15,000,000 for fiscal year 
2006, and such sums as may be necessary for each of fiscal years 2007 
through 2009.
    (e) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 395. COORDINATION.

    The Secretary of Health and Human Services, the Corporation for 
National and Community Service, the Attorney General, and the Secretary 
of Housing and Urban Development shall coordinate their activities 
under this subtitle to ensure--
            (1) nonduplication of activities under this subtitle; and
            (2) an equitable distribution of resources under this 
        subtitle.

                   Subtitle H--Maternity Group Homes

SEC. 399. MATERNITY GROUP HOMES.

    (a) Contract for Evaluation.--Part B of the Runaway and Homeless 
Youth Act (42 U.S.C. 5701 et seq.) is amended by adding at the end the 
following:

``SEC. 323. CONTRACT FOR EVALUATION.

    ``(a) In General.--The Secretary shall enter into a contract with a 
public or private entity for an evaluation of the maternity group homes 
that are supported by grant funds under this Act.
    ``(b) Information.--The evaluation described in subsection (a) 
shall include the collection of information about the relevant 
characteristics of individuals who benefit from maternity group homes 
such as those that are supported by grant funds under this Act and what 
services provided by those maternity group homes are most beneficial to 
such individuals.
    ``(c) Report.--Not later than 2 years after the date on which the 
Secretary enters into a contract for an evaluation under subsection 
(a), and biennially thereafter, the entity conducting the evaluation 
under this section shall submit to Congress a report on the status, 
activities, and accomplishments of maternity group homes that are 
supported by grant funds under this Act.''.
    (b) Authorization of Appropriations.--Section 388 of the Runaway 
and Homeless Youth Act (42 U.S.C. 5751) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``There'' and inserting the 
                following:
                    ``(A) In general.--There'';
                    (B) in subparagraph (A), as redesignated, by 
                inserting ``and the purpose described in subparagraph 
                (B)'' after ``other than part E''; and
                    (C) by adding at the end the following:
                    ``(B) Maternity group homes.--There is authorized 
                to be appropriated, for maternity group homes eligible 
                for assistance under section 322(a)(1)--
                            ``(i) $33,000,000 for fiscal year 2006; and
                            ``(ii) such sums as may be necessary for 
                        fiscal year 2007.''; and
            (2) in subsection (a)(2)(A), by striking ``paragraph (1)'' 
        and inserting ``paragraph (1)(A)''.
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