110 HR 3395 IH: Responsible Fatherhood and Healthy
U.S. House of Representatives
2007-08-03
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of
contents
(a)This Act may be cited as the Responsible Fatherhood and Healthy Families Act of
2007
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Title I—Promoting Responsible Fatherhood and Strengthening
Low-Income Families
Sec. 101. Healthy marriage promotion and responsible fatherhood
programs.
Sec. 102. Grants to healthy family partnerships for domestic
violence prevention, for services for families and individuals affected by
domestic violence, and for developing and implementing best
practices.
Sec. 103. Elimination of separate TANF work participation rate
for 2-parent families.
Sec. 104. Ban on recovery of Medicaid costs for
births.
Sec. 105. Improved collection and distribution of child
support.
Sec. 106. Grants to States to conduct demonstration projects to
promote economic opportunity for low-income parents.
Sec. 107. State assessments of barriers to employment and
financial support of children.
Sec. 108. Collection of child support under the food stamp
program.
Title II—Revenue provisions
Sec. 201. Expansion of earned income credit for eligible
individuals with no qualifying children.
Sec. 202. Broker reporting of customer's basis in securities
transactions.
Sec. 203. Modification of effective date of leasing provisions
of the American Jobs Creation Act of 2004.
Sec. 204. Clarification of economic substance
doctrine.
2.Congress makes the following
findings:
(1)The most important
factor in a child’s upbringing is whether the child is brought up in a loving,
healthy, supportive environment.
(2)Children who grow
up with two parents are, on average, more likely than their peers in
single-parent homes to finish high school and be economically
self-sufficient.
(3)Father-child
interaction, like mother-child interaction, has been shown to promote the
positive physical, social, emotional, and mental development of
children.
(4)Children typically
live without both parents when their parents are divorced or did not marry.
More than 1/3 of all first marriages end in divorce, and
60 percent of divorcing couples have children. More than
1/3 of all births are to unmarried women.
(5)More than 1 in 4
families with children have only 1 parent present, and more than 1 in 3
children live absent their biological father.
(6)Recent studies
demonstrate that most unwed fathers in urban areas are highly involved with the
mother of their child before and after the child's birth, with 80 percent
involved during the mother's pregnancy, and 50 percent living with the child’s
mother at the time of the child's birth. However, the relationship between the
parents often does not last, and many fathers do not maintain contact with
their children as the children grow up.
(7)An estimated 40
percent of the children who live in households without their father have not
seen their fathers in at least 1 year.
(8)The inability of
parents to sustain a healthy relationship with their child’s other parent and
remain involved in their child's life can have severe negative consequences for
the parents, the child, their community, and taxpayers.
(9)Single-parent
families are 5 times as likely to be poor as married-couple families.
(10)Children raised
in single-parent families are more likely than children raised in 2-parent
families to do poorly in school, have emotional and behavioral problems, become
teenage parents, commit crimes, smoke cigarettes, abuse drugs and alcohol, and
have poverty-level incomes as adults.
(11)High rates of
unemployment and low wages are primary reasons why parents do not marry, why
2-parent families break up, and why fathers fail to remain involved with their
children.
(12)Domestic violence
is also a significant problem leading to the non-formation or break-up of
2-parent families.
(13)A history of
incarceration is a major barrier to employment. Sixty percent of young
African-American men who dropped out of high school have served time. When
these men leave prison, they often have difficulty finding a job and supporting
their children.
(14)Over ½ of State
prison inmates are parents. When noncustodial parents go to prison, their child
support obligations continue, even though they have little ability to pay the
support. When these parents leave prison, they typically owe more than $20,000
in child support debt. Noncustodial parents leaving prison often re-enter the
underground economy because of financial pressures or to avoid the child
support system, making it less likely that they will successfully rejoin
society and reunite with their families.
(15)Children should
receive the child support paid by their parents, and the government should not
keep the money to recover welfare costs. Regular child support income appears
to have a greater positive impact on children dollar for dollar than other
types of income. Researchers in Wisconsin found that when monthly child support
was passed through to families receiving assistance under the Temporary
Assistance for Needy Families program established under part A of title IV of
the Social Security Act (TANF) and disregarded 100 percent in determining
assistance for the families, fathers paid more child support, established their
legal relationship with their children more quickly, and worked less in the
underground economy. Moreover, the State costs of a full pass-through and
disregard of child support were fully offset by increased payments by fathers
and decreased public assistance use by families.
(16)The Department of
Health and Human Services National Child Support Enforcement Strategic Plan for
fiscal years 2005 through 2009 states that child support is no longer a
welfare reimbursement, revenue-producing device for the Federal and State
governments; it is a family-first program, intended to ensure families'
self-sufficiency by making child support a more reliable source of
income
.
(17)Current law
permits States to apply the cost of passing through child support to families
receiving assistance under the TANF program toward their maintenance of effort
(MOE) requirements, but only to the extent that the State disregards the child
support payments in determining the amount and type of TANF assistance.
(18)Programs that
increase employment opportunity and reduce barriers by increasing employment
opportunity and reducing recidivism will benefit children and families.
(19)Transitional jobs
programs have shown promise in reducing unemployment among chronically
unemployed or underemployed population groups, including formerly incarcerated
individuals, the homeless, and young African-American men.
(20)To strengthen
families it is important to improve the upward economic mobility of the
custodial and noncustodial parent wage-earners, as well as youth at risk of
early parenthood or incarceration, by providing the skills and experience
necessary to access jobs with family-sustaining wages and benefits. In families
in which all the members do not live together, this is important to enable the
prompt and consistent payment of adequate child support.
(21)It is important
and useful to foster local and regional economic development and job
advancement for workers, especially young custodial and noncustodial parents,
by funding local collaborations among business, education, and the community in
the development of pathways for preparing disadvantaged citizens to meet the
workforce needs of the local and regional economy.
(22)Employers benefit
from working with and being supported by the local education, post-secondary
and workforce systems in identifying the academic and occupational skill sets
needed to fill the skilled jobs in the changing economy. Local economic and
community development is enhanced when residents have access to higher wage
employment, thus increasing the tax base, fueling the economy, and contributing
to greater family economic security.
(23)Public-private
career pathways partnerships are an important tool for linking employers and
workers with the workforce education services they need and for integrating
community economic development and workforce education services. Transitional
jobs programs can serve as the first step in a career pathway by giving
unemployed individuals with multiple barriers to employment, valuable work
experience and related services.
(24)The purpose of
child support is to provide necessary income support for and increase the
well-being of children living apart from a parent. To improve the ability of
low-income noncustodial parents to provide long-term support and care for their
children throughout their entire childhood, it is important that child support
polices support parental efforts to pursue education and employment and to stay
involved with their children.
(25)Responsible
parenthood includes active participation in financial support and
child-rearing, as well as the formation and maintenance of a positive, healthy,
and nonviolent relationship between parent and child and a cooperative,
healthy, and nonviolent relationship between parents.
(26)States should be
encouraged to implement voluntary programs that provide support for responsible
parenting, including by increasing the employment and financial security of
parents, and the parental involvement of noncustodial parents.
(27)Promoting
responsible parenthood saves the government money by reducing the need for
public assistance, increasing the educational attainment of children, juvenile
delinquency and crime, reducing substance abuse, and lowering rates of
unemployment.
(28)Programs to
encourage responsible fatherhood or responsible motherhood should promote and
provide support services for—
(A)fostering loving
and healthy relationships between parents and children;
(B)increasing
responsibility of noncustodial parents for the long-term care and financial
well-being of their children;
(C)increasing
employment of low-income, noncustodial parents and improving compliance with
child support obligations; and
(D)reducing barriers
to active 2-parent involvement and cooperative parenting.
(29)The promotion of
marriage and responsible parenthood should not denigrate the standing or
parenting efforts of single parents or other caregivers, lessen the protection
of children from abusive parents, or compromise the safety or health of the
custodial or noncustodial parent, but should increase the chance that children
will have 2 caring parents to help them grow up healthy and secure.
<enum>I</enum><header>Promoting
Responsible Fatherhood and Strengthening Low-Income Families</header>
<section id="H5D21299923F440DB94D7A6A80150C0B8"><enum>101.</enum><header>Healthy
marriage promotion and responsible fatherhood programs</header>
<subsection id="H675FF90A0A3C422599A7D006938E134"><enum>(a)</enum><header>Ensuring funding
for responsible fatherhood programs</header><text>Section 403(a)(2)(C) of the
Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/603">42 U.S.C. 603(a)(2)(C)</external-xref>) is amended—</text>
<paragraph id="HDD16E78F422B4355B8AC8E6925C6181"><enum>(1)</enum><text>in
the subparagraph heading, by striking <quote><header-in-text level="subparagraph" style="OLC">Limitation on use of</header-in-text></quote>
and inserting <quote><header-in-text level="subparagraph" style="OLC">Requirement to use certain</header-in-text></quote>; and</text>
</paragraph><paragraph id="H175415FCA8394E488591A4C600220031"><enum>(2)</enum><text>in clause (i), by
striking <quote>may not award more than $50,000,000</quote> and inserting
<quote>shall award at least $100,000,000</quote>.</text>
</paragraph></subsection><subsection id="HCF28A976A01842CE99A3828374D4719D"><enum>(b)</enum><header>Requirements To
ensure procedures To address domestic violence prevention</header>
<paragraph id="HF3FB620A6BE0495280A9A3474E9CBAF1"><enum>(1)</enum><header>In
general</header><text>Section 403(a)(2) of the Social Security Act (42 U.S.C.
603(a)(2)) is amended—</text>
<subparagraph id="H3D01154F91A845899DBCE45292EC814D"><enum>(A)</enum><text>by redesignating
subparagraph (D) as subparagraph (G); and</text>
</subparagraph><subparagraph id="H40BF003F45BE4C048C7F9927E9E5487B"><enum>(B)</enum><text>by inserting after
subparagraph (C) the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="H4E195CA1DBD94ED6BA334F82BBC42475" style="OLC">
<subparagraph id="H0586399C79DD437482E77E002BDDF7FF"><enum>(D)</enum><header>Requirements for
receipt of funds</header><text>An entity may not be awarded a grant under this
paragraph unless the entity, as a condition of receiving funds under such a
grant—</text>
<clause id="HE38A063443DE4CE0B07E67DC71A343DE"><enum>(i)</enum><text>consults with
domestic violence organizations that have demonstrated expertise working with
survivors of domestic violence in developing policies, procedures, programs and
training necessary to appropriately address domestic violence in families
served by programs and activities funded under such grant;</text>
</clause><clause id="H76F940EF4DD74A95892BC400061772F"><enum>(ii)</enum><text>describes in the
application for a grant under this paragraph—</text>
<subclause id="H141542D39D7A4FE000253C1462208824"><enum>(I)</enum><text>how the programs
or activities proposed to be conducted will appropriately address issues of
domestic violence; and</text>
</subclause><subclause id="HA2026242E67940E1959118AA8C110993"><enum>(II)</enum><text>what the entity
will do, to the extent relevant, to ensure that participation in such programs
or activities is voluntary, and to inform potential participants that their
involvement is voluntary;</text>
</subclause></clause><clause id="HCD1D2E3E0955450E84DBF5EAEE1EC64F"><enum>(iii)</enum><text>establishes a
written protocol for providers and administrators of programs and activities
relevant to the grant that—</text>
<subclause id="H95DE6FBFE70045B398D298FF51EE6990"><enum>(I)</enum><text>provides for
helping identify instances or risks of domestic violence; and</text>
</subclause><subclause id="HE916EAE4C8584B56AA1CEB00D785B5CF"><enum>(II)</enum><text>specifies the
procedures for making service referrals and providing protections and
appropriate assistance for identified individuals and families; and</text>
</subclause></clause><clause id="HF45D556BFB614B9E93F6EE41F8DCAE9F"><enum>(iv)</enum><text>submits the
annual reports required under subparagraph (E).</text>
</clause></subparagraph><subparagraph id="H5141BE4FF93445A59E2CE389A60070CA"><enum>(E)</enum><header>Annual reports
to the secretary</header><text>Each entity awarded a grant under this paragraph
shall submit to the Secretary an annual report on the programs and activities
funded under the grant that includes the following:</text>
<clause id="HD77A865C1D70488AA53563BB705CC7AF"><enum>(i)</enum><text>A
description of the written protocols developed in accordance with the
requirements of subparagraph (D)(iii) for each program or activity funded under
the grant and how such protocols are used, including specific policies and
procedures for addressing domestic violence issues within each program or
activity funded under the grant and how confidentiality issues are
addressed.</text>
</clause><clause id="HAE31270AA32348209BFE729002A9A1C3"><enum>(ii)</enum><text>The name of each
individual, organization, or entity that was consulted in the development of
such protocols.</text>
</clause><clause id="H25A8A1ADB237466582009C7546311020"><enum>(iii)</enum><text>A description of
each individual, organization, or entity (if any) that provided training on
domestic violence for the entity or for any subgrantees.</text>
</clause><clause id="H8DA74BF4B2164A8690C1BF80D01D62E1"><enum>(iv)</enum><text>A
description of any implementation issues identified with respect to domestic
violence and how such issues were addressed.</text>
</clause></subparagraph><subparagraph id="H52AE875DA4A24FB89872B8AECDF51C88"><enum>(F)</enum><header>Domestic
violence defined</header><text>In this paragraph, the term <term>domestic
violence</term> has the meaning given that term in section
402(a)(7)(B).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H34DDDAA76DE0435CA950618631DA9C92"><enum>(2)</enum><header>Conforming
amendments</header><text>Section 403(a)(2) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/42/603">42 U.S.C. 603(a)(2)</external-xref>) is
amended—</text>
<subparagraph id="HDBD3BFB5F43B4B9B88446D48057C5700"><enum>(A)</enum><text>in subparagraph
(A)(i)—</text>
<clause id="HC478EE1E53494B9C97C4BDE33B06B941"><enum>(i)</enum><text>by
striking <quote>(B) and (C)</quote> and inserting <quote>(B), (C), (D), and
(E)</quote>; and</text>
</clause><clause id="H2705AEB958544C65A3E900713DE0065B"><enum>(ii)</enum><text>by
striking <quote>subparagraph (D)</quote> and inserting <quote>subparagraph
(G)</quote>;</text>
</clause></subparagraph><subparagraph id="HA69E3D3AADFB43ABAEE20942559FE323"><enum>(B)</enum><text>in subparagraphs
(B)(i) and (C)(i), by striking <quote>(D)</quote> each place it appears and
inserting <quote>(G)</quote>; and</text>
</subparagraph><subparagraph id="H8882C4E762D44E5D00A917CE7F5515F5"><enum>(C)</enum><text>in subparagraph
(G) (as redesignated by paragraph (1)(A)), by striking <quote>$150,000,000 for
each of fiscal years 2006 through 2010</quote> and inserting
<quote>$150,000,000 for each of fiscal years 2006 and 2007 and $200,000,000 for
each of fiscal years 2008 through 2010</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="H7F5B8DFBA6544681ACBA3E7FC3723FED"><enum>(c)</enum><header>Assurance of
voluntary participation</header><text>Section 403(a)(2)(A)(ii)(II) of the
Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/603">42 U.S.C. 603(a)(2)(A)(ii)(II)</external-xref>) is amended—</text>
<paragraph id="H4CB6A63D47464F8300BFF5D62B22ED77"><enum>(1)</enum><text>in item (aa), by
striking <quote>and</quote> at the end;</text>
</paragraph><paragraph id="H7AD1BDF4947847FB8E87515D8F7DC1C"><enum>(2)</enum><text>in
item (bb), by striking the period at the end and inserting a semicolon;
and</text>
</paragraph><paragraph id="HB4FA367798F34B83AEC288CC4060B36C"><enum>(3)</enum><text>by adding at the
end the following new items:</text>
<quoted-block display-inline="no-display-inline" id="H1C87C7B305294E54B7317853AB1E1D2C" style="OLC">
<item id="HAE595998B6414E0BB4892440B0566DB6"><enum>(cc)</enum><text>to
not condition the receipt of assistance under the program funded under this
part, under a program funded with qualified State expenditures (as defined in
section 409(a)(7)(B)(i)), or under any other program funded under this title on
enrollment in any such programs or activities; and</text>
</item><item id="H1DE5E2468E78414FBDDEEEED34FB17B2"><enum>(dd)</enum><text>to
permit any individual who has begun to participate in a particular program or
activity funded under this paragraph, including an individual whose
participation is specified in the individual responsibility plan developed for
the individual in accordance with section 408(b), to transfer to another such
program or activity funded under this paragraph upon notification to the entity
and the State agency responsible for administering the State program funded
under this
part.</text>
</item><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H7802275509C2445690A25BD203C94CB8"><enum>(d)</enum><header>Activities
promoting responsible fatherhood</header><text>Section 403(a)(2)(C)(ii) of the
Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/603">42 U.S.C. 603(a)(2)(C)(ii)</external-xref>) is amended—</text>
<paragraph id="H43DF1F18C12D44E080D552B06FA9F594"><enum>(1)</enum><text>in subclause (I),
by striking <quote>marriage or sustain marriage</quote> and insert
<quote>healthy relationships and marriages or to sustain healthy relationships
or marriages</quote>;</text>
</paragraph><paragraph id="HDF402C2160994EF3001E213E08CF6754"><enum>(2)</enum><text>in subclause (II),
by inserting <quote>educating youth who are not yet parents about the economic,
social, and family consequences of early parenting, helping participants in
fatherhood programs work with their own children to break the cycle of early
parenthood,</quote> after <quote>child support payments,</quote>; and</text>
</paragraph><paragraph id="HF21391A209844CC08028B2346C165158"><enum>(3)</enum><text>in subclause
(III), by striking <quote>fathers</quote> and inserting <quote>low-income
fathers and other low-income noncustodial parents whom are not eligible for
assistance under the State program funded under this part</quote>.</text>
</paragraph></subsection><subsection id="HF859395C14E0404E8801F0CB64091259"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on
October 1, 2007.</text>
</subsection></section><section id="H173ECAE565EE4B6CBF364FD6C7BF5AE"><enum>102.</enum><header>Grants to
healthy family partnerships for domestic violence prevention, for services for
families and individuals affected by domestic violence, and for developing and
implementing best practices</header><text display-inline="no-display-inline">Section 403(a) of the Social Security Act
(<external-xref legal-doc="usc" parsable-cite="usc/42/603">42 U.S.C. 603(a)</external-xref>) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H3F9EB67B9257452BA09003187302DCE6" style="OLC">
<paragraph id="H9BFB8792A9124499A360D5FACFB5F15"><enum>(6)</enum><header>Grants to healthy
family partnerships for domestic violence prevention, for services for families
and individuals affected by domestic violence, and for developing and
implementing best practices</header>
<subparagraph id="HC79C15B7B8D24743B3BB81AF8200BE04"><enum>(A)</enum><header>In
general</header><text>The Secretary shall award grants on a competitive basis
to healthy family partnerships to—</text>
<clause id="H41824CFF317F4763B433199036CBC597"><enum>(i)</enum><text>conduct programs
and activities that are designed to prevent domestic violence;</text>
</clause><clause id="H7E9F48858E5945219794555390CAD768"><enum>(ii)</enum><text>provide services
for victims of domestic violence; and</text>
</clause><clause id="H531C1F2086B24DA8955418C7824C31C5"><enum>(iii)</enum><text>develop and
implement best practices for preventing domestic violence, particularly as a
barrier to economic security, and for providing services to families and
individuals affected by such violence including through caseworker training and
the provision of technical assistance.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HBE6B99DEBBF546BB9158E862C8469F20"><enum>(B)</enum><header>Education
services</header><text>In awarding grants under subparagraph (A), the Secretary
shall ensure that 10 percent of the funds made available under such grants are
used for high schools and other secondary educational institutions and
institutions of higher education to provide education services on the value of
healthy relationships, responsible parenting, and healthy marriages
characterized by mutual respect and non-violence, and the importance of
building relationships skills such as communication, conflict resolution, and
budgeting.</text>
</subparagraph><subparagraph id="H8048C1AF796E43E8B8CE3FDAB1C4861"><enum>(C)</enum><header>Application</header><text>The
respective entity and organization of a healthy family partnership entered into
for purposes of receiving a grant under this paragraph shall submit a joint
application to the Secretary, at such time and in such manner as the Secretary
shall specify, containing—</text>
<clause id="H27C7DFFE219047398D54783BAA00C278"><enum>(i)</enum><text>a
description of how the partnership intends to carry out the activities
described in subparagraph (A);</text>
</clause><clause id="H03478C9B89144036A53B1936009698F1"><enum>(ii)</enum><text>an assurance that
funds made available under the grant shall be used to supplement, and not
supplant, other funds used by the entity or organization to carry out programs,
activities, or services described in subparagraph (A) or (B); and</text>
</clause><clause id="H8EA68B7C407147FC944309E22C2F6C"><enum>(iii)</enum><text>such other
information as the Secretary may require.</text>
</clause></subparagraph><subparagraph id="H38D9656B35BB440E8FBB3907009DF035"><enum>(D)</enum><header>General rules
governing use of funds</header><text>The rules of section 404, other than
subsection (b) of that section, shall not apply to a grant made under this
paragraph.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HE330ED1607554C1C8E001FA247365321"><enum>(E)</enum><header>Definitions</header><text>In
this paragraph:</text>
<clause commented="no" display-inline="no-display-inline" id="H3C5E7C11DC4E4741AFF96D7201A349CE"><enum>(i)</enum><header>Domestic
violence</header><text>The term <term>domestic violence</term> has the meaning
given that term in section 402(a)(7)(B).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="HC78C85E9A9C7462899CDEA40000D939"><enum>(ii)</enum><header>Healthy family
partnership</header><text>The term <term>healthy family partnership</term>
means a partnership between—</text>
<subclause commented="no" display-inline="no-display-inline" id="H0F6D26779A9D4F31B1D78FE5D87D75E4"><enum>(I)</enum><text>an entity
receiving funds under a grant made under paragraph (2) to promote healthy
marriage or responsible fatherhood; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="H42B6B59173034AB78E787E0682569E18"><enum>(II)</enum><text>an organization
described in paragraph (2)(D)(i).</text>
</subclause></clause></subparagraph><subparagraph id="H65E2A6586F79469386359B959481FB1B"><enum>(F)</enum><header>Appropriation</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated for each of fiscal years 2008 through 2010, $25,000,000
for purposes of awarding grants to healthy family partnerships under this
paragraph.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H7B3656F610474B439822CCB95FC56179"><enum>103.</enum><header>Elimination of
separate TANF work participation rate for 2-parent families</header>
<subsection id="H9D25B4C2B8CA41F0B09240649D22DE19"><enum>(a)</enum><header>In
General</header><text>Section 407 of the <act-name parsable-cite="SSA">Social
Security Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/607">42 U.S.C. 607</external-xref>) is amended—</text>
<paragraph id="H61508EE2B48E41C2B56224C6FA4142C8"><enum>(1)</enum><text>in subsection
(a)—</text>
<subparagraph id="H1F38DA367A5E4B48943FC31F0170FF69"><enum>(A)</enum><text>beginning in the
heading, by striking <quote><header-in-text level="subsection" style="OLC">Participation Rate Requirements</header-in-text></quote> and all
that follows through <quote>A State</quote> in paragraph (1) and inserting
<quote><header-in-text level="subsection" style="OLC">Participation Rate
Requirements</header-in-text>.—A State</quote>; and</text>
</subparagraph><subparagraph id="HA70307D4D175407191165F807F20B8A9"><enum>(B)</enum><text>by striking
paragraph (2);</text>
</subparagraph></paragraph><paragraph id="HD1AD1F0873F3435CB4DAD79E8D91CD1"><enum>(2)</enum><text>in
subsection (b)—</text>
<subparagraph id="HF464466355A148DF96A6793D5F3B8763"><enum>(A)</enum><text>in paragraph
(1)(A), by striking <quote>subsection (a)(1)</quote> and inserting
<quote>subsection (a)</quote>;</text>
</subparagraph><subparagraph id="H1E6ABDB73A0546E7A91791AE50B85E2D"><enum>(B)</enum><text>in paragraph (2),
by striking the paragraph heading and all that follows through <quote>A
family</quote> and inserting <quote><header-in-text level="paragraph" style="OLC">Special rule</header-in-text>.—A family</quote>;</text>
</subparagraph><subparagraph id="HB9FBE98E96F64AA68FA5BA93FE495FDC"><enum>(C)</enum><text>in paragraph (4),
by striking <quote>paragraphs (1)(B) and (2)(B)</quote> and inserting
<quote>determining monthly participation rates under paragraph (1)(B)</quote>;
and</text>
</subparagraph><subparagraph id="H9F74FEBD32814E0DB169A2380028C8EE"><enum>(D)</enum><text>in paragraph (5),
by striking <quote>rates</quote> and inserting <quote>rate</quote>; and</text>
</subparagraph></paragraph><paragraph id="H19C7AB6C817840AD81CDC2E277C092AA"><enum>(3)</enum><text>in subsection
(c)—</text>
<subparagraph id="H6C1E0430FB81416B9DE0A7ECF06C0500"><enum>(A)</enum><text>in paragraph
(1)(B), in the matter preceding clause (i), by striking <quote>subsection
(b)(2)(B)</quote> and inserting <quote>subsection (b)(1)(B)(i)</quote>;
and</text>
</subparagraph><subparagraph id="H2E19588CB7AA420400CFA6B2251B3346"><enum>(B)</enum><text>in paragraph
(2)(D)—</text>
<clause id="HBD1F5E9DD98142F39E6CC2979D7E772F"><enum>(i)</enum><text>by
striking <quote>paragraphs (1)(B)(i) and (2)(B) of subsection (b)</quote> and
inserting <quote>subsection (b)(1)(B)(i)</quote>; and</text>
</clause><clause id="H70B75C3843824596B7E0EACF772DA1AD"><enum>(ii)</enum><text>by
striking <quote>and in 2-parent families, respectively,</quote>.</text>
</clause></subparagraph></paragraph></subsection><subsection id="HD037795859C34533BE2DB046AE809117"><enum>(b)</enum><header>Effective
Date</header>
<paragraph id="H2E17FC4D1907413ABF21096DBCEEF737"><enum>(1)</enum><header>In
general</header><text>The amendments made by subsection (a) shall take effect
on the date of enactment of this Act and shall apply to the determination of
minimum participation rates for months beginning on or after that date.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H051D7051B129472CB5BC0601312B14A6"><enum>(2)</enum><header>Limitation on
penalty imposition</header><text>Notwithstanding section 409(a)(3) of the
Social Security Act, the Secretary of Health and Human Services shall not
impose a penalty against a State under that section on the basis of the State's
failure to satisfy the participation rate required for fiscal year 2006 and
2007 if the State demonstrates that the State would have met such requirement
if, with respect to those months of fiscal year 2007 that began prior to or on
the date of enactment of this Act, the State were permitted to count 2-parent
families that met the requirements of section 407(c)(1)(A) of the Social
Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/607">42 U.S.C. 607(c)(1)(A)</external-xref>) in the determination of monthly
participation rates under section 407(b)(1)(B)(i) of such Act (42 U.S.C.
607(b)(1)(B)(i)).</text>
</paragraph></subsection></section><section id="H1F385B083F7542CEB79CE0FB8F250997"><enum>104.</enum><header>Ban on recovery
of Medicaid costs for births</header>
<subsection id="H6D1283701B87497BB577C755B972E7D"><enum>(a)</enum><header>Ban on
recovery</header>
<paragraph id="H1BC0FC0CA6C54BBF9FE6E1DCE35F2E40"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 454 of the
Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/654">42 U.S.C. 654</external-xref>), is amended—</text>
<subparagraph id="HFE87F521AFC4422397E0679288F686A7"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of paragraph (32);</text>
</subparagraph><subparagraph id="H52D0035EF65C48BDB0D689D6483E2102"><enum>(B)</enum><text>by striking the
period at the end of paragraph (33) and inserting a semicolon; and</text>
</subparagraph><subparagraph id="H36B172F917E14E49A5E4934039366300"><enum>(C)</enum><text>by inserting after
paragraph (33) the following:</text>
<quoted-block display-inline="no-display-inline" id="HBFE79C4812DD45DC8CEAB3FCE1A32893" style="OLC">
<paragraph id="H269D4097012444DA9875401857568565"><enum>(34)</enum><text>provide that,
except as provided in section 1902(a)(25)(F)(ii), the State shall not use the
State program operated under this part to collect any amount owed to the State
by reason of costs incurred under the State plan approved under title XIX for
the birth of a child for whom support rights have been assigned pursuant to
section 471(a)(17) or 1912;
and</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H4999749A6C0143FF00A21D79E7CDB2F2"><enum>(2)</enum><header>Rule of
construction</header><text>Nothing in section 454(34) of the Social Security
Act (<external-xref legal-doc="usc" parsable-cite="usc/42/654">42 U.S.C. 654(34)</external-xref>), as added by paragraph (1), shall be construed as
affecting the application of section 1902(a)(25) of such Act (42 U.S.C.
1396a(a)(25)) with respect to a State (relating to the State Medicaid plan
requirement for the State to take all reasonable measures to ascertain the
legal liability of third parties to pay for care and services available under
the plan).</text>
</paragraph><paragraph id="H39FB31D1E1084BCBBD7B8E133433B387"><enum>(3)</enum><header>Repeal of
certain DRA amendments</header><text>For provisions repealing amendments to
section 454 of the Social Security Act made by section 7301(b)(1)(C) of the
Deficit Reduction Act of 2005, see section 105(a)(3) of this Act.</text>
</paragraph></subsection><subsection id="HF749C8DBB59249218F37A400F6BF4E4F"><enum>(b)</enum><header>Clarification
that ban on recovery does not apply with respect to insurance of a parent with
an obligation to pay child support</header><text>Clause (ii) of section
1902(a)(25)(F) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396a">42 U.S.C. 1396a(a)(25)(F)</external-xref>) is
amended by inserting <quote>only if such third-party liability is derived
through insurance,</quote> before <quote>seek</quote>.</text>
</subsection><subsection id="H9F3F952C9C1B4788ADB913EDAC2CCE5B"><enum>(c)</enum><header>Effective
date</header>
<paragraph id="H62B4316CD2D94845B17054B72992EAC"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section take effect on October 1, 2007.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H129E37A257B044C1AA36F98D7FA843AD"><enum>(2)</enum><header>Extension of
effective date for state law amendment</header><text>In the case of a State
plan under title XIX of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/1396">42 U.S.C. 1396 et seq.</external-xref>) which
the Secretary of Health and Human Services determines requires State
legislation in order for the plan to meet the additional requirements imposed
by the amendments made by this section, the State plan shall not be regarded as
failing to comply with the requirements of such title solely on the basis of
its failure to meet these additional requirements before the first day of the
first calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of enactment of this Act.
For purposes of the previous sentence, in the case of a State that has a 2-year
legislative session, each year of the session is considered to be a separate
regular session of the State legislature.</text>
</paragraph></subsection></section><section id="H06EDA91B12054455B11010C9EE02065C"><enum>105.</enum><header>Improved
collection and distribution of child support</header>
<subsection id="H6322E4C51E1C421797AC437133004747"><enum>(a)</enum><header>Distribution of
child support</header>
<paragraph id="H7BBC9373239A4C51A769DE2D3100ED81"><enum>(1)</enum><header>Full
distribution of child support collected; reform of rules for distribution of
child support collected on behalf of children in foster care</header>
<subparagraph id="H5B2AE5C6B5BD49BDA8773CC0CB000033"><enum>(A)</enum><header>In
general</header><text>Section 457 of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/657">42 U.S.C. 657</external-xref>) is
amended—</text>
<clause id="HAD09E6081C7A423D944EF77B84E3CAD9"><enum>(i)</enum><text>by
striking subsection (a) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HA64410A23CE247A2BCAB1D49002D9BCA" style="OLC">
<subsection id="HD5131A3223764EABA294AD1BE5A9D43"><enum>(a)</enum><header>Full distribution
of amounts collected on behalf of any family</header><text>Subject to
subsection (c), the entire amount collected on behalf of any family as support
by a State pursuant to a plan approved under this part shall be paid by the
State to the family, and shall not be retained by the State to reimburse costs
of assistance provided under part A, part E, or any State-funded assistance or
benefits.</text>
</subsection><after-quoted-block>;
and</after-quoted-block></quoted-block>
</clause><clause id="H4F7F3FAB53BC4C12AB2EAE9C1799538E"><enum>(ii)</enum><text>by
striking subsections (c) through (e) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HAFECD0146B5D4E15808CB0D0CA94865E" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="HF0C04F2C451F49A3859FE229EC00A068"><enum>(c)</enum><header>Amounts
collected for child for whom foster care maintenance payments are
made</header><text display-inline="yes-display-inline">Notwithstanding the
preceding provisions of this section, amounts collected by a State as child
support for months in any period on behalf of a child for whom a public agency
is making foster care maintenance payments under part E shall be paid to the
public agency responsible for supervising the placement of the child, which may
use the payments in the manner it determines will serve the best interests of
the child, including setting such payments aside for the child’s future needs,
depositing the funds in a child asset account, or making all or a part thereof
available to the individual responsible for meeting the child’s day-to-day
needs.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</clause></subparagraph><subparagraph id="H5218D9E387044A88A9E7A738D6144E6"><enum>(B)</enum><header>Foster care state
plan amendment</header><text>Section 471(a)(17) of the Social Security Act (42
U.S.C. 671(a)(17)) is amended—</text>
<clause id="H68A193431DD5493D9400BE9E6284BA7D"><enum>(i)</enum><text>by
inserting <quote>and consistent with the child's case plan</quote> after
<quote>where appropriate</quote>; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="H0622964084B14C8BB4DD52A77C526B5"><enum>(ii)</enum><text>by striking
<quote>secure an assignment to the State of any rights to support</quote> and
inserting <quote>establish paternity and establish, modify, and enforce child
support obligations</quote>.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H102988BF34214B6F00C37D1D26326C3F"><enum>(C)</enum><header>Social Security
Act amendments</header>
<clause commented="no" display-inline="no-display-inline" id="HB126A78982A044098CA35653DAC57E41"><enum>(i)</enum><header>Child support
State plan amendment</header><text>Section 454 of the Social Security Act (42
U.S.C. 654), as amended by section 104(a)(1), is amended by adding at the end
the following new paragraph:</text>
<quoted-block act-name="" id="H5C09C02F522D4B58A7EDCAD30037FB71" style="OLC">
<paragraph id="HA58F5F6206724FB2A12824321C6F6286"><enum>(35)</enum><text>provide that a
State shall pay all collected child support to the payee, except as provided in
section 457(c), and shall not use the State program operated under this part to
retain payments to recover the cost of State-funded assistance or
benefits.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</clause><clause commented="no" display-inline="no-display-inline" id="HC2440178CFA943A4AB14BB3178FFCEA3"><enum>(ii)</enum><header>Disbursement of
support payments</header><text>Section 454B(c) of the Social Security Act (42
U.S.C. 654B(c)) is amended by adding at the end the following new
paragraph:</text>
<quoted-block act-name="" id="H5AE8B272A59C4C19B74E1C12D6FD5266" style="OLC">
<paragraph id="H69CECE29AFE142A080EF432C13BC1775"><enum>(3)</enum><header>Disbursement to
families</header><text>The State disbursement unit shall pay all collected
child support to the payee, except as otherwise provided in section 457, and
may not disburse collections to the State to reimburse the State for assistance
or benefits provided under a State-funded
program.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</clause></subparagraph></paragraph><paragraph id="HBB640332F4EA457794A3B17CA3561E33"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph id="H96BDF44947C74ECAA1B978341F98378"><enum>(A)</enum><text>Section
409(a)(7)(B)(i)(I)(aa) of such Act (42 U.S.C. 609(a)(7)(B)(i)(I)(aa)) is
amended by striking <quote>457(a)(1)(B)</quote> and inserting
<quote>457(a)</quote>.</text>
</subparagraph><subparagraph id="H054023799C2240B3946213FA8F4774D1"><enum>(B)</enum><text>Section 454(5) of
such Act (<external-xref legal-doc="usc" parsable-cite="usc/42/654">42 U.S.C. 654(5)</external-xref>) is amended by striking <quote>(A) in any
case</quote> and all that follows through <quote>(B)</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H316210D2E65449A3A21CCA6E83E0688B"><enum>(C)</enum><text>Section
466(a)(3)(B) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/42/666">42 U.S.C. 666(a)(3)(B)</external-xref>) is amended by striking
<quote>408(a)(3) or 671(a)(17)</quote>.</text>
</subparagraph></paragraph><paragraph id="H687C1AFAB2254E958FA1D0E9C7ED989E"><enum>(3)</enum><header>Repeal of
certain DRA amendments</header><text>Effective on the date of enactment of this
Act, subsections (a) and (b) of section 7301 of the Deficit Reduction Act of
2005 (<external-xref legal-doc="public-law" parsable-cite="pl/109/171">Public Law 109–171</external-xref>; 120 Stat. 141) are repealed and parts A and D of
title IV of the Social Security Act shall be applied as if the amendments made
by such subsections had not been enacted.</text>
</paragraph></subsection><subsection id="H90103D468E804DCA90DADA12520601A8"><enum>(b)</enum><header>Prohibition on
conditioning receipt of TANF on assignment of support</header><text>Section
408(a)(3) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/608">42 U.S.C. 608(a)(3)</external-xref>) is amended—</text>
<paragraph id="H65528863401442D1BBAAD71E8C85B27"><enum>(1)</enum><text>in
the paragraph heading, by striking <quote><header-in-text level="paragraph" style="OLC">No assistance for families not</header-in-text></quote> and
inserting <quote><header-in-text level="paragraph" style="OLC">Prohibition on
conditioning assistance for families on</header-in-text></quote>;</text>
</paragraph><paragraph id="HB99C89C95DAC4D678576354B3572D56C"><enum>(2)</enum><text>by inserting
<quote>not</quote> after <quote>shall</quote>;</text>
</paragraph><paragraph id="H4972E354CA5E45B08CB156A4906F9065"><enum>(3)</enum><text>by inserting
<quote>or under a program funded with qualified State expenditures (as defined
in section 409(a)(7)(B)(i))</quote> after <quote>this part</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H0F10960CC1EA47EBA4BEE150ABF16274"><enum>(4)</enum><text>by striking
<quote>, not exceeding the total amount of assistance so paid to the
family,</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HBFE79DBF76184B558D4F4FD0C978F868"><enum>(c)</enum><header>Requirement To
disregard percentage of child support collected in determining amount and type
of TANF assistance</header><text>Section 408(a) of the Social Security Act (42
U.S.C. 608(a)) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HF30CA5BD481C4F90B43CB6EF217A52C" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="HF4C5699AA69D400D9F72FFBB10C548AD"><enum>(12)</enum><header>Requirement to
disregard percentage of child support collected in determining amount and type
of TANF assistance</header><text>A State to which a grant is made under section
403 shall disregard at least the same percentage of amounts collected as
support on behalf of a family as the percentage of earned income that the State
disregards in determining the amount or type of assistance provided to the
family under the State program funded under this part or under a program funded
with qualified State expenditures (as defined in section
409(a)(7)(B)(i)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HE668E97730C34DA7B19C0368709E5942"><enum>(d)</enum><header>State option To
discontinue older support assignments</header><text>Effective as if included in
the amendment made by section 7301(c) of the Deficit Reduction Act of 2005,
section 457(b) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/657">42 U.S.C. 657(b)</external-xref>) is amended to read
as follows:</text>
<quoted-block act-name="" id="HAA2A98C888194FBAA90000C028DB9D27" style="OLC">
<subsection id="HD199362D85BD45AEB5DE5B895DB05EA5"><enum>(b)</enum><header>Continuation of
assignments</header>
<paragraph id="H91AB1F3F2AFB47D793B3185C1015C93C"><enum>(1)</enum><header>In
general</header><text>Any rights to support obligations assigned to a State as
a condition of receiving assistance from the State under parts A and E and in
effect on September 30, 2009 (or such earlier date as the State may choose),
may be discontinued after such date.</text>
</paragraph><paragraph id="HA6605EAFD486477DA75D37A44EFFB00"><enum>(2)</enum><header>Distribution of
amounts after assignment discontinuation</header><text>If a State chooses to
discontinue the assignment of a support obligation described in paragraph (1),
the State may treat amounts collected pursuant to the assignment as if the
amounts had never been assigned and may distribute the amounts to the family in
accordance with subsections (a) and
(c).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H5CD88F30265D44B9AA15C8BA9410A3B"><enum>(e)</enum><header>Restoration of
Federal funding</header><text>Effective on the date of enactment of this Act,
section 7309 of the Deficit Reduction Act of 2005 (<external-xref legal-doc="public-law" parsable-cite="pl/109/171">Public Law 109–171</external-xref>; 120
Stat. 147) is repealed and part D of title IV of the Social Security Act shall
be applied as if the amendment made by subsection (a) of that section had not
been enacted.</text>
</subsection><subsection id="H469309E5DCC34361B11F57B6A382E341"><enum>(f)</enum><header>Repeal of
mandatory fee for child support collection</header><text>Effective on the date
of enactment of this Act, section 7310 of the Deficit Reduction Act of 2005
(<external-xref legal-doc="public-law" parsable-cite="pl/109/171">Public Law 109–171</external-xref>; 120 Stat. 147) is repealed and part D of title IV of the
Social Security Act shall be applied as if the amendments made by that section
had not been enacted.</text>
</subsection><subsection id="HFD77A9CC55074AE795862F49B346C470"><enum>(g)</enum><header>Prohibition on
considering a period of incarceration voluntary
unemployment</header><text>Section 466(a) of the Social Security Act (42 U.S.C.
666(a)) is amended by inserting after paragraph (19) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H8AFF37DDA0C5478AADDC57884032C4F6" style="OLC">
<paragraph id="HDA2BEE8715AF45D5800889372052E053"><enum>(20)</enum><header>Procedures
relating to periods of incarceration of noncustodial parents</header>
<subparagraph id="H67E6F138EF624CFABFEA76FF746F7178"><enum>(A)</enum><header>In
general</header><text>Procedures which require that, in determining or
modifying the amount of, or terms and conditions of, any support obligation of
a noncustodial parent, the State—</text>
<clause id="H2D12D0556E43479C943E79B2D4E1C12B"><enum>(i)</enum><text>shall not consider
any period of incarceration of such parent as a period of voluntary
unemployment that disqualifies the parent from obtaining a modification of the
support obligation consistent with the parent's ability to pay child support;
and</text>
</clause><clause id="HC4D820B551284DCB8E8EAC2F0818BECB"><enum>(ii)</enum><text>subject to
subparagraph (B) in the case of an incarcerated parent, may—</text>
<subclause id="HEB27C5070A9D41DBBA1660F8005350CE"><enum>(I)</enum><text>temporarily
suspend any support obligation on the parent and the enforcement of any support
obligation of the parent existing prior to the period of incarceration;
and</text>
</subclause><subclause id="HD63ADF2C269C47A991002644C842E3CF"><enum>(II)</enum><text>temporarily
prohibit the accrual of any interest on any support obligation of the parent
existing prior to the period of incarceration during any such period.</text>
</subclause></clause></subparagraph><subparagraph id="HB9F537820D3D46D591C8A28487A55908"><enum>(B)</enum><header>Notice and
opportunity to challenge suspension</header><text>Such procedures shall require
the State to provide a custodial parent with—</text>
<clause id="H3B9D2186637B4448888D81761193B2F3"><enum>(i)</enum><text>notice of any
suspension of review, adjustment, or enforcement of a support obligation and of
any prohibition on interest accrual on such obligation that is imposed in
accordance with subparagraph (A)(ii); and</text>
</clause><clause id="HD59CF0FB212D40E4AD00DA78E3C93592"><enum>(ii)</enum><text>an opportunity to
request that the suspension or prohibition be terminated or modified on the
basis that the noncustodial parent has sufficient income or resources to
continue payment of the support obligation during the noncustodial parent's
period of
incarceration.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H7B4DDD8C889B4B70AE00074200002831"><enum>(h)</enum><header>Forgiving or
other modification of child support arrearages assigned to the
State</header><text>Section 466(a)(9) of the Social Security Act (42 U.S.C.
666(a)(9)) is amended in the flush matter following subparagraph (C), by
inserting the following new sentence at the end: <quote>Nothing in this
paragraph shall be construed as prohibiting a State from forgiving,
compromising, reducing or waiving arrearages permanently assigned to the State
under part A or E or under title XIX.</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H165F870EE10F4B398B2BB312B971186"><enum>(i)</enum><header>Review and
adjustment of child support arrearages upon request</header><text>Section
466(a)(10) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/666">42 U.S.C. 666(a)(10)</external-xref>) is amended by
adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H01375BCB88664B70AF533B10B6D5DC53" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="HA0827A1A50F44DD681135E18E4E7A305"><enum>(D)</enum><header>Review and
adjustment of arrearages</header><text>Procedures which require the State to
review, and if appropriate, reduce the balance of arrearages permanently
assigned to the State under part A or E, or under title XIX, pursuant to
standards and procedures established by the State, in cases where the obligor
lacks sufficient ability to pay the arrears, adjustment will promote timely
payment of current support, or barriers, such as incarceration, may have
limited the ability of the obligor to timely seek a modification of the order,
and it is in the best interests of the child to make such reduction. Nothing in
the preceding sentence shall be construed as affecting arrearages that have not
been permanently assigned to the State under such part or
title.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HFAD28AF3388B4D8CB984E257CF107C3"><enum>(j)</enum><header>Study and
report</header><text>Not later than October 1, 2008, the Secretary of Health
and Human Services shall study and submit a report to Congress regarding the
following:</text>
<paragraph id="H307C56C47BE84865ACBE4FF388A21454"><enum>(1)</enum><text>The effect of age
eligibility restrictions for the earned income tax credit established under
<external-xref legal-doc="usc" parsable-cite="usc/26/32">section 32</external-xref> of the Internal Revenue Code of 1986 for individuals without
qualifying children on—</text>
<subparagraph id="HDD32CC3AE059475B83DF03103806E52"><enum>(A)</enum><text>the ability of
young parents to pay child support;</text>
</subparagraph><subparagraph id="H3A4C50717C1D4F148555D663B8AF69E6"><enum>(B)</enum><text>compliance with
child support orders; and</text>
</subparagraph><subparagraph id="HAD0FD00154984FE38039C450AE72F68"><enum>(C)</enum><text>the relationship
between young noncustodial parents and their children.</text>
</subparagraph></paragraph><paragraph id="H10103D0DE921413FAFE531530000E205"><enum>(2)</enum><text>The impact of
State earned income tax credit programs, especially such programs with targeted
benefits for noncustodial parents, on—</text>
<subparagraph id="HEDEA32CA99A24310BD28006466F8B8F6"><enum>(A)</enum><text>the ability of
noncustodial parents to pay child support;</text>
</subparagraph><subparagraph id="HD0CADF6731C44B4DA8CD6050E05D65F5"><enum>(B)</enum><text>compliance with
child support orders; and</text>
</subparagraph><subparagraph id="H4BD56E5A7B2442E69469C6748D47009D"><enum>(C)</enum><text>the relationship
between noncustodial parents and their children.</text>
</subparagraph></paragraph><paragraph id="H6CB1CBB78E634F9C82D5FFC6C27B779F"><enum>(3)</enum><text>The challenges
faced by legal immigrants and individuals for whom English is not their primary
language in fulfilling child support and other noncustodial parenting
obligations.</text>
</paragraph></subsection><subsection id="H02F90EA97104407D84E3438E0000CA60"><enum>(k)</enum><header>Effective
date</header>
<paragraph id="H856C75BA57F846868EDF27C46B0020CE"><enum>(1)</enum><header>In
general</header><text>Except as otherwise provided in this section, the
amendments made by this section shall take effect on October 1, 2009, and shall
apply to payments under parts A and D of title IV of the Social Security Act
for calendar quarters beginning on or after that date, and without regard to
whether regulations to implement the amendments are promulgated by such
date.</text>
</paragraph><paragraph id="H9511EE5148E648B88358E5B1006841BF"><enum>(2)</enum><header>State option to
accelerate effective date</header><text>Notwithstanding paragraph (1), a State
may elect to have the amendments made by the preceding provisions of this
section apply to the State and to amounts collected by the State (and to
payments under parts A and D of title IV of such Act), on and after such date
as the State may select that is not later than September 30, 2009.</text>
</paragraph></subsection></section><section id="H95FF4BF52723490D84164B41E7EE0936"><enum>106.</enum><header>Grants to
States to conduct demonstration projects to promote economic opportunity for
low-income parents</header>
<subsection id="HDFFC92724A0945EA83713100A7B1AAD0"><enum>(a)</enum><header>Court-supervised
or IV–D agency-supervised employment programs for noncustodial parents</header>
<paragraph id="H64B9E10A271C4935BDF71BD93D6D9772"><enum>(1)</enum><header>In
general</header><text>The Secretary of Health and Human Services shall award
grants to States to conduct demonstration projects to establish, in
coordination with counties and other local or tribal governments,
court-supervised or IV–D agency supervised-employment programs for noncustodial
parents who have barriers to employment and a history of nonpayment of child
support obligations, as determined by a court or the IV–D agency, and who are
determined by the court or agency to be in need of employment services or
placement in order to pay such child support obligations. A noncustodial parent
described in the preceding sentence who is an ex-offender shall be eligible to
participate in a program established under this subsection.</text>
</paragraph><paragraph id="H89BE6B283A2B4873AAC0DDDCDE61D39"><enum>(2)</enum><header>Requirements</header>
<subparagraph id="HEED5E36BBC57418995006B2630CA67A2"><enum>(A)</enum><header>Option to
participate prior to contempt finding</header><text>A State shall not be
eligible to receive a grant under this subsection unless any program
established with funds made available under the grant provides noncustodial
parents described in paragraph (1) with an option to participate in the program
prior to the court or agency entering a finding that the noncustodial parent is
in contempt for failure to pay a child support obligation and, potentially
subject to criminal penalties.</text>
</subparagraph><subparagraph id="H68A7D6FA658E40139E57710845EDF200"><enum>(B)</enum><header>Program
goals</header><text>An employment program established with funds made available
under a grant awarded under this subsection shall be designed to do the
following:</text>
<clause id="H5609A3BE1ED2465098DAAA0650C69000"><enum>(i)</enum><text>To
assist noncustodial parents described in paragraph (1) obtain and maintain
unsubsidized employment.</text>
</clause><clause id="H59242955649342E09FE33B7B2E99039E"><enum>(ii)</enum><text>To
increase the amount of financial support received by children.</text>
</clause><clause id="H498CFCA46A334DB6B9223E647FBCB631"><enum>(iii)</enum><text>To
help noncustodial parents described in paragraph (1) improve relationships with
their children and their children's custodial parent.</text>
</clause></subparagraph><subparagraph id="H441DBB8383EB4D599E4E084DF5E61812"><enum>(C)</enum><header>6 months of
continuous, timely payments</header><text>An employment program established
with funds made available under this subsection shall not permit a noncustodial
parent placed in the program to graduate from the program and avoid penalties
for failure to pay a child support obligation until the noncustodial parent
completes at least 6 months of continuous, timely payment of the parent’s child
support obligations.</text>
</subparagraph><subparagraph id="HF36A7F7C173F46AFBE0000785B400289"><enum>(D)</enum><header>Use of
funds</header>
<clause id="HBB667DF831DC464EB3225DFC3A316B2"><enum>(i)</enum><text>Services provided
under an employment program established with funds made available under a grant
made under this subsection must include the following:</text>
<subclause id="H2514F61587F7416EAABF8838C3C8F1AD"><enum>(I)</enum><text>Job placement,
including job development and supervised job search as necessary.</text>
</subclause><subclause id="H4332E3C3F22D4F17A3CC8D48EF00F456"><enum>(II)</enum><text>Case management,
including educational assessment and advising, vocational assessment and career
exploration services, and court liaison services.</text>
</subclause><subclause id="HEB034FC40D844BE69145ECF7F79FE00"><enum>(III)</enum><text>Counseling on
responsible parenthood.</text>
</subclause><subclause id="H081A54B0ED854914A8F8798E5C44F3E0"><enum>(IV)</enum><text>Referral for
support and educational services.</text>
</subclause><subclause id="HDE454392A0DA42C29B8FCBCB21F47D3B"><enum>(V)</enum><text>Employment
retention services.</text>
</subclause></clause><clause id="HE840B60398384905AF00FADEABDCD03"><enum>(ii)</enum><text>Services provided
under an employment program established with funds made available under a grant
made under this subsection may include the following:</text>
<subclause id="HD0AB6581993B412C885F00C03FDB7448"><enum>(I)</enum><text>Remedial education
services or educational referral.</text>
</subclause><subclause id="HD2DD0187224C4A1698AA5C9F21D0C054"><enum>(II)</enum><text>Support funds for
services such as transportation, child care, or short-term training.</text>
</subclause><subclause id="H3FDFB453BBC94818BB5C3E9F55B4617"><enum>(III)</enum><text>Transitional jobs
programs.</text>
</subclause><subclause id="H374FAF3F2C0B418996B3006EF604912"><enum>(IV)</enum><text>Public-private
career pathway partnerships established in accordance with subsection
(b)(2).</text>
</subclause><subclause id="H6CE3041890BE4565922C2E601DABCF96"><enum>(V)</enum><text>Occupational skill
training, including college credit programs.</text>
</subclause><subclause id="HC6AD10875F05493985C7BD7F8600A0EB"><enum>(VI)</enum><text>Curricula
development.</text>
</subclause></clause></subparagraph><subparagraph id="H0715DECC479F4709BACD32D81E65F6D0"><enum>(E)</enum><header>Administration</header><text>A
State that receives a grant under this subsection may contract with a public or
private nonprofit organization, including a faith-based or community-based
organization, to administer (in conjunction with the court of jurisdiction or
the IV–D agency) the court-supervised or IV–D agency-supervised employment
program.</text>
</subparagraph></paragraph></subsection><subsection id="H624B6B55FBDC448EB8A3BB37AAA19059"><enum>(b)</enum><header>Transitional
jobs and public-private partnership grants</header><text>The Secretary of Labor
shall award grant to States to conduct demonstration projects to carry out one
or more of the projects described in paragraphs (1) and (2).</text>
<paragraph id="HF764C48BD3FA42B68F484B0022A9B69F"><enum>(1)</enum><header>Transitional
jobs grants</header>
<subparagraph id="HD4FCF08EA85F4DC194467BA720796B6C"><enum>(A)</enum><header>In
general</header><text>The Secretary of Labor may award grants under this
subsection to establish and expand transitional jobs programs for eligible
individuals, including such programs conducted by local governments, State
employment agencies, nonprofit organizations, and faith-based or
community-based organizations or intermediaries, that—</text>
<clause commented="no" id="H0B1412CFF5C246F79C1C09A40399DF37"><enum>(i)</enum><text>combine
time-limited employment in transitional jobs that may be subsidized with public
funds, with activities that promote skill development and remove barriers to
employment, such as case management services and education, training, child
support-related services, and other activities, pursuant to individual plans;
and</text>
</clause><clause commented="no" id="HDC68EC6F29304DC0B838282C816D1D39"><enum>(ii)</enum><text>provide such
individuals with—</text>
<subclause commented="no" id="H589AA6E46B0B4F519D4200005EC94116"><enum>(I)</enum><text>transitional jobs
placements and job placement assistance, to help the individuals make the
transition from subsidized employment in transitional jobs to stable
unsubsidized employment; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="H5E8C0E02A6D24BA385DBBF00B855D611"><enum>(II)</enum><text>retention
services after the transition to unsubsidized employment.</text>
</subclause></clause></subparagraph><subparagraph commented="no" id="HD7CAE8A83BF84485B128979B67D868F0"><enum>(B)</enum><header>Eligible
individuals</header><text>For purposes of this paragraph, the term
<term>eligible individuals</term> means individuals within any of the following
categories of disproportionately chronically unemployed individuals:</text>
<clause commented="no" id="HBB740761E55D40918947F1D64B3E73E4"><enum>(i)</enum><text>Individuals who
have attained age 16, but not attained age 36, and who have documented barriers
to employment such as lack of a high school diploma, limited English
proficiency, aging out of foster care, or offender status, particularly such
individuals who are parents or expectant parents.</text>
</clause><clause commented="no" id="HC6E5C6CDDCF04BFCBA4E15CBC37313EF"><enum>(ii)</enum><text>Formerly
incarcerated individuals.</text>
</clause><clause commented="no" id="H50782ACE456445DB94032E04F8CA1830"><enum>(iii)</enum><text>Homeless or
formerly homeless individuals.</text>
</clause><clause commented="no" id="HAD39AD6DCFA247709EC409D261CFD5D"><enum>(iv)</enum><text>Individuals with
disabilities.</text>
</clause><clause commented="no" id="H9823A44CBDC049D7B0BC348D79604000"><enum>(v)</enum><text>Individuals
designated by a court or the IV–D agency to participate in transitional jobs
programs.</text>
</clause></subparagraph><subparagraph commented="no" id="H7C864B93EA604D28948344B192EAC6F4"><enum>(C)</enum><header>Limitations on
use of funds</header>
<clause commented="no" id="H304F3DAA0B75484287C8644C73EB0163"><enum>(i)</enum><header>Allowable
activities</header><text>A State that receives a grant under this paragraph (or
a subgrantee of such State) (referred to in this paragraph as the
<quote>program operator</quote>) shall use the funds made available under the
grant to operate a transitional jobs program for eligible individuals
consistent with the following requirements:</text>
<subclause commented="no" id="H8EC50BB82FB744379E29F4932169D9DB"><enum>(I)</enum><header>Jobs</header><text>The
program operator shall place eligible individuals in temporary jobs, the
incomes from which may be subsidized in whole or in part with public funds. An
eligible individual placed in such a job (referred to in this paragraph as
<quote>a participant</quote>) shall perform work directly for the program
operator or another public, nonprofit, or private sector organization (which
operator or organization may be referred to in this paragraph as a
<quote>worksite employer</quote>) within the community involved.</text>
</subclause><subclause commented="no" id="H298F30EFC2F54231BCA50854EB1386EC"><enum>(II)</enum><header>Hours</header>
<item commented="no" id="HBE8B5F11C8D6461C95393929FF41DED6"><enum>(aa)</enum><header>In
general</header><text>Subject to item (bb), the transitional jobs program shall
provide a participant with not less than 30, and not more than 40, hours per
week of a combination of paid employment and the services described in
subclauses (III), (IV), and (V).</text>
</item><item commented="no" id="H09A8C068488B462AAE6573E4DA094B2"><enum>(bb)</enum><header>Accommodation of
special circumstances</header><text>The number of hours per week required under
item (aa) may be adjusted in the case of a participant who requires a modified
work week to accommodate special circumstances.</text>
</item></subclause><subclause commented="no" id="H147B187405884EA68F43EFB4A473D4FB"><enum>(III)</enum><header>Job
preparation and services</header><text>The program operator shall—</text>
<item commented="no" id="H40A4061722874D5F92A218D3ABD9378D"><enum>(aa)</enum><text>develop an
individual plan for each participant, which shall contain a goal that focuses
on preparation of the participant for unsubsidized jobs in demand in the local
economy that offer the potential for advancement and growth (including
increases in wages and benefits);</text>
</item><item commented="no" id="H4FB559396A464640AE1051309687F2D4"><enum>(bb)</enum><text>develop
transitional jobs placements for participants that will best prepare them for
jobs described in item (aa) or participation in the public-private career
pathway partnerships established in accordance with paragraph (2); and</text>
</item><item commented="no" id="H03F983F31EF14EDCB58200887E005E00"><enum>(cc)</enum><text>provide case
management services and ensure that appropriate education, training, and other
activities are available to participants, consistent with each participant’s
individual plan.</text>
</item></subclause><subclause commented="no" id="H2ACF08C231B44C268EA26C42318CF9D"><enum>(IV)</enum><header>Job placement
assistance and retention services</header><text>The program operator shall
provide job placement assistance to help participants obtain unsubsidized
employment and shall provide retention services to the participants for a
minimum of 6 months after entry into the unsubsidized employment.</text>
</subclause><subclause commented="no" id="H775CB61933574EFA97D95767105E0087"><enum>(V)</enum><header>Education or
training</header><text>In any workweek in which a participant is scheduled to
work at least 30 hours in the program, not less than 20 percent of the
scheduled hours and not more than 50 percent of the scheduled hours shall
involve participation in—</text>
<item commented="no" id="H910E672706B74AD59BCB9E639BCFF48"><enum>(aa)</enum><text>education or
training activities designed to improve the participant’s employability and
potential earnings;</text>
</item><item commented="no" id="HFE7CBF62B6AC4A6993B9017FF651C58"><enum>(bb)</enum><text>other activities
designed to reduce or eliminate any barriers that may impede the participant’s
ability to secure and advance in unsubsidized employment; or</text>
</item><item commented="no" id="HD9A93D84E6ED4A92B900FE046FA926CC"><enum>(cc)</enum><text>activities
designed to promote financial literacy and the use of products and services
that increase personal savings and build financial assets for family support,
education, homeownership, and retirement.</text>
</item></subclause><subclause commented="no" id="HB5F9E39F6CF94A2C9EEFE14E4B2C5900"><enum>(VI)</enum><header>Duration</header>
<item commented="no" id="H66B92CB25FAB45869843F8F83739DAC"><enum>(aa)</enum><header>In
general</header><text>Subject to item (bb), the duration of any placement in
the program shall be for a minimum period of 3 consecutive months.</text>
</item><item commented="no" id="H476938639D3E4E298794707689381CC3"><enum>(bb)</enum><header>3 month
extension</header><text>A program placement may be extended for up to 2
additional consecutive 3-month periods upon the conclusion of the original
3-month placement period if such extension would be consistent with the
individual’s plan for transition to unsubsidized employment.</text>
</item></subclause><subclause commented="no" id="HBF1346A5B69148798DF1AD00C6008F26"><enum>(VII)</enum><header>Supervision</header><text>The
worksite employer or program operator shall supervise program participants,
consistent with the goal of addressing the limited work experience and skills
of the participants.</text>
</subclause></clause></subparagraph><subparagraph commented="no" id="H722A23FAFA4442FBAF2018977C36B439"><enum>(D)</enum><header>Reports</header><text>Not
later than 120 days after the end of the grant period, the State shall submit a
report to the Secretary of Labor that contains information on the number of
participants in the program who have entered unsubsidized employment, the
percentage of program participants who are employed during the second quarter
after exit, the percentage of program participants who are employed during the
fourth quarter after exit, the median earnings of program participants during
the second quarter after exit, the percentage of program participants who
obtain an education or training credential during participation or within one
year of exit, and demographic information regarding the participants.</text>
</subparagraph><subparagraph commented="no" id="H3D00FC149ADE4E8AA6252305073B47A2"><enum>(E)</enum><header>Technical
assistance</header><text>The Secretary of Labor shall enter into contracts with
entities with demonstrated experience in the provision of transitional jobs to
provide technical assistance to the program operators and worksite employers
for the programs assisted under this paragraph.</text>
</subparagraph></paragraph><paragraph id="H1A72038754724DE7AE0831006F30E1AA"><enum>(2)</enum><header>Public-private
career pathways partnerships</header>
<subparagraph id="H1A2AE3FF362B42329495ECC121403B28"><enum>(A)</enum><header>In
general</header><text>To allow workforce education providers representing
career pathway partnerships—</text>
<clause id="H3F47B3696DA34F49B2C0FB45B9B2E402"><enum>(i)</enum><text>to
create or expand career pathways, with groups of employers in specific industry
or occupational sectors, for disadvantaged workers, which may include any mix
of such employers’ existing lower wage employees, new hires or potential hires;
or</text>
</clause><clause id="H9BF1CE6DEAEF427F81E900B85C951186"><enum>(ii)</enum><text>to
fill in gaps in career pathways in particular localities or regions as needed
to ensure that career pathways are accessible to unemployed disadvantaged
workers and at risk youth who have lower skills or limited English proficiency,
including through the creation of workforce education services, such as
<quote>bridge</quote> programs that contextualize basic skills, English
language, or college remedial education services to specific career pathways,
and efforts to create opportunities for gaining work experience in a career
pathway.</text>
</clause></subparagraph><subparagraph id="H67EC7BAEB497418295F816564EDF512E"><enum>(B)</enum><header>Use of
funds</header><text>Funds made available under a grant under this paragraph may
be used by career pathways partnerships for any expense reasonably related to
the accomplishment of the specific objectives of the partnership and the
purpose described in this paragraph, including any of the activities described
in subsection (a)(2)(D).</text>
</subparagraph><subparagraph id="H2F17A0EDF1534ED5ADACB8F5026076AB"><enum>(C)</enum><header>Limitations</header>
<clause id="H1347611B35A343B697727D633422C33E"><enum>(i)</enum><header>In
general</header><text>Of the funds made available to a career pathway
partnership to carry out the purpose described in this paragraph—</text>
<subclause id="H7CC1F7150CA648A8BE9498439DBA558"><enum>(I)</enum><text>not more than 30
percent of such funds may be used to pay or subsidize wages during a period of
work experience or internship, not to exceed 90 days; and</text>
</subclause><subclause id="H72844B4E7E914165BDC556F5A227FDE"><enum>(II)</enum><text>not more than 10
percent of such funds may be used for administrative purposes, but this
limitation shall not apply to activities related to building and maintaining
partnerships, including such activities as conducting workforce needs
assessments, brokering public-private and interagency agreements, creating
customized curricula, and developing work experience opportunities.</text>
</subclause></clause><clause id="HFEB08A406C7D4006AD2CE548ED3BAE0"><enum>(ii)</enum><header>Prohibition on
subsidizing wages of current employees</header><text>No funds made available to
carry out this paragraph shall be used to subsidize the wages of any individual
who, as of the date of the establishment of the career pathway partnership, is
an employee of any employer participating in the partnership.</text>
</clause></subparagraph><subparagraph id="H091C6AF38ADD40B0B718915469215840"><enum>(D)</enum><header>Requirements for
awarding of subgrants</header>
<clause id="H6AF55A2AE23C4DF5A4B96D2C30DD19EA"><enum>(i)</enum><header>In
general</header><text>Funds shall be made available to career pathway
partnerships to carry out the purpose described in this paragraph based on a
performance-based accountability system that includes the following measures of
performance:</text>
<subclause id="H6A164B1A88CB48B8A3050600A9D75BE4"><enum>(I)</enum><text>The number of
individuals to be trained.</text>
</subclause><subclause id="H0D6AD90E07EC469AA0EF848D73FCC8B"><enum>(II)</enum><text>The percentage of
such individuals who complete the program.</text>
</subclause><subclause id="H0C205C9FBCDF42ED8F06F0CDF63C524"><enum>(III)</enum><text>The percentage of
such individuals who enter or advance in employment.</text>
</subclause><subclause id="H9CB8CDBE94544E62A2D10002BBA1C7F9"><enum>(IV)</enum><text>The wage and
benefit gains of individuals who complete the program before and within 6
months after their program completion, including the extent to which the
individuals achieved economic self-sufficiency.</text>
</subclause><subclause id="H703A59084EE843859044FA3DC2547072"><enum>(V)</enum><text>The percentage of
individuals who complete the program and enter employment who retain employment
for at least 6 months.</text>
</subclause><subclause id="H16ED22FAC01F4519ABABEBA63DCDF91"><enum>(VI)</enum><text>Where applicable,
the percentage of individuals who owe child support and complete the program
who improve in their payment of child support within 6 months after their
program completion.</text>
</subclause><continuation-text continuation-text-level="clause">In establishing
goals for such measures, due consideration shall be given to the education,
work experience, and job readiness of the individuals expected to participate
in the program; the barriers of such individuals to employment, and the local
job market.</continuation-text></clause><clause id="H93AC484BBFB6489E91F2B3786031000"><enum>(ii)</enum><header>Considerations
for funding renewals</header><text>A subgrantee's level of success in achieving
employment, advancement, wage, and employment retention goals shall be a
primary consideration for determining whether to renew a grant made to such
entity and the funding level for such grant.</text>
</clause><clause id="HCF58AAA455654ADD9F5EA5B562D57240"><enum>(iii)</enum><header>Priorities for
awards of subgrants</header><text>In awarding subgrants under this paragraph, a
State shall give priority to applications that—</text>
<subclause id="HCA835823EF8E46E198EB5885A6473C81"><enum>(I)</enum><text>propose to serve
areas of high poverty, high youth unemployment, high drop out rates, or high
rates of low-income single-parent families;</text>
</subclause><subclause id="H8688743F03CE4ADA85E8FAF4D31D493"><enum>(II)</enum><text>include a
substantial cash or in-kind match by all employers, including joint
labor-management programs where applicable, in the partnerships, such as paid
release time for employed workforce education participants;</text>
</subclause><subclause id="H6B5CEBB52F9F48FF8BF0782CD9000075"><enum>(III)</enum><text>use
instructional materials and instructors directly used in the specific business
or industry sectors of the partnership employers;</text>
</subclause><subclause id="H521302BCC1CF485D88F86F13309FA646"><enum>(IV)</enum><text>link successful
completion of workforce education services to wage increases, promotions or job
hires;</text>
</subclause><subclause id="HDC50AF2A2444479F87FACE7B5CA3002F"><enum>(V)</enum><text>will result in
attainment of employer-recognized occupational and educational
credentials;</text>
</subclause><subclause id="H7D829FB896D546D5B9E265AEAEC3A863"><enum>(VI)</enum><text>address career
guidance and adult basic education and English language needs as well as
job-specific skills;</text>
</subclause><subclause id="H7A34504DD5CD49F100B45900B67021D6"><enum>(VII)</enum><text>demonstrate a
blending of resources from partner agencies in the workforce system and other
sectors and Federal programs, including superior procedures for coordinating
responsible fatherhood promotion activities, where appropriate, to support the
development of high quality pathways;</text>
</subclause><subclause id="HE252C98BA7284949AED317C13BFC7809"><enum>(VIII)</enum><text>identify how
the subgrantee will maximize services to unemployed disadvantaged workers who
also face other barriers in the labor market, such as high school dropout,
offender status, aging out of foster care, low basic skill level, including
limited English proficiency, learning disabilities, physical, emotional or
behavior disabilities, or substance abuse recovery, which may be through direct
relationships with local providers of transitional jobs programs under which in
appropriate circumstances transitional jobs participants may access career
pathways programs upon completion of the transitional jobs program; and</text>
</subclause><subclause id="HEE20928861CD43A399B3A737513DAB60"><enum>(IX)</enum><text>support
collaboration, as appropriate, between employers and labor organizations and
other workforce development professionals, including joint labor management
training and education programs where appropriate.</text>
</subclause></clause></subparagraph><subparagraph id="H6C3C0E47347C4053B0EB54AA3CCF96FD"><enum>(E)</enum><header>Definitions</header><text>In
this paragraph:</text>
<clause id="H38266F94C816464698D40600C8900000"><enum>(i)</enum><header>Adult
education</header><text>The term <term>adult education</term> has the meaning
given that term in section 203 of the Workforce Investment Act of 1998 (20
U.S.C. 9202).</text>
</clause><clause id="H0449CF7B429D4F88BAD3C337E8F1A412"><enum>(ii)</enum><header>Career
pathway</header><text>The term <term>career pathway</term> means a linked set
of workforce education and job opportunities within a specific industry sector,
or for an occupational sector that cuts across multiple business and industry
sectors, which begins at the lowest skill and English language levels, and
extends through for-credit college opportunities such as earning relevant
associate or bachelor’s degrees, and prepares individuals for advancement in
jobs in demand in the local or regional labor market.</text>
</clause><clause id="H01E2FA0566EE4C799C160209C2217807"><enum>(iii)</enum><header>Community-based
provider</header><text>The term <term>community-based provider</term> means a
not-for-profit organization, with local boards of directors, that directly
provides workforce education services.</text>
</clause><clause id="H320EFA6EB9234B69A095C6359FE11D4C"><enum>(iv)</enum><header>Institution of
higher education</header><text>The term <term>institution of higher
education</term> has the meaning given that term in section 101 of the Higher
Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1001">20 U.S.C. 1001</external-xref>).</text>
</clause><clause id="H5B9F44F597B245B190D4EAB824F053D1"><enum>(v)</enum><header>Charter
school</header><text>The term <term>charter school</term> has the meaning given
that term in section 5210 of the Elementary and Secondary Education Act of 1965
(<external-xref legal-doc="usc" parsable-cite="usc/20/7221i">20 U.S.C. 7221i</external-xref>).</text>
</clause><clause id="H8A4806351FFB4257959B607E8E08C8E2"><enum>(vi)</enum><header>Area vocational
education school</header><text>The term <term>area vocational and technical
education school</term> has the meaning given that term in section 3 of the
Carl D. Perkins Vocational and Technical Education Act of 1998 (20 U.S.C.
2302).</text>
</clause><clause id="HD1ABEDB5D53B44D693A1C849AFEDD814"><enum>(vii)</enum><header>Disadvantaged
workers</header><text>The term <term>disadvantaged workers</term> means
unemployed individuals in low-income households or employed individuals in
low-income households with wages at or below <fraction>2/3</fraction> of the
median wage for the State or region applying for the grant.</text>
</clause><clause id="HB5EC9DB7E0494EC5BF3259CBEEE9500"><enum>(viii)</enum><header>Career pathway
partnership</header><text>The term <term>career pathway partnership</term>
means collaborations of 1 or more workforce education providers, 1 or more
employers, 1 or more labor organizations, where applicable, as a result of such
organization's representation of employees at the worksite who have skills in
which the training or employment programs are proposed, and may include
optional additional entities as needed to provide a comprehensive range of
workforce education and ancillary support services.</text>
</clause><clause id="HBA9C101AD4DE450DBC1D3956936CECF6"><enum>(ix)</enum><header>Workforce
education</header><text>The term <term>workforce education</term> means a set
of career guidance and exploration services, adult education and English
language services, job training, registered apprenticeship programs, and credit
and non-credit postsecondary education services aimed at preparing individuals
to enter and sustain employment in specific occupations and to have the
sufficient skills to respond to shifting employment opportunities.</text>
</clause><clause id="HD1BA67621C8943AB84CB95AEBB2990F9"><enum>(x)</enum><header>Workforce
education provider</header><text>The term <term>workforce education
provider</term> means community-based providers, institutions of higher
education, area vocational and technical education schools, charter schools,
and other public nonprofit entities that have a demonstrated capacity to
provide quality workforce education services.</text>
</clause></subparagraph></paragraph></subsection><subsection id="HDB049555072A4F3FB99EACC19B9400AA"><enum>(c)</enum><header>Matching
requirement</header>
<paragraph id="HBE9ECA055AB94CEC92ACFE4E5889EDBA"><enum>(1)</enum><header>In general
</header><text>The Secretary of Health and Human Services and the Secretary of
Labor may not award a grant to a State under this section unless the State
agrees that, with respect to the costs to be incurred by the State in
conducting a demonstration project with funds provided under the grant, the
State will make available non-Federal contributions in an amount equal to 10
percent of the amount of Federal funds paid to the State under such
grant.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H3C2EA06A36634D22AD3153C46CEE6E42"><enum>(2)</enum><header>Non-federal
contributions</header><text>In this subsection, the term <term>non-Federal
contributions</term> includes contributions by the State and by public and
private entities that may be in cash or in kind, but does not include any
amounts provided by the Federal Government, or services assisted or subsidized
to any significant extent by the Federal Government, or any amount expended by
a State before October 1, 2007.</text>
</paragraph></subsection><subsection commented="no" id="HD6153BA5B1A04FD2B0A1D4D86107BA7"><enum>(d)</enum><header>Worker
protections and labor standards</header>
<paragraph commented="no" id="H386061D903514C0FAB350799284DBD00"><enum>(1)</enum><header>Rate of pay;
benefits and working conditions</header>
<subparagraph commented="no" id="H64D967111CF542F883EB95B5288B2DB4"><enum>(A)</enum><header>In
general</header><text>A worksite employer of a participant in a program or
activity funded under this section shall pay the participant at the rate paid
to employees of the worksite employer who are not participants in such program
or activity and who perform comparable work at the worksite, including periodic
increases where appropriate. If no other employees of the worksite employer
perform comparable work at the worksite, the worksite employer shall pay the
participant not less than the applicable Federal or State minium wage,
whichever is higher.</text>
</subparagraph><subparagraph commented="no" id="H1EC8046AB5074505A8021CFDE12DBC93"><enum>(B)</enum><header>Benefits and
conditions</header><text>An individual employed through participation in a
program or activity funded under this section shall be provided with benefits
and working conditions at the same level and to the same extent as such
benefits and conditions are provided to other employees of the employer of the
individual who have worked a similar length of time and perform the same
work</text>
</subparagraph></paragraph><paragraph commented="no" id="H6C2AB6DDDF92494492AEDF7F5F6C80AC"><enum>(2)</enum><header>Nonduplication</header>
<subparagraph commented="no" id="H96DA4200B2234F06B787A7335BDF8770"><enum>(A)</enum><header>In
general</header><text>Funds provided through a grant made under this paragraph
shall be used only for a program or activity that does not duplicate, and is in
addition to, a program or activity otherwise available in the locality of the
program or activity funded under this section.</text>
</subparagraph><subparagraph commented="no" id="H11EF293FFB584465BE193F0371D49961"><enum>(B)</enum><header>Private,
nonprofit entity</header><text>Funds provided through a grant made under this
section shall not be provided to a private nonprofit entity to conduct programs
or activities that are the same as or substantially equivalent to activities
provided by a State or local government agency in the area in which such entity
is located, unless the requirements of paragraph (3) are met.</text>
</subparagraph></paragraph><paragraph commented="no" id="HC51B117DF8C347479FEFD8F921E4834"><enum>(3)</enum><header>Nondisplacement</header>
<subparagraph commented="no" id="H19AAAB0FE44D4A5B8D3C4F643E5755C7"><enum>(A)</enum><header>In
general</header><text>A worksite employer shall not displace an employee or
position (including partial displacement such as reduction in hours, wages, or
employment benefits) or impair contracts for services or collective bargaining
agreements, as a result of the use by such employer of a participant in a
program or activity funded under this section, and no participant in the
program or activity shall be assigned to fill any established unfilled position
vacancy.</text>
</subparagraph><subparagraph commented="no" id="H78D0C001CE4849578279B03D28347E85"><enum>(B)</enum><header>Job
opportunities</header><text>A job opportunity shall not be created under this
paragraph that will infringe in any manner on the promotional opportunity of an
employed individual.</text>
</subparagraph><subparagraph commented="no" id="H7DBDE34CAA2E481DA7B5DF621F7E6D3E"><enum>(C)</enum><header>Limitation on
services</header>
<clause commented="no" id="H769394189946419EB3AD9311416B9C65"><enum>(i)</enum><header>Supplantation of
hiring</header><text>A participant in any program or activity funded under this
section shall not perform any services or duties, or engage in activities, that
will supplant the hiring of employees that are not participants in the program
or activity.</text>
</clause><clause commented="no" id="HA6C7BEDCE75448999751D9020658661C"><enum>(ii)</enum><header>Duties formerly
performed by another employee</header><text>A participant in any program or
activity funded under this section shall not perform services or duties, or
engage in activities, that are services, duties, or activities that had been
performed by or were assigned to any employee who recently resigned or was
discharged, who is subject to a reduction in force, who has recall rights
pursuant to a collective bargaining agreement or applicable personnel
procedures, who is on leave (such as terminal, temporary, vacation, emergency,
or sick leave), who is on strike, or who is being locked out.</text>
</clause></subparagraph><subparagraph commented="no" id="H64777C47002B439182F2B11CB32812B1"><enum>(D)</enum><header>Concurrence of
local labor organization</header><text>No placement shall be made under a
program or activity funded under this section until the entity conducting the
program or activity has obtained the written concurrence of any local labor
organization representing employees who are engaged in the same or
substantially similar work as that proposed to be carried out for the worksite
employer with whom a participant is to be placed under the program or
activity.</text>
</subparagraph></paragraph><paragraph commented="no" id="H8A1562C0258046718D1F407D6BA14B50"><enum>(4)</enum><header>No impact on
union organizing</header><text>A State conducting a demonstration project
funded under this section and any entity conducting a program or activity
funded under this section shall provide the Secretary with a certified
assurance that none of such funds shall be used to assist or deter union
organizing.</text>
</paragraph><paragraph commented="no" id="H2A28746F0D704608A457425C6D77DA5C"><enum>(5)</enum><header>Accountability</header>
<subparagraph commented="no" id="HF2442F798D864F5E961C08A9C23553E4"><enum>(A)</enum><header>In
general</header><text>Funds provided under this section shall not be used to
subsidize training or employment with an employer that has a demonstrable
record of noncompliance with Federal labor, civil rights, workplace safety, or
related laws.</text>
</subparagraph><subparagraph commented="no" id="H1BB315BF03A2464981FB3D501EB2D7F"><enum>(B)</enum><header>Certified
satisfactory record</header><text>Employers who receive training or wage
subsidies under programs or activities funded under this section shall have a
satisfactory record in labor relations and employment practices, as certified
by the Secretary of Labor.</text>
</subparagraph><subparagraph commented="no" id="H4284EA3DFC7A4F8497DFEAC63808348"><enum>(C)</enum><header>Application of
worker protection laws</header><text>A participant in a program or activity
funded under this section shall be considered to be an employee of any employer
that the participant is placed with for all purposes under Federal and State
law, including laws relating to health and safety, civil rights, and worker’s
compensation.</text>
</subparagraph><subparagraph commented="no" id="H5849EEF40EDC463D8167FF7117E667F5"><enum>(D)</enum><header>Other job
quality standards</header><text>Employers who receive training or wage
subsidies under programs or activities funded under this section shall meet all
applicable State or local job or employer quality standards regarding such
issues as wages, benefits, advancement opportunities, and turnover rates
established for programs funded under the Workforce Investment Act of 1998 (29
U.S.C. 2801 et seq.).</text>
</subparagraph></paragraph><paragraph commented="no" id="HC34F562D416244688400C54E1E673EF7"><enum>(6)</enum><header>Grievance
procedure</header><text>An entity conducting a program or activity funded under
this section shall establish and maintain a procedure for the filing and
adjudication of grievances by employees of worksite employers who are not
participants in the program, or such employees’ representatives, or by
participants in such a program or activity alleging a violation of a provision
of this subsection that is similar to the grievance procedure established by a
State for purposes of section 407(f)(3) of the Social Security Act (42 U.S.C.
607(f)(3)).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HE63953B0F14C438AAB36A5C47E2EDF85"><enum>(7)</enum><header>Nonpreemption of
state law</header><text>The provisions of this subsection shall not be
construed to preempt any provision of State law that affords greater
protections to employees or participants than are afforded by this
subsection.</text>
</paragraph><paragraph id="HECB4E1E0157442A4B68862D355C53F11"><enum>(8)</enum><header>Treatment of
amounts paid to participants</header><text>Amounts paid to a participant in a
program or activity funded under this section shall be—</text>
<subparagraph id="H25E6C81C488346EB8956329B80779DB6"><enum>(A)</enum><text>considered earned
income for purpose of determining the participant's eligibility for the child
tax credit established under <external-xref legal-doc="usc" parsable-cite="usc/26/24">section 24</external-xref> of the Internal Revenue Code of 1986,
the earned income tax credit established under section 32 of such Code, and any
other tax benefit established under such Code the eligibility for which is
based on earned income; and</text>
</subparagraph><subparagraph id="HCC5044BCBCD14A85007F3D67F2729CAD"><enum>(B)</enum><text>disregarded for
purposes of determining the participant's, the participant's family's, or the
participant's household's eligibility for, or amount of, assistance or benefits
provided under any means-tested program funded in whole or in part with Federal
funds.</text>
</subparagraph></paragraph></subsection><subsection id="HDF7CC093EF0A41750033BA006DE7BD9"><enum>(e)</enum><header>Application</header>
<paragraph id="H18DF3CCDD3534C569E20AD1E95A86DAA"><enum>(1)</enum><header>Requirements for
all applications</header>
<subparagraph id="H5266667B51CB4E83A8FB08697870CF8"><enum>(A)</enum><header>In
general</header><text>A State desiring to receive a grant to conduct a
demonstration project under this section shall submit an application—</text>
<clause id="HC219CD0346F842258F6C3DF3B9CC0908"><enum>(i)</enum><text>to
the Secretary of Health and Human Services, in the case of a grant under
subsection (a); or</text>
</clause><clause id="H58503489C9D34BA6922002F93507B5C"><enum>(ii)</enum><text>to
the Secretary of Labor, in the case of a grant under subsection (b);</text>
</clause><continuation-text continuation-text-level="subparagraph">at such
time, in such manner, and containing such information or assurances as the
Secretary of Health and Human Services or the Secretary of Labor, as
appropriate, may require.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HB6A8CC9C67C04712A898F5C0F28F009B"><enum>(B)</enum><header>Compliance with
worker protections and labor standards</header><text>The application shall
include an assurance that the State and any entity conducting a program or
activity under the project shall comply with the worker protections and labor
standards established in accordance with such protections under subsection
(d),</text>
</subparagraph><subparagraph id="HF161CD6305954704B357E715646D4748"><enum>(C)</enum><header>Nondiscrimination</header><text>The
application shall include an assurance that the State and any entity conducting
a program or activity under the demonstration project shall comply with section
188(a)(2) of the Workforce Investment Act of 1998 (<external-xref legal-doc="usc" parsable-cite="usc/29/2938">29 U.S.C. 2938(a)(2)</external-xref>) to the
same extent that such section would apply to the entity if the program or
activity conducted under the demonstration project was considered to be funded
or otherwise financially assisted under that Act.</text>
</subparagraph><subparagraph id="H5584364F05504330ACA578B8F23982A"><enum>(D)</enum><header>Assurance grant
will supplement, not supplant, other State funding</header><text>The
application shall include an assurance from the chief executive officer of the
State that funds made available under the grant will supplement, and not
supplant, other funds used by the State to establish or support employment
placements for low-income parents.</text>
</subparagraph></paragraph><paragraph id="H02615E46CB8F4AA4A87E650601B87176"><enum>(2)</enum><header>Specific
demonstration project requirements</header>
<subparagraph id="HD5903FCEF3F04CD18600DE3D07E7897B"><enum>(A)</enum><header>Court-supervised
or IV–D agency-supervised employment programs for noncustodial
parents</header><text>In order to conduct a demonstration project described in
subsection (a), a State shall include in the application submitted to the
Secretary of Health and Human Services the following:</text>
<clause id="HAAEF4EBD03A24CE7AE8CC504ACAA34A4"><enum>(i)</enum><text>Evidence of an
agreement between the State and 1 or more counties to establish an employment
program that meets the requirements of subsection (a).</text>
</clause><clause id="H4413303DFC0E45C4BD62A38D8D5B001B"><enum>(ii)</enum><text>The
number of potential noncustodial parents to be served by the program.</text>
</clause><clause id="H8DA94BC4B5A844EFAF242685F93551AE"><enum>(iii)</enum><text>The purposes
specific to that State’s program.</text>
</clause><clause id="H0DC1E3D25443442C00F435ABA6D1BCC"><enum>(iv)</enum><text>The
median income of the target population.</text>
</clause></subparagraph><subparagraph id="H83ED74C870D5419090CA506219FBFE43"><enum>(B)</enum><header>Public-private
career pathways partnerships</header><text>In order to conduct a demonstration
project described in paragraph (2) of subsection (b), a State shall include in
the application submitted to the Secretary of Labor a description of—</text>
<clause id="H812301F26F9D452E87C8F70DBACF1D2"><enum>(i)</enum><text>the
number, characteristics, and employment and earnings status of disadvantaged
individuals in the State or applicable region where the program is to be
conducted;</text>
</clause><clause id="H253E01D8D0404613AAB78D4793D9B998"><enum>(ii)</enum><text>which business
and industry sectors, or occupational clusters that cut across sectors, will be
targeted by the career pathways partnership, based on overall economic benefit
to the community, the current and future demand for workers, the advancement
opportunities for workers, the wages at each step of the career pathway, and
availability of worker benefits;</text>
</clause><clause id="H5F85B556F9B84D3F9C30E41CA64FDF3F"><enum>(iii)</enum><text>the
interventions that will be put in place to address any educational deficits,
limited English proficiency, or learning disabilities of individuals who
participate in the program and to ensure that such individuals have the
academic, technical, communications, and other job skills to function in the
jobs targeted by the partnership;</text>
</clause><clause id="H0DBB6C7B776B4F36872F1B6705F13D18"><enum>(iv)</enum><text>how
the members of the partnership will collaborate on the development of
curriculum and delivery of training that will provide the necessary
occupational, academic and other work-related skills and credentialing needed
for the specific labor market areas;</text>
</clause><clause id="H3D2CB95D8AFD4A769B8BCF52BD8E91D5"><enum>(v)</enum><text>the
supports that will be used to provide counseling, mentoring or other support to
individuals while in training or to assist them in navigating in complicated
work environments;</text>
</clause><clause id="HFA329C5BF9144A1B90E253FA3879AE2B"><enum>(vi)</enum><text>the
set of career exposure activities that will be put in place to provide hands-on
experience such as work experience, on the job training, internships, or
work-study;</text>
</clause><clause id="H501DAFBDD46747958388C32FA7074320"><enum>(vii)</enum><text>the agreements
that are in place with employers, industry groups, and labor organizations,
where applicable, to ensure access to jobs and advancement opportunities in the
targeted businesses, industry or occupations;</text>
</clause><clause id="H489C696488DA4151B85ECF45CFC53F1"><enum>(viii)</enum><text>how the
workforce education providers in the partnership will assess the employment
barriers and needs of local disadvantaged individuals who participate in the
program and will identify resources for meeting those needs;</text>
</clause><clause id="HE6D95AC986694CB8851DAE91B473D4BD"><enum>(ix)</enum><text>how
the workforce education providers will work with partnership employers,
business and industry groups, labor organizations, where applicable, and local
economic development organizations to identify the priority workforce needs of
the local industry;</text>
</clause><clause id="H9C7184DC25424D669C3D8867A790E52F"><enum>(x)</enum><text>how
the partnerships will ensure that the appropriate program delivery models and
formal agreements are in place to ensure maximum benefits to the individuals
receiving career pathway partnership services and to the employers and labor
organizations, where applicable, in the partnership and the industries or
businesses they represent;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="H8A374340DB0647CCB86D1F80DDBC555"><enum>(xi)</enum><text>how partnership
employers and labor organizations, where applicable, will be actively involved
in identifying specific workforce education needs, planning the curriculum,
assisting in training activities, providing job opportunities, and coordinating
job retention for individuals hired after training through the program and
follow-up support; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="H0DB7132D5A624AB9814E1D7131A6A604"><enum>(xii)</enum><text>how the
partnership will build on existing career pathways programs, where applicable,
to serve the targeted population.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H83E499041C444E808F6E2289EE66E79D"><enum>(3)</enum><header>Applications by
Indian tribes or tribal organizations</header><text>The Secretary of Health and
Human Services and the Secretary of Labor may exempt an Indian tribe or tribal
organization from any requirement of this section that the Secretary of Health
and Human Services or the Secretary of Labor determines would be inappropriate
to apply to the Indian tribe or tribal organization, taking into account the
resources, needs, and other circumstances of the Indian tribe or tribal
organization.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HE39AD188345249C3B150193DD358372F"><enum>(f)</enum><header>Priorities and
requirements for awarding grants</header>
<paragraph commented="no" id="H17E43172666E480AA18BCE55C7EECC7B"><enum>(1)</enum><header>In
general</header><text>Subject to paragraphs (2) and (3), the Secretary of
Health and Human Services (in the case of a grant under subsection (a)) and the
Secretary of Labor (in the case of a grant under subsection (b)) shall give
priority to making grants under this section to entities that—</text>
<subparagraph commented="no" id="HA2F777486F0F4BB6B7A55072AB5508E2"><enum>(A)</enum><text>demonstrate
success with respect to meeting the goals of quality job placement, long-term
unsubsidized job retention, and, where applicable, increasing child support
payments, decreasing unpaid child support arrearages, and increasing the
involvement of low-income noncustodial parents with their children through
their participation in responsible fatherhood activities, including
participation in programs that provide culturally-relevant curricula in core
subjects including—</text>
<clause commented="no" id="H6590D3C816DC42F8B4B2A7F691537657"><enum>(i)</enum><text>conducting
activities with children;</text>
</clause><clause commented="no" id="HFE200B32966D4DDA80C5C5E08123B700"><enum>(ii)</enum><text>improving
communication skills;</text>
</clause><clause commented="no" id="H02924273B9DE4FDD8700008D149F476E"><enum>(iii)</enum><text>child support
management;</text>
</clause><clause commented="no" id="HF6F32F096FB64B39AE5DC87C4B65C06F"><enum>(iv)</enum><text>providing
financially for the family's security and wellbeing;</text>
</clause><clause commented="no" id="HA960981444654E3E810798B8B3DC6F55"><enum>(v)</enum><text>managing stress
and anger;</text>
</clause><clause commented="no" id="H639EBD0FC2DD42C78EA811DB53935CD2"><enum>(vi)</enum><text>maintaining
physical and mental health;</text>
</clause><clause commented="no" id="HFB9A0FDD9952468CA8DFB5A70085B945"><enum>(vii)</enum><text>parenting and
relationship skills;</text>
</clause><clause commented="no" id="HF4146E13A8764AAA934E00EC1F4BA025"><enum>(viii)</enum><text>child
development; and</text>
</clause><clause commented="no" id="H9CEB1CBD88CA495E9FE17707B2E5702D"><enum>(ix)</enum><text>barriers to
responsible parenthood, including substance abuse, unemployment, criminal
justice system involvement, and inadequate housing; and</text>
</clause></subparagraph><subparagraph id="H3490B41DB2734D03BDC853AA00222640"><enum>(B)</enum><text>coordinate with,
and link individuals as applicable to, other public and private benefits and
employment services for low-income adults among the different systems or
programs in which such adults are involved, including the criminal justice
system, the State programs funded under each part of title IV of the Social
Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/601">42 U.S.C. 601 et seq.</external-xref>) (including programs and activities funded
under section 403(a)(2) of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/603">42 U.S.C. 603(a)(2)</external-xref>),
educational assistance and student aid programs, and job training or employment
programs, including State employment agencies.</text>
</subparagraph></paragraph><paragraph id="HDD121AD714E34597AFB1A92091768835"><enum>(2)</enum><header>Performance
measures</header><text>In making grants under this section, the Secretary of
Health and Human Services (in the case of a grant under subsection (a)) and the
Secretary of Labor (in the case of a grant under subsection (b)) shall ensure
that grantees demonstrate a plan for implementing measures to track their
performance with respect to meeting the goals of quality job placement,
long-term unsubsidized job retention, and, where applicable, increasing child
support payments, decreasing child support arrearages, and increasing the
involvement of low-income noncustodial parents with their children.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H110BF9BA2926488AA5AD6E6627E81BC9"><enum>(3)</enum><header>Reflective of
target populations</header><text>In making grants under this section, the
Secretary of Health and Human Services (in the case of a grant under subsection
(a)) and the Secretary of Labor (in the case of a grant under subsection (b))
shall give priority to States with proposed demonstration projects that are
designed to target low-income adults, including custodial and noncustodial
parents, and low-income married couples.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H1FCC0DE70002462594A49B296741EDB"><enum>(4)</enum><header>Substantial
funding for each of the purposes</header><text>In making grants under
subsection (b), the Secretary of Labor shall ensure that a substantial share of
the amount appropriated under subsection (j) for a fiscal year is used for
carrying out each of the projects described in paragraphs (1) and (2) of
subsection (b).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H0F940B18E85D47C6A81EF500838C32B2"><enum>(g)</enum><header>Regulatory and
policy flexibility</header><text>The Secretary of Labor and the Secretary of
Health and Human Services, in coordination with the Secretary of Education and
the Attorney General, shall work with grantees under this section to resolve
policy barriers that may impede blending of federal resources to support these
demonstration projects.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H1938C6E9DFE04934B5F235BCB6A01308"><enum>(h)</enum><header>Evaluation</header><text>The
Secretary of Health and Human Services (in the case of a grant under subsection
(a)) and the Secretary of Labor (in the case of a grant under subsection (b))
shall provide for an independent and rigorous evaluation of the demonstration
projects conducted under this section that includes, to the maximum extent
feasible, random assignment or other appropriate statistical techniques, in
order to assess the effectiveness of the projects.</text>
</subsection><subsection id="H54835305A7D94CA5A9B4F367A52EE25D"><enum>(i)</enum><header>General
Definitions</header><text>In this section:</text>
<paragraph id="H11B144AB12F74BBFB0BD06F600960333"><enum>(1)</enum><header>State</header><text>The
term <term>State</term> means each of the 50 States, the District of Columbia,
the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam,
American Samoa, and includes an Indian tribe or tribal organization.</text>
</paragraph><paragraph id="HD4FA4C75F59E4C46A1B661002BCE6EA"><enum>(2)</enum><header>IV–D
agency</header><text>The term <term>IV–D agency</term> means the State or local
agency responsible for administering the State program established under part D
of title IV of the Social Security Act (<external-xref legal-doc="usc" parsable-cite="usc/42/651">42 U.S.C. 651 et seq.</external-xref>).</text>
</paragraph><paragraph id="H9435C49ACBD347299C89576CE693D284"><enum>(3)</enum><header>Indian tribe;
tribal organization</header><text>The terms <term>Indian tribe</term> and
<term>tribal organization</term> have the meaning given such terms in section 4
of the Indian Self-Determination and Education Assistance Act (25 U.S.C.
450b).</text>
</paragraph></subsection><subsection commented="no" id="HEB1815A7495B469299488FBC5E78D2FE"><enum>(j)</enum><header>Appropriation</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated to carry out this section—</text>
<paragraph commented="no" id="H21E56DD34BD3459F8EEAC906562FA24"><enum>(1)</enum><text>for programs
administered by the Secretary of Health and Human Services under subsection
(a), $15,000,000 for each of fiscal years 2008 through 2010; and</text>
</paragraph><paragraph commented="no" id="H4E41CE0499A7467C834200764654633D"><enum>(2)</enum><text>for programs
administered by the Secretary of Labor under subsection (b), $35,000,000 for
each of fiscal years 2008 through 2010.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="HEC3C7EE85BB14413B4A92954C1082F72"><enum>107.</enum><header>State
assessments of barriers to employment and financial support of
children</header>
<subsection commented="no" display-inline="no-display-inline" id="H710164C1C9994CFB8E4EAAABC1C77A7"><enum>(a)</enum><header>State assessments
and reports</header><text>As a condition of the continued approval of a State
plan under part D of title IV of the Social Security Act (42 U.S.C. 651 et
seq.), each State with an approved such plan, acting through the appropriate
State agencies, shall assess the State policies with respect to the issues
described in subsection (b) and submit a report to the Secretary of Health and
Human Services on the results of such assessment not later than March 15,
2008.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H344D505CF7F048B38FE8EFDFA9ED86BF"><enum>(b)</enum><header>Issues
described</header><text>For purposes of subsection (a), the issues described in
this subsection are the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="HEDD9F19ABFD64E608029B702CD79BD68"><enum>(1)</enum><text>The process of
setting and modifying child support obligations, particularly with respect to
low-income parents, including—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="H2F2D09A0056F431DBE0014BB11062CE3"><enum>(A)</enum><text>the role and
criteria for using imputed income in determining child support
obligations;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HF121A617163C4C92BF52A588BC12CC32"><enum>(B)</enum><text>the process of
modifying obligations;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H74A8BF0CB13048F2AED3A4347F748400"><enum>(C)</enum><text>the consideration
of income and employment status, including efforts to identify unreported
income;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H602AA7B4841D4303ACFD93BCEE610042"><enum>(D)</enum><text>the consideration
of incarceration;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HE4333B153C064331003005C0EEA73017"><enum>(E)</enum><text>the consideration
of disability;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H724B69660F594614A93C4D736324B0F"><enum>(F)</enum><text>the treatment of
arrearages, including interest charged, and laws or procedures that interfere
with forgiveness, adjustment, waiver, or compromise of arrears owed to the
State by low-income noncustodial parents who lack sufficient ability to pay
such arrearages;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="HBBD6100DB1C74D8BBFA03E31347DA8E4"><enum>(G)</enum><text>the procedures
related to retroactive support; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H0591BB1101DC4351A3787098AB044D08"><enum>(H)</enum><text>State pass-through
and disregard policies for recipients of means tested public benefits.</text>
</subparagraph></paragraph><paragraph id="H8020440926884503B3CE3C00355865EF"><enum>(2)</enum><text>The impact of
state criminal laws and law enforcement practices on the employment
acquisition, retention, and advancement prospects of individuals following
arrest, conviction, or incarceration, including—</text>
<subparagraph id="H4081782660C6423FB3C675C62B4BF2B2"><enum>(A)</enum><text>any efforts,
including counseling or employment support, to assist ex-prisoners with reentry
to a community and successful reunification with their families; and</text>
</subparagraph><subparagraph id="HFE76A99BF4B547E186EEEDF7E35BC5C"><enum>(B)</enum><text>an assessment of
any efforts to seal or expunge arrest and conviction records and any efforts to
grant certificates or other acknowledgments of rehabilitation to ex-prisoners,
and to examine State occupational licensing and certification
procedures.</text>
</subparagraph></paragraph><paragraph id="H55C127A98F434C25A0FAA515C5BA0415"><enum>(3)</enum><text>An assessment of
the impact of debt on employment retention, including child support and
non-child support debts imposed to recover costs related to welfare and
criminal justice.</text>
</paragraph><paragraph id="HFA015B46BD074393AA69FD4BD566B2DA"><enum>(4)</enum><text>An assessment of
State practices related to providing prisoners and ex-prisoners with valid
identification documents upon release from prison.</text>
</paragraph><paragraph id="H70FDDF17FB0C420C95A86567629E42BA"><enum>(5)</enum><text>Identification of
any other barriers to healthy family formation or sustainable economic
opportunity for custodial and noncustodial parents that are created or
exacerbated by Federal or State laws, policies, or procedures, including an
examination of the rules of Federal and State means-tested programs, the
operation of the State workforce system, the availability of financial
education services, and the availability of domestic violence services and
child support procedures to help victims of domestic violence stay safe and
obtain the child support they are owed.</text>
</paragraph></subsection><subsection id="H7088152205A846C597F2E06343D3F52C"><enum>(c)</enum><header>Grants to states
for commissions on state law improvements in the best interest of children and
families</header><text>The Secretary of Health and Human Services shall award
grants to States to establish or support commissions to review the State
assessment conducted in accordance with subsection (a) and to make
recommendations on ways to improve State law in the best interest of children
and families.</text>
</subsection><subsection id="H3285719EF3C8418C8EF43134AFCBA83C"><enum>(d)</enum><header>Appropriations</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated to the Secretary of Health and Human Services for the
period of fiscal years 2008 through 2009, $3,000,000, to remain available until
expended, for the purpose of making—</text>
<paragraph id="H2C7C70B553CA482C9462776EFFAE06AB"><enum>(1)</enum><text>payments to States
to offset all or a portion of the costs of conducting the State assessments and
reports required under subsection (a); and</text>
</paragraph><paragraph id="HBD647FEA1E6C4A3F89115374307C6150"><enum>(2)</enum><text>grants to States
under subsection (c).</text>
</paragraph></subsection></section><section id="HB9C8B75237514C8E9731B76B164276C3"><enum>108.</enum><header>Collection of
child support under the food stamp program</header>
<subsection commented="no" id="HBED4034C2ED84BA7BA05D9DE1146B402"><enum>(a)</enum><header>Encouragement of
collection of child support</header><text>Section 5 of the Food Stamp Act of
1977 (<external-xref legal-doc="usc" parsable-cite="usc/7/2014">7 U.S.C. 2014</external-xref>) is amended—</text>
<paragraph commented="no" id="H4C347B4D42BE4C38B240B8E604C94DC"><enum>(1)</enum><text>in subsection
(e)—</text>
<subparagraph commented="no" id="HAA688BF66C9742F2B706D460D2BD3100"><enum>(A)</enum><text>by redesignating
paragraphs (5) and (6) as paragraphs (6) and (7), respectively;</text>
</subparagraph><subparagraph commented="no" id="H10F224598FA24E89948610FEB7764280"><enum>(B)</enum><text>in paragraph
(4)(B), by striking <quote>paragraph (6)</quote> and inserting <quote>paragraph
(7)</quote>; and</text>
</subparagraph><subparagraph commented="no" id="HE638784A56C9431C83F3E381409C7546"><enum>(C)</enum><text>by inserting after
paragraph (4) the following:</text>
<quoted-block display-inline="no-display-inline" id="HA118DDB4914748299F72BCD441BBE4F" style="OLC">
<paragraph commented="no" id="H862E0C7124414D09A70757E2AF58AB9"><enum>(5)</enum><header>Deduction for
child support received</header>
<subparagraph commented="no" id="HAC201F9503274EDFBDF202332E740040"><enum>(A)</enum><header>In
general</header><text>A household shall be allowed a deduction of 20 percent of
all legally obligated child support payments received from an identified or
putative parent of a child in the household if that parent is not a household
member.</text>
</subparagraph><subparagraph commented="no" id="H81386087644240CAAA4BF738FB1D8C94"><enum>(B)</enum><header>Order of
determining deductions</header><text>A deduction under this paragraph shall be
determined before the computation of the excess shelter deduction under
paragraph (7).</text>
</subparagraph></paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" id="H34F83E7A40EF47ED9B772BA2F4FA8BA0"><enum>(2)</enum><text>in subsection
(k)(4)(B), by striking <quote>subsection (e)(6)</quote> and inserting
<quote>subsection (e)(7)</quote>;</text>
</paragraph></subsection><subsection id="HD12E502A85104769864654E4DA8C553C"><enum>(b)</enum><header>Simplified
verification of child support payments</header><text>Section 5(n) of the Food
Stamp Act of 1977 (<external-xref legal-doc="usc" parsable-cite="usc/7/2014">7 U.S.C. 2014(n)</external-xref>) is amended—</text>
<paragraph id="HFCAF57CCE75B438FAEE5DF143469F001"><enum>(1)</enum><text>in the subsection
heading, by striking <quote><header-in-text level="subsection" style="OLC">State options to simplify</header-in-text></quote>, and inserting
<quote><header-in-text level="subsection" style="OLC">Simplified</header-in-text></quote>; and</text>
</paragraph><paragraph id="H71AA993ED70543EDBBFF2FC85177B5F6"><enum>(2)</enum><text>by striking
<quote>Regardless of whether</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H89B462127AC8490788BA72957811945C" style="OLC">
<paragraph id="HE704952847BF4A13A464F9AA9E43FB12"><enum>(1)</enum><header>In
general</header><text>A household that is paying legally obligated child
support through the program under part D of title IV of the Social Security Act
(<external-xref legal-doc="usc" parsable-cite="usc/42/651">42 U.S.C. 651 et seq.</external-xref>) shall receive—</text>
<subparagraph id="HC8B09BB3966F4876BB04004B976E0600"><enum>(A)</enum><text>a deduction under
subsection (e)(4); or</text>
</subparagraph><subparagraph id="HC9D242E72922418999A52EDC7C67E08"><enum>(B)</enum><text>an exclusion for
paid child support under subsection (d)(3).</text>
</subparagraph></paragraph><paragraph id="H488442BF157944DCA4D7A07BC2DB2F56"><enum>(2)</enum><header>State
options</header><text>Regardless of
whether</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H8D31D1FE4F7649C18EF10600363B6603"><enum>(c)</enum><header>Inclusion of
economic opportunities programs in definition of work
program</header><text>Section 6(o)(2) of the Food Stamp Act of 1977 (7 U.S.C.
2015(o)(2)) is amended—</text>
<paragraph id="H39206A49DBF143ADACFE61996DE5C4CF"><enum>(1)</enum><text>in subparagraph
(C), by striking <quote>or </quote> at the end;</text>
</paragraph><paragraph id="H283E46152622433C926785D2938CC016"><enum>(2)</enum><text>in subparagraph
(D), by striking the period at the end and inserting <quote>; or</quote>;
and</text>
</paragraph><paragraph id="H94C5C618A0DB4E0597E77EE2C9754ED9"><enum>(3)</enum><text>by adding at the
end the following:</text>
<quoted-block display-inline="no-display-inline" id="H63845704FFAC4935AE176C041CF66E92" style="OLC">
<subparagraph id="H1FDB49C7F10D421AA7CAE2B493A5F64F"><enum>(E)</enum><text>participate in and
comply with the requirements of a demonstration project under section 106 of
the <short-title>Responsible Fatherhood and Healthy
Families Act of
2007</short-title>;</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H8CAA07FB47004B28924D2CD438E4C225"><enum>(d)</enum><header>Effective
date</header>
<paragraph id="HF78AAA17640D4B059CA1D9875E9466C1"><enum>(1)</enum><header>In
general</header><text>This section and the amendments made by this section take
effect on October 1, 2007.</text>
</paragraph><paragraph id="HE784DCBD7D7F43F08DD89509865B4602"><enum>(2)</enum><header>State
option</header><text>A State may implement the amendments made by subsections
(a) and (b) for participating households at the first recertification of the
households that occurs on or after October 1, 2007.</text>
</paragraph></subsection></section><enum>II</enum><header>Revenue
provisions</header>
<section display-inline="no-display-inline" id="H842767488A92493AA77C4C00288C2CC3" section-type="subsequent-section"><enum>201.</enum><header> Expansion of earned
income credit for eligible individuals with no qualifying children</header>
<subsection id="H0588595944EC4DD7BC8247A3234DE8C0"><enum>(a)</enum><header>Increase in
earned income amount</header><text display-inline="yes-display-inline">The
table in subparagraph (A) of section 32(b)(2) of the Internal Revenue Code of
1986 is amended by striking <quote>$4,220</quote> and inserting
<quote>$5,500</quote>.</text>
</subsection><subsection id="H02EE57C2BCD24B3B9D68246692CC5728"><enum>(b)</enum><header>Expansion of
marriage penalty relief</header><text>Subparagraph (B) of section 32(b)(2) of
such Code is amended by striking <quote>and</quote> at the end of clause (ii)
and by clause (iii) and inserting the following new clauses:</text>
<quoted-block display-inline="no-display-inline" id="HA4298FE4924349BA005C4B9946C89539" style="OLC">
<clause id="H607721B6AD004438AB9E51A6D02D1FE"><enum>(iii)</enum><text display-inline="yes-display-inline">$3,000 in the case of taxable years
beginning in 2007, and</text>
</clause><clause id="HFEBFB03D807F417D9EA0758FFFF9358"><enum>(iv)</enum><text display-inline="yes-display-inline">$4,000 in the case of taxable years
beginning after
2007.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H26B90EF1925E4E03B2D9F7BB64220249"><enum>(c)</enum><header>Adjustments for
inflation</header>
<paragraph id="H2A7381ED23BD49659F3C1659E0E49D2B"><enum>(1)</enum><header>Earned income
amount</header><text>Subparagraph (B) of section 32(j)(1) of such Code is
amended by striking <quote>and</quote> at the end of clause (i), by striking
the period at the end of clause (ii) and inserting <quote>, and</quote>, and by
inserting after clause (ii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H4F871FF1C8F54B468C2DDC2DDAC9CC7" style="OLC">
<clause id="H3993EF1E660F400AB6C027C61310AF33"><enum>(iii)</enum><text display-inline="yes-display-inline">in the case of the $10,000 amount in the
table in subsection (b)(2)(A), by substituting <quote>calendar year
2006</quote> for <quote>calendar year 1992</quote> in subparagraph (B) of such
section
1.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H8F1ADF8E3FF44E17B5BA00769F8500E9"><enum>(2)</enum><header>Marriage penalty
amount</header><text display-inline="yes-display-inline">Clause (ii) of section
32(j)(1)(B) of such Code is amended—</text>
<subparagraph id="HE26DF2D81C8841B3987442421D926E7F"><enum>(A)</enum><text>by striking
<quote>$3,000</quote> and inserting <quote>$4,000</quote>, and</text>
</subparagraph><subparagraph id="HEAE38442763643EEA50427F72FD700B8"><enum>(B)</enum><text>by striking
<quote>2007</quote> and inserting <quote>2008</quote>.</text>
</subparagraph></paragraph><paragraph id="HBDBBBA0EC2544047A4658BD959D12F44"><enum>(3)</enum><header>Conforming
amendment</header><text display-inline="yes-display-inline">Section
32(j)(1)(B)(i) of such Code is amended by inserting <quote>except as provided
in clause (iii),</quote> before <quote>in the case of</quote>.</text>
</paragraph></subsection><subsection id="HCDF0F8B6838E4563B893DABFDF112800"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2006.</text>
</subsection></section><section id="H79DF425AF34A4AE1AB36D6CED3AFD3A8" section-type="subsequent-section"><enum>202.</enum><header>Broker reporting of
customer's basis in securities transactions</header>
<subsection id="H2549347E2929474CA4139DDEA32F4600"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 6045 of the
Internal Revenue Code of 1986 (relating to returns of brokers) is amended by
adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HFF63CF8BCAD545A6824E163E0779C704" style="OLC">
<subsection id="HFFDDB1710E7242F0ACBEBD286BCB7F27"><enum>(g)</enum><header>Additional
information required in the case of securities transactions</header>
<paragraph id="H0AC017E2C8FB435FBC9828ED06989F00"><enum>(1)</enum><header>In
general</header><text>If a broker is otherwise required to make a return under
subsection (a) with respect to any applicable security, the broker shall
include in such return the information described in paragraph (2).</text>
</paragraph><paragraph id="H2EE7E9E743FE4E3E00F971CC34449D"><enum>(2)</enum><header>Additional
information required</header>
<subparagraph id="H7A8E8D402A3B42BD8F8DBC33752CA7BE"><enum>(A)</enum><header>In
general</header><text>The information required under paragraph (1) to be shown
on a return with respect to an applicable security of a customer shall include
for each reported applicable security the customer's adjusted basis in such
security.</text>
</subparagraph><subparagraph id="H1EDB5A0AD75C442388DDF4D18BA7F700"><enum>(B)</enum><header>Exemption from
requirement</header><text>The Secretary shall issue such regulations or
guidance as necessary concerning the application of the requirement under
subparagraph (A) in cases in which a broker in making a return does not have
sufficient information to meet such requirement with respect to the reported
applicable security. Such regulations or guidance may—</text>
<clause id="H5D88B0F405A7421BA13108498204AA39"><enum>(i)</enum><text>require such other
information related to such adjusted basis as the Secretary may prescribe,
and</text>
</clause><clause id="H8DD1F197D619425EABC7C253CD18E39E"><enum>(ii)</enum><text>exempt classes of
cases in which the broker does not have sufficient information to meet either
the requirement under subparagraph (A) or the requirement under clause
(i).</text>
</clause></subparagraph></paragraph><paragraph id="H6BBB43289CD84CFE00919F89FC16F007"><enum>(3)</enum><header>Information
transfers</header><text>To the extent provided in regulations, there shall be
such exchanges of information between brokers as such regulations may require
for purposes of enabling such brokers to meet the requirements of this
subsection.</text>
</paragraph><paragraph id="H4438F4DEDDEC4A5AB421C2A48F7D701D"><enum>(4)</enum><header>Definitions</header><text>For
purposes of this subsection, the term <term>applicable security</term> means
any—</text>
<subparagraph id="H2C6D99C1DEFB49D7905D1750E7C3DC93"><enum>(A)</enum><text>security described
in subparagraph (A) or (C) of section 475(c)(2),</text>
</subparagraph><subparagraph id="H90DD51E8F17D44B1ABBE9E73131337E3"><enum>(B)</enum><text>interest in a
regulated investment company (as defined in section 851), or</text>
</subparagraph><subparagraph id="H4274011832CB493DA9471CD73EA5774"><enum>(C)</enum><text>other financial
instrument designated in regulations prescribed by the
Secretary.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HCA143D5CEF09487D8CCA4135DA23FB56"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to returns
the due date for which (determined without regard to extensions) is after
December 31, 2009, with respect to securities acquired after December 31,
2008.</text>
</subsection></section><section id="HB40382142A0F493DBE2848021578B43B"><enum>203.</enum><header>Modification of
effective date of leasing provisions of the American Jobs Creation Act of
2004</header>
<subsection id="H107EB692D0B74CCCBCB0005666C8E8BA"><enum>(a)</enum><header>Leases to
Foreign Entities</header><text>Section 849(b) of the American Jobs Creation Act
of 2004 is amended by adding at the end the following new paragraph:</text>
<quoted-block id="H95FD1FC6C15044EEB965BDEBC0840940" style="OLC">
<paragraph id="H6A7AA31AAF134BC096521D00E8C2A976"><enum>(5)</enum><header>Leases to
foreign entities</header><text>In the case of tax-exempt use property leased to
a tax-exempt entity which is a foreign person or entity, the amendments made by
this part shall apply to taxable years beginning after December 31, 2006, with
respect to leases entered into on or before March 12,
2004.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H29939A79775E410FA67D3F7C07580721"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by this section shall take effect as if
included in the enactment of the American Jobs Creation Act of 2004.</text>
</subsection></section><section changed="added" id="HE6BB2DBAB84E45F4AE46642B41668218"><enum>204.</enum><header>Clarification
of economic substance doctrine</header>
<subsection id="H29B88220ABB0440199BD94D3C500993E"><enum>(a)</enum><header>In
general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/7701">Section 7701</external-xref> of the Internal Revenue Code of 1986 is
amended by redesignating subsection (o) as subsection (p) and by inserting
after subsection (n) the following new subsection:</text>
<quoted-block changed="added" id="H3F067BD413FA4422B1F7C3EA75F28713">
<subsection id="H6270ABDEAC2B4FF1B17B2E32ABC87647"><enum>(o)</enum><header>Clarification of
economic substance doctrine; etc</header>
<paragraph id="HF2D3C3C3AAB142629FCAE430A0EF1D45"><enum>(1)</enum><header>General
rules</header>
<subparagraph id="H673F0E9FF1944941B9C5D6001BEBC966"><enum>(A)</enum><header>In
general</header><text>In any case in which a court determines that the economic
substance doctrine is relevant for purposes of this title to a transaction (or
series of transactions), such transaction (or series of transactions) shall
have economic substance only if the requirements of this paragraph are
met.</text>
</subparagraph><subparagraph id="HF274C808670E472C9F69EE92A4B7199"><enum>(B)</enum><header>Definition of
economic substance</header><text>For purposes of subparagraph (A)—</text>
<clause id="H59377E6FAD544A4D8B508116D59E3EC7"><enum>(i)</enum><header>In
general</header><text>A transaction has economic substance only if—</text>
<subclause id="H8070E8A8DFBA4074B4C4BDECD2BE8474"><enum>(I)</enum><text>the transaction
changes in a meaningful way (apart from Federal tax effects) the taxpayer’s
economic position, and</text>
</subclause><subclause id="H0383ADF6BAB34AD0B059A65D7534BCA5"><enum>(II)</enum><text>the taxpayer has
a substantial nontax purpose for entering into such transaction and the
transaction is a reasonable means of accomplishing such purpose.</text>
</subclause><continuation-text continuation-text-level="clause">In applying subclause (II), a purpose of
achieving a financial accounting benefit shall not be taken into account in
determining whether a transaction has a substantial nontax purpose if the
origin of such financial accounting benefit is a reduction of income
tax.</continuation-text></clause><clause id="H87681822B0D64EA3BA02FA81DF710460"><enum>(ii)</enum><header>Special rule
where taxpayer relies on profit potential</header><text>A transaction shall not
be treated as having economic substance by reason of having a potential for
profit unless—</text>
<subclause id="H14A043EB466642ED9311EC9342350037"><enum>(I)</enum><text>the present value
of the reasonably expected pre-tax profit from the transaction is substantial
in relation to the present value of the expected net tax benefits that would be
allowed if the transaction were respected, and</text>
</subclause><subclause id="H4B717D8777C643D1A38313C31D94CEF"><enum>(II)</enum><text>the reasonably
expected pre-tax profit from the transaction exceeds a risk-free rate of
return.</text>
</subclause></clause></subparagraph><subparagraph id="HF9EC5926429140738615994F82C17AE"><enum>(C)</enum><header>Treatment of fees
and foreign taxes</header><text>Fees and other transaction expenses and foreign
taxes shall be taken into account as expenses in determining pre-tax profit
under subparagraph (B)(ii).</text>
</subparagraph></paragraph><paragraph id="HF7A839550CE945C2AB51005E5BE42CB1"><enum>(2)</enum><header>Special rules
for transactions with tax-indifferent parties</header>
<subparagraph id="H9AB83479C1294E55A2DA93EF81FF3113"><enum>(A)</enum><header>Special rules
for financing transactions</header><text>The form of a transaction which is in
substance the borrowing of money or the acquisition of financial capital
directly or indirectly from a tax-indifferent party shall not be respected if
the present value of the deductions to be claimed with respect to the
transaction is substantially in excess of the present value of the anticipated
economic returns of the person lending the money or providing the financial
capital. A public offering shall be treated as a borrowing, or an acquisition
of financial capital, from a tax-indifferent party if it is reasonably expected
that at least 50 percent of the offering will be placed with tax-indifferent
parties.</text>
</subparagraph><subparagraph id="HDEE392C73B1E4F738691005EA54F9BDF"><enum>(B)</enum><header>Artificial
income shifting and basis adjustments</header><text>The form of a transaction
with a tax-indifferent party shall not be respected if—</text>
<clause id="HF5FBF03BDDDF4E5AA17497CF79EE586E"><enum>(i)</enum><text>it results in an
allocation of income or gain to the tax-indifferent party in excess of such
party’s economic income or gain, or</text>
</clause><clause id="HCC95E7EDCE8C46D2854D36B043008B00"><enum>(ii)</enum><text>it results in a
basis adjustment or shifting of basis on account of overstating the income or
gain of the tax-indifferent party.</text>
</clause></subparagraph></paragraph><paragraph id="H367D453A0A694EFDA65E835777A61797"><enum>(3)</enum><header>Definitions and
special rules</header><text>For purposes of this subsection—</text>
<subparagraph id="HC11BD09BD307470B81D21D692C9F31E5"><enum>(A)</enum><header>Economic
substance doctrine</header><text>The term <term>economic substance
doctrine</term> means the common law doctrine under which tax benefits under
subtitle A with respect to a transaction are not allowable if the transaction
does not have economic substance or lacks a business purpose.</text>
</subparagraph><subparagraph id="HC00A95C7DE4E4719B92DF744D35F5E82"><enum>(B)</enum><header>Tax-indifferent
party</header><text>The term <term>tax-indifferent party</term> means any
person or entity not subject to tax imposed by subtitle A. A person shall be
treated as a tax-indifferent party with respect to a transaction if the items
taken into account with respect to the transaction have no substantial impact
on such person’s liability under subtitle A.</text>
</subparagraph><subparagraph id="H5DBC87D397EF48FA96670700F397DDFB"><enum>(C)</enum><header>Exception for
personal transactions of individuals</header><text>In the case of an
individual, this subsection shall apply only to transactions entered into in
connection with a trade or business or an activity engaged in for the
production of income.</text>
</subparagraph><subparagraph id="H99BB73C0267E4953BDBDF2507E8EA036"><enum>(D)</enum><header>Treatment of
lessors</header><text>In applying paragraph (1)(B)(ii) to the lessor of
tangible property subject to a lease—</text>
<clause id="H3865B2E1F2AE4090B77B0317EE99FCB"><enum>(i)</enum><text>the expected net
tax benefits with respect to the leased property shall not include the benefits
of—</text>
<subclause id="HFF676178A7E445DAA1CBBCF391867FBB"><enum>(I)</enum><text>depreciation,</text>
</subclause><subclause id="HA013487A999143A893CC7D477BC6BF1"><enum>(II)</enum><text>any tax credit,
or</text>
</subclause><subclause id="HC8800281EF294358B53FBC9696368540"><enum>(III)</enum><text>any other
deduction as provided in guidance by the Secretary, and</text>
</subclause></clause><clause id="HB219C5E183954C18B49FB431A96893B2"><enum>(ii)</enum><text>subclause (II) of
paragraph (1)(B)(ii) shall be disregarded in determining whether any of such
benefits are allowable.</text>
</clause></subparagraph></paragraph><paragraph id="H580AC41CC5114B869368F37410D20989"><enum>(4)</enum><header>Other common law
doctrines not affected</header><text>Except as specifically provided in this
subsection, the provisions of this subsection shall not be construed as
altering or supplanting any other rule of law, and the requirements of this
subsection shall be construed as being in addition to any such other rule of
law.</text>
</paragraph><paragraph id="H67CA95CDB2414604B81E67001B074529"><enum>(5)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this subsection. Such regulations may include
exemptions from the application of this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HC8292B7173DC451C9C876C89277383E6"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions entered into after the date of the enactment of this Act.</text>
</subsection></section>