1.Short title; table of
contents
(a)This Act may be cited as the Responsible Fatherhood and Healthy Families Act of
2009
.
(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. Elimination of separate TANF work participation rate
for 2-parent families.
Sec. 103. Ban on recovery of medicaid costs for
births.
Sec. 104. Improved collection and distribution of child
support.
Sec. 105. Grants to States to conduct demonstration projects to
promote economic opportunity for low-income parents.
Sec. 106. State assessments of barriers to employment and
financial support of children.
Sec. 107. Collection of child support under the supplemental
nutrition assistance program.
Sec. 108. Grants supporting healthy family partnerships for
domestic violence intervention and prevention.
Sec. 109. Procedures to address domestic violence
prevention.
TITLE II—Revenue provisions
Sec. 201. Modifications to the earned income tax
credit.
Sec. 202. Clarification of economic substance
doctrine.
Sec. 203. Penalty for
understatements attributable to transactions lacking economic substance,
etc.
Sec. 204. Denial of deduction for interest on underpayments
attributable to noneconomic substance transactions.
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 parents are divorced or did not marry.
More than 1/3 of all marriages end in divorce, and 60
percent of divorcing couples have children. Almost 4 in 10 births are to
unmarried women, however, this figure varies by age. Six in 10 births to women
ages 20 to 24, nearly 1 in 10 births to women ages 25 to 28, and 1 in 5 births
to women in their 30s are to unmarried women.
(5)More than 1 in 4
families with children have only 1 parent present, and more than 1 in 5
children live with their mother only.
(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 with their mother’s pregnancy, with 50 percent living with the child’s
mother at the time of the child’s birth. When the children of these fathers
were 5 years old, 50 percent had seen their fathers 10 or fewer days in the
past month, over 35 percent had not seen their fathers at all in the past
month, and nearly 23 percent had not seen their fathers at all in the past 2
years.
(7)An estimated 30
percent of the children who live in households without their father have not
seen their father in at least 1 year, and only 40 percent have contact once or
more per month.
(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)Early parenting
has serious consequences for young men and young women, their children, and
society. Too-early childbearing makes it harder for young parents to finish
their education. Fathers of children born to teen mothers have lower earnings
than fathers of children born to mothers who are in their early 20s and
children born to teen parents are more likely to end up in poverty than
children born to adult parents. Children of teen parents are at increased risk
of involvement with the child welfare system and the sons of teen mothers are
more likely to end up in prison. The daughters of teen mothers are more likely
to end up teen mothers themselves. In addition, teen childbearing costs
taxpayers at least $9,100,000,000 annually.
(10)Single-parent
families are 5 times as likely to be poor as married-couple families.
(11)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.
(12)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.
(13)Domestic
violence is also a significant problem leading to the non-formation or break-up
of 2-parent families.
(14)According to the
National Fatherhood Initiative National Marriage Survey in 2005, 42 percent of
women and 9 percent of men cite domestic violence as the reason for their
divorces.
(15)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.
(16)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.
(17)Children should
receive the child support paid by their parents, and the government should not
keep the money to recover welfare costs. Current pass-through limits on Federal
cost-sharing have been a barrier to States choosing to pass through child
support. 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.
(18)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
.
(19)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.
(20)Programs that
increase employment opportunity and reduce barriers by increasing employment
opportunity and reducing recidivism will benefit children and families.
(21)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.
(22)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.
(23)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.
(24)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.
(25)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.
(26)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.
(27)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.
(28)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, when it is appropriate, with appropriate safeguards related to
child abuse and domestic violence, the parental involvement of noncustodial
parents.
(29)Promoting
responsible parenthood saves the government money by reducing the need for
public assistance, increasing the educational attainment of children, reducing
juvenile delinquency and crime, reducing substance abuse, and lowering rates of
unemployment.
(30)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.
(31)The promotion of
healthy 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="id9E8D6B5A88BF4336922125D93844FD31"><enum>101.</enum><header>Healthy
marriage promotion and responsible fatherhood programs</header>
<subsection id="id9F3B032B4D084F14AEC22D1558A5C55B"><enum>(a)</enum><header>Ensuring
funding for responsible fatherhood programs</header><text>Section 403(a)(2)(C)
of the Social Security Act (42 U.S.C. 603(a)(2)(C)) is amended—</text>
<paragraph id="id30390D15DAE54970BC5FFF2B17E38B11"><enum>(1)</enum><text>in the
subparagraph heading, by striking <quote><header-in-text level="subparagraph" style="OLC">Limitation on use of</header-in-text></quote> and inserting
<quote><header-in-text level="subparagraph" style="OLC">Requirement to use
certain</header-in-text></quote>; and</text>
</paragraph><paragraph id="id61C46425714544EA98A07DA722C359F8"><enum>(2)</enum><text>in clause (i), by
striking <quote>may not award more than $50,000,000</quote> and inserting
<quote>shall award at least $100,000,000</quote>.</text>
</paragraph></subsection><subsection id="idEB2581BD189548F0A7DB990EC0E9DB83"><enum>(b)</enum><header>Assurance of
voluntary participation</header><text>Section 403(a)(2)(A)(ii)(II) of the
Social Security Act (42 U.S.C. 603(a)(2)(A)(ii)(II)) is amended—</text>
<paragraph id="id0BC933F35F8944C4B587F7FB969478A2"><enum>(1)</enum><text>in item (aa), by
striking <quote>and</quote> at the end;</text>
</paragraph><paragraph id="id70F1FF4552B348C783AD68A1CE8EA782"><enum>(2)</enum><text>in item (bb), by
striking the period at the end and inserting a semicolon; and</text>
</paragraph><paragraph id="idDA34F012697F49CFB6688AAB561718C5"><enum>(3)</enum><text>by adding at the
end the following new items:</text>
<quoted-block display-inline="no-display-inline" id="idF2329688E0264ED8A0284F723344217E" style="OLC">
<item id="id426D5925678A41E39C382AB930E38657"><enum>(cc)</enum><text>to
not condition the receipt of assistance under the program funded under this
part, under a program funded with qualified State expenditures (as defined in
section 409(a)(7)(B)(i)), or under any other program funded under this title on
enrollment in any such programs or activities; and</text>
</item><item id="id13B1E631491042CEB8A1440F5215EE11"><enum>(dd)</enum><text>to
permit any individual who has begun to participate in a particular program or
activity funded under this paragraph, including an individual whose
participation is specified in the individual responsibility plan developed for
the individual in accordance with section 408(b), to transfer to another such
program or activity funded under this paragraph upon notification to the entity
and the State agency responsible for administering the State program funded
under this
part.</text>
</item><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="idABAF1313C04341C7B6EE8827B1A58920"><enum>(c)</enum><header>Activities
promoting responsible fatherhood</header><text>Section 403(a)(2)(C)(ii) of the
Social Security Act (42 U.S.C. 603(a)(2)(C)(ii)) is amended—</text>
<paragraph id="idF5A57C38DE444C5DADD1ED3AF71E57BF"><enum>(1)</enum><text>in subclause (I),
by striking <quote>marriage or sustain marriage</quote> and insert
<quote>healthy relationships and healthy marriages or to sustain healthy
relationships or healthy marriages</quote>;</text>
</paragraph><paragraph id="idD0936A1F1499468194332772484D62EE"><enum>(2)</enum><text>in subclause
(II), by inserting <quote>educating youth who are not yet parents about the
economic, social, and family consequences of early parenting, helping
participants in fatherhood programs work with their own children to break the
cycle of early parenthood,</quote> after <quote>child support
payments,</quote>; and</text>
</paragraph><paragraph id="id1F4C235E63D94C01A0C749DFF956D142"><enum>(3)</enum><text>in subclause
(III), by striking <quote>fathers</quote> and inserting <quote>low-income
fathers and other low-income noncustodial parents</quote>.</text>
</paragraph></subsection><subsection id="id7FD59E954A504BEAAB0A26B2AAF4440D"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on
October 1, 2009.</text>
</subsection></section><section id="id7FCCE82F4D0D4233BA155645611DB07F"><enum>102.</enum><header>Elimination of
separate TANF work participation rate for 2-parent families</header>
<subsection id="ID57F1F09EF087473CA297E0995C7EE575"><enum>(a)</enum><header>In
General</header><text>Section 407 of the <act-name parsable-cite="SSA">Social
Security Act</act-name> (42 U.S.C. 607) is amended—</text>
<paragraph id="IDFDD87AA84CAB40B6875F2BCD196D3E78"><enum>(1)</enum><text>in subsection
(a)—</text>
<subparagraph id="ID2BC48B69B26949689DED1B2B23ED2FCC"><enum>(A)</enum><text>beginning in the
heading, by striking <quote><header-in-text level="subsection" style="OLC">Participation Rate Requirements</header-in-text></quote> and all
that follows through <quote>A State</quote> in paragraph (1) and inserting
<quote><header-in-text level="subsection" style="OLC">Participation Rate
Requirements</header-in-text>.—A State</quote>; and</text>
</subparagraph><subparagraph id="IDE9FAC7A4E3624380B4765BA53F33A814"><enum>(B)</enum><text>by striking
paragraph (2);</text>
</subparagraph></paragraph><paragraph id="IDF18F10EBA91140D0AC932F220490FAB4"><enum>(2)</enum><text>in subsection
(b)—</text>
<subparagraph id="id1E40348E965C4C74950574C037A737AD"><enum>(A)</enum><text>in paragraph
(1)(A), by striking <quote>subsection (a)(1)</quote> and inserting
<quote>subsection (a)</quote>;</text>
</subparagraph><subparagraph id="IDB1A0C7091C574243B7E244AF1C5A56A4"><enum>(B)</enum><text>in paragraph (2),
by striking the paragraph heading and all that follows through <quote>A
family</quote> and inserting <quote><header-in-text level="paragraph" style="OLC">Special rule</header-in-text>.—A family</quote>;</text>
</subparagraph><subparagraph id="id8F377B267D5D4302803F9B80A993035D"><enum>(C)</enum><text>in paragraph (4),
by striking <quote>paragraphs (1)(B) and (2)(B)</quote> and inserting
<quote>determining monthly participation rates under paragraph (1)(B)</quote>;
and</text>
</subparagraph><subparagraph id="ID997A2B4780854DBB933E531A060E1B32"><enum>(D)</enum><text>in paragraph (5),
by striking <quote>rates</quote> and inserting <quote>rate</quote>; and</text>
</subparagraph></paragraph><paragraph id="ID7D8FD6AC15E44B6F8907CFC8DD656DEC"><enum>(3)</enum><text>in subsection
(c)—</text>
<subparagraph id="id1367186890A048BA8A2CEF48DB5BD763"><enum>(A)</enum><text>in paragraph
(1)(B), in the matter preceding clause (i), by striking <quote>subsection
(b)(2)(B)</quote> and inserting <quote>subsection (b)(1)(B)(i)</quote>;
and</text>
</subparagraph><subparagraph id="id712F8D0683F840448339FA99D49FED6C"><enum>(B)</enum><text>in paragraph
(2)(D)—</text>
<clause id="ID51965309D76C44828C7604E807D2EA85"><enum>(i)</enum><text>by
striking <quote>paragraphs (1)(B)(i) and (2)(B) of subsection (b)</quote> and
inserting <quote>subsection (b)(1)(B)(i)</quote>; and</text>
</clause><clause id="IDA8962E361CCC40A7A2B3E4D8B6FE3DB5"><enum>(ii)</enum><text>by
striking <quote>and in 2-parent families, respectively,</quote>.</text>
</clause></subparagraph></paragraph></subsection><subsection id="ID7BCB6667D02545059B35242916B7A09D"><enum>(b)</enum><header>Effective
Date</header>
<paragraph id="id133EF4FF122D40019A199905DC65AEB5"><enum>(1)</enum><header>In
general</header><text>The amendments made by subsection (a) shall take effect
on the date of enactment of this Act and shall apply to the determination of
minimum participation rates for months beginning on or after that date.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id33D289255EF44B49BCF1CADE356EC2C3"><enum>(2)</enum><header>Limitation on
penalty imposition</header><text>Notwithstanding section 409(a)(3) of the
Social Security Act, the Secretary of Health and Human Services shall not
impose a penalty against a State under that section on the basis of the State's
failure to satisfy the participation rate required for fiscal year 2006, 2007,
2008, or 2009 if the State demonstrates that the State would have met such
requirement if, with respect to those months of fiscal year 2009 that began
prior to or on the date of enactment of this Act, the State were permitted to
count 2-parent families that met the requirements of section 407(c)(1)(A) of
the Social Security Act (42 U.S.C. 607(c)(1)(A)) in the determination of
monthly participation rates under section 407(b)(1)(B)(i) of such Act (42
U.S.C. 607(b)(1)(B)(i)).</text>
</paragraph></subsection></section><section id="IDBB7F66642D2A4B53B84B4DB9775DEAB6"><enum>103.</enum><header>Ban on
recovery of medicaid costs for births</header>
<subsection id="id03BA33BEC0334BFE81AFC46CF9ED300C"><enum>(a)</enum><header>Ban on
recovery</header>
<paragraph id="id55ADB86698964B6AB8EFB4A607902F6C"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 454 of the
Social Security Act (42 U.S.C. 654), as amended by section 7301 of Public Law
109–171, is amended—</text>
<subparagraph id="ID1ED6980838564426825A34A62C9C284E"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of paragraph (33);</text>
</subparagraph><subparagraph id="ID262470C2123B4729824A585387C6AED5"><enum>(B)</enum><text>by striking the
period at the end of paragraph (34) and inserting a semicolon; and</text>
</subparagraph><subparagraph id="IDBA5C8F52491643D49F572AEAF10B72F3"><enum>(C)</enum><text>by inserting
after paragraph (34) the following:</text>
<quoted-block display-inline="no-display-inline" id="id89C3028D24C849BAA288E2901BB7F900" style="OLC">
<paragraph id="id6578D66290E74E099421D55EF6F48BE5"><enum>(35)</enum><text>provide that,
except as provided in section 1902(a)(25)(F)(ii), the State shall not use the
State program operated under this part to collect any amount owed to the State
by reason of costs incurred under the State plan approved under title XIX for
the birth of a child for whom support rights have been assigned pursuant to
section 471(a)(17) or 1912;
and</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="idAFDFF1577EE44598BD7F5D9E3BEDEBA8"><enum>(2)</enum><header>Rule of
construction</header><text>Nothing in section 454(35) of the Social Security
Act (42 U.S.C. 654(34)), as added by paragraph (1), shall be construed as
affecting the application of section 1902(a)(25) of such Act (42 U.S.C.
1396a(a)(25)) with respect to a State (relating to the State Medicaid plan
requirement for the State to take all reasonable measures to ascertain the
legal liability of third parties to pay for care and services available under
the plan).</text>
</paragraph></subsection><subsection id="id551D3DE9330446E0B3EAC9536C501961"><enum>(b)</enum><header>Clarification
that ban on recovery does not apply with respect to insurance of a parent with
an obligation To pay child support</header><text>Clause (ii) of section
1902(a)(25)(F) of the Social Security Act (42 U.S.C. 1396a(a)(25)(F)) is
amended by inserting <quote>only if such third-party liability is derived
through insurance,</quote> before <quote>seek</quote>.</text>
</subsection><subsection id="id94660BAA6716448FAFD3179A9CF10B69"><enum>(c)</enum><header>Effective
date</header>
<paragraph id="id26283A6E5A3D4C1C9454669D3789C58B"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section take effect on October 1, 2009.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id34B4CCCF2ACE4E0E91886DF97DBBCE34"><enum>(2)</enum><header>Extension of
effective date for state law amendment</header><text>In the case of a State
plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) which
the Secretary of Health and Human Services determines requires State
legislation in order for the plan to meet the additional requirements imposed
by the amendments made by this section, the State plan shall not be regarded as
failing to comply with the requirements of such title solely on the basis of
its failure to meet these additional requirements before the first day of the
first calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of enactment of this Act.
For purposes of the previous sentence, in the case of a State that has a 2-year
legislative session, each year of the session is considered to be a separate
regular session of the State legislature.</text>
</paragraph></subsection></section><section id="idF5BCBDEE33564C6D82F8D6993291556E"><enum>104.</enum><header>Improved
collection and distribution of child support</header>
<subsection id="id1363D8F25FCC4533AC8D06E2D0CDE08E"><enum>(a)</enum><header>Elimination of
pass-through limits and other changes effective beginning with fiscal year
2010</header>
<paragraph commented="no" display-inline="no-display-inline" id="idC27BE89F5D984F1BB0E65A2A5E157F71"><enum>(1)</enum><header>Elimination of
pass-through limits on federal cost-sharing</header><text>Section 457(a)(6)(B)
of the Social Security Act (42 U.S.C. 657(a)(6)(B)) (as redesignated by clause
(iii) of section 7301(b)(1)(B) of the Deficit Reduction Act of 2005), is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id47F8BAE7ABBA4BDEB730886750EF307B" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID0191FAE5361040D4A5BC0A5A4A594AB8"><enum>(B)</enum><header display-inline="yes-display-inline">Families that currently receive
assistance</header><text>Notwithstanding paragraph (1), in the case of a family
that receives assistance from the State, a State shall not be required to pay
to the Federal Government the Federal share of any amount collected on behalf
of such family during a month to the extent that—</text>
<clause id="ID122AEDF5A34E43D6AB54FD06AAF8A603"><enum>(i)</enum><text>the State pays
the amount to the family; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3A9B652F926C44339B5FB38154455069"><enum>(ii)</enum><text>the amount is
disregarded in determining the amount and type of assistance provided to the
family under such
program.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idF494DBD75A5E4E6DB66C3AB3B5D9F7D8"><enum>(2)</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 103(a)(1), is amended by adding at the end
the following new paragraph:</text>
<quoted-block act-name="" id="idA00DF88BA153474CB16BDD5460928B3B" style="OLC">
<paragraph id="idC4CCA2B5298443B9B5BF7C0A6790AF62"><enum>(36)</enum><text>provide that a
State shall pay all collected child support to the payee, except as provided in
section 457, 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>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id5D980286BD2E421D9B117EDD40251348"><enum>(3)</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="id0B8C8409EF6A4CF18B2F0E1F9145EE70" style="OLC">
<paragraph id="idC230B913A9384979BB8FFD754A7DA4C3"><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>
</paragraph><paragraph id="id5A88EF02573E414AB04691B643C6A0EC"><enum>(4)</enum><header>State option to
condition receipt of TANF on assignment of support</header><text>Section
408(a)(3) of the Social Security Act (42 U.S.C. 608(a)(3)) is amended—</text>
<subparagraph id="id51503B515C9748629FF2455D88E2A8DD"><enum>(A)</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">State option to condition
assistance for families on</header-in-text></quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id38964582DDF742A09B5A7E7C14B1684F"><enum>(B)</enum><text>by striking
<quote>shall</quote> and inserting <quote>may</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idC4CDC1A57C2D4579BF397D273B4E1CB0"><enum>(5)</enum><header>Inclusion of
distributions to former TANF families in determination of TANF maintenance of
effort</header><text>Section 409(a)(7)(B)(i)(V) of the Social Security Act (42
U.S.C. 609(a)(7)(B)(i)(V)) is amended by inserting <quote>, including the State
share of child support distributed to former TANF families under an election by
the State under section 454(34) (as in effect on the day before the date of
enactment of the <short-title>Responsible Fatherhood and
Healthy Families Act of 2009</short-title>) to apply the amendments made by
subsection (b)(1) of section 7301 of the Deficit Reduction Act of 2005 (as so
in effect)</quote> after <quote>401(a)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idC7C0B168FFAF411898D173A318A908EE"><enum>(6)</enum><header>State option To
discontinue older support assignments</header><text>Section 457(b) of the
Social Security Act (42 U.S.C. 657(b)) is amended to read as follows:</text>
<quoted-block act-name="" display-inline="no-display-inline" id="id0DE4F7A10DBA4125BBB5B8B4BC64C4ED" style="OLC">
<subsection id="id8458FF4CDE8F4876822C5E76794B04ED"><enum>(b)</enum><header>Continuation of
assignments</header>
<paragraph id="idA3FE74020A99469A9EA8201DCABF381B"><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 commented="no" display-inline="no-display-inline" id="id45B01CE0653C4498B1C4E4E23C9F79C5"><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>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id0BF9534F5D0A44CFBD2D27005CC309CC"><enum>(7)</enum><header>Effective
date</header><text>The amendments and repeal made by this subsection 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></subsection><subsection id="id974448821437429F9D806CB364CE2017"><enum>(b)</enum><header>Reform of rules
for distribution of child support collected on behalf of children in foster
care beginning with fiscal year 2011</header>
<paragraph id="id590FB954D1A44555BE681353C52DDABA"><enum>(1)</enum><header>In
general</header><text>Section 457 of such Act (42 U.S.C. 657) is
amended—</text>
<subparagraph id="idBE503E9224F149D589C5DFEFE7A0D644"><enum>(A)</enum><text>by striking
subsections (d) and (e);</text>
</subparagraph><subparagraph id="id7CCCAB28533348BBB4A2407B343E1E2B"><enum>(B)</enum><text>by redesignating
subsection (c) as subsection (d); and</text>
</subparagraph><subparagraph id="id8DDB641CFE1745089A2A6F89688CF7CF"><enum>(C)</enum><text>by inserting
after subsection (b) the following:</text>
<quoted-block display-inline="no-display-inline" id="idE32A0B85A3BE4146820C523AD6BBFECB" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="id9D3B3963945F43EE9DC7408AB9E525D4"><enum>(c)</enum><header>Amounts
collected for child for whom foster care maintenance payments are
made</header><text display-inline="yes-display-inline">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 and used in the manner such public agency determines will serve the best
interests of the child, which may include depositing the funds in a child asset
account for the child's future needs or making all or a part thereof available
to the individual responsible for meeting the child’s day-to-day needs. A State
shall not be required to pay to the Federal Government the Federal share of any
amounts collected on behalf of a child and used by the public agency in the
best interests of the child in accordance with this
subsection.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id2E3C2A9E1AD14A4EB342DDE618C1C8A6"><enum>(2)</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>
<subparagraph id="idD10D76C90E824E42892809F6109C0271"><enum>(A)</enum><text>by inserting
<quote>and consistent with the child's case plan</quote> after <quote>where
appropriate</quote>; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idF7B8EACF81CE4CD0A93BFB14133578E0"><enum>(B)</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>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id0E455067F6964E0183B3C3527EEC65A6"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection take effect on
October 1, 2010, and shall apply to collections made on behalf of children who
are receiving foster care maintenance payments under part E 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></subsection><subsection commented="no" display-inline="no-display-inline" id="idF3B215BA5D024795B3E40229DEA51665"><enum>(c)</enum><header>Full
distribution of child support collected and other changes beginning with fiscal
year 2015</header>
<paragraph id="id33BCEF5314B34EE2B58CEB406CE80807"><enum>(1)</enum><header>Full
distribution of child support collected</header>
<subparagraph id="id21B12BADC4C249AB8BEA1350EA6876B9"><enum>(A)</enum><header>In
general</header><text>Section 457 of the Social Security Act (42 U.S.C. 657) is
amended by striking subsection (a) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="id533CC37FEBB8446E8007E0CAD1B57DB9" style="OLC">
<subsection id="id46B3D7A595CB4A239CA35803E6BB7372"><enum>(a)</enum><header>Full
distribution of amounts collected on behalf of any child</header><text>Subject
to subsection (c), the entire amount collected on behalf of any child as
support by a State pursuant to a plan approved under this part shall be paid by
the State to the family (or, in the case of a child receiving assistance under
part E, to the public agency responsible for supervising the child’s
placement), 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>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id840EC35BB138409C82A9A17190086D95"><enum>(B)</enum><header>Conforming
amendments</header>
<clause id="idDA7C330B2C5140A88BCBB12BFEDA51EA"><enum>(i)</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>
</clause><clause id="id457A6BFEDDF1458AB2A4B17D82661668"><enum>(ii)</enum><text>Section 454(5)
of such Act (42 U.S.C. 654(5)) is amended by striking <quote>(A) in any
case</quote> and all that follows through <quote>(B)</quote>.</text>
</clause><clause id="idD22299E5B18648B49CE68E6BF126C78F"><enum>(iii)</enum><text>Section 454 of
such Act (42 U.S.C. 654) is amended by striking paragraph (34).</text>
</clause><clause id="id8CFDA6667FD8413C879A248C20CB0915"><enum>(iv)</enum><text>Section 457 of
such Act (42 U.S.C. 657), as amended by subsection (b)(1)(3) of this Act, is
amended by striking subsection (d).</text>
</clause></subparagraph><subparagraph id="id9DE68B29DCC1489F91B004140BF41448"><enum>(C)</enum><header>Repeal of dra
amendments</header><text>The amendments made by subsections (a) and (b) of
section 7301 the Deficit Reduction Act (Public Law 109–171; 120 Stat. 141) are
repealed.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idCB87300F755949738CCA744FADEEA1A2"><enum>(2)</enum><header>Requirement To
disregard percentage of child support collected in determining amount and type
of TANF assistance</header><text>Section 408(a) of the Social Security Act (42
U.S.C. 608(a)) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id64213A0DC13C449C867AA4B3764CD140" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id1F94B35CDFD8402DA6CE08D5254D8DBB"><enum>(12)</enum><header>Requirement to
disregard percentage of child support collected in determining amount and type
of TANF assistance</header><text>A State to which a grant is made under section
403 shall disregard at least the same percentage of amounts collected as
support on behalf of a family as the percentage of earned income that the State
disregards in determining the amount or type of assistance provided to the
family under the State program funded under this part or under a program funded
with qualified State expenditures (as defined in section
409(a)(7)(B)(i)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id983911BFB8974918B99071F2CDDE568D"><enum>(3)</enum><header>Effective
date</header><text>The amendments and repeal made by this subsection take
effect on October 1, 2014, 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></subsection><subsection commented="no" display-inline="no-display-inline" id="idF045466DF3D64FB78CB7DFAFCA79D657"><enum>(d)</enum><header>Immediate
elimination of certain changes made by the Deficit Reduction Act of 2005 and
other improvements</header>
<paragraph commented="no" display-inline="no-display-inline" id="id5C1AB820E59745FC8A99466638111554"><enum>(1)</enum><header>Immediate
restoration of certain dra changes</header>
<subparagraph id="id87AEE349A3C842A2BB22FE6FA95E7931"><enum>(A)</enum><header>Restoration of
Federal matching of certain state spending</header>
<clause id="id27067DF9D08C44E2950835869568EF8C"><enum>(i)</enum><header>In
general</header><text>Section 2104 of division B of the American Recovery and
Reinvestment Act of 2009 (Public Law 111–5) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id0594F051B7D0442AB8B0096D410AC3E9" style="OLC">
<section id="id67933205076F4884883EB37392BFAA7D"><enum>2104.</enum><header>Resumption of
prior child support law</header><text display-inline="no-display-inline">Effective October 1, 2008, section 455(a)(1)
of the Social Security Act (42 U.S.C. 655(a)(1)) is amended by striking
<quote>from amounts paid to the State under section 458
or</quote>.</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</clause><clause id="id781DE5C80F0E462FA8CCB7673548FB38"><enum>(ii)</enum><header>Repeal of dra
amendment</header><text>The amendment made by section 7309 of the Deficit
Reduction Act of 2005 (Public Law 109–171; 120 Stat. 147) is repealed.</text>
</clause></subparagraph><subparagraph id="idF0AB089093514FB28248B00FD173983E"><enum>(B)</enum><header>Repeal of
mandatory fee for child support collection</header>
<clause id="id25FC1AD6A0B8468FA9C9C4EEB0C38A5A"><enum>(i)</enum><header>Elimination of
dra amendments</header><text>Section 454(6)(B) of such Act (42 U.S.C.
654(6)(B)) is amended—</text>
<subclause id="idEBD23FEAC83A407FBDC369021649CF18"><enum>(I)</enum><text>by striking
clause (ii);</text>
</subclause><subclause id="id729146EEE99A4818BBFAD01BC08816EF"><enum>(II)</enum><text>by striking
<quote>(i)</quote> after <quote>(B)</quote>; and</text>
</subclause><subclause id="id0C6AB05F23294D85BE255D37835D29C5"><enum>(III)</enum><text>by
redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively,
and realigning the left margins of such clauses accordingly.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="id0C33F890749D42A7BE5E4838163C97D5"><enum>(ii)</enum><header>Conforming
amendment</header><text>Effective as if enacted on October 1, 2009, section
457(a) of the Social Security Act, as amended by section 7301(b)(1)(A) of the
Deficit Reduction Act of 2005, is amended by striking paragraph (4).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id7F20C8F3C813466EA088F2CE3D142EA8"><enum>(iii)</enum><header>Repeal of dra
amendments</header><text>The amendments made by section 7310 of the Deficit
Reduction Act of 2005 (Public Law 109–171, 120 Stat. 147) are repealed.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idF5FF27D9ADC34A279B6D091FFE46EEB5"><enum>(C)</enum><header>Conforming
amendment</header><text>Section 466(a)(3)(B) of such Act (42 U.S.C.
666(a)(3)(B)) is amended by striking <quote>in accordance with</quote> and all
that follows through the semicolon and inserting <quote>after deduction of any
fees imposed by the State to cover the costs of collection, in accordance with
section 457;</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id2BC5B128632643269411454E75B2E1B3"><enum>(2)</enum><header>Other immediate
improvements</header>
<subparagraph id="id6E145836E6C54A71ACD0F3012259C6CC"><enum>(A)</enum><header>Prohibition on
considering a period of incarceration voluntary
unemployment</header><text>Section 466(a) of the Social Security Act (42 U.S.C.
666(a)) is amended by inserting after paragraph (19) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idB7E01345AA4A4514BA3CF197246A280B" style="OLC">
<paragraph id="id1CEF691CC4BB441AAFB839FB8A3795A9"><enum>(20)</enum><header>Procedures
relating to periods of incarceration of noncustodial parents</header>
<subparagraph id="idF82AD85C8D17455C9950368C4141058E"><enum>(A)</enum><header>In
general</header><text>Procedures which require that, in determining or
modifying the amount of, or terms and conditions of, any support obligation of
a noncustodial parent, the State—</text>
<clause id="idEE97E7D0A5724F6BAE8EC8EB36333F7D"><enum>(i)</enum><text>shall not
consider any period of incarceration of such parent as a period of voluntary
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="idBECA20D2885C4ECDB610E45338354181"><enum>(ii)</enum><text>subject to
subparagraph (B) in the case of an incarcerated parent, may—</text>
<subclause id="id1799F5F81AF24FB0833D70DAB19D355A"><enum>(I)</enum><text>temporarily
suspend any support obligation on the parent and the enforcement of any support
obligation of the parent existing prior to the period of incarceration;
and</text>
</subclause><subclause id="id2E3D44E49A0F491E8C6CF204EB6760F7"><enum>(II)</enum><text>temporarily
prohibit the accrual of any interest on any support obligation of the parent
existing prior to the period of incarceration during any such period.</text>
</subclause></clause></subparagraph><subparagraph id="idF01FF618CC1F48CFBE12CE0AE670539A"><enum>(B)</enum><header>Notice and
opportunity to challenge suspension</header><text>Such procedures shall require
the State to provide a custodial parent with—</text>
<clause id="idBAE8EC8E43C94968815482942B8C40FF"><enum>(i)</enum><text>notice of any
suspension of review, adjustment, or enforcement of a support obligation and of
any prohibition on interest accrual on such obligation that is imposed in
accordance with subparagraph (A)(ii); and</text>
</clause><clause id="id9647964452E64F8CBCED1B3F64DA192C"><enum>(ii)</enum><text>an opportunity
to request that the suspension or prohibition be terminated or modified on the
basis that the noncustodial parent has sufficient income or resources to
continue payment of the support obligation during the noncustodial parent's
period of
incarceration.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idCA72CCC5565143FB8B95468A31874627"><enum>(B)</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>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id44A5CEEAEC9D4FD68794F7A7404A06B5"><enum>(C)</enum><header>Review and
adjustment of child support arrearages upon request</header><text>Section
466(a)(10) of the Social Security Act (42 U.S.C. 666(a)(10)) is amended by
adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id7319CCB8526F4FB68D67C8F6252F09C4" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="id9E3ED2B668104E18A2CC9EECECEA9709"><enum>(d)</enum><header>Review and
adjustment of arrearages</header><text>Procedures which require the State to
review, and if appropriate, reduce the balance of arrearages permanently
assigned to the State under part A or E, 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>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id82E24C7BE2BD40BABD4D25D6FDEEB896"><enum>(D)</enum><header>Update of title
IV–D purposes</header><text>Section 451 of the Social Security Act (42 U.S.C.
651) is amended by striking <quote>purpose of</quote> and all that follows
through <quote>for whom such assistance is requested,</quote> and inserting
<quote>purposes of enforcing the support obligations owed by noncustodial
parents to their children and the spouse (or former spouse) with whom such
children are living, locating parents, establishing paternity, providing
assistance in obtaining child and spousal support to all children for whom such
assistance is requested (whether or not eligible for assistance under a State
program funded under part A), obtaining health care coverage for children
participating in the State child support program, and carrying out other
activities that improve child well-being by increasing the ability of parents
to support their children financially and emotionally,</quote>.</text>
</subparagraph></paragraph><paragraph id="id8970BE8ED5B34EB5B72AE8745D7469A6"><enum>(3)</enum><header>Effective
date</header><text>Except as provided in paragraph (1)(B)(ii), the amendments
and repeals made by this subsection shall take effect on the date of enactment
of this Act, or October 1, 2009 (whichever is earlier), 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></subsection><subsection commented="no" display-inline="no-display-inline" id="idFAE3896A68CC4A05A636238E103FB27C"><enum>(e)</enum><header>Study and
report</header><text>Not later than October 1, 2010, the Secretary of Health
and Human Services shall study and submit a report to Congress regarding the
following:</text>
<paragraph id="ID30096485526346ac811a60c3167fc075"><enum>(1)</enum><text>The effect of age
eligibility restrictions for the earned income tax credit established under
section 32 of the Internal Revenue Code of 1986 for individuals without
qualifying children on—</text>
<subparagraph id="id088BCCACF19C4BFEB0BE473DC5951D4E"><enum>(A)</enum><text>the ability of
young parents to pay child support;</text>
</subparagraph><subparagraph id="id72F082613015422CBB98923A3F631798"><enum>(B)</enum><text>compliance with
child support orders; and</text>
</subparagraph><subparagraph id="idAD4CCBEE2AFA4BBDB35A98BD45B916DB"><enum>(C)</enum><text>the relationship
between young noncustodial parents and their children.</text>
</subparagraph></paragraph><paragraph id="id1F000F697EDF445991FBFCCA02676668"><enum>(2)</enum><text>The impact of
State earned income tax credit programs, especially such programs with targeted
benefits for noncustodial parents, on—</text>
<subparagraph id="id159AE0B50DFF40209F5631CE7B95144F"><enum>(A)</enum><text>the ability of
noncustodial parents to pay child support;</text>
</subparagraph><subparagraph id="id601321FAB5CA4F51986DD21D078370F2"><enum>(B)</enum><text>compliance with
child support orders; and</text>
</subparagraph><subparagraph id="idAF01B2309D73465DAE1311878746CC1D"><enum>(C)</enum><text>the relationship
between noncustodial parents and their children.</text>
</subparagraph></paragraph><paragraph id="id16A6C285736B4EA1A9D6009CA1416040"><enum>(3)</enum><text>The challenges
faced by legal immigrants and individuals for whom English is not their primary
language in fulfilling child support and other noncustodial parenting
obligations.</text>
</paragraph></subsection></section><section id="id36E0291EE0874A928D1405E571F911E0"><enum>105.</enum><header>Grants to
States to conduct demonstration projects to promote economic opportunity for
low-income parents</header>
<subsection id="id1C23BE68DC884BD697C77EBCB3E98A26"><enum>(a)</enum><header>Court-Supervised
or IV–D agency-Supervised employment programs for noncustodial parents</header>
<paragraph id="id35FB2E3609A04B649BA051B57DEE35EF"><enum>(1)</enum><header>In
general</header><text>To assist States in implementing section 466(a)(15) of
the Social Security Act (42 U.S.C. 666(a)(15)), the Secretary of Health and
Human Services shall award grants to States 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="id935C92AAADB049B29C74AC5D31A745DE"><enum>(2)</enum><header>Requirements</header>
<subparagraph id="idD62847EDDB2341B388B1A4866B7F1C1E"><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="id4210AC1F473A4BED83A1BA74B991C27E"><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="id2AEA9131ABA54D68B4E62119E90C8DEF"><enum>(i)</enum><text>To
assist noncustodial parents described in paragraph (1) obtain and maintain
unsubsidized employment.</text>
</clause><clause id="id93433880351F464182794CBDAF199E0F"><enum>(ii)</enum><text>To
increase the amount of financial support received by children.</text>
</clause><clause id="idD4C252CE684B410BB03660C47681BCBD"><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="idF99B1C1B1F2E4AABB2537C2D86456106"><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="id71A1D5310152492E960A790A50165CED"><enum>(D)</enum><header>Use of
funds</header>
<clause id="idFAF2303BC4EB41A2ACE8E7387278BD04"><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="id586DCA4CEA34407AAA5D6D8CA99822D1"><enum>(I)</enum><text>Job placement,
including job development and supervised job search as necessary.</text>
</subclause><subclause id="id11D3650F39C54316A1AA568FF9FA7907"><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="idC414C11C138548588A7747B9BBE57E72"><enum>(III)</enum><text>Counseling on
responsible parenthood.</text>
</subclause><subclause id="id461CF9BC83B744F091F88AFE96BD70DC"><enum>(IV)</enum><text>Referral for
support and educational services.</text>
</subclause><subclause id="idF00FCA643A544005B3A94DE406AAA693"><enum>(V)</enum><text>Employment
retention services.</text>
</subclause></clause><clause id="id319F0D87F27543AA852BC1EC372B4D30"><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="id0C58BD0289A54870B27C80A09136E8AC"><enum>(I)</enum><text>Remedial
education services or educational referral.</text>
</subclause><subclause id="id2F97600D84B6498F806B4FEDB62C9F74"><enum>(II)</enum><text>Support funds
for services such as transportation, child care, or job readiness
training.</text>
</subclause><subclause id="id201C7540A17F4882822007B3D63AB0FC"><enum>(III)</enum><text>Transitional
jobs programs.</text>
</subclause><subclause id="id9052559A077A4A3C8D83AC42F4C42719"><enum>(IV)</enum><text>Public-private
career pathway partnerships established in accordance with subsection
(b)(2).</text>
</subclause><subclause id="idBFF27DBDD7BB4EFF88FA040F8A54DF81"><enum>(V)</enum><text>Occupational
skill training, including college credit programs.</text>
</subclause><subclause id="idD2D34E42E62245EE8947867F8F3691A3"><enum>(VI)</enum><text>Curricula
development.</text>
</subclause></clause></subparagraph><subparagraph id="id07F40287ABB0440097B8E3F40723E287"><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="idBD8E878D9AB94012843C6EA4F16A9DF7"><enum>(b)</enum><header>Transitional
jobs and career pathways partnership grants</header><text>The Secretary of
Labor shall award grants to States to conduct demonstration projects to carry
out one or more of the projects described in paragraphs (1) and (2).</text>
<paragraph id="id11A6AE4E4C2247A7855C356D08BB52A0"><enum>(1)</enum><header>Transitional
jobs grants</header>
<subparagraph id="id704E0D2478F64A0B88C7429799F97490"><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="idCD9CA9AC8CD4400797395C7381E485F5"><enum>(i)</enum><text>combine
time-limited employment in transitional jobs that may be subsidized with public
funds, with activities that promote skill development and remove barriers to
employment, such as case management services and education, training, child
support-related services, and other activities, pursuant to individual plans;
and</text>
</clause><clause commented="no" id="id6E945D87BE824699880262A7336271EE"><enum>(ii)</enum><text>provide such
individuals with—</text>
<subclause commented="no" id="id858503125FC24D939A58509F11EE8F23"><enum>(I)</enum><text>transitional jobs
placements and job placement assistance, to help the individuals make the
transition from subsidized employment in transitional jobs to stable
unsubsidized employment; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="idA1AD1EC3A02E46198A4D26902115FAC9"><enum>(II)</enum><text>retention
services after the transition to unsubsidized employment.</text>
</subclause></clause></subparagraph><subparagraph commented="no" id="idFFF17D32B0594F57B441A478C4B5B970"><enum>(B)</enum><header>Eligible
individuals</header><text>For purposes of this paragraph, the term
<term>eligible individuals</term> means individuals within any of the following
categories of disproportionately chronically unemployed individuals:</text>
<clause commented="no" id="id27032F7E7F4E48DEBCA9F4383AE9388E"><enum>(i)</enum><text>Individuals who
have attained age 16, but not attained age 36, and who have documented barriers
to employment 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="id26D49C02A9964F078CF8CB9644F3712F"><enum>(ii)</enum><text>Formerly
incarcerated individuals.</text>
</clause><clause commented="no" id="idC65EB599E4F44F128D6DD5C37957AAA8"><enum>(iii)</enum><text>Homeless or
formerly homeless individuals.</text>
</clause><clause commented="no" id="id0F2FD8C4EABE46DBB5D046F053D4F348"><enum>(iv)</enum><text>Individuals with
disabilities.</text>
</clause><clause commented="no" id="id3309401653D146CFA1477521C1B4DFDD"><enum>(v)</enum><text>Individuals
designated by a court or the IV–D agency to participate in transitional jobs
programs.</text>
</clause></subparagraph><subparagraph commented="no" id="idAEF194FD458C44668F662C6119AA815D"><enum>(C)</enum><header>Limitations on
use of funds</header>
<clause commented="no" id="id0FF8B10A712C45AF8FEDE57B8B916CD5"><enum>(i)</enum><header>Allowable
activities</header><text>A State that receives a grant 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="id71A03A05909D4BFD9BE0136818BEF171"><enum>(I)</enum><header>Jobs</header><text>The
program operator shall place eligible individuals in temporary jobs, the
incomes from which may be subsidized in whole or in part with public funds. An
eligible individual placed in such a job (referred to in this paragraph as
<quote>a participant</quote>) shall perform work directly for the program
operator or another public, nonprofit, or private sector organization (which
operator or organization may be referred to in this paragraph as a
<quote>worksite employer</quote>) within the community involved.</text>
</subclause><subclause commented="no" id="id21908CD8FBFE4F7B8111B4D3099A3714"><enum>(II)</enum><header>Hours</header>
<item commented="no" id="id9D7091E769BD4439B01CB7438241540A"><enum>(aa)</enum><header>In
general</header><text>Subject to item (bb), the transitional jobs program shall
provide a participant with not less than 30, and not more than 40, hours per
week of a combination of paid employment and the services described in
subclauses (III), (IV), and (V).</text>
</item><item commented="no" id="idEE26BEBDE50642A59D64D192A5D379E2"><enum>(bb)</enum><header>Accommodation
of special circumstances</header><text>The number of hours per week required
under item (aa) may be adjusted in the case of a participant who requires a
modified work week to accommodate special circumstances.</text>
</item></subclause><subclause commented="no" id="idE1D34981FFD84B5490FC1ECDC34A561D"><enum>(III)</enum><header>Job
preparation and services</header><text>The program operator shall—</text>
<item commented="no" id="id2F31EF440AB74C69AEA89817BDFC8457"><enum>(aa)</enum><text>develop an
individual plan for each participant, which shall contain a goal that focuses
on preparation of the participant for unsubsidized jobs in demand in the local
economy that offer the potential for advancement and growth (including
increases in wages and benefits);</text>
</item><item commented="no" id="idA6031F062EF242B8BC456E6658F8E002"><enum>(bb)</enum><text>develop
transitional jobs placements for participants that will best prepare them for
jobs described in item (aa) or participation in the public-private career
pathway partnerships established in accordance with paragraph (2); and</text>
</item><item commented="no" id="idD1BCC449133741F6A7BFC63C613F019D"><enum>(cc)</enum><text>provide case
management services and ensure that appropriate education, training, and other
activities are available to participants, consistent with each participant’s
individual plan.</text>
</item></subclause><subclause commented="no" id="idF348936DFECD401D9A181A25AE6289DB"><enum>(IV)</enum><header>Job placement
assistance and retention services</header><text>The program operator shall
provide job placement assistance to help participants obtain unsubsidized
employment and shall provide retention services to the participants for a
minimum of 6 months after entry into the unsubsidized employment.</text>
</subclause><subclause commented="no" id="id395ADD5B0E5D4015B6175A8B93CEFA5A"><enum>(V)</enum><header>Education or
training</header><text>In any workweek in which a participant is scheduled to
work at least 30 hours in the program, not less than 20 percent of the
scheduled hours and not more than 50 percent of the scheduled hours shall
involve participation in—</text>
<item commented="no" id="idACB874697D5649A29431F68F73A07BE1"><enum>(aa)</enum><text>education or
training activities designed to improve the participant’s employability and
potential earnings;</text>
</item><item commented="no" id="idD327DD6B762140DDBC66A544842A7324"><enum>(bb)</enum><text>other activities
designed to reduce or eliminate any barriers that may impede the participant’s
ability to secure and advance in unsubsidized employment; or</text>
</item><item commented="no" id="id5CF2C6D3ED21413B8C88386C8B89E41B"><enum>(cc)</enum><text>activities
designed to promote financial literacy and the use of products and services
that increase personal savings and build financial assets for family support,
education, homeownership, and retirement.</text>
</item></subclause><subclause commented="no" id="idC06327F9C48F4A82AEB53D4F8CA3C34E"><enum>(VI)</enum><header>Duration</header>
<item commented="no" id="id626659F77CD74FEC8CCAB8590D68C3AD"><enum>(aa)</enum><header>In
general</header><text>Subject to item (bb), the duration of any placement in
the program shall be for a minimum period of 3 consecutive months.</text>
</item><item commented="no" id="idBB676D42110940A3A5B0C2E6CD0105DD"><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="idC249EAA5E43249E2823315FCBAFB1CD2"><enum>(VII)</enum><header>Supervision</header><text>The
worksite employer or program operator shall supervise program participants,
consistent with the goal of addressing the limited work experience and skills
of the participants.</text>
</subclause></clause></subparagraph><subparagraph commented="no" id="idB236C43E912D49728DE1831E957E7127"><enum>(D)</enum><header>Reports</header><text>Not
later than 120 days after the end of the grant period, the 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="id7E302A1B682A41A58C9AE7E736CE03BB"><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="id25F4236596B6408298B3B698C463C0C3"><enum>(2)</enum><header>Public-private
career pathways partnerships</header>
<subparagraph id="idE6042A15E0A94E7797337B57F4E14D79"><enum>(A)</enum><header>In
general</header><text>To allow workforce education providers representing
career pathway partnerships—</text>
<clause id="idA3902963657141AEAE432CC233BC0D31"><enum>(i)</enum><text>to
create or expand career pathways, with 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="id311EC698CA7A47D0A076FF624AC4C8C3"><enum>(ii)</enum><text>to
fill in gaps in career pathways in particular localities or regions as needed
to ensure that career pathways are accessible to unemployed disadvantaged
workers and at risk youth who have lower skills or limited English proficiency,
including through the creation of workforce education services, such as
<quote>bridge</quote> programs that contextualize basic skills, English
language, or college remedial education services to specific career pathways,
and efforts to create opportunities for gaining work experience in a career
pathway.</text>
</clause></subparagraph><subparagraph id="id81B5B32F25BF42F0B32D3CDD98CCCCF3"><enum>(B)</enum><header>Use of
funds</header><text>Funds made available under a grant under this 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="id978279C2925A4A1AA8C66409E826422A"><enum>(C)</enum><header>Limitations</header>
<clause id="id091B489681E24752BBFEEC080D46DD72"><enum>(i)</enum><header>In
general</header><text>Of the funds made available to a career pathway
partnership to carry out the purpose described in this paragraph—</text>
<subclause id="id8B41BC68C11B499A9FE75BC5B14E8C55"><enum>(I)</enum><text>not more than 30
percent of such funds may be used to pay or subsidize wages during a period of
work experience or internship, not to exceed 90 days; and</text>
</subclause><subclause id="id9F6590E220404983879E85CAFEEB50A9"><enum>(II)</enum><text>not more than 10
percent of such funds may be used for administrative purposes, 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="id0580AB03DDBA4E30AA48ADEE76C255DC"><enum>(ii)</enum><header>Prohibition on
subsidizing wages of current employees</header><text>No funds made available to
carry out this paragraph shall be used to subsidize the wages of any individual
who, as of the date of the establishment of the career pathway partnership, is
an employee of any employer participating in the partnership.</text>
</clause></subparagraph><subparagraph id="id61A768C50B144AB3A35A3B6AEC960D66"><enum>(D)</enum><header>Requirements
for awarding of subgrants</header>
<clause id="id8B8E16C023514367A66B672CBC199CCD"><enum>(i)</enum><header>In
general</header><text>Funds shall be made available to career pathway
partnerships to carry out the purpose described in this paragraph based on a
performance-based accountability system that includes the following measures of
performance:</text>
<subclause id="idA27BF9F37CEF4E429F7E085FED1C7507"><enum>(I)</enum><text>The number of
individuals to be trained.</text>
</subclause><subclause id="idC8DEAA7E0A134D27A3726984F2BA2699"><enum>(II)</enum><text>The percentage
of such individuals who complete the program.</text>
</subclause><subclause id="id1773E630C7FD47869D86A9A80C73C346"><enum>(III)</enum><text>The percentage
of such individuals who enter or advance in employment.</text>
</subclause><subclause id="id1C51E9FA62E245DDB480D4E13C0D1F0D"><enum>(IV)</enum><text>The wage and
benefit gains of individuals who complete the program before and within 6
months after their program completion, including the extent to which the
individuals achieved economic self-sufficiency.</text>
</subclause><subclause id="idE7E19023C97D441B8AD3908BA354CB0C"><enum>(V)</enum><text>The percentage of
individuals who complete the program and enter employment who retain employment
for at least 6 months.</text>
</subclause><subclause id="idCA0C4CD60D95408EBF79BD7CF2C08DDD"><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="idB0AED34D5C1D4F1EB808911792843945"><enum>(ii)</enum><header>Considerations
for funding renewals</header><text>A subgrantee's level of success in achieving
employment, advancement, wage, and employment retention goals shall be a
primary consideration for determining whether to renew a grant made to such
entity and the funding level for such grant.</text>
</clause><clause id="id6FD6AAB2DF8E47DBB264AA4C1431A31B"><enum>(iii)</enum><header>Priorities
for awards of subgrants</header><text>In awarding subgrants under this
paragraph, a State shall give priority to applications that—</text>
<subclause id="id8344E168708644E1AB4BC256E07B3B69"><enum>(I)</enum><text>propose to serve
areas of high poverty, high youth unemployment, high drop out rates, or high
rates of low-income single-parent families;</text>
</subclause><subclause id="id7A7B9D71B344423E9BBC146A9BD19248"><enum>(II)</enum><text>include a
substantial cash or in-kind match by all employers, including joint
labor-management programs where applicable, in the partnerships, such as paid
release time for employed workforce education participants;</text>
</subclause><subclause id="id34813CF7041849E182FCD5BF19A2FAC6"><enum>(III)</enum><text>use
instructional materials and instructors directly used in the specific business
or industry sectors of the partnership employers;</text>
</subclause><subclause id="idC74E46822CA2459985C76A64FEDD5526"><enum>(IV)</enum><text>link successful
completion of workforce education services to wage increases, promotions or job
hires;</text>
</subclause><subclause id="idFA42B76793C744249C81B2673B1AD3C4"><enum>(V)</enum><text>will result in
attainment of employer-recognized occupational and educational
credentials;</text>
</subclause><subclause id="id2469A1B3A74448BA82A23627D6D16226"><enum>(VI)</enum><text>address career
guidance and adult basic education and English language needs as well as
job-specific skills;</text>
</subclause><subclause id="idCC16E0C3A7E7493DBDDFB2CD0B206C29"><enum>(VII)</enum><text>demonstrate a
blending of resources from partner agencies in the workforce system and other
sectors and Federal programs, including superior procedures for coordinating
responsible fatherhood promotion activities, where appropriate, to support the
development of high quality pathways;</text>
</subclause><subclause id="id376C1499258B47F1BCDEA31A091E165C"><enum>(VIII)</enum><text>identify how
the subgrantee will maximize services to unemployed disadvantaged workers who
also face other barriers in the labor market, such as high school dropout,
offender status, aging out of foster care, low basic skill level, including
limited English proficiency, learning disabilities, physical, emotional or
behavior disabilities, or substance abuse recovery, which may be through direct
relationships with local providers of transitional jobs programs under which in
appropriate circumstances transitional jobs participants may access career
pathways programs upon completion of the transitional jobs program; and</text>
</subclause><subclause id="id1B0DE1945B0C487D97A48FCF1EC75E35"><enum>(IX)</enum><text>support
collaboration, as appropriate, between employers and labor organizations and
other workforce development professionals, including joint labor management
training and education programs where appropriate.</text>
</subclause></clause></subparagraph><subparagraph id="idB6DE73BE9F824679B9E7C844A6043588"><enum>(E)</enum><header>Definitions</header><text>In
this paragraph:</text>
<clause id="idF61E64EBC793446DA1AFA1CF7FFCD72B"><enum>(i)</enum><header>Adult
education</header><text>The term <term>adult education</term> has the meaning
given that term in section 203 of the Workforce Investment Act of 1998 (20
U.S.C. 9202).</text>
</clause><clause id="idF709015306FC4B97B9A68DD33201D1DB"><enum>(ii)</enum><header>Career
pathway</header><text>The term <term>career pathway</term> means a linked set
of workforce education and job opportunities within a specific industry sector,
or for an occupational sector that cuts across multiple business and industry
sectors, which begins at the lowest skill and English language levels, and
extends through for-credit college opportunities such as earning relevant
associate or bachelor’s degrees, and prepares individuals for advancement in
jobs in demand in the local or regional labor market.</text>
</clause><clause id="id2941BCC4E54A45BDA258ACAA5F404BDB"><enum>(iii)</enum><header>Community-based
provider</header><text>The term <term>community-based provider</term> means a
not-for-profit organization, with local boards of directors, that directly
provides workforce education services.</text>
</clause><clause id="id3FC81FAFC99B45279F8FF3B18755F29D"><enum>(iv)</enum><header>Institution of
higher education</header><text>The term <term>institution of higher
education</term> has the meaning given that term in section 101 of the Higher
Education Act of 1965 (20 U.S.C. 1001).</text>
</clause><clause id="id43B84253B72C43C9AA944924FDC8BF43"><enum>(v)</enum><header>Charter
school</header><text>The term <term>charter school</term> has the meaning given
that term in section 5210 of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 7221i).</text>
</clause><clause id="id48BB22B29235464796DFC7F2A4A735C8"><enum>(vi)</enum><header>Area
vocational education school</header><text>The term <term>area vocational and
technical education school</term> has the meaning given that term in section 3
of the Carl D. Perkins Vocational and Technical Education Act of 1998 (20
U.S.C. 2302).</text>
</clause><clause id="idA556A1E520BB4093B980A10261DC1208"><enum>(vii)</enum><header>Disadvantaged
workers</header><text>The term <term>disadvantaged workers</term> means
unemployed individuals in 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="idA589FB0B869E4E83B65679002D387A77"><enum>(viii)</enum><header>Career
pathway partnership</header><text>The term <term>career pathway
partnership</term> means collaborations of 1 or more workforce education
providers, 1 or more employers, 1 or more labor organizations, where
applicable, as a result of such organization's representation of employees at
the worksite who have skills in which the training or employment programs are
proposed, and may include optional additional entities as needed to provide a
comprehensive range of workforce education and ancillary support
services.</text>
</clause><clause id="idB7EACC77854D4109B522D20519A7F4F2"><enum>(ix)</enum><header>Workforce
education</header><text>The term <term>workforce education</term> means a set
of career guidance and exploration 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="id80CBD25638F94042ABB1145E401E9E22"><enum>(x)</enum><header>Workforce
education provider</header><text>The term <term>workforce education
provider</term> means community-based providers, institutions of higher
education, area vocational and technical education schools, charter schools,
and other public nonprofit entities that have a demonstrated capacity to
provide quality workforce education services.</text>
</clause></subparagraph></paragraph></subsection><subsection id="idD9D862F4903B444292E34510EADE4D62"><enum>(c)</enum><header>Matching
requirement</header>
<paragraph id="id4576E7B3D35041A497762957896CB162"><enum>(1)</enum><header>In
general</header><text>The Secretary of Health and Human Services 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="IDA1CE82871B12407BB3ABECDD4179BEB3"><enum>(2)</enum><header>Non-federal
contributions</header><text>In this subsection, the term <term>non-Federal
contributions</term> includes contributions by the State and by public and
private entities that may be in cash or in kind, but does not include any
amounts provided by the Federal Government, or services assisted or subsidized
to any significant extent by the Federal Government, or any amount expended by
a State before October 1, 2009.</text>
</paragraph></subsection><subsection commented="no" id="id63F66F39997946DC9548FE954D9354C1"><enum>(d)</enum><header>Worker
protections and labor standards</header>
<paragraph commented="no" id="id6E5BDF543BCB44ACB60B6F8B3CC48854"><enum>(1)</enum><header>Rate of pay;
benefits and working conditions</header>
<subparagraph commented="no" id="id3A2528321BBD47E2BC82DB6259A43552"><enum>(A)</enum><header>In
general</header><text>A worksite employer of a participant in a program or
activity funded under this section shall pay the participant at the rate paid
to employees of the worksite employer who are not participants in such program
or activity and who perform comparable work at the worksite, including periodic
increases where appropriate. If no other employees of the worksite employer
perform comparable work at the worksite, the worksite employer shall pay the
participant not less than the applicable Federal or State minium wage,
whichever is higher.</text>
</subparagraph><subparagraph commented="no" id="id011A2476417F4DA2BD753C5D1FEBA061"><enum>(B)</enum><header>Benefits and
conditions</header><text>An individual employed through participation in a
program or activity funded under this section shall be provided with benefits
and working conditions at the same level and to the same extent as such
benefits and conditions are provided to other employees of the employer of the
individual who have worked a similar length of time and perform the same
work.</text>
</subparagraph></paragraph><paragraph commented="no" id="id188610D93BAB4E049336718ACA08BA7B"><enum>(2)</enum><header>Nonduplication</header>
<subparagraph commented="no" id="idB64EB8BB2C5845E1839D932C91275CFC"><enum>(A)</enum><header>In
general</header><text>Funds provided through a grant made under this paragraph
shall be used only for a program or activity that does not duplicate, and is in
addition to, a program or activity otherwise available in the locality of the
program or activity funded under this section.</text>
</subparagraph><subparagraph commented="no" id="idE88E89092B6B4A9A83FB8CF660300EA2"><enum>(B)</enum><header>Private,
nonprofit entity</header><text>Funds provided through a grant made under this
section shall not be provided to a private nonprofit entity to conduct programs
or activities that are the same as or substantially equivalent to activities
provided by a State or local government agency in the area in which such entity
is located, unless the requirements of paragraph (3) are met.</text>
</subparagraph></paragraph><paragraph commented="no" id="id581D616A190E48CDAF2974A59C66800F"><enum>(3)</enum><header>Nondisplacement</header>
<subparagraph commented="no" id="idE8F55AB1848B4A2AA4ABE23DF4E1377F"><enum>(A)</enum><header>In
general</header><text>A worksite employer shall not displace an employee or
position (including partial displacement such as reduction in hours, wages, or
employment benefits) or impair contracts for services or collective bargaining
agreements, as a result of the use by such employer of a participant in a
program or activity funded under this section, and no participant in the
program or activity shall be assigned to fill any established unfilled position
vacancy.</text>
</subparagraph><subparagraph commented="no" id="idB00DB256C618489EB1DB47642075DD75"><enum>(B)</enum><header>Job
opportunities</header><text>A job opportunity shall not be created under this
paragraph that will infringe in any manner on the promotional opportunity of an
employed individual.</text>
</subparagraph><subparagraph commented="no" id="id26429F7F452C4113B78CC0D3D0D3D48C"><enum>(C)</enum><header>Limitation on
services</header>
<clause commented="no" id="id1933CFFFABF740529245D6CC17D2B1CD"><enum>(i)</enum><header>Supplantation
of hiring</header><text>A participant in any program or activity funded under
this section shall not perform any services or duties, or engage in activities,
that will supplant the hiring of employees that are not participants in the
program or activity.</text>
</clause><clause commented="no" id="id2FAACE25CD8A470FAB0EF0A4B80F05B2"><enum>(ii)</enum><header>Duties
formerly performed by another employee</header><text>A participant in any
program or activity funded under this section shall not perform services or
duties, or engage in activities, that are services, duties, or activities that
had been performed by or were assigned to any employee who recently resigned or
was discharged, who is subject to a reduction in force, who has recall rights
pursuant to a collective bargaining agreement or applicable personnel
procedures, who is on leave (such as terminal, temporary, vacation, emergency,
or sick leave), who is on strike, or who is being locked out.</text>
</clause></subparagraph><subparagraph commented="no" id="id31630A0B8F5D450D8D72478B706CC79C"><enum>(D)</enum><header>Concurrence of
local labor organization</header><text>No placement shall be made under a
program or activity funded under this section until the entity conducting the
program or activity has obtained the written concurrence of any local labor
organization representing employees who are engaged in the same or
substantially similar work as that proposed to be carried out for the worksite
employer with whom a participant is to be placed under the program or
activity.</text>
</subparagraph></paragraph><paragraph commented="no" id="id3B602F2E09F142BF9CD27FB366647BA9"><enum>(4)</enum><header>No impact on
union organizing</header><text>A State conducting a demonstration project
funded under this section and any entity conducting a program or activity
funded under this section shall provide the Secretary with a certified
assurance that none of such funds shall be used to assist or deter union
organizing.</text>
</paragraph><paragraph commented="no" id="idB594BD2AEC2C4F1D963B993F0CE4FCAA"><enum>(5)</enum><header>Accountability</header>
<subparagraph commented="no" id="id1C621FF5CB1D44ACBB8F06658C08D233"><enum>(A)</enum><header>In
general</header><text>Funds provided under this section shall not be used to
subsidize training or employment with an employer that has a demonstrable
record of noncompliance with Federal labor, civil rights, workplace safety, or
related laws.</text>
</subparagraph><subparagraph commented="no" id="idC843F60B623341599740F8557D6AA607"><enum>(B)</enum><header>Certified
satisfactory record</header><text>Employers who receive training or wage
subsidies under programs or activities funded under this section shall have a
satisfactory record in labor relations and employment practices, as certified
by the Secretary of Labor.</text>
</subparagraph><subparagraph commented="no" id="idA76190F3DA78446E86CA5C80E12F47F6"><enum>(C)</enum><header>Application of
worker protection laws</header><text>A participant in a program or activity
funded under this section shall be considered to be an employee of any employer
that the participant is placed with for all purposes under Federal and State
law, including laws relating to health and safety, civil rights, and worker’s
compensation.</text>
</subparagraph><subparagraph commented="no" id="idB7F7D8DBBECF4501BED6B0A4B9BB5BD2"><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="idEC22ABE810CD4E789318CB773DAA35DC"><enum>(6)</enum><header>Grievance
procedure</header><text>An entity conducting a program or activity funded under
this section shall establish and maintain a procedure for the filing and
adjudication of grievances by employees of worksite employers who are not
participants in the program, or such employees’ representatives, or by
participants in such a program or activity alleging a violation of a provision
of this subsection that is similar to the grievance procedure established by a
State for purposes of section 407(f)(3) of the Social Security Act (42 U.S.C.
607(f)(3)).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD06A7019A9A948C68AF0BDFDAE77169D"><enum>(7)</enum><header>Nonpreemption
of state law</header><text>The provisions of this subsection shall not be
construed to preempt any provision of State law that affords greater
protections to employees or participants than are afforded by this
subsection.</text>
</paragraph><paragraph id="idA6FDC28881964311A5C5BB44CF41D0B8"><enum>(8)</enum><header>Treatment of
amounts paid to participants</header><text>Amounts paid to a participant in a
program or activity funded under this section shall be—</text>
<subparagraph id="idAE270EA8F7CE4B22809268A7269FF3AE"><enum>(A)</enum><text>considered earned
income for purpose of determining the participant's eligibility for the child
tax credit established under section 24 of the Internal Revenue Code of 1986,
the earned income tax credit established under section 32 of such Code, and any
other tax benefit established under such Code the eligibility for which is
based on earned income; and</text>
</subparagraph><subparagraph id="id4FCFAF9A521943E0B2047A8168157D73"><enum>(B)</enum><text>disregarded for
purposes of determining the participant's, the participant's family's, or the
participant's household's eligibility for, or amount of, assistance or benefits
provided under any means-tested program funded in whole or in part with Federal
funds.</text>
</subparagraph></paragraph></subsection><subsection id="id3CA0113EABCF4177B1005B8D4A6053F4"><enum>(e)</enum><header>Application</header>
<paragraph id="idFE892151969748BAAABA87B7CBFD9ECF"><enum>(1)</enum><header>Requirements
for all applications</header>
<subparagraph id="id2723242F71994473AA03B05C2AA1DC4D"><enum>(A)</enum><header>In
general</header><text>A State desiring to receive a grant to conduct a
demonstration project under this section shall submit an application—</text>
<clause id="id0E33EEABA1714D2F948064D39F9D6C53"><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="id8A54024487BE4122AB6ADEE602BA0D68"><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="id0BCA2488CFE94A18803DEC27B37BF66E"><enum>(B)</enum><header>Compliance with
worker protections and labor standards</header><text>The application shall
include an assurance that the State and any entity conducting a program or
activity under the project shall comply with the worker protections and labor
standards established in accordance with such protections under subsection
(d).</text>
</subparagraph><subparagraph id="idA782B43E17AD4250B6007402F1CB5A04"><enum>(C)</enum><header>Nondiscrimination</header><text>The
application shall include an assurance that the State and any entity conducting
a program or activity under the demonstration project shall comply with section
188(a)(2) of the Workforce Investment Act of 1998 (29 U.S.C. 2938(a)(2)) to the
same extent that such section would apply to the entity if the program or
activity conducted under the demonstration project was considered to be funded
or otherwise financially assisted under that Act.</text>
</subparagraph><subparagraph id="idEB24962A6F91453CA20EC3EAC2FA4058"><enum>(D)</enum><header>Assurance grant
will supplement, not supplant, other State funding</header><text>The
application shall include an assurance from the chief executive officer of the
State that funds made available under the grant will supplement, and not
supplant, other funds used by the State to establish or support employment
placements for low-income parents.</text>
</subparagraph></paragraph><paragraph id="id595E60B96C854792BBB742458D501167"><enum>(2)</enum><header>Specific
demonstration project requirements</header>
<subparagraph id="idAF06436615C0420DA1998CE978677348"><enum>(A)</enum><header>Court-supervised
or IV–D agency-supervised employment programs for noncustodial
parents</header><text>In order to conduct a demonstration project described in
subsection (a), a State shall include in the application submitted to the
Secretary of Health and Human Services the following:</text>
<clause id="ID0B6B44C8525E45C38561A4548882B5CC"><enum>(i)</enum><text>Evidence of an
agreement between the State and 1 or more counties to establish an employment
program that meets the requirements of subsection (a).</text>
</clause><clause id="IDCE60FD831F5240EE8390CE90C56B5BB5"><enum>(ii)</enum><text>The number of
potential noncustodial parents to be served by the program.</text>
</clause><clause id="ID0FEB8407A3F74071B0128B30F416B4D4"><enum>(iii)</enum><text>The purposes
specific to that State’s program.</text>
</clause><clause id="ID8599233202F8411EB4E3004DB4B2FD92"><enum>(iv)</enum><text>The median
income of the target population.</text>
</clause></subparagraph><subparagraph id="id5B57B3A829D8430EBB698A2FAE21954F"><enum>(B)</enum><header>Public-private
career pathways partnerships</header><text>In order to conduct a demonstration
project described in paragraph (2) of subsection (b), a State shall include in
the application submitted to the Secretary of Labor a description of—</text>
<clause id="id8A862EE12F794EE8BDFEE58A47506B43"><enum>(i)</enum><text>the
number, characteristics, and employment and earnings status of disadvantaged
individuals in the State or applicable region where the program is to be
conducted;</text>
</clause><clause id="id289AF5DA02E249639797042D272ECAA8"><enum>(ii)</enum><text>which business
and industry sectors, or occupational clusters that cut across sectors, will be
targeted by the career pathways partnership, based on overall economic benefit
to the community, the current and future demand for workers, the advancement
opportunities for workers, the wages at each step of the career pathway, and
availability of worker benefits;</text>
</clause><clause id="idB64A15FBFCCC44309F6DBB8142B0EF4F"><enum>(iii)</enum><text>the
interventions that will be put in place to address any educational deficits,
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="id048725576CBE4CBDA6BCA4DBBB355DDF"><enum>(iv)</enum><text>how the members
of the partnership will collaborate on the development of curriculum and
delivery of training that will provide the necessary occupational, academic and
other work-related skills and credentialing needed for the specific labor
market areas;</text>
</clause><clause id="id9985BF762821431CBE68CF1EAB591B1E"><enum>(v)</enum><text>the
supports that will be used to provide counseling, mentoring or other support to
individuals while in training or to assist them in navigating in complicated
work environments;</text>
</clause><clause id="id64EF30EC166640A385289216BA86C01B"><enum>(vi)</enum><text>the set of
career exposure activities that will be put in place to provide hands-on
experience such as work experience, on the job training, internships, or
work-study;</text>
</clause><clause id="id7435AECF2EF34F129F19825D763D05F4"><enum>(vii)</enum><text>the agreements
that are in place with employers, industry groups, and labor organizations,
where applicable, to ensure access to jobs and advancement opportunities in the
targeted businesses, industry or occupations;</text>
</clause><clause id="idB5FA336EFD314C4B99A0B332C12ADCEC"><enum>(viii)</enum><text>how the
workforce education providers in the partnership will assess the employment
barriers and needs of local disadvantaged individuals who participate in the
program and will identify resources for meeting those needs;</text>
</clause><clause id="id14802AE4C05C4250A044004FA005CF9C"><enum>(ix)</enum><text>how the
workforce education providers will work with partnership employers, business
and industry groups, labor organizations, where applicable, and local economic
development organizations to identify the priority workforce needs of the local
industry;</text>
</clause><clause id="idFD0E8EF1E4BE43FB878AEA1CF48249FC"><enum>(x)</enum><text>how
the partnerships will ensure that the appropriate program delivery models and
formal agreements are in place to ensure maximum benefits to the individuals
receiving career pathway partnership services and to the employers and labor
organizations, where applicable, in the partnership and the industries or
businesses they represent;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id588065BDF8914EF095719A39EBAABC81"><enum>(xi)</enum><text>how partnership
employers and labor organizations, where applicable, will be actively involved
in identifying specific workforce education needs, planning the curriculum,
assisting in training activities, providing job opportunities, and coordinating
job retention for individuals hired after training through the program and
follow-up support; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id43B45CF857DE47DB8E82D40245D17A89"><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="id59597A83E8F446948700ADE526E47D0B"><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="idF171B719090A4338923963310B422F5E"><enum>(f)</enum><header>Priorities and
requirements for awarding grants</header>
<paragraph commented="no" id="id11F2EBF615CF452081BE09490FBA293B"><enum>(1)</enum><header>In
general</header><text>Subject to paragraphs (2) and (3), the Secretary of
Health and Human Services (in 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="id5140C4B750D14CD4949D7C0090C99FBD"><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="idD83EB70B6E1D42E3BE785752B01C36A7"><enum>(i)</enum><text>conducting
activities with children;</text>
</clause><clause commented="no" id="id6B9FEA4F33CE4431BA4D6F8F2AE8D17B"><enum>(ii)</enum><text>improving
communication skills;</text>
</clause><clause commented="no" id="idC94377E71D254FD79007B305BE894DFE"><enum>(iii)</enum><text>child support
management;</text>
</clause><clause commented="no" id="idF161F772A29C482D8438CE25698BA0F4"><enum>(iv)</enum><text>providing
financially for the family's security and well-being;</text>
</clause><clause commented="no" id="id2DE55070A2D54CF393300661695DB15E"><enum>(v)</enum><text>managing stress
and anger, as well as domestic violence intervention services when
appropriate;</text>
</clause><clause commented="no" id="idFC05D53B014C41768206744C187CA0D4"><enum>(vi)</enum><text>maintaining
physical and mental health;</text>
</clause><clause commented="no" id="id694FAD4F2DAB4625893D3CFFB7E53792"><enum>(vii)</enum><text>parenting and
relationship skills;</text>
</clause><clause commented="no" id="idB43419EE9F544E59A821FE33F71C1993"><enum>(viii)</enum><text>child
development; and</text>
</clause><clause commented="no" id="idD33042AF4EAA42EA85B91E5F4E42B0FC"><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="idAEEFAD0E025B472DBC22AB19D8DA4111"><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 (42 U.S.C. 601 et seq.) (including programs and activities funded
under section 403(a)(2) of the Social Security Act (42 U.S.C. 603(a)(2))),
educational assistance and student aid programs, and job training or employment
programs, including State employment agencies.</text>
</subparagraph></paragraph><paragraph id="id198AC859DE1244179AEA180DFD70B999"><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 when
determined to be appropriate.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id9C0AE34F3AF24549AD5E2BF0C89423AC"><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="idA687690822B544A980F5D7F4A811D6E9"><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="id86912EA71D984D0AA6E571C15C25811A"><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="id0B501B00C317403E8C4D690B40D34EDB"><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="id13E1C950E07748A5AD3AE5A11F305BC5"><enum>(i)</enum><header>General
Definitions</header><text>In this section:</text>
<paragraph id="id25E2F6D00C3D4A098C70D9A4ED6FFD00"><enum>(1)</enum><header>State</header><text>The
term <term>State</term> means each of the 50 States, the District of Columbia,
the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam,
American Samoa, and includes an Indian tribe or tribal organization.</text>
</paragraph><paragraph id="id2D68BCE43C544199B167AA3E00EEAE4B"><enum>(2)</enum><header>IV–D
agency</header><text>The term <term>IV–D agency</term> means the State or local
agency responsible for administering the State program established under part D
of title IV of the Social Security Act (42 U.S.C. 651 et seq.).</text>
</paragraph><paragraph id="idF0CF4730A7294FD9BE16EB7306A7D464"><enum>(3)</enum><header>Indian tribe;
tribal organization</header><text>The terms <term>Indian tribe</term> and
<term>tribal organization</term> have the meaning given such terms in section 4
of the Indian Self-Determination and Education Assistance Act (25 U.S.C.
450b).</text>
</paragraph></subsection><subsection commented="no" id="IDAB2BBFBFD1974205A0FCB0D599DB8827"><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="id87922613BF714C36825ECC65C86977D7"><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 2010 through 2013; and</text>
</paragraph><paragraph commented="no" id="id6A01296C5E73411296B7C25E9A469B4F"><enum>(2)</enum><text>for programs
administered by the Secretary of Labor under subsection (b), $35,000,000 for
each of fiscal years 2010 through 2013.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="id6E634D3EBFC7408A8485F0E89B8026D4"><enum>106.</enum><header>State
assessments of barriers to employment and financial support of
children</header>
<subsection commented="no" display-inline="no-display-inline" id="id352F02E422654CC1A8AB99B147147C46"><enum>(a)</enum><header>State
assessments and reports</header><text>As a condition of the continued approval
of a State plan under part D of title IV of the Social Security Act (42 U.S.C.
651 et seq.), each State with an approved such plan, acting through the
appropriate State agencies, shall assess the State policies with respect to the
issues described in subsection (b) and submit a report to the Secretary of
Health and Human Services on the results of such assessment not later than
March 15, 2010.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id91B37E1B713D4EC4A63B30A0890149AC"><enum>(b)</enum><header>Issues
described</header><text>For purposes of subsection (a), the issues described in
this subsection are the following:</text>
<paragraph commented="no" display-inline="no-display-inline" id="id46A29EA992B9430E8BE734C2C069D66D"><enum>(1)</enum><text>The process of
setting and modifying child support obligations, particularly with respect to
low-income parents, including—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id816490839C22486592DFAB934CF5B466"><enum>(A)</enum><text>the role and
criteria for using imputed income in determining child support
obligations;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE6636107802D4088A3832649B0E77368"><enum>(B)</enum><text>the process of
modifying obligations;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id6306EAA0163A4FD4873A3FD2CF5F451D"><enum>(C)</enum><text>the consideration
of income and employment status, including efforts to identify unreported
income;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idD6987BE52A424A2D8B6280B7FD529979"><enum>(D)</enum><text>the consideration
of incarceration;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id97F25F76AC2B471B8DFAC38552367FE8"><enum>(E)</enum><text>the consideration
of disability;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idEC1C9AAB3457456BBB5FDF14599D550A"><enum>(F)</enum><text>the treatment of
arrearages, including interest charged, and laws or procedures that interfere
with forgiveness, adjustment, waiver, or compromise of arrears owed to the
State by low-income noncustodial parents who lack sufficient ability to pay
such arrearages;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBD97E46DA78943F78ED5838A2D1B18DA"><enum>(G)</enum><text>the procedures
related to retroactive support; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idDE56F5BBB2E746A3844180D1E7CF70B3"><enum>(H)</enum><text>State
pass-through and disregard policies for recipients of means tested public
benefits.</text>
</subparagraph></paragraph><paragraph id="ID0fd2df9b04a5486ab436e9179eeb4b6c"><enum>(2)</enum><text>The impact of
state criminal laws and law enforcement practices on the employment
acquisition, retention, and advancement prospects of individuals following
arrest, conviction, or incarceration, including—</text>
<subparagraph id="id1F1F28413148414D80091001C6870B1F"><enum>(A)</enum><text>any efforts,
including counseling or employment support, to assist ex-prisoners with reentry
to a community and successful reunification with their families; and</text>
</subparagraph><subparagraph id="idF2B6D08FBCBB486384AC1BF1980745BD"><enum>(B)</enum><text>an assessment of
any efforts to seal or expunge arrest and conviction records and any efforts to
grant certificates or other acknowledgments of rehabilitation to ex-prisoners,
and to examine State occupational licensing and certification
procedures.</text>
</subparagraph></paragraph><paragraph id="idD4C05DFAAAAC4A4F839840EDA8F4D727"><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="id1A68FF2392824010A3D340D502AE351F"><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="id83B13D667FB749B3B4566FF802A15B7C"><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="id5F01D6706C204CA6AD1EBBF620E50747"><enum>(c)</enum><header>Grants to
states for commissions on state law improvements in the best interest of
children and families</header><text>The Secretary of Health and Human Services
shall award grants to States to establish or support commissions to review the
State assessment conducted in accordance with subsection (a) and to make
recommendations on ways to improve State law in the best interest of children
and families.</text>
</subsection><subsection id="id4437F12C204C4C6494DC58305B5BF9F4"><enum>(d)</enum><header>Appropriations</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated to the Secretary of Health and Human Services for the
period of fiscal years 2010 through 2011, $3,000,000, to remain available until
expended, for the purpose of making—</text>
<paragraph id="id9D35CF557A4F4E17ACC55947A7CDCC9B"><enum>(1)</enum><text>payments to
States to offset all or a portion of the costs of conducting the State
assessments and reports required under subsection (a); and</text>
</paragraph><paragraph id="id75534328A269479488C355A79226B5F6"><enum>(2)</enum><text>grants to States
under subsection (c).</text>
</paragraph></subsection></section><section id="idA9BF4D0D72EF486F98A0EFAFFBF19BE8"><enum>107.</enum><header>Collection of
child support under the supplemental nutrition assistance program</header>
<subsection commented="no" id="ID44cb3a59628d49fc9520c0079bbb0c75"><enum>(a)</enum><header>Encouragement
of collection of child support</header><text>Section 5 of the Food and
Nutrition Act of 2008 (7 U.S.C. 2014) is amended—</text>
<paragraph commented="no" id="id0F52297A186B4B0EA69928128A1FC514"><enum>(1)</enum><text>in subsection
(e)—</text>
<subparagraph commented="no" id="id38CDAD415F3A41959766D3DB0D623414"><enum>(A)</enum><text>by redesignating
paragraphs (5) and (6) as paragraphs (6) and (7), respectively;</text>
</subparagraph><subparagraph commented="no" id="id60B8505D6CFC41768B2E6C34A144B23C"><enum>(B)</enum><text>in paragraph
(4)(B), by striking <quote>paragraph (6)</quote> and inserting <quote>paragraph
(7)</quote>; and</text>
</subparagraph><subparagraph commented="no" id="id52E223E7EBC149329DFF4ED82FE608BB"><enum>(C)</enum><text>by inserting
after paragraph (4) the following:</text>
<quoted-block display-inline="no-display-inline" id="id411E1B21F17A4384BFA00D99983C2FAC" style="OLC">
<paragraph commented="no" id="ID52735f87e4d54d3a93c8ec705e7969cc"><enum>(5)</enum><header>Deduction for
child support received</header>
<subparagraph commented="no" id="id2D68F7C39BD14F0FA2A2C49BD0F33C63"><enum>(A)</enum><header>In
general</header><text>A household shall be allowed a deduction of 20 percent of
all legally obligated child support payments received from an identified or
putative parent of a child in the household if that parent is not a household
member.</text>
</subparagraph><subparagraph commented="no" id="idE96CAAE5940B43F1AF081288989189D0"><enum>(B)</enum><header>Order of
determining deductions</header><text>A deduction under this paragraph shall be
determined before the computation of the excess shelter deduction under
paragraph (7).</text>
</subparagraph></paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" id="id8D4B014F661E4E3D87C21F85A7AEBB96"><enum>(2)</enum><text>in subsection
(k)(4)(B), by striking <quote>subsection (e)(6)</quote> and inserting
<quote>subsection (e)(7)</quote>.</text>
</paragraph></subsection><subsection id="ID4e7ef40937474f43a668687932324fe5"><enum>(b)</enum><header>Simplified
verification of child support payments</header><text>Section 5(n) of the Food
and Nutrition Act of 2008 (7 U.S.C. 2014(n)) is amended—</text>
<paragraph id="ID693b507c3c84491fb621935be905f14d"><enum>(1)</enum><text>in the subsection
heading, by striking <quote><header-in-text level="subsection" style="OLC">State options to simplify</header-in-text></quote>, and inserting
<quote><header-in-text level="subsection" style="OLC">Simplified</header-in-text></quote>; and</text>
</paragraph><paragraph id="ID476e38de19d1402e895a331b2ec958ce"><enum>(2)</enum><text>by striking
<quote>Regardless of whether</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="idAAC7F827E30C4A399A31EDEE3F5E8B7E" style="OLC">
<paragraph id="IDdf456c468ed746e1852e0084bc8682fe"><enum>(1)</enum><header>In
general</header><text>A household that is paying legally obligated child
support through the program under part D of title IV of the Social Security Act
(42 U.S.C. 651 et seq.) shall receive—</text>
<subparagraph id="id0389A8C0E2294D63930D9F32509792B6"><enum>(A)</enum><text>a deduction under
subsection (e)(4); or</text>
</subparagraph><subparagraph id="idCB32239FD8B144AF956297C3ABBF9394"><enum>(B)</enum><text>an exclusion for
paid child support under subsection (d)(6).</text>
</subparagraph></paragraph><paragraph id="idE0EAFF16B1EF4340922761B008286C00"><enum>(2)</enum><header>State
options</header><text>Regardless of
whether</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID7f9a383d497747b6a26577ed2ae13471"><enum>(c)</enum><header>Inclusion of
economic opportunities programs in definition of work
program</header><text>Section 6(o)(2) of the Food and Nutrition Act of 2008 (7
U.S.C. 2015(o)(2)) is amended—</text>
<paragraph id="ID600a8601191242a0956f42df61dcdbd7"><enum>(1)</enum><text>in subparagraph
(C), by striking <quote>or </quote> at the end;</text>
</paragraph><paragraph id="id7AF21234F8BB48F6B5FD888A80D37C10"><enum>(2)</enum><text>in subparagraph
(D), by striking the period at the end and inserting <quote>; or</quote>;
and</text>
</paragraph><paragraph id="IDdd6b10654841426b981511f588a6f9da"><enum>(3)</enum><text>by adding at the
end the following:</text>
<quoted-block display-inline="no-display-inline" id="id8571EB25435C42B3A0CB94319213275D" style="OLC">
<subparagraph id="ID25428c7796204e11aefcd48b91d1070b"><enum>(E)</enum><text>participate in
and comply with the requirements of a demonstration project under section 106
of the <short-title>Responsible Fatherhood and Healthy
Families Act of
2009</short-title>;</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="ID064d6f5dced244479750096a5e34e123"><enum>(d)</enum><header>Effective
date</header>
<paragraph id="idCBAE797977B44E0EAA708ECFF8A30167"><enum>(1)</enum><header>In
general</header><text>This section and the amendments made by this section take
effect on October 1, 2009.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDf8dc24ef943e4467999538d31a711f37"><enum>(2)</enum><header>State
option</header><text>A State may implement the amendments made by subsections
(a) and (b) for participating households at the first recertification of the
households that occurs on or after October 1, 2009.</text>
</paragraph></subsection></section><section id="id9CCA4B484EB44988A37BF39DC4208781"><enum>108.</enum><header>Grants
supporting healthy family partnerships for domestic violence intervention and
prevention</header><text display-inline="no-display-inline">Section 403(a) of
the Social Security Act (42 U.S.C. 603(a)) is amended by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id55DE564ADB4041F2A9E84316E4568661" style="OLC">
<paragraph id="id41F837B816B94E8083794FA971D56F3F"><enum>(6)</enum><header>Grants
supporting healthy family partnerships for domestic violence intervention and
prevention</header>
<subparagraph id="idDA6ACAA161DA44C3B868CDB3ED90A65A"><enum>(A)</enum><header>In
general</header><text>The Secretary shall award grants on a competitive basis
to healthy family partnerships to—</text>
<clause id="ID6772b4f0fd604649ad9c02ce3d513be1"><enum>(i)</enum><text>develop and
implement promising practices for assessing and providing services to
individuals and families affected by domestic violence, including through
caseworker training, the provision of technical assistance to community
partners, and the implementation of safe visitation and exchange programs;
or</text>
</clause><clause id="IDa0d81ace078d430ea0fdc92af7a71bea"><enum>(ii)</enum><text>develop and
implement promising practices for preventing domestic violence, particularly as
a barrier to economic security, and fostering healthy relationships.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBBD45AE48D0146BAA77AA43212322677"><enum>(B)</enum><header>Education
services</header><text>In awarding grants under subparagraph (A), the Secretary
shall ensure that 10 percent of the funds made available under such grants are
used for high schools and other secondary educational institutions and
institutions of higher education to provide education services on the value of
healthy relationships, responsible parenting, and healthy marriages
characterized by mutual respect and non-violence, and the importance of
building relationships skills such as communication, conflict resolution, and
budgeting.</text>
</subparagraph><subparagraph id="ID5027E0606493410DBA4D514ECEF73B50"><enum>(C)</enum><header>Application</header><text>The
respective entity and organization of a healthy family partnership entered into
for purposes of receiving a grant under this paragraph shall submit a joint
application to the Secretary, at such time and in such manner as the Secretary
shall specify, containing—</text>
<clause id="id801DD2C4E1B3440C9DE2BB2074B79BA7"><enum>(i)</enum><text>a
description of how the partnership intends to carry out the activities
described in subparagraph (A);</text>
</clause><clause id="id1D2ED0F9F4C54A52AEDF674D2C57FC40"><enum>(ii)</enum><text>an assurance
that funds made available under the grant shall be used to supplement, and not
supplant, other funds used by the entity or organization to carry out programs,
activities, or services described in subparagraph (A) or (B); and</text>
</clause><clause id="idA7BBC23541D44AFBBAFA0B2ED1B7600A"><enum>(iii)</enum><text>such other
information as the Secretary may require.</text>
</clause></subparagraph><subparagraph id="ID09AA0DCBA9C345688AAB0E5C2A4FFAA6"><enum>(D)</enum><header>General rules
governing use of funds</header><text>The rules of section 404, other than
subsection (b) of that section, shall not apply to a grant made under this
paragraph.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id856C87B4493E465C8FF45252CFF9F060"><enum>(E)</enum><header>Definitions</header><text>In
this paragraph:</text>
<clause commented="no" display-inline="no-display-inline" id="idAC3DCA36675B475CA3A1BDD34DA61E69"><enum>(i)</enum><header>Domestic
violence</header><text>The term <term>domestic violence</term> has the meaning
given that term in section 402(a)(7)(B).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idA61914DA39F44643A55489E026315B2D"><enum>(ii)</enum><header>Healthy family
partnership</header><text>The term <term>healthy family partnership</term>
means a partnership between—</text>
<subclause commented="no" display-inline="no-display-inline" id="idD1F42B93330F4A33851E0F9F396B1397"><enum>(I)</enum><text>an entity
receiving funds under a grant made under paragraph (2) to promote healthy
marriage or responsible fatherhood; and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="id57C6AD32A111497FAF3644148734CE8F"><enum>(II)</enum><text>an organization
or organizations with demonstrated expertise working with survivors of domestic
violence.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7AFB24233628450FB386419E25D55C21"><enum>(F)</enum><header>Appropriation</header><text>Out
of any money in the Treasury of the United States not otherwise appropriated,
there are appropriated for each of fiscal years 2010 through 2012, $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="id2CDDDFBD0B0B4C87A37B0EC542D346B9"><enum>109.</enum><header>Procedures to
address domestic violence prevention</header>
<subsection id="id5D352825E0B24BFBB1A1B84400341ABB"><enum>(a)</enum><header>Requirements To
ensure procedures To address domestic violence prevention</header><text>Section
403(a)(2) of the Social Security Act (42 U.S.C. 603(a)(2)), as amended by
section 101, is amended—</text>
<paragraph id="idF8D1B7EB61DF467AA8CE9F861D363851"><enum>(1)</enum><text>by redesignating
subparagraph (D) as subparagraph (F); and</text>
</paragraph><paragraph id="idE5DA8B703EE04A33BEC60C0D0EFBF65B"><enum>(2)</enum><text>by inserting
after subparagraph (C) the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="id94F0609C32594C5FB05A202D1DF36C07" style="OLC">
<subparagraph id="IDEBDCF0465FDA474DAFDD7334D21A8269"><enum>(D)</enum><header>Requirements
for receipt of funds</header><text>An entity may not be awarded a grant under
this paragraph unless the entity, as a condition of receiving funds under such
a grant—</text>
<clause id="IDbe231954ff204a30955d31a2ad01b09c"><enum>(i)</enum><text>identifies in its
application the domestic violence experts at the local, State, or national
level with whom it will consult in the development and implementation of its
programs and activities;</text>
</clause><clause id="id49298FBDC127494388F332A273E94B00"><enum>(ii)</enum><text>upon an award of
funds, and in consultation with such domestic violence experts, develops a
written protocol which describes—</text>
<subclause id="ID30142ae9050143d9bd60b224aacd1e7e"><enum>(I)</enum><text>how the entity
will identify instances or risks of domestic violence;</text>
</subclause><subclause id="id9A9D3DF080914A3B8490FD98F6B6A14E"><enum>(II)</enum><text>the procedures
for responding to such instances or risk, including making service referrals
and providing protections and appropriate assistance for identified individuals
and families;</text>
</subclause><subclause id="id236BCC048F38413095048FA260E0586B"><enum>(III)</enum><text>how
confidentiality issues will be addressed; and</text>
</subclause><subclause id="id2518B83B76EB4FEDA237AADAACB6B98A"><enum>(IV)</enum><text>the domestic
violence training that will be provided to ensure effective and consistent
implementation of the protocol; and</text>
</subclause></clause><clause id="idC0EBA0373345425889FCF256B74E935B"><enum>(iii)</enum><text>in its annual
report to the Secretary, includes a description such domestic violence
protocols and a description of any implementation issues identified with
respect to domestic violence and how such issues were addressed.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID35497C585129419EA1EFF7005EE8A5EE"><enum>(E)</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>
</paragraph></subsection><subsection id="id8843E166494A42B0836F5928C9FAA138"><enum>(b)</enum><header>Conforming
amendments</header><text>Section 403(a)(2) of such Act (42 U.S.C. 603(a)(2)),
as so amended, is amended—</text>
<paragraph id="id05355D9B628D4E8DAB50FAF68DA6EAD9"><enum>(1)</enum><text>in subparagraph
(A)(i)—</text>
<subparagraph id="id3F15DE34CE184823BF62F012599F7915"><enum>(A)</enum><text>by striking
<quote>(B) and (C)</quote> and inserting <quote>(B), (C), and (D)</quote>;
and</text>
</subparagraph><subparagraph id="id7A3A1A58ECB941AFA2683C110848CFBC"><enum>(B)</enum><text>by striking
<quote>subparagraph (D)</quote> and inserting <quote>subparagraph
(F)</quote>;</text>
</subparagraph></paragraph><paragraph id="id043D855DF3434F6CB348F3D1C3D66E99"><enum>(2)</enum><text>in subparagraphs
(B)(i) and (C)(i), by striking <quote>(D)</quote> each place it appears and
inserting <quote>(F)</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id62C6375BBC9E4838A934A602FE444065"><enum>(3)</enum><text>in subparagraph
(F) (as redesignated by subsection (a)(1)), 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 through 2008 and $200,000,000
for each of fiscal years 2009 through 2014</quote>.</text>
</paragraph></subsection></section><enum>II</enum><header>Revenue
provisions</header>
<section id="id5A343D0C36404991A256F0CCA124F9D3"><enum>201.</enum><header>Modifications
to the earned income tax credit</header>
<subsection id="idE869574094204C06975C8750179064DD"><enum>(a)</enum><header>Increase in
earned income credit for workers with no qualifying children</header>
<paragraph id="id7329C0789AAC49CAB4E37DDB948FF896"><enum>(1)</enum><header>Earned income
amount</header>
<subparagraph id="idF6D33F4048624097A5ECC08F7FF232BA"><enum>(A)</enum><header>In
general</header><text>The table under section 32(b)(2)(A) of the Internal
Revenue Code of 1986 is amended by striking <quote>$4,220</quote> and inserting
<quote>$7,250</quote>.</text>
</subparagraph><subparagraph id="id2A5C0C8737BD43778F6F421CE936867A"><enum>(B)</enum><header>Transition for
earned income amount</header><text>Section 32(b)(2) of such Code is amended by
adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id298BF7A016C7495192C58AF80BFE4E5C" style="OLC">
<subparagraph id="id9EB56F2DF7CC408F818991AF04A659A3"><enum>(C)</enum><header>Transition for
earned income amount</header><text>For purposes of subparagraph (A), in lieu of
the earned income amount specified for eligible individuals with no qualifying
children, the earned income amount for such individuals for 2010 is $5,900, for
2011 is $6,200, for 2012 is $6,500, and for 2013 is
$6,900.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id292360A8545D4C5B854F6977436028F9"><enum>(2)</enum><header>Phaseout
amount</header>
<subparagraph id="idF52CB6ABE2384AD0831CDF6C3B9AD638"><enum>(A)</enum><header>In
general</header><text>The table under section 32(b)(2)(A) of the Internal
Revenue Code of 1986 is amended by striking <quote>$5,280</quote> and inserting
<quote>phaseout amount % of annual minimum wage</quote>.</text>
</subparagraph><subparagraph id="id4363B69E51C743E5AF52ADAC97CEEDB8"><enum>(B)</enum><header>Phaseout amount
percentage</header><text>Section 32(b)(2) of such Code, as amended by this Act,
is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id833EB2C50FE04A04AA8A0901689C233F" style="OLC">
<subparagraph id="idDE6FB5637D85404896F36D544FD46F6A"><enum>(D)</enum><header>Phaseout amount
percentage</header><text>For purposes of subparagraph (A), the phaseout amount
percentage is 70 percent for 2010, 72 percent for 2011, 75 percent for 2012, 85
percent in 2013, and 100 percent in 2014 and
thereafter.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="idDF4F00118DA944D9A98D7DCADF6FA2E4"><enum>(3)</enum><header>Annual minimum
wage</header><text>Section 32(b)(2) of such Code, as amended by this Act, is
amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idF03D12B8EFF6479596CA9253F9259D61" style="OLC">
<subparagraph id="idFEE5F9972F8D42AEABD4AB8337B252D7"><enum>(E)</enum><header>Annual minimum
wage</header><text>For purposes of subparagraph (A), the annual minimum wage
for any calendar year is an amount equal to the product of 2,000 and the
minimum hourly wage effective on January 1 of such year under section 6(a)(1)
of the Fair Labor Standards Act of
1938.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idE935C9339884499A80B269C1CD57888C"><enum>(4)</enum><header>Inflation
adjustment</header>
<subparagraph id="id4CF121BEA937442E80014C9BF12DEA4E"><enum>(A)</enum><header>In
general</header><text>Section 32(j) of such Code is amended by redesignating
paragraph (2) as paragraph (3) and by inserting after paragraph (1) the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idE3192BE8C6474B2BA570D2B2F0D766CD" style="OLC">
<paragraph id="id04B09779628C47989CB22FDE2416577F"><enum>(2)</enum><header>Earned income
amount and phaseout amount for individuals with no qualifying
children</header><text>In the case of any taxable year beginning after calendar
year 2014, the earned income amount and the phaseout amount in effect for an
eligible individual with no qualifying children in subsection (b)(2)(A) shall
be increased by an amount equal to—</text>
<subparagraph id="id0F294E531AD042E98267717D83230988"><enum>(A)</enum><text>such amount,
multiplied by</text>
</subparagraph><subparagraph id="id6BF6E03150D44FE1BC8E0B431AACEA48"><enum>(B)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins, determined by substituting
<quote>calendar year 2013</quote> for <quote>calendar year 1992</quote> in
subparagraph (B)
thereof.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id5D443A7828BE4C22A0472EDAFAB4FAFB"><enum>(B)</enum><header>Conforming
amendments</header>
<clause id="id947DCC3ACB2D44FB9B02C4D1F6746739"><enum>(i)</enum><text>Section
32(j)(1)(B)(i) of such Code is amended by inserting <quote>(other than the
amount described in paragraph (2))</quote> after <quote>subsections
(b)(2)(A)</quote>.</text>
</clause><clause id="idE55500AFA9464BE6BC29F0C167F96E2D"><enum>(ii)</enum><text>Section
32(b)(3)(B)(iii) of such Code is amended by striking <quote>subsection
(j)(2)</quote> and inserting <quote>subsection (j)(3)</quote>.</text>
</clause></subparagraph></paragraph><paragraph id="idE6814ABA31AE4C96B1355BBC075D86E4"><enum>(5)</enum><header>Conforming
amendment</header><text>Section 32(b)(2)(A) of such Code is amended by striking
<quote>Subject to subparagraph (B)</quote> and inserting <quote>Except as
otherwise provided in this paragraph</quote>.</text>
</paragraph><paragraph id="id3708987D99684904B5449EC190CCCC42"><enum>(6)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
taxable years beginning after December 31, 2009.</text>
</paragraph></subsection><subsection commented="no" id="id65593163B2A74831AFF6EB9848ED0624"><enum>(b)</enum><header>Enhanced credit
for certain workers with no qualifying children</header>
<paragraph commented="no" id="idC611AA853C3F46AE92567BB517D70FD7"><enum>(1)</enum><header>In
general</header><text>Section 32 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id39D5A8DEC18A45EDA66AB686E56D09BF" style="OLC">
<subsection commented="no" id="id2B1FC35C2B8F4B518682576033555055"><enum>(n)</enum><header>Additional
credit for certain workers</header>
<paragraph commented="no" id="idCB26482E832C45CCB2195A7D0838EBFA"><enum>(1)</enum><header> In
general</header><text>In the case of a qualified individual, the credit allowed
under subsection (a) shall be increased by an amount equal to 100 percent of
the amount of the credit allowed under this section (without regard to this
subsection).</text>
</paragraph><paragraph commented="no" id="id8C78BFA4D70346BF882302191CA56334"><enum>(2)</enum><header>Qualified
individual</header><text>For purposes of this subsection, the term
<term>qualified individual</term> means an eligible individual who—</text>
<subparagraph commented="no" id="id927ADBC82E3C43DB9B23AB262293B65B"><enum>(A)</enum><text>is described in
clause (ii) of subsection (c)(1)(A),</text>
</subparagraph><subparagraph commented="no" id="id7195A3D6F58C4390BA759BA23F98D495"><enum>(B)</enum><text>is the parent of
a child and is required to make child support payments with respect to such
child pursuant to an order which—</text>
<clause commented="no" id="idE521D028DB2C4B87A4F3BAAC71399889"><enum>(i)</enum><text>is in effect
during the taxable year of such individual, and</text>
</clause><clause commented="no" id="id1E8F08F3137B4BC088EE58F35D1A6F82"><enum>(ii)</enum><text>is enforced
during such taxable year by a State agency responsible for administering the
State plan under part D of title IV of the Social Security Act, and</text>
</clause></subparagraph><subparagraph id="IDcba6e6a1b07548bda57439bb6df3f5e8"><enum>(C)</enum><text>has paid child
support during the taxable year in an amount not less than the amount of
current child support for such taxable year for every order requiring the
individual to make child support payments.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">For
purposes of subparagraph (C), a child support payment will be considered to
have been made during the taxable year if such payment is withheld from or
attributable to a pay period beginning in such taxable year and is made no
later than 30 days after the date on which such taxable year ends.</continuation-text></paragraph><paragraph id="id5FF8E90BCAAA4683AEB9F240034F68CC"><enum>(3)</enum><header>Regulations</header><text>The
Secretary shall establish regulations to carry out the purposes of this
subsection, including regulations which provide for the verification of the
payment of child support in accordance with paragraph
(2)(D).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="idEBDDE009364A4A978EE258DA501DD5A7"><enum>(2)</enum><header>Verification of
payment</header>
<subparagraph commented="no" id="id40D10D15916F40988ECD51D53706E12E"><enum>(A)</enum><header>In
general</header><text>The Secretary of Health and Human Services, in
consultation with the Secretary of the Treasury and the States, shall establish
such procedures as are appropriate to ensure that the Secretary of the Treasury
has the information that the Secretary of the Treasury determines necessary to
allow for verification of the status of individuals as qualified individuals
(as defined under section 32(n) of the Internal Revenue Code of 1986, as added
by paragraph (1)) and of payment of child support obligations in a timely
fashion.</text>
</subparagraph><subparagraph commented="no" id="id970302796C104DEE90B7D519E883100C"><enum>(B)</enum><header>Authority to
use Federal case registry</header><text>The Secretary of Health and Human
Services may include in the Federal Case Registry of Child Support Orders
established under section 453(h) of the Social Security Act (42 U.S.C. 653(h))
such information as the Secretary determines appropriate to allow for the
verification described in subparagraph (A).</text>
</subparagraph><subparagraph commented="no" id="idA9B8A41413214ACDB2C25A7F6B1C4080"><enum>(C)</enum><header>State
procedures</header><text>The Secretary of Health and Human Services, in
consultation with the States, shall establish procedures for informing a
noncustodial parent in a timely fashion when the parent has paid the amount of
child support owed by the parent for a taxable year so that the parent may
determine the extent to which the parent is a qualified individual for purposes
of qualifying for the additional credit established under section 32(n) of the
Internal Revenue Code of 1986, as added by paragraph (1).</text>
</subparagraph></paragraph><paragraph commented="no" id="idBC6A3500B0B042E5B83E1BF8AD2438CA"><enum>(3)</enum><header>Information
sharing</header><text>Subsection (j) of section 453 of the Social Security Act
(42 U.S.C. 653(j)) is amended by adding at the end the following new
paragraph:</text>
<quoted-block act-name="" id="id16CB448CEE59424196BDB5EFBB099575" style="OLC">
<paragraph id="idB09E920065EF4C14B848A71F0D121496"><enum>(12)</enum><header>Administration
of Federal tax laws</header><text>In addition to the access provided under
subsections (h)(3) and (i)(3), the Secretary of the Treasury shall have access
to such information maintained under this chapter as the Secretary of the
Treasury determines is necessary to verify eligibility for the credit allowed
under section 32(n) of the Internal Revenue Code of 1986, under procedures
established pursuant to such
section.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="idF1B005429F2B49C98FAE94A9CC198369"><enum>(4)</enum><header>Effective
date</header><text>The amendments made by paragraphs (1) and (3) shall apply to
taxable years beginning after December 31, 2009.</text>
</paragraph></subsection><subsection id="id7DCB269832664DA988B6D3E29F789997"><enum>(c)</enum><header>Marriage
penalty relief</header>
<paragraph id="idCD6C803C32BD4BA7A2475CACD4AFDB79"><enum>(1)</enum><header>In
general</header><text>Section 32(b)(2)(B) of the Internal Revenue Code of 1986
is amended—</text>
<subparagraph id="id2F3863BA64C244B5A08607AC4766248F"><enum>(A)</enum><text>by striking
<quote>after 2007</quote> in clause (iii) and inserting <quote>in
2008</quote>,</text>
</subparagraph><subparagraph id="id8A138E5417A94CBFB608FCCE66151094"><enum>(B)</enum><text>by striking
<quote>and</quote> at the end of clause (ii),</text>
</subparagraph><subparagraph id="idFE516AF01EE14886952C33DB507FB375"><enum>(C)</enum><text>by striking the
period at the end of clause (iii) and inserting <quote>, and</quote>,
and</text>
</subparagraph><subparagraph id="id7F148DECF9A4429990B1C813CDEDB96D"><enum>(D)</enum><text>by adding at the
end the following new clauses:</text>
<quoted-block display-inline="no-display-inline" id="id73184B06FA5A4DC3BE77B9A88174277E" style="OLC">
<clause id="id7F5CC9981B5D4D15AD8889791D570825"><enum>(iv)</enum><text>the amount
determined under paragraph (3)(B) in the case of taxable years beginning in
2009 and 2010, and</text>
</clause><clause id="idBB37266E59F04449AD3D2FC1B37315A6"><enum>(v)</enum><text>$4,000 in the
case of taxable years beginning after
2010.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" id="id0A5802CCA3FC479FB5070430C068C3BE"><enum>(2)</enum><header>Inflation
adjustment</header><text>Section 32(j)(1)(B)(ii) of such Code is
amended—</text>
<subparagraph commented="no" id="idCC5B6F19334F449A9DE86CDFEDD702DB"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of clause (i),</text>
</subparagraph><subparagraph commented="no" id="idFBB69AB95C3A4F8DA98A4F14C49D7E47"><enum>(B)</enum><text>by striking the
period at the end of clause (ii) and inserting <quote>, and</quote>, and</text>
</subparagraph><subparagraph commented="no" id="id4FF5990BDC474B3D92C0B16DE1B9646A"><enum>(C)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block act-name="" id="id53DA1229ADC94AF9849A947311E2209E" style="OLC">
<clause id="id024FCC817BD24433850EEDDD48501959"><enum>(iii)</enum><text>in the case of
the $4,000 amount in subsection (b)(2)(B)(v), by substituting <quote>calendar
year 2010</quote> for <quote>calendar year 1992</quote> in subparagraph (B) of
such section
1.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id6E0239224ED34FA6B4E208BFABDE5AA2"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
taxable years beginning after December 31, 2009.</text>
</paragraph></subsection></section><section changed="added" id="H02E3481346D3482B8ACF83FD73FD067E"><enum>202.</enum><header>Clarification
of economic substance doctrine</header>
<subsection commented="no" display-inline="no-display-inline" id="IDCA823D726F27487E9DBC16C55883B29F"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">Section 7701 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" display-inline="no-display-inline" id="ID4DF4553E0FE4406EA79569808CF3A923" style="OLC">
<subsection id="IDB104DB28DC804FF38066AA1B46BCEB6D"><enum>(o)</enum><header>Clarification
of Economic Substance Doctrine; etc</header>
<paragraph id="ID4F155D6FFF2141DDADE687516B7ADA9F"><enum>(1)</enum><header>General
rules</header>
<subparagraph id="ID9860C7D9EE4E4375B5361323A09BC80C"><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="IDECA4F0DFEF9B4823B8CC1F02D4947C59"><enum>(B)</enum><header>Definition of
economic substance</header><text>For purposes of subparagraph (A)—</text>
<clause id="IDB1BB918E5F164C529A35ACC4A013CCC9"><enum>(i)</enum><header>In
general</header><text>A transaction has economic substance only if—</text>
<subclause id="IDE9A3E850E5C746DB856994A2B4A271DF"><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="ID2F7A086A72AA482A9FBC68FC1D1BBAFE"><enum>(II)</enum><text>subject to
clause (iii), the taxpayer has a substantial purpose (other than a Federal tax
purpose) for entering into such transaction.</text>
</subclause></clause><clause id="ID05E3D97A370B4016A926756B28616539"><enum>(ii)</enum><header>Special rule
where taxpayer relies on profit potential</header><text>A transaction shall not
be treated as having economic substance solely by reason of having a potential
for profit unless the present value of the reasonably expected pre-Federal tax
profit from the transaction is substantial in relation to the present value of
the expected net Federal tax benefits that would be allowed if the transaction
were respected. In determining pre-Federal tax profit, there shall be taken
into account fees and other transaction expenses and to the extent provided by
the Secretary, foreign taxes.</text>
</clause><clause id="ID67B33DEE4E55480AA8D60B3829422DB9"><enum>(iii)</enum><header>Special rules
for determining whether non-federal tax purpose</header><text>For purposes of
clause (i)(II)—</text>
<subclause id="ID8271BD5C56EC481F8B66F153A1CFD611"><enum>(I)</enum><text>a purpose of
achieving a financial accounting benefit shall not be taken into account in
determining whether a transaction has a substantial purpose (other than a
Federal tax purpose) if the origin of such financial accounting benefit is a
reduction of Federal tax, and</text>
</subclause><subclause id="ID090A8EE9958443DB8B60D408F88F93BB"><enum>(II)</enum><text>the taxpayer
shall not be treated as having a substantial purpose (other than a Federal tax
purpose) with respect to a transaction if the only such purpose is the
reduction of non-Federal taxes and the transaction will result in a reduction
of Federal taxes substantially equal to, or greater than, the reduction in
non-Federal taxes because of similarities between the laws imposing the
taxes.</text>
</subclause></clause></subparagraph></paragraph><paragraph id="ID4B0A9D14225C4991A86468DC21A1F067"><enum>(2)</enum><header>Definitions and
special rules</header><text>For purposes of this subsection—</text>
<subparagraph id="IDA6F2CD12E6D64583A99381C1B8C99E53"><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="ID463598906A134579ABEE70EA0D8CCD53"><enum>(B)</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></paragraph><paragraph id="IDDC14531114B54EB5AD9ED2AB254F2B43"><enum>(3)</enum><header>Other
provisions 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 or provision of this title, and
the requirements of this subsection shall be construed as being in addition to
any such other rule of law or provision of this title.</text>
</paragraph><paragraph id="ID20558900557B4C3689F5AFD020A94830"><enum>(4)</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 id="ID54F25D28B81043A9AB31FD9D6159D580"><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><section id="ID980B867A7472405DAA4787C168763C98"><enum>203.</enum><header>Penalty for
understatements attributable to transactions lacking economic substance,
etc</header>
<subsection id="IDBE569C651CC244E1A8878BBEF955E23B"><enum>(a)</enum><header>In
General</header><text>Subchapter A of chapter 68 of the Internal Revenue Code
of 1986 is amended by inserting after section 6662A the following new
section:</text>
<quoted-block display-inline="no-display-inline" id="id99DF6F1B11FD4CD1AE0156670BD55A8D" style="OLC">
<section id="ID838F2DCAA7C746F38415731FC19283C5"><enum>6662B.</enum><header>Penalty for
understatements attributable to transactions lacking economic substance,
etc</header>
<subsection id="ID34935308AC6C488FA96D0A48DCD94B55"><enum>(a)</enum><header>Imposition of
Penalty</header><text>If a taxpayer has an noneconomic substance transaction
understatement for any taxable year, there shall be added to the tax an amount
equal to 30 percent of the amount of such understatement.</text>
</subsection><subsection id="IDD4336694EF76405A97DDD0E9537180C1"><enum>(b)</enum><header>Reduction of
Penalty for Disclosed Transactions</header><text>Subsection (a) shall be
applied by substituting <quote>20 percent</quote> for <quote>30 percent</quote>
with respect to the portion of any noneconomic substance transaction
understatement with respect to which the relevant facts affecting the tax
treatment of the item are adequately disclosed in the return or a statement
attached to the return.</text>
</subsection><subsection id="IDB98A568FB9F5436DAB28F8165BCFF933"><enum>(c)</enum><header>Noneconomic
Substance Transaction Understatement</header><text>For purposes of this
section—</text>
<paragraph id="ID0B0A70A449244FEEA35D61FF8FB03BAA"><enum>(1)</enum><header>In
general</header><text>The term <term>noneconomic substance transaction
understatement</term> means any amount which would be an understatement under
section 6662A(b)(1) if section 6662A were applied by taking into account items
attributable to noneconomic substance transactions rather than items to which
section 6662A would apply without regard to this paragraph.</text>
</paragraph><paragraph id="IDEC07CA21D95D457E920D4F68AE69E7D7"><enum>(2)</enum><header>Noneconomic
substance transaction</header><text>The term <term>noneconomic substance
transaction</term> means any transaction if there is a lack of economic
substance (within the meaning of section 7701(o)(1)(B)) for the transaction
giving rise to the claimed benefit.</text>
</paragraph></subsection><subsection id="ID0F6016D4F6DA4FF994BFF3E7B936767F"><enum>(d)</enum><header>Rules
Applicable To Assertion, Compromise, and Collection of Penalty</header>
<paragraph id="ID4041976508DD41CCA260BA71980A3BC0"><enum>(1)</enum><header>In
general</header><text>Only the Chief Counsel for the Internal Revenue Service
may assert a penalty imposed under this section or may compromise all or any
portion of such penalty. The Chief Counsel may delegate the authority under
this paragraph only to an individual holding the position of chief of a branch
within the Office of the Chief Counsel for the Internal Revenue Service.</text>
</paragraph><paragraph id="IDD35E392EC46D4E75BAF397C157A3C8A1"><enum>(2)</enum><header>Specific
requirements</header>
<subparagraph id="IDD9EDABFB557A47FD9FBACAE8C2B7C570"><enum>(A)</enum><header>Assertion of
penalty</header><text>The Chief Counsel for the Internal Revenue Service (or
the Chief Counsel's delegate under paragraph (1)) shall not assert a penalty
imposed under this section unless, before the assertion of the penalty, the
taxpayer is provided—</text>
<clause id="ID3FE66F13F1624D41B0B09BA177F70FAD"><enum>(i)</enum><text>a
notice of intent to assert the penalty, and</text>
</clause><clause id="IDE71593E06AB242988388A89B7B87783B"><enum>(ii)</enum><text>an opportunity
to provide to the Commissioner (or the Chief Counsel's delegate under paragraph
(1)) a written response to the proposed penalty within a reasonable period of
time after such notice.</text>
</clause></subparagraph><subparagraph id="IDC25371B9BC724FD5B577D624200D190C"><enum>(B)</enum><header>Compromise of
penalty</header><text>A compromise shall not result in a reduction in the
penalty imposed by this section in an amount greater than the amount which
bears the same ratio to the amount of the penalty determined without regard to
the compromise as—</text>
<clause id="ID140489D36BD246CEA720DB7F982107B3"><enum>(i)</enum><text>the reduction
under the compromise in the noneconomic substance transaction understatement to
which the penalty relates, bears to</text>
</clause><clause id="ID66A11F0125C34B2AA7A5709B31DF95C1"><enum>(ii)</enum><text>the amount of
the noneconomic substance transaction understatement determined without regard
to the compromise.</text>
</clause></subparagraph></paragraph><paragraph id="ID4D51DF0F60B143499976AA785A2B24DE"><enum>(3)</enum><header>Rules relating
to relevancy requirement</header>
<subparagraph id="ID650A08001F9E4A0DAE053853185DD46D"><enum>(A)</enum><header>Determination
of relevance by chief counsel</header><text>The Chief Counsel for the Internal
Revenue Service (or the Chief Counsel's delegate under paragraph (1)) may
assert, compromise, or collect a penalty imposed by this section with respect
to a noneconomic substance transaction even if there has not been a court
determination that the economic substance doctrine was relevant for purposes of
this title to the transaction if the Chief Counsel (or delegate) determines
that either was so relevant.</text>
</subparagraph><subparagraph id="ID29D8282EDCF544C684B51C245D42982E"><enum>(B)</enum><header>Final order of
court</header><text>If there is a final order of a court that determines that
the economic substance doctrine was not relevant for purposes of this title to
a transaction (or series of transactions), any penalty imposed under this
section with respect to the transaction (or series of transactions) shall be
rescinded.</text>
</subparagraph></paragraph><paragraph id="ID53D7156C32D54C19BBB6F8C7B8D0FC17"><enum>(4)</enum><header>Applicable
rules</header><text>The rules of paragraphs (2) and (3) of section 6707A(d)
shall apply to a compromise under paragraph (1).</text>
</paragraph></subsection><subsection id="ID5CB86F8C60C846B5BCED0056D199F481"><enum>(e)</enum><header>Coordination
With Other Penalties</header><text>Except as otherwise provided in this part,
the penalty imposed by this section shall be in addition to any other penalty
imposed by this title.</text>
</subsection><subsection id="IDF807D2915090451AAF57133318830FC0"><enum>(f)</enum><header>Cross
References</header>
<paragraph id="idCCFCCF354F6940F09758E828BBE92BBE"><enum>(1)</enum><text>For coordination
of penalty with understatements under section 6662 and other special rules, see
section 6662A(e).</text>
</paragraph><paragraph id="idAEFA804FE932414B9CCAD5F350D40CDD"><enum>(2)</enum><text>For reporting of
penalty imposed under this section to the Securities and Exchange Commission,
see section
6707A(e).</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID0BE5C4C6105E4B1899AA8FD104B37CB7"><enum>(b)</enum><header>Coordination
With Other Understatements and Penalties</header>
<paragraph id="ID7515E8FE3774421B821D4B32EEE8D73B"><enum>(1)</enum><text>The second
sentence of section 6662(d)(2)(A) of the Internal Revenue Code of 1986 is
amended by inserting <quote>and without regard to items with respect to which a
penalty is imposed by section 6662B</quote> before the period at the
end.</text>
</paragraph><paragraph id="ID2AF0D18FC3514253B0555C5A43D15B3B"><enum>(2)</enum><text>Subsection (e) of
section 6662A of such Code is amended—</text>
<subparagraph id="IDC6077D41F5FE4C528E76F3943CCB1D65"><enum>(A)</enum><text>in paragraph (1),
by inserting <quote>and noneconomic substance transaction
understatements</quote> after <quote>reportable transaction
understatements</quote> both places it appears,</text>
</subparagraph><subparagraph id="IDDC2D2D46CF2A448CAC1E53BD94137EC8"><enum>(B)</enum><text>in paragraph
(2)(A)—</text>
<clause id="ID6896A3CFFE9E4EE183FAEF3E8BB0F5C3"><enum>(i)</enum><text>by
inserting <quote>6662B or</quote> before <quote>6663</quote> in the text,
and</text>
</clause><clause id="ID63FE47EA1DAB413CB8B8039E9866A0DD"><enum>(ii)</enum><text>by
striking <quote><header-in-text level="subparagraph" style="OLC">penalty</header-in-text></quote> in the heading and inserting
<quote><header-in-text level="subparagraph" style="OLC">and economic substance
penalties</header-in-text></quote>,</text>
</clause></subparagraph><subparagraph id="IDA2AD380A1107400CA76D6DA941C92743"><enum>(C)</enum><text>in paragraph
(2)(B)—</text>
<clause id="IDD2D51CAD228645949F098A0BD04CBF6A"><enum>(i)</enum><text>by
inserting <quote>and section 6662B</quote> after <quote>This section</quote>,
and</text>
</clause><clause id="IDDA5A28FDF7474C4A96F76270C36B8CC7"><enum>(ii)</enum><text>by
striking <quote><header-in-text level="subparagraph" style="OLC">penalty</header-in-text></quote> in the heading and inserting
<quote><header-in-text level="subparagraph" style="OLC">and economic substance
penalties</header-in-text></quote>,</text>
</clause></subparagraph><subparagraph id="ID526B944B6F244D8ABF92CB438D936CA2"><enum>(D)</enum><text>in paragraph (3),
by inserting <quote>or noneconomic substance transaction understatement</quote>
after <quote>reportable transaction understatement</quote>, and</text>
</subparagraph><subparagraph id="IDA359AFC6EC0645C69D9D13E3996410B8"><enum>(E)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="IDE1888128114F46338D16660CBD0BAA0F" style="OLC">
<paragraph id="ID367A6A62EAFB4EE8BF2416963885B956"><enum>(4)</enum><header>Noneconomic
substance transaction understatement</header><text>For purposes of this
subsection, the term <term>noneconomic substance transaction
understatement</term> has the meaning given such term by section
6662B(c).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="IDFA375DBF87154D678ED3EDB26FB08B56"><enum>(3)</enum><text>Subsection (e) of
section 6707A of such Code is amended—</text>
<subparagraph id="ID4280719F733B400995AA2C5269E63397"><enum>(A)</enum><text>by striking
<quote>or</quote> at the end of subparagraph (B), and</text>
</subparagraph><subparagraph id="IDBFA797ED1C4E48B29641F99682DA38A1"><enum>(B)</enum><text>by striking
subparagraph (C) and inserting the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="ID2CD1167BFB9C40DE91334F22BDBD63D7" style="OLC">
<subparagraph id="ID77EDF8B2457B40E7B036052AE86786B7"><enum>(C)</enum><text>is required to
pay a penalty under section 6662B with respect to any noneconomic substance
transaction, or</text>
</subparagraph><subparagraph id="IDA12FB043E48244B187F3137E8912DD9E"><enum>(D)</enum><text>is required to
pay a penalty under section 6662(h) with respect to any transaction and would
(but for section 6662A(e)(2)(B)) have been subject to penalty under section
6662A at a rate prescribed under section 6662A(c) or to penalty under section
6662B,</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="ID30C91097BC9B4FE4A49D6761ADA378CE"><enum>(c)</enum><header>Clerical
Amendment</header><text>The table of sections for part II of subchapter A of
chapter 68 of the Internal Revenue Code of 1986 is amended by inserting after
the item relating to section 6662A the following new item:</text>
<quoted-block display-inline="no-display-inline" id="ID6714C06E270A478195DAE188CE702AD0" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 6662B. Penalty for understatements
attributable to transactions lacking economic substance,
etc.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID4DC99E23015B4E5191FA2F5C4E2B3E24"><enum>(d)</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><section id="ID3E72875B175C43CE8843EFA94DD20843"><enum>204.</enum><header>Denial of
deduction for interest on underpayments attributable to noneconomic substance
transactions</header>
<subsection id="ID30E5786B7AC245FEBBC0B69969E3A4D1"><enum>(a)</enum><header>In
General</header><text>Section 163(m) of the Internal Revenue Code of 1986
(relating to interest on unpaid taxes attributable to nondisclosed reportable
transactions) is amended—</text>
<paragraph id="ID85B61EDF4ADD4EB6A0FD8D3580A81D00"><enum>(1)</enum><text>by striking
<quote>attributable</quote> and all that follows and inserting the
following:</text>
<quoted-block display-inline="yes-display-inline" id="IDDF8DA618ED04496DA5643FC2EB69DFE8" style="OLC">
<text>attributable
to—</text><paragraph id="IDB709AF488C6246A6B122D5E012B3EA69"><enum>(1)</enum><text>the portion of
any reportable transaction understatement (as defined in section 6662A(b)) with
respect to which the requirement of section 6664(d)(2)(A) is not met, or</text>
</paragraph><paragraph id="ID387EB377154849AAA485B1119DC0D55D"><enum>(2)</enum><text>any noneconomic
substance transaction understatement (as defined in section
6662B(c)).</text>
</paragraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID7F35302F6BAD4B02AF6CF0636A2F5FC4"><enum>(2)</enum><text>by inserting
<quote><header-in-text level="subsection" style="OLC">and Noneconomic Substance
Transactions</header-in-text></quote> in the heading thereof after
<quote><header-in-text level="subsection" style="OLC">Transactions</header-in-text></quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID221B07D03A5744C6BED503F92DCA8942"><enum>(b)</enum><header>Effective
Date</header><text>The amendments made by this section shall apply to
transactions after the date of the enactment of this Act in taxable years
ending after such date.</text>
</subsection></section>