[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3091 Introduced in Senate (IS)]

<DOC>






114th CONGRESS
  2d Session
                                S. 3091

  To reauthorize the program of block grants to States for temporary 
 assistance for needy families through fiscal year 2021, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 23, 2016

    Mr. King (for himself, Ms. Ayotte, Mr. Brown, and Mrs. Capito) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To reauthorize the program of block grants to States for temporary 
 assistance for needy families through fiscal year 2021, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Enhancing and 
Modernizing Pathways to Opportunity through Work, Education, and 
Responsibility Act of 2016'' or the ``EMPOWER Act of 2016''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. Extension of Program.
Sec. 4. Amending the Purposes of TANF Program.
Sec. 5. Eliminating the Marriage Penalty.
Sec. 6. Individualized employment plans.
Sec. 7. Strengthening work participation requirements.
Sec. 8. Streamlining work participation activities.
Sec. 9. Improving the accountability of TANF financial resources.
Sec. 10. Strengthening Transparency of TANF Program Effectiveness and 
                            Outcomes.
Sec. 11. Exclusion of education accounts from income and asset tests.
Sec. 12. Exclusion of income and resources of child receiving 
                            supplemental security income payments from 
                            family income and asset tests.
Sec. 13. Effective date.

SEC. 2. REFERENCES.

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

SEC. 3. EXTENSION OF PROGRAM.

    (a) Family Assistance Grants.--Section 403(a)(1) (42 U.S.C. 
603(a)(1)) is amended by striking ``fiscal year 2012'' in each of 
subparagraphs (A) and (C) and inserting ``each of fiscal years 2017 
through 2021''.
    (b) Tribal Grants.--Section 412(a) (42 U.S.C. 612(a)) is amended in 
each of paragraphs (1)(A) and (2)(A) by striking ``fiscal year 2012'' 
and inserting ``each of fiscal years 2017 through 2021''.
    (c) Child Care Entitlement.--Section 418(a)(3) (42 U.S.C. 
618(a)(3)) is amended by striking ``fiscal year 2012'' and inserting 
``each of fiscal years 2017 through 2021''.

SEC. 4. AMENDING THE PURPOSES OF TANF PROGRAM.

    Section 401(a) (42 U.S.C. 601(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(5) reduce child poverty, including the incidence of 
        children living in families with incomes of less than 50 
        percent of the poverty line; and
            ``(6) encourage employment entry, retention, and 
        advancement.''.

SEC. 5. ELIMINATING THE MARRIAGE PENALTY.

    (a) Elimination of Separate and Higher Participation Rate 
Requirements for 2-Parent Families.--Section 407 (42 U.S.C. 607) is 
amended--
            (1) in subsection (a)--
                    (A) by striking all through ``A State'' the first 
                place it appears and inserting the following:
    ``(a) Participation Rate Requirements.--A State''; and
                    (B) by striking paragraph (2);
            (2) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Rates'' and inserting ``Rate'';
                    (B) in paragraph (1)(A), by striking ``(a)(1)'' and 
                inserting ``(a)'';
                    (C) by striking paragraph (2) and redesignating 
                paragraphs (3), (4), and (5) as paragraphs (2), (3), 
                and (4), respectively;
                    (D) in paragraph (3) (as so redesignated), by 
                striking ``paragraphs (1)(B) and (2)(B)'' and inserting 
                ``paragraph (1)(B)''; and
                    (E) in paragraph (4) (as so redesignated), by 
                striking ``rates'' and inserting ``rate''; and
            (3) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking all through ``For purposes 
                        of subsection (b)(1)(B)(i)'' and inserting the 
                        following:
            ``(1) General rules.--For purposes of subsection 
        (b)(1)(B)(i)''; and
                            (ii) by striking subparagraph (B); and
                    (B) in paragraph (2)(D)--
                            (i) by striking ``paragraphs (1)(B)(i) and 
                        (2)(B) of subsection (b)'' and inserting 
                        ``subsection (b)(1)(B)(i)''; and
                            (ii) by striking ``in all families and in 
                        2-parent families, respectively,''.
    (b) Conforming Amendment.--The paragraph heading for section 
409(a)(3) (42 U.S.C. 609(a)(3)) is amended by striking ``Rates'' and 
inserting ``Rate''.
    (c) Equitable Access for 2-Parent Families.--Section 402(a) (42 
U.S.C. 602(a)) is amended by adding at the end the following:
            ``(8) Certification of equitable access to assistance for 
        2-parent families.--A certification by the chief executive 
        officer of the State that, during the fiscal year--
                    ``(A) 2-parent households will be eligible for 
                equitable access to assistance under the State program 
                funded under this part;
                    ``(B) eligibility for assistance will not be 
                conditioned on deprivation of parental presence; and
                    ``(C) no other additional eligibility requirements 
                will be imposed on 2-parent households.
        The certification shall include a description of how the State 
        will ensure the equitable access described in subparagraph 
        (A).''.
    (d) Failure To Maintain Equitable Access for 2-Parent Families.--
Section 409(a) (42 U.S.C. 609(a)) is amended by adding at the end the 
following:
            ``(17) Failure to maintain equitable access for 2-parent 
        families.--If the Secretary determines that a State has not 
        complied with section 402(a)(8) during a fiscal year, the 
        Secretary shall reduce the grant payable to the State under 
        section 403(a)(1) for the immediately succeeding fiscal year by 
        an amount equal to 2 percent of the State family assistance 
        grant.''.

SEC. 6. INDIVIDUALIZED EMPLOYMENT PLANS.

    Section 408(b) (42 U.S.C. 608(b)) is amended to read as follows:
    ``(b) Individualized Employment Plans.--
            ``(1) Assessment.--The State agency responsible for 
        administering a State program funded under this part or any 
        other State program funded with qualified State expenditures 
        (as defined in section 409(a)(7)(B)(i)) shall conduct a 
        comprehensive assessment of the skills, prior work experience, 
        barriers to employment, and employability of each recipient of 
        assistance under the program who is an adult or a minor child 
        head of household (and, at State option, any other adult who is 
        a member of the household of such recipient).
            ``(2) Contents of plan.--On the basis of the assessment 
        made under paragraph (1) with respect to an individual, the 
        State agency, in consultation with the individual, shall 
        develop an individualized employment plan which--
                    ``(A) specifies the immediate needs of the 
                individual;
                    ``(B) describes the resources available to the 
                individual to meet the immediate needs;
                    ``(C) describes the assistance and services the 
                State will provide to help the individual meet 
                immediate needs;
                    ``(D) sets forth an employment goal for the 
                individual and a plan for moving the individual into 
                employment that provides an opportunity for advancement 
                and that, to the extent possible, reflects the 
                preferences of the individual;
                    ``(E) is designed to move the individual into 
                employment or the education or job training required 
                for employment;
                    ``(F) describes any significant barriers to 
                employment applicable to the individual, including any 
                work-limiting disability that affects the individual's 
                ability to comply with the requirements of section 
                407(c) (without regard to paragraph (2)(E) thereof), 
                and sets forth a plan to address and accommodate such 
                barriers;
                    ``(G) sets forth the obligations of the individual, 
                including specific benchmarks for success that will 
                help the individual become and remain employed;
                    ``(H) may direct the individual to undergo 
                appropriate substance abuse or other treatment;
                    ``(I) describes the services necessary for the 
                individual to comply with the plan which the State will 
                provide to the individual; and
                    ``(J) specifies a timeline for meeting the 
                benchmarks and goals outlined.
            ``(3) Timing.--The State agency shall comply with 
        paragraphs (1) and (2)--
                    ``(A) not later than October 1, 2017, in the case 
                of an individual who, as of October 1, 2016, was a 
                recipient of assistance under a State program described 
                in paragraph (1); and
                    ``(B) within 60 days after the individual is 
                determined to be eligible for assistance, in the case 
                of any individual not described in subparagraph (A).
            ``(4) Periodic review.--The State shall meet with each 
        individual with respect to whom an individualized employment 
        plan is required under this subsection, not less frequently 
        than every 6 months as long as the individual is receiving 
        assistance under the State program described in paragraph (1), 
        to--
                    ``(A) review the individualized employment plan 
                developed for the individual;
                    ``(B) discuss with the individual the progress made 
                by the individual in meeting the benchmarks and goals 
                specified in the plan; and
                    ``(C) update the plan, as necessary, to reflect any 
                changes in circumstances of the individual in the 
                preceding 6 months.
            ``(5) Individual option to request modifications.--In 
        addition to the review required under paragraph (4), at any 
        time an individual with respect to whom an individualized 
        employment plan is created under this subsection may request, 
        and the State shall consider, a modification of any of the 
        contents of such plan.''.

SEC. 7. STRENGTHENING WORK PARTICIPATION REQUIREMENTS.

    (a) Limitation on Credit Toward Work Participation Requirement for 
Caseload Size and Excess State Spending.--Section 407(b)(2)(A) (42 
U.S.C. 607(b)(2)(A)), as amended by section 5, is amended--
            (1) by redesignating clauses (i) and (ii) as subclauses (I) 
        and (II), respectively, and by moving such subclauses 2 ems to 
        the right;
            (2) by striking ``clause (i)'' in subclause (II), as so 
        redesignated, and inserting ``subclause (I)''; and
            (3) by striking ``for a fiscal year by the number of 
        percentage points'' and inserting ``for a fiscal year by the 
        lesser of--
                            ``(i) 25 percentage points; or
                            ``(ii) the number of percentage points''.
    (b) Counting of Work Performed by Individuals Receiving Atypical 
Benefit Payments.--Section 407(i)(1)(A) (42 U.S.C. 607(i)(1)(A)) is 
amended by adding at the end the following:
                            ``(iii) Recipients receiving work 
                        supplement payments.--Not later than September 
                        30, 2018, the Secretary shall promulgate 
                        regulations to ensure that the participation 
                        rate of a State under this section is 
                        determined without regard to work engaged in by 
                        an individual who has been included in the 
                        State program funded under this part under 
                        State policies that include the individual 
                        solely to increase the participation rate. Such 
                        regulations shall include individuals receiving 
                        assistance under this part that has a 
                        legitimate work-supporting purpose in the 
                        calculation of the participation rate of the 
                        State and shall--
                                    ``(I) set forth the criteria for 
                                determining whether an individual has 
                                been included solely for such reason;
                                    ``(II) set a minimum monthly dollar 
                                amount (not less than an amount 
                                equivalent to $30 per family in fiscal 
                                year 2018) equal to or above which a 
                                work supplement payment will be treated 
                                as having a legitimate work-supporting 
                                purpose; and
                                    ``(III) permit a State to appeal an 
                                unfavorable determination if the State 
                                can demonstrate that its work 
                                supplement payments have a legitimate 
                                work supporting purpose.
                        The regulations required under this clause 
                        shall not be effective before fiscal year 
                        2019.''.
    (c) State Option To Include Subsidized Employment.--Section 407(b) 
(42 U.S.C. 607(b)), as amended by section 5, is further amended by 
adding at the end the following:
            ``(5) State option to include subsidized employment.--If an 
        individual who is not a recipient of assistance under the State 
        program funded under this part (or any other State program 
        funded with qualified State expenditures (as defined in section 
        409(a)(7)(B)(i))) participates in work activities as part of a 
        State's subsidized employment program funded under section 
        403(b), the State may count the individual as a family that 
        includes an adult or a minor child head of household who is 
        engaged in work for the month for purposes of paragraph 
        (1)(B).''.
    (d) Redesign of Penalty for Failure To Satisfy Minimum 
Participation Rates.--Section 409(a)(3) (42 U.S.C. 609(a)(3)), as 
amended by this Act, is amended--
            (1) in subparagraph (A), by striking ``the Secretary shall 
        reduce'' and all that follows and inserting ``then the 
        applicable percentage which would otherwise apply with respect 
        to the State for purposes of paragraph (7) for the fiscal year 
        that succeeds the year in which the State receives notice of 
        noncompliance with section 407(a) shall be increased by the 
        penalty number of percentage points determined under 
        subparagraph (B) with respect to the State for that succeeding 
        fiscal year.''; and
            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Penalty number of percentage points.--For the 
                purposes of subparagraph (A), the penalty number of 
                percentage points determined under this subparagraph 
                with respect to a State and a fiscal year is--
                            ``(i) if the penalty was not imposed on the 
                        State under subparagraph (A) for the preceding 
                        fiscal year, 5 percentage points; or
                            ``(ii) the lesser of--
                                    ``(I) the penalty number of 
                                percentage points determined under this 
                                subparagraph with respect to the State 
                                for the preceding fiscal year, plus 5 
                                percentage points; or
                                    ``(II) the number of percentage 
                                points which, when added to the 
                                applicable percentage referred to in 
                                subparagraph (A), would result in the 
                                applicable percentage being 100 
                                percent.''.
    (e) Rescission of Penalties for Failure To Satisfy Minimum 
Participation Rates.--Any penalties imposed with respect to a State's 
failure to satisfy the minimum participation rates described in section 
409(a)(3) of the Social Security Act (42 U.S.C. 609(a)(3)) for any of 
fiscal years 2007 through 2016 that remain in effect as of the date of 
enactment of this Act are rescinded, and no such penalty shall be 
imposed after the date of enactment of this Act for any such fiscal 
year.

SEC. 8. STREAMLINING WORK PARTICIPATION ACTIVITIES.

    (a) Improving Counting of Hours of Work Participation.--
            (1) Elimination of distinction between core and non-core 
        work activities.--Section 407(c)(1)(A) (42 U.S.C. 607(c)(1)(A)) 
        is amended by striking ``, not fewer than 20 hours per week of 
        which are attributable to an activity described in paragraph 
        (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection 
        (d)''.
            (2) Allowing states to receive partial credit for partial 
        engagement.--Section 407(c)(1) (42 U.S.C. 607(c)(1)), as 
        amended by section 5, is amended--
                    (A) by striking ``General rules--For purposes of'' 
                and inserting ``General rules.--
                    ``(A) In general.--For purposes of''; and
                    (B) by adding at the end the following:
                    ``(B) Partial credit for families participating for 
                less than the minimum hours required.--If a family 
                receiving assistance under this part, or any other 
                State program funded with qualified State expenditures 
                (as defined in section 409(a)(7)(B)(i)), includes an 
                adult or minor child head of household receiving 
                assistance who has participated in work activities for 
                an average of 15 hours (or 10 hours, in the case of a 
                single parent specified in paragraph (2)(B)) per week 
                during a month, the family shall count as .5 of a 
                family for purposes of calculating the number described 
                in subsection (b)(1)(B)(i) for the month.''.
            (3) State option to request alternative work participation 
        rate calculation.--Section 407(a) (42 U.S.C. 607(a)), as 
        amended by section 5, is amended--
                    (A) by striking ``Requirements.--A State'' and 
                inserting ``Requirements.--
            ``(1) In general.--A State''; and
                    (B) by adding at the end the following:
            ``(2) State option to request alternative work 
        participation rate calculation.--
                    ``(A) Application.--A State may apply to the 
                Secretary to apply subparagraph (C) with respect to the 
                State.
                    ``(B) Approval of application.--The Secretary may 
                approve the application if the State demonstrates to 
                the Secretary (in accordance with such guidelines as 
                the Secretary shall establish) that the State has 
                systems and mechanisms in place to accurately record 
                individual hours of participation in work activities 
                that accurately reflect the number of hours of 
                participation of the individuals required to 
                participate in activities.
                    ``(C) Alternative work participation rate 
                calculation.--A State whose application under this 
                paragraph is approved by the Secretary shall be 
                considered to be in compliance with this subsection for 
                a month in a fiscal year if the total number of hours 
                during which the recipients of assistance under the 
                State program funded under this part, or any other 
                State program funded with qualified State expenditures 
                (as defined in section 409(a)(7)(B)(i)), who are 
                required to be participating in work activities during 
                the month have participated in the activities, is not 
                less than the percentage equal to the minimum 
                participation rate in effect under paragraph (1) for 
                the fiscal year, multiplied by the sum of--
                            ``(i) 30 times the number of the recipients 
                        who are so required to participate for an 
                        average of at least 30 hours per week in the 
                        month (as determined by the State); and
                            ``(ii) 20 times the number of the 
                        recipients who are so required to participate 
                        for an average of at least 20 hours per week in 
                        the month (as so determined).''.
    (b) Modification to Definition and Applicability of Vocational 
Education.--Section 407(d) (42 U.S.C. 607(d)) is amended by striking 
paragraph (8) and inserting the following:
            ``(8) post-secondary, vocational, or career and technical 
        education (not to exceed 36 months with respect to any 
        individual);''.
    (c) Modification to Counting Job Search as Work.--Section 
407(c)(2)(A) (42 U.S.C. 607(c)(2)(A)) is amended to read as follows:
                    ``(A) Counting of job search as work.--
                Participation of an individual in an activity described 
                in subsection (d)(6) of a State program funded under 
                this part or any other State program funded with 
                qualified State expenditures (as defined in section 
                409(a)(7)(B)(i)) may count as all hours of 
                participation in a work activity for a total of 3 
                months. Upon exhaustion of the 3 months, participation 
                by the individual in such an activity shall count 
                towards not more than half of the hours of 
                participation in work activities by the individual.''.
    (d) Providing Child Care Assistance to Community Service 
Participant Replaced by Job Readiness Assistance as Separate Work 
Activity.--
            (1) In general.--Section 407(d) (42 U.S.C. 607(d)) is 
        amended by striking paragraph (12) and inserting the following:
            ``(12) job readiness assistance.''.
            (2) Conforming amendment.--Section 407(d)(6) (42 U.S.C. 
        607(d)(6)) is amended by striking ``and job readiness 
        assistance''.
    (e) Elimination of Age Cap on Participation in Secondary School 
Attendance.--Section 407(c)(2)(C) (42 U.S.C. 607(c)(2)(C)) is amended--
            (1) in the subparagraph heading, by striking ``Single teen 
        head of household or married teen'' and inserting 
        ``Individual''; and
            (2) by striking ``who is married or a head of household and 
        has not attained 20 years of age''.
    (f) Elimination of Limitation on Number of Persons Who May Be 
Treated as Engaged in Work by Reason of Participation in Educational 
Activities.--Section 407(c)(2) (42 U.S.C. 607(c)(2)) is amended by 
striking subparagraph (D).
    (g) Modification to Counting Job Readiness Activities as Work.--
Section 407(c)(2) (42 U.S.C. 607(c)(2)), as amended by subsection (f), 
is amended by adding at the end the following:
                    ``(D) Counting of job readiness activities as 
                work.--An individual shall be considered to be engaged 
                in work by reason of participation in an activity 
                described in subsection (d)(12) of a State program 
                funded under this part or any other State program 
                funded with qualified State expenditures (as defined in 
                section 409(a)(7)(B)(i)) for not more than 6 months, 
                unless the individual's individualized employment plan 
                under section 408(b) specifies that continued 
                participation in such an activity is necessary to help 
                prepare the individual for, or support the individual 
                in, employment.''.
    (h) Individuals With Work-Limiting Disabilities.--Section 407(c)(2) 
(42 U.S.C. 607(c)(2)), as amended by subsections (f) and (g), is 
amended by adding at the end the following:
                    ``(E) Individuals with work-limiting 
                disabilities.--An individual whose individualized 
                employment plan under section 408(b) details a work-
                limiting disability of the individual and includes 
                specific benchmarks, goals, and services to accommodate 
                such disability in moving the individual toward 
                employment shall be considered to be engaged in work 
                for a month in a fiscal year if the individual 
                participates in work activities in accordance with such 
                individualized employment plan for such month and is 
                making appropriate progress toward the goals and 
                benchmarks set forth in such plan.''.

SEC. 9. IMPROVING THE ACCOUNTABILITY OF TANF FINANCIAL RESOURCES.

    (a) Prohibition on Use of Federal TANF Funds for Families With 
Income Greater Than 200 Percent of the Poverty Line.--Section 404 (42 
U.S.C. 604) is amended by adding at the end the following:
    ``(l) Prohibition on Use of Federal TANF Funds for Families With 
Income Greater Than 200 Percent of the Poverty Line.--A State shall not 
use a grant made under this part, or any other program funded with 
qualified State expenditures (as defined in section 409(a)(7)(B)(i)), 
to provide any assistance, benefit, or service to a family whose 
monthly income, for the month in which the family applied for the 
assistance, benefit, or service, exceeds 200 percent of the poverty 
line (as defined by the Office of Management and Budget, and revised 
annually in accordance with section 673(2) of the Omnibus Budget 
Reconciliation Act of 1981 (42 U.S.C. 9902(2))).''.
    (b) Expenditures for Certain Families With Income Greater Than 200 
Percent of the Poverty Line Disregarded in Applying State Spending 
Requirement.--Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)) is 
amended by adding at the end the following:
                                    ``(VI) Exclusion of expenditures 
                                for certain families with income 
                                greater than 200 percent of the poverty 
                                line.--Such term does not include any 
                                amount expended to provide any 
                                assistance, benefit, or service to a 
                                family whose monthly income for the 
                                month in which the family applied for 
                                the assistance, benefit, or service 
                                exceeded 200 percent of the poverty 
                                line (as defined in the Office of 
                                Management and Budget, and revised 
                                annually in accordance with section 
                                673(2) of the Omnibus Budget 
                                Reconciliation Act of 1981 (42 U.S.C. 
                                9902(2))) in effect with respect to the 
                                month involved.''.
    (c) Minimum Spending Requirement on TANF Core Activities.--Section 
404 (42 U.S.C. 604), as amended by subsection (a), is amended by adding 
at the end the following:
    ``(m) Minimum Spending Requirement on TANF Core Activities.--
            ``(1) In general.--For each fiscal year, a State to which a 
        grant is made under this part shall expend not less than the 
        applicable percentage of the total of the amounts paid to the 
        State under this part and the State's qualified State 
        expenditures (as defined in section 409(a)(7)(B)(i)) on core 
        program activities.
            ``(2) Applicable percentage.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the applicable percentage with respect to a State is 
                the greater of--
                            ``(i) the percentage of the total described 
                        in paragraph (1) which was expended on core 
                        program activities by the State in fiscal year 
                        2016; or
                            ``(ii) the annual minimum percentage.
                    ``(B) Annual minimum percentage.--For purposes of 
                subparagraph (A), the annual minimum percentage is--
                            ``(i) for fiscal year 2017, 25 percent;
                            ``(ii) for fiscal year 2018, 35 percent;
                            ``(iii) for fiscal year 2019, 45 percent;
                            ``(iv) for fiscal year 2020, 55 percent; 
                        and
                            ``(v) for fiscal years thereafter, 60 
                        percent.
            ``(3) Amounts attributable to penalty for failure to 
        satisfy minimum work participation rates.--If a State is 
        required to increase its qualified State expenditures for a 
        fiscal year to avoid the reduction under section 409(a)(7) by 
        reason of section 409(a)(3)(A), the amount of any such increase 
        which is attributable to the penalty under section 409(a)(3)(A) 
        shall be expended on core program activities.
            ``(4) Core program activities.--For purposes of this 
        subsection, the term `core program activities' means any of the 
        following with respect to eligible families:
                    ``(A) Cash assistance to such families.
                    ``(B) Work, education, and training activities, 
                including transportation.
                    ``(C) Child care assistance (including amounts 
                transferred to the State's Child Care and Development 
                Block Grant fund pursuant to subsection (d)(1)(B)).''.
    (d) Penalty for Failure To Comply With Requirement of Minimum 
Spending on Core Program Activities.--Section 409(a) (42 U.S.C. 
609(a)), as amended by section 5, is amended by adding at the end the 
following:
            ``(18) Penalty for failure to comply with requirement of 
        minimum spending on core program activities.--
                    ``(A) In general.--If, for any year beginning after 
                the date that is 2 years after the date of enactment of 
                this paragraph, the Secretary determines that a State 
                has not complied with the minimum spending requirements 
                applicable to such State under section 404(m), the 
                Secretary shall reduce the grant payable to the State 
                under section 403(a)(1) for the immediately succeeding 
                fiscal year by an amount equal to 5 percent of the 
                State family assistance grant.
                    ``(B) Reduction of applicable penalty.--The 
                Secretary may reduce the amount of the penalty required 
                under subparagraph (A) based on the degree of 
                noncompliance of the State with the requirements of 
                section 404(m).''.
    (e) Exclusion of Third Party Contributions in Determining State 
Spending.--Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)), as 
amended by subsection (b), is amended by adding at the end the 
following:
                                    ``(VII) Exclusion of third party 
                                contributions.--Such term shall not 
                                include--
                                            ``(aa) for fiscal year 
                                        2017, the amount (if any) by 
                                        which--

                                                    ``(AA) the value of 
                                                all expenditures for 
                                                benefits or services 
                                                including cash 
                                                donations and in-kind 
                                                contributions provided 
                                                by a source other than 
                                                the State or a local 
                                                government during the 
                                                fiscal year; exceeds

                                                    ``(BB) the value of 
                                                all such expenditures 
                                                for benefits or 
                                                services including cash 
                                                donations and in-kind 
                                                contributions claimed 
                                                by the State as 
                                                qualified State 
                                                expenditures for fiscal 
                                                year 2016;

                                            ``(bb) for fiscal year 
                                        2018, the amount (if any) by 
                                        which--

                                                    ``(AA) the value 
                                                referred to in item 
                                                (aa)(AA); exceeds

                                                    ``(BB) 50 percent 
                                                of the value referred 
                                                to in item (aa)(BB); 
                                                and

                                            ``(cc) for any fiscal year 
                                        after 2018, the value referred 
                                        to in item (aa)(AA).''.

SEC. 10. STRENGTHENING TRANSPARENCY OF TANF PROGRAM EFFECTIVENESS AND 
              OUTCOMES.

    (a) In General.--Subsection (c) of section 411 (42 U.S.C. 611) is 
amended to read as follows:
    ``(c) Strengthening Transparency on TANF Effectiveness and 
Outcomes.--
            ``(1) In general.--Each State, in consultation with the 
        Secretary, shall establish robust indicators and targets for 
        performance in relation to such indicators, to track the 
        effectiveness of the State program funded under this part and 
        any other State program funded with qualified State 
        expenditures (as defined in section 409(a)(7)(B)(i)). Such 
        performance targets shall apply to fiscal years 2019 and 
        beyond.
            ``(2) Indicators.--Each State shall consult with the 
        Secretary to determine a robust set of indicators related to 
        the State's success in meeting the purposes of the program 
        under this part. Such indicators shall include, at a minimum, 
        the following:
                    ``(A) The percentage of former adult recipients of 
                assistance under the State program funded under this 
                part or any other State program funded with qualified 
                State expenditures (as defined in section 
                409(a)(7)(B)(i)) who ceased receiving assistance during 
                the fiscal year and who, while such recipients, were 
                work-eligible individuals, and are employed during--
                            ``(i) the 2nd quarter after exiting from 
                        the program; and
                            ``(ii) the 4th quarter after exiting the 
                        program.
                    ``(B) The median earnings of such former recipients 
                of assistance during--
                            ``(i) the 2nd quarter after exiting from 
                        the program; and
                            ``(ii) the 4th quarter after exiting from 
                        the program.
                    ``(C) The percentage of former adult recipients 
                described in subparagraph (A)(i) who are also described 
                in subparagraph (A)(ii).
                    ``(D) The average number of families with children 
                in the State on a monthly basis who received cash 
                assistance funded under this part or by qualified State 
                expenditures (as defined in section 409(a)(7)(B)(i)) 
                during the fiscal year, expressed both--
                            ``(i) as a percentage of all of the 
                        families in the State whose income is less than 
                        the poverty line (as defined by the Office of 
                        Management and Budget and revised annually in 
                        accordance with section 673(2) of the Omnibus 
                        Budget Reconciliation Act of 1981 (42 U.S.C. 
                        9902(2))) for months during the same fiscal 
                        year; and
                            ``(ii) as a percentage of all of the 
                        families in the State whose income is less than 
                        50 percent of such poverty line for months 
                        during the same fiscal year.
                    ``(E) The percentage of children in the State 
                living in families whose income is less than 50 percent 
                of the Federal poverty line.
                    ``(F) The percentage of children in the State 
                living in families that experienced food insecurity (as 
                defined by the Secretary of Agriculture) at any time 
                during the fiscal year.
            ``(3) Additional indicators.--Nothing in this subsection 
        shall be construed as limiting a State, in consultation with 
        the Secretary, from establishing additional indicators and 
        performance targets in relationship to such indicators for 
        purposes of measuring the effectiveness of the State program 
        funded under this part and any other State program funded with 
        qualified State expenditures (as defined in section 
        409(a)(7)(B)(i)). The State shall consult and reach agreement 
        with the Secretary on any such additional indicators that the 
        State plans to track and report in accordance with paragraph 
        (4)(B).
            ``(4) Timeline for establishing performance targets for 
        each indicator.--
                    ``(A) Baseline year.--For purposes of establishing 
                performance targets under this subsection, the State 
                shall use fiscal year 2018 as the baseline year from 
                which to compare performance.
                    ``(B) Fiscal years 2019 and beyond.--The State 
                shall reach agreement with the Secretary in fiscal year 
                2017 on the performance targets for each of the 
                indicators described in paragraphs (2) and (3), for 
                each of fiscal years 2019, 2020, and 2021. In 
                establishing such targets, the State and the Secretary 
                shall--
                            ``(i) take into account a comparison with 
                        the targets established for other States;
                            ``(ii) ensure that the targets reflect 
                        differences among States in actual economic 
                        conditions, including--
                                    ``(I) unemployment rates and job 
                                losses or gains in particular 
                                industries; and
                                    ``(II) characteristics of 
                                recipients of assistance, including 
                                prior work history, educational or 
                                skills attainment, and other factors 
                                that may present barriers to 
                                employment; and
                            ``(iii) ensure that the targets promote 
                        continuous improvement by the State.
            ``(5) Report on state performance.--
                    ``(A) In general.--Not later than October 1, 2018, 
                the Secretary shall develop a template which each State 
                shall use to report annually on outcomes achieved under 
                the State program funded under this part.
                    ``(B) Contents.--Each such report shall include--
                            ``(i) the number of individuals who exited 
                        the program during the year and their reasons 
                        for doing so;
                            ``(ii) the characteristics of the 
                        individuals who exited the program during the 
                        year, including information about the length of 
                        time the individual received assistance under 
                        the program, the educational level of the 
                        individual, and the work earnings of the 
                        individual in the 4 fiscal quarters preceding 
                        the individual's exit; and
                            ``(iii) information specifying the levels 
                        of performance achieved on each of the 
                        indicators described in paragraphs (2) and (3).
                    ``(C) Publication.--Not later than September 30 of 
                fiscal year 2019 and each succeeding fiscal year, the 
                Secretary shall make available electronically to the 
                public each report submitted under this subparagraph 
                during the fiscal year.''.

SEC. 11. EXCLUSION OF EDUCATION ACCOUNTS FROM INCOME AND ASSET TESTS.

    Section 408(a) is amended by adding at the end the following:
            ``(13) Exclusion of education accounts from income and 
        asset tests.--In determining eligibility for assistance under 
        this part or any other State program funded with qualified 
        State expenditures (as defined in section 409(a)(7)(B)(i)), a 
        State to which a grant is made under section 403 shall exclude 
        from financial resources the value of any funds in a qualified 
        tuition program described in section 529 of the Internal 
        Revenue Code of 1986 or in a Coverdell education savings 
        account under section 530 of such Code.''.

SEC. 12. EXCLUSION OF INCOME AND RESOURCES OF CHILD RECEIVING 
              SUPPLEMENTAL SECURITY INCOME PAYMENTS FROM FAMILY INCOME 
              AND ASSET TESTS.

    Section 408(a), as amended by section 5 and section 11, is amended 
by adding at the end the following:
            ``(14) Exclusion of income and resources of child receiving 
        supplemental security income payments from family income and 
        asset tests.--In determining eligibility for assistance under 
        this part or any other State program funded with qualified 
        State expenditures (as defined in section 409(a)(7)(B)(i)), a 
        State to which a grant is made under section 403 shall exclude 
        from income and assets any income or resources of a dependent 
        child who is a recipient of supplemental security income 
        benefits under title XVI.''.

SEC. 13. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act shall take effect on October 1, 2016.
    (b) State Option To Accelerate the Effective Date of the Amendments 
Related to Work Requirements.--A State may elect to have the amendments 
made by section 8 take effect with the State on such earlier date as 
the State may elect that occurs on or after the date of enactment of 
this Act.
                                 <all>