[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[Senate]
[Pages 5401-5437]
[From the U.S. Government Publishing Office, www.gpo.gov]




  PERSONAL RESPONSIBILITY AND INDIVIDUAL DEVELOPMENT FOR EVERYONE ACT

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will proceed to consideration of H.R. 4, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (H.R. 4) to reauthorize and improve the program of 
     block grants to States for temporary assistance for needy 
     families, improve access to quality child care, and for other 
     purposes.

  The Senate proceeded to consider the bill which had been reported 
from the Committee on Finance, with an amendment to strike all after 
the enacting clause and insert in lieu thereof the following:
  (Strike the part shown in black brackets and insert the part shown in 
italic.)

     [SECTION 1. SHORT TITLE.

       [This Act may be cited as the ``Personal Responsibility, 
     Work, and Family Promotion Act of 2003''.

     [SEC. 2. TABLE OF CONTENTS.

       [The table of contents of this Act is as follows:

[Sec. 1. Short title.
[Sec. 2. Table of contents.
[Sec. 3. References.
[Sec. 4. Findings.

                             [TITLE I--TANF

[Sec. 101. Purposes.
[Sec. 102. Family assistance grants.
[Sec. 103. Promotion of family formation and healthy marriage.
[Sec. 104. Supplemental grant for population increases in certain 
              States.
[Sec. 105. Bonus to reward employment achievement.
[Sec. 106. Contingency fund.
[Sec. 107. Use of funds.
[Sec. 108. Repeal of Federal loan for State welfare programs.
[Sec. 109. Universal engagement and family self-sufficiency plan 
              requirements.
[Sec. 110. Work participation requirements.
[Sec. 111. Maintenance of effort.
[Sec. 112. Performance improvement.
[Sec. 113. Data collection and reporting.
[Sec. 114. Direct funding and administration by Indian tribes.
[Sec. 115. Research, evaluations, and national studies.
[Sec. 116. Studies by the Census Bureau and the General Accounting 
              Office.
[Sec. 117. Definition of assistance.
[Sec. 118. Technical corrections.
[Sec. 119. Fatherhood program.
[Sec. 120. State option to make TANF programs mandatory partners with 
              one-stop employment training centers.
[Sec. 121. Sense of the Congress.
[Sec. 122. Extension through fiscal year 2003.

                         [TITLE II--CHILD CARE

[Sec. 201. Short title.
[Sec. 202. Goals.
[Sec. 203. Authorization of appropriations.
[Sec. 204. Application and plan.
[Sec. 205. Activities to improve the quality of child care.
[Sec. 206. Report by secretary.
[Sec. 207. Definitions.
[Sec. 208. Entitlement funding.

                       [TITLE III--CHILD SUPPORT

[Sec. 301. Federal matching funds for limited pass through of child 
              support payments to families receiving TANF.
[Sec. 302. State option to pass through all child support payments to 
              families that formerly received TANF.
[Sec. 303. Mandatory review and adjustment of child support orders for 
              families receiving TANF.
[Sec. 304. Mandatory fee for successful child support collection for 
              family that has never received TANF.
[Sec. 305. Report on undistributed child support payments.
[Sec. 306. Use of new hire information to assist in administration of 
              unemployment compensation programs.
[Sec. 307. Decrease in amount of child support arrearage triggering 
              passport denial.
[Sec. 308. Use of tax refund intercept program to collect past-due 
              child support on behalf of children who are not minors.
[Sec. 309. Garnishment of compensation paid to veterans for service-
              connected disabilities in order to enforce child support 
              obligations.

[[Page 5402]]

[Sec. 310. Improving Federal debt collection practices.
[Sec. 311. Maintenance of technical assistance funding.
[Sec. 312. Maintenance of Federal Parent Locator Service funding.

                        [TITLE IV--CHILD WELFARE

[Sec. 401. Extension of authority to approve demonstration projects.
[Sec. 402. Elimination of limitation on number of waivers.
[Sec. 403. Elimination of limitation on number of States that may be 
              granted waivers to conduct demonstration projects on same 
              topic.
[Sec. 404. Elimination of limitation on number of waivers that may be 
              granted to a single State for demonstration projects.
[Sec. 405. Streamlined process for consideration of amendments to and 
              extensions of demonstration projects requiring waivers.
[Sec. 406. Availability of reports.
[Sec. 407. Technical correction.

                 [TITLE V--SUPPLEMENTAL SECURITY INCOME

[Sec. 501. Review of State agency blindness and disability 
              determinations.

                 [TITLE VI--STATE AND LOCAL FLEXIBILITY

[Sec. 601. Program coordination demonstration projects.
[Sec. 602. State food assistance block grant demonstration project.

                    [TITLE VII--ABSTINENCE EDUCATION

[Sec. 701. Extension of abstinence education program.

              [TITLE VIII--TRANSITIONAL MEDICAL ASSISTANCE

[Sec. 801. Extension of medicaid transitional medical assistance 
              program through fiscal year 2004.
[Sec. 802. Adjustment to payments for medicaid administrative costs to 
              prevent duplicative payments and to fund extension of 
              transitional medical assistance.

                       [TITLE IX--EFFECTIVE DATE

[Sec. 901. Effective date.

     [SEC. 3. 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 
     amendment or repeal shall be considered to be made to a 
     section or other provision of the Social Security Act.

     [SEC. 4. FINDINGS.

       [The Congress makes the following findings:
       [(1) The Temporary Assistance for Needy Families (TANF) 
     Program established by the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (Public Law 104-193) 
     has succeeded in moving families from welfare to work and 
     reducing child poverty.
       [(A) There has been a dramatic increase in the employment 
     of current and former welfare recipients. The percentage of 
     working recipients reached an all-time high in fiscal year 
     1999 and continued steady in fiscal years 2000 and 2001. In 
     fiscal year 2001, 33 percent of adult recipients were 
     working, compared to less than 7 percent in fiscal year 1992, 
     and 11 percent in fiscal year 1996. All States met the 
     overall participation rate standard in fiscal year 2001, as 
     did the District of Columbia and Puerto Rico.
       [(B) Earnings for welfare recipients remaining on the rolls 
     have also increased significantly, as have earnings for 
     female-headed households. The increases have been 
     particularly large for the bottom 2 income quintiles, that 
     is, those women who are most likely to be former or present 
     welfare recipients.
       [(C) Welfare dependency has plummeted. As of June 2002, 
     2,025,000 families and 5,008,000 individuals were receiving 
     assistance. Accordingly, the number of families in the 
     welfare caseload and the number of individuals receiving cash 
     assistance declined 54 percent and 58 percent, respectively, 
     since the enactment of TANF. These declines have persisted 
     even as unemployment rates have increased: unemployment rates 
     nationwide rose 50 percent, from 3.9 percent in September 
     2000 to 6 percent in November 2002, while welfare caseloads 
     continued to decline.
       [(D) The child poverty rate continued to decline between 
     1996 and 2001, falling 20 percent from 20.5 to 16.3 percent. 
     The 2001 child poverty rate remains at the lowest level since 
     1979. Child poverty rates for African-American and Hispanic 
     children have also fallen dramatically during the past 6 
     years. African-American child poverty is at the lowest rate 
     on record and Hispanic child poverty is at the lowest level 
     reported in over 20 years.
       [(E) Despite these gains, States have had mixed success in 
     fully engaging welfare recipients in work activities. While 
     all States have met the overall work participation rates 
     required by law, in 2001, in an average month, only just over 
     \1/3\ of all families with an adult participated in work 
     activities that were countable toward the State's 
     participation rate. Five jurisdictions failed to meet the 
     more rigorous 2-parent work requirements, and 19 
     jurisdictions (States and territories) are not subject to the 
     2-parent requirements, most because they moved their 2-parent 
     cases to separate State programs where they are not subject 
     to a penalty for failing the 2-parent rates.
       [(2) As a Nation, we have made substantial progress in 
     reducing teen pregnancies and births, slowing increases in 
     nonmarital childbearing, and improving child support 
     collections and paternity establishment.
       [(A) The teen birth rate has fallen continuously since 
     1991, down a dramatic 22 percent by 2000. During the period 
     of 1991-2000, teenage birth rates fell in all States and the 
     District of Columbia, Puerto Rico, and the Virgin Islands. 
     Declines also have spanned age, racial, and ethnic groups. 
     There has been success in lowering the birth rate for both 
     younger and older teens. The birth rate for those 15-17 years 
     of age is down 29 percent since 1991, and the rate for those 
     18 and 19 is down 16 percent. Between 1991 and 2000, teen 
     birth rates declined for all women ages 15-19--white, African 
     American, American Indian, Asian or Pacific Islander, and 
     Hispanic women ages 15-19. The rate for African American 
     teens--until recently the highest--experienced the largest 
     decline, down 31 percent from 1991 to 2000, to reach the 
     lowest rate ever reported for this group. Most births to 
     teens are nonmarital; in 2000, about 73 percent of the births 
     to teens aged 15-19 occurred outside of marriage.
       [(B) Nonmarital childbearing continued to increase slightly 
     in 2001, however not at the sharp rates of increase seen in 
     recent decades. The birth rate among unmarried women in 2001 
     was 4 percent lower than its peak reached in 1994, while the 
     proportion of births occurring outside of marriage has 
     remained at approximately 33 percent since 1998.
       [(C) The negative consequences of out-of-wedlock birth on 
     the mother, the child, the family, and society are well 
     documented. These include increased likelihood of welfare 
     dependency, increased risks of low birth weight, poor 
     cognitive development, child abuse and neglect, and teen 
     parenthood, and decreased likelihood of having an intact 
     marriage during adulthood.
       [(D) An estimated 24,500,000 children do not live with 
     their biological fathers, and 7,100,000 children do not live 
     with their biological mothers. These facts are attributable 
     largely to declining marriage rates, increasing divorce 
     rates, and increasing rates of nonmarital births during the 
     latter part of the 20th century.
       [(E) There has been a dramatic rise in cohabitation as 
     marriages have declined. Only 40 percent of children of 
     cohabiting couples will see their parents marry. Those who do 
     marry experience a 50 percent higher divorce rate. Children 
     in single-parent households and cohabiting households are at 
     much higher risk of child abuse than children in intact 
     married and stepparent families.
       [(F) Children who live apart from their biological fathers, 
     on average, are more likely to be poor, experience 
     educational, health, emotional, and psychological problems, 
     be victims of child abuse, engage in criminal behavior, and 
     become involved with the juvenile justice system than their 
     peers who live with their married, biological mother and 
     father. A child living in a single-parent family is nearly 5 
     times as likely to be poor as a child living in a married-
     couple family. In 2001, in married-couple families, the child 
     poverty rate was 8 percent, and in households headed by a 
     single mother, the poverty rate was 39.3 percent.
       [(G) Since the enactment of the Personal Responsibility and 
     Work Opportunity Reconciliation Act of 1996, child support 
     collections within the child support enforcement system have 
     grown every year, increasing from $12,000,000,000 in fiscal 
     year 1996 to nearly $19,000,000,000 in fiscal year 2001. The 
     number of paternities established or acknowledged in fiscal 
     year 2002 reached an historic high of over 1,500,000--which 
     includes more than a 100 percent increase through in-hospital 
     acknowledgement programs to 790,595 in 2001 from 324,652 in 
     1996. Child support collections were made in well over 
     7,000,000 cases in fiscal year 2000, significantly more than 
     the almost 4,000,000 cases having a collection in 1996.
       [(3) The Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 gave States great flexibility in 
     the use of Federal funds to develop innovative programs to 
     help families leave welfare and begin employment and to 
     encourage the formation of 2-parent families.
       [(A) Total Federal and State TANF expenditures in fiscal 
     year 2001 were $25,500,000,000, up from $24,000,000,000 in 
     fiscal year 2000 and $22,600,000,000 in fiscal year 1999. 
     This increased spending is attributable to significant new 
     investments in supportive services in the TANF program, such 
     as child care and activities to support work.
       [(B) Since the welfare reform effort began there has been a 
     dramatic increase in work participation (including 
     employment, community service, and work experience) among 
     welfare recipients, as well as an unprecedented reduction in 
     the caseload because recipients have left welfare for work.
       [(C) States are making policy choices and investment 
     decisions best suited to the needs of their citizens.
       [(i) To expand aid to working families, all States 
     disregard a portion of a family's

[[Page 5403]]

     earned income when determining benefit levels.
       [(ii) Most States increased the limits on countable assets 
     above the former Aid to Families with Dependent Children 
     (AFDC) program. Every State has increased the vehicle asset 
     level above the prior AFDC limit for a family's primary 
     automobile.
       [(iii) States are experimenting with programs to promote 
     marriage and father involvement. Over half the States have 
     eliminated restrictions on 2-parent families. Many States use 
     TANF, child support, or State funds to support community-
     based activities to help fathers become more involved in 
     their children's lives or strengthen relationships between 
     mothers and fathers.
       [(4) Therefore, it is the sense of the Congress that 
     increasing success in moving families from welfare to work, 
     as well as in promoting healthy marriage and other means of 
     improving child well-being, are very important Government 
     interests and the policy contained in part A of title IV of 
     the Social Security Act (as amended by this Act) is intended 
     to serve these ends.

                             [TITLE I--TANF

     [SEC. 101. PURPOSES.

       [Section 401(a) (42 U.S.C. 601(a)) is amended--
       [(1) in the matter preceding paragraph (1), by striking 
     ``increase'' and inserting ``improve child well-being by 
     increasing'';
       [(2) in paragraph (1), by inserting ``and services'' after 
     ``assistance'';
       [(3) in paragraph (2), by striking ``parents on government 
     benefits'' and inserting ``families on government benefits 
     and reduce poverty''; and
       [(4) in paragraph (4), by striking ``two-parent families'' 
     and inserting ``healthy, 2-parent married families, and 
     encourage responsible fatherhood''.

     [SEC. 102. FAMILY ASSISTANCE GRANTS.

       [(a) Extension of Authority.--Section 403(a)(1)(A) (42 
     U.S.C. 603(a)(1)(A)) is amended--
       [(1) by striking ``1996, 1997, 1998, 1999, 2000, 2001, and 
     2002'' and inserting ``2004 through 2008''; and
       [(2) by inserting ``payable to the State for the fiscal 
     year'' before the period.
       [(b) State Family Assistance Grant.--Section 403(a)(1) (42 
     U.S.C. 603(a)(1)) is amended by striking subparagraphs (B) 
     through (E) and inserting the following:
       [``(B) State family assistance grant.--The State family 
     assistance grant payable to a State for a fiscal year shall 
     be the amount that bears the same ratio to the amount 
     specified in subparagraph (C) of this paragraph as the amount 
     required to be paid to the State under this paragraph for 
     fiscal year 2002 (determined without regard to any reduction 
     pursuant to section 409 or 412(a)(1)) bears to the total 
     amount required to be paid under this paragraph for fiscal 
     year 2002 (as so determined).
       [``(C) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for each of fiscal years 2004 through 2008 
     $16,566,542,000 for grants under this paragraph.''.
       [(c) Matching Grants for the Territories.--Section 
     1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by striking 
     ``1997 through 2002'' and inserting ``2004 through 2008''.

     [SEC. 103. PROMOTION OF FAMILY FORMATION AND HEALTHY 
                   MARRIAGE.

       [(a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 
     602(a)(1)(A)) is amended by adding at the end the following:
       [``(vii) Encourage equitable treatment of married, 2-parent 
     families under the program referred to in clause (i).''.
       [(b) Healthy Marriage Promotion Grants; Repeal of Bonus for 
     Reduction of Illegitimacy Ratio.--Section 403(a)(2) (42 
     U.S.C. 603(a)(2)) is amended to read as follows:
       [``(2) Healthy marriage promotion grants.--
       [``(A) Authority.--The Secretary shall award competitive 
     grants to States, territories, and tribal organizations for 
     not more than 50 percent of the cost of developing and 
     implementing innovative programs to promote and support 
     healthy, married, 2-parent families.
       [``(B) Healthy marriage promotion activities.--Funds 
     provided under subparagraph (A) shall be used to support any 
     of the following programs or activities:
       [``(i) Public advertising campaigns on the value of 
     marriage and the skills needed to increase marital stability 
     and health.
       [``(ii) Education in high schools on the value of marriage, 
     relationship skills, and budgeting.
       [``(iii) Marriage education, marriage skills, and 
     relationship skills programs, that may include parenting 
     skills, financial management, conflict resolution, and job 
     and career advancement, for non-married pregnant women and 
     non-married expectant fathers.
       [``(iv) Pre-marital education and marriage skills training 
     for engaged couples and for couples or individuals interested 
     in marriage.
       [``(v) Marriage enhancement and marriage skills training 
     programs for married couples.
       [``(vi) Divorce reduction programs that teach relationship 
     skills.
       [``(vii) Marriage mentoring programs which use married 
     couples as role models and mentors in at-risk communities.
       [``(viii) Programs to reduce the disincentives to marriage 
     in means-tested aid programs, if offered in conjunction with 
     any activity described in this subparagraph.
       [``(C) Appropriation.--
       [``(i) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated for each of fiscal years 2003 through 2008 
     $100,000,000 for grants under this paragraph.
       [``(ii) Extended availability of fy2003 funds.--Funds 
     appropriated under clause (i) for fiscal year 2003 shall 
     remain available to the Secretary through fiscal year 2004, 
     for grants under this paragraph for fiscal year 2003.''.
       [(c) Counting of Spending on Non-Eligible Families to 
     Prevent and Reduce Incidence of Out-of-Wedlock Births, 
     Encourage Formation and Maintenance of Healthy, 2-Parent 
     Married Families, or Encourage Responsible Fatherhood.--
     Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)) is 
     amended by adding at the end the following:

       [``(V) Counting of spending on non-eligible families to 
     prevent and reduce incidence of out-of-wedlock births, 
     encourage formation and maintenance of healthy, 2-parent 
     married families, or encourage responsible fatherhood.--The 
     term `qualified State expenditures' includes the total 
     expenditures by the State during the fiscal year under all 
     State programs for a purpose described in paragraph (3) or 
     (4) of section 401(a).''.

     [SEC. 104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN 
                   CERTAIN STATES.

       [Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)) is amended--
       [(1) in the subparagraph heading, by striking ``of grants 
     for fiscal year 2002'';
       [(2) in clause (i), by striking ``fiscal year 2002'' and 
     inserting ``each of fiscal years 2004 through 2007'';
       [(3) in clause (ii), by striking ``2002'' and inserting 
     ``2007''; and
       [(4) in clause (iii), by striking ``fiscal year 2002'' and 
     inserting ``each of fiscal years 2004 through 2007''.

     [SEC. 105. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

       [(a) Reallocation of Funding.--
       [(1) In general.--Section 403(a)(4) (42 U.S.C. 603(a)(4)) 
     is amended--
       [(A) in the paragraph heading, by striking ``high 
     performance states'' and inserting ``employment 
     achievement'';
       [(B) in subparagraph (D)(ii)--
       [(i) in subclause (I), by striking ``equals $200,000,000'' 
     and inserting ``(other than 2003) equals $200,000,000, and 
     for bonus year 2003 equals $100,000,000''; and
       [(ii) in subclause (II), by striking ``$1,000,000,000'' and 
     inserting ``$900,000,000''; and
       [(C) in subparagraph (F), by striking ``$1,000,000,000'' 
     and inserting ``$900,000,000''.
       [(2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on the date of the enactment of this Act, 
     or September 30, 2003, whichever is earlier.
       [(b) Bonus to Reward Employment Achievement.--
       [(1) In general.--Section 403(a)(4) (42 U.S.C. 603(a)(4)) 
     is amended by striking subparagraphs (A) through (F) and 
     inserting the following:
       [``(A) In general.--The Secretary shall make a grant 
     pursuant to this paragraph to each State for each bonus year 
     for which the State is an employment achievement State.
       [``(B) Amount of grant.--
       [``(i) In general.--Subject to clause (ii) of this 
     subparagraph, the Secretary shall determine the amount of the 
     grant payable under this paragraph to an employment 
     achievement State for a bonus year, which shall be based on 
     the performance of the State as determined under subparagraph 
     (D)(i) for the fiscal year that immediately precedes the 
     bonus year.
       [``(ii) Limitation.--The amount payable to a State under 
     this paragraph for a bonus year shall not exceed 5 percent of 
     the State family assistance grant.
       [``(C) Formula for measuring state performance.--
       [``(i) In general.--Subject to clause (ii), not later than 
     October 1, 2003, the Secretary, in consultation with the 
     States, shall develop a formula for measuring State 
     performance in operating the State program funded under this 
     part so as to achieve the goals of employment entry, job 
     retention, and increased earnings from employment for 
     families receiving assistance under the program, as measured 
     on an absolute basis and on the basis of improvement in State 
     performance.
       [``(ii) Special rule for bonus year 2004.--For the purposes 
     of awarding a bonus under this paragraph for bonus year 2004, 
     the Secretary may measure the performance of a State in 
     fiscal year 2003 using the job entry rate, job retention 
     rate, and earnings gain rate components of the formula 
     developed under section 403(a)(4)(C) as in effect immediately 
     before the effective date of this paragraph.
       [``(D) Determination of state performance.--For each bonus 
     year, the Secretary shall--
       [``(i) use the formula developed under subparagraph (C) to 
     determine the performance

[[Page 5404]]

     of each eligible State for the fiscal year that precedes the 
     bonus year; and
       [``(ii) prescribe performance standards in such a manner so 
     as to ensure that--

       [``(I) the average annual total amount of grants to be made 
     under this paragraph for each bonus year equals $100,000,000; 
     and
       [``(II) the total amount of grants to be made under this 
     paragraph for all bonus years equals $600,000,000.

       [``(E) Definitions.--In this paragraph:
       [``(i) Bonus year.--The term `bonus year' means each of 
     fiscal years 2004 through 2009.
       [``(ii) Employment achievement state.--The term `employment 
     achievement State' means, with respect to a bonus year, an 
     eligible State whose performance determined pursuant to 
     subparagraph (D)(i) for the fiscal year preceding the bonus 
     year equals or exceeds the performance standards prescribed 
     under subparagraph (D)(ii) for such preceding fiscal year.
       [``(F) Appropriation.--
       [``(i) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated for fiscal years 2004 through 2009 $600,000,000 
     for grants under this paragraph.
       [``(ii) Extended availability of prior appropriation.--
     Amounts appropriated under section 403(a)(4)(F) of the Social 
     Security Act (as in effect before the date of the enactment 
     of this clause) that have not been expended as of such date 
     of enactment shall remain available through fiscal year 2004 
     for grants under section 403(a)(4) of such Act (as in effect 
     before such date of enactment) for bonus year 2003.
       [``(G) Grants for tribal organizations.--This paragraph 
     shall apply with respect to tribal organizations in the same 
     manner in which this paragraph applies with respect to 
     States. In determining the criteria under which to make 
     grants to tribal organizations under this paragraph, the 
     Secretary shall consult with tribal organizations.''.
       [(2) Effective date.--The amendment made by paragraph (1), 
     except for section 403(a)(4)(F)(ii) of the Social Security 
     Act as inserted by the amendment, shall take effect on 
     October 1, 2003.

     [SEC. 106. CONTINGENCY FUND.

       [(a) Deposits Into Fund.--Section 403(b)(2) (42 U.S.C. 
     603(b)(2)) is amended--
       [(1) by striking ``1997, 1998, 1999, 2000, 2001, and 2002'' 
     and inserting ``2004 through 2008''; and
       [(2) by striking all that follows ``$2,000,000,000'' and 
     inserting a period.
       [(b) Grants.--Section 403(b)(3)(C)(ii) (42 U.S.C. 
     603(b)(3)(C)(ii)) is amended by striking ``fiscal years 1997 
     through 2002'' and inserting ``fiscal years 2004 through 
     2008''.
       [(c) Definition of Needy State.--Clauses (i) and (ii) of 
     section 403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by 
     inserting after ``1996'' the following: ``, and the Food 
     Stamp Act of 1977 as in effect during the corresponding 3-
     month period in the fiscal year preceding such most recently 
     concluded 3-month period,''.
       [(d) Annual Reconciliation: Federal Matching of State 
     Expenditures Above ``Maintenance of Effort'' Level.--Section 
     403(b)(6) (42 U.S.C. 603(b)(6)) is amended--
       [(1) in subparagraph (A)(ii)--
       [(A) by adding ``and'' at the end of subclause (I);
       [(B) by striking ``; and'' at the end of subclause (II) and 
     inserting a period; and
       [(C) by striking subclause (III);
       [(2) in subparagraph (B)(i)(II), by striking all that 
     follows ``section 409(a)(7)(B)(iii))'' and inserting a 
     period;
       [(3) by amending subparagraph (B)(ii)(I) to read as 
     follows:

       [``(I) the qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i)) for the fiscal year; plus''; and

       [(4) by striking subparagraph (C).
       [(e) Consideration of Certain Child Care Expenditures in 
     Determining State Compliance With Contingency Fund 
     Maintenance of Effort Requirement.--Section 409(a)(10) (42 
     U.S.C. 609(a)(10)) is amended--
       [(1) by striking ``(other than the expenditures described 
     in subclause (I)(bb) of that paragraph)) under the State 
     program funded under this part'' and inserting a close 
     parenthesis; and
       [(2) by striking ``excluding any amount expended by the 
     State for child care under subsection (g) or (i) of section 
     402 (as in effect during fiscal year 1994) for fiscal year 
     1994,''.
       [(f) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2003.

     [SEC. 107. USE OF FUNDS.

       [(a) General Rules.--Section 404(a)(2) (42 U.S.C. 
     604(a)(2)) is amended by striking ``in any manner that'' and 
     inserting ``for any purposes or activities for which''.
       [(b) Treatment of Interstate Immigrants.--
       [(1) State plan provision.--Section 402(a)(1)(B) (42 U.S.C. 
     602(a)(1)(B)) is amended by striking clause (i) and 
     redesignating clauses (ii) through (iv) as clauses (i) 
     through (iii), respectively.
       [(2) Use of funds.--Section 404 (42 U.S.C. 604) is amended 
     by striking subsection (c).
       [(c) Increase in Amount Transferable to Child Care.--
     Section 404(d)(1) (42 U.S.C. 604(d)(1)) is amended by 
     striking ``30'' and inserting ``50''.
       [(d) Increase in Amount Transferable to Title XX 
     Programs.--Section 404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is 
     amended to read as follows:
       [``(B) Applicable percent.--For purposes of subparagraph 
     (A), the applicable percent is 10 percent for fiscal year 
     2004 and each succeeding fiscal year.''.
       [(e) Clarification of Authority of States To Use TANF Funds 
     Carried Over From Prior Years To Provide TANF Benefits and 
     Services.--Section 404(e) (42 U.S.C. 604(e)) is amended to 
     read as follows:
       [``(e) Authority To Carryover or Reserve Certain Amounts 
     for Benefits or Services or for Future Contingencies.--
       [``(1) Carryover.--A State or tribe may use a grant made to 
     the State or tribe under this part for any fiscal year to 
     provide, without fiscal year limitation, any benefit or 
     service that may be provided under the State or tribal 
     program funded under this part.
       [``(2) Contingency reserve.--A State or tribe may designate 
     any portion of a grant made to the State or tribe under this 
     part as a contingency reserve for future needs, and may use 
     any amount so designated to provide, without fiscal year 
     limitation, any benefit or service that may be provided under 
     the State or tribal program funded under this part. If a 
     State or tribe so designates a portion of such a grant, the 
     State shall, on an annual basis, include in its report under 
     section 411(a) the amount so designated.''.

     [SEC. 108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.

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

     [SEC. 109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY 
                   PLAN REQUIREMENTS.

       [(a) Modification of State Plan Requirements.--Section 
     402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by striking 
     clauses (ii) and (iii) and inserting the following:
       [``(ii) Require a parent or caretaker receiving assistance 
     under the program to engage in work or alternative self-
     sufficiency activities (as defined by the State), consistent 
     with section 407(e)(2).
       [``(iii) Require families receiving assistance under the 
     program to engage in activities in accordance with family 
     self-sufficiency plans developed pursuant to section 
     408(b).''.
       [(b) Establishment of Family Self-Sufficiency Plans.--
       [(1) In general.--Section 408(b) (42 U.S.C. 608(b)) is 
     amended to read as follows:
       [``(b) Family Self-Sufficiency Plans.--
       [``(1) In general.--A State to which a grant is made under 
     section 403 shall--
       [``(A) assess, in the manner deemed appropriate by the 
     State, the skills, prior work experience, and employability 
     of each work-eligible individual (as defined in section 
     407(b)(2)(C)) receiving assistance under the State program 
     funded under this part;
       [``(B) establish for each family that includes such an 
     individual, in consultation as the State deems appropriate 
     with the individual, a self-sufficiency plan that specifies 
     appropriate activities described in the State plan submitted 
     pursuant to section 402, including direct work activities as 
     appropriate designed to assist the family in achieving their 
     maximum degree of self-sufficiency, and that provides for the 
     ongoing participation of the individual in the activities;
       [``(C) require, at a minimum, each such individual to 
     participate in activities in accordance with the self-
     sufficiency plan;
       [``(D) monitor the participation of each such individual in 
     the activities specified in the self sufficiency plan, and 
     regularly review the progress of the family toward self-
     sufficiency;
       [``(E) upon such a review, revise the self-sufficiency plan 
     and activities as the State deems appropriate.
       [``(2) Timing.--The State shall comply with paragraph (1) 
     with respect to a family--
       [``(A) in the case of a family that, as of October 1, 2003, 
     is not receiving assistance from the State program funded 
     under this part, not later than 60 days after the family 
     first receives assistance on the basis of the most recent 
     application for the assistance; or
       [``(B) in the case of a family that, as of such date, is 
     receiving the assistance, not later than 12 months after the 
     date of enactment of this subsection.
       [``(3) State discretion.--A State shall have sole 
     discretion, consistent with section 407, to define and design 
     activities for families for purposes of this subsection, to 
     develop methods for monitoring and reviewing progress 
     pursuant to this subsection, and to make modifications to the 
     plan as the State deems appropriate to assist the individual 
     in increasing their degree of self-sufficiency.
       [``(4) Rule of interpretation.--Nothing in this part shall 
     preclude a State from requiring participation in work and any 
     other activities the State deems appropriate for helping 
     families achieve self-sufficiency and improving child well-
     being.''.

[[Page 5405]]

       [(2) Penalty for failure to establish family self-
     sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is 
     amended--
       [(A) in the paragraph heading, by inserting ``or establish 
     family self-sufficiency plan'' after ``rates''; and
       [(B) in subparagraph (A), by inserting ``or 408(b)'' after 
     ``407(a)''.

     [SEC. 110. WORK PARTICIPATION REQUIREMENTS.

       [(a) Elimination of Separate Participation Rate 
     Requirements for 2-Parent Families.--
       [(1) In general.--
       [(A) Section 407 (42 U.S.C. 607) is amended in each of 
     subsections (a) and (b) by striking paragraph (2).
       [(B) Section 407(b)(4) (42 U.S.C. 607(b)(4)) is amended by 
     striking ``paragraphs (1)(B) and (2)(B)'' and inserting 
     ``paragraph (1)(B)''.
       [(C) Section 407(c)(1) (42 U.S.C. 607(c)(1)) is amended by 
     striking subparagraph (B).
       [(D) Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is 
     amended by striking ``paragraphs (1)(B)(i) and (2)(B) of 
     subsection (b)'' and inserting ``subsection (b)(1)(B)(i)''.
       [(2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on October 1, 2002.
       [(b) Work Participation Requirements.--Section 407 (42 
     U.S.C. 607) is amended by striking all that precedes 
     subsection (b)(3) and inserting the following:

     [``SEC. 407. WORK PARTICIPATION REQUIREMENTS.

       [``(a) Participation Rate Requirements.--A State to which a 
     grant is made under section 403 for a fiscal year shall 
     achieve a minimum participation rate equal to not less than--
       [``(1) 50 percent for fiscal year 2004;
       [``(2) 55 percent for fiscal year 2005;
       [``(3) 60 percent for fiscal year 2006;
       [``(4) 65 percent for fiscal year 2007; and
       [``(5) 70 percent for fiscal year 2008 and each succeeding 
     fiscal year.
       [``(b) Calculation of Participation Rates.--
       [``(1) Average monthly rate.--For purposes of subsection 
     (a), the participation rate of a State for a fiscal year is 
     the average of the participation rates of the State for each 
     month in the fiscal year.
       [``(2) Monthly participation rates; incorporation of 40-
     hour work week standard.--
       [``(A) In general.--For purposes of paragraph (1), the 
     participation rate of a State for a month is--
       [``(i) the total number of countable hours (as defined in 
     subsection (c)) with respect to the counted families for the 
     State for the month; divided by
       [``(ii) 160 multiplied by the number of counted families 
     for the State for the month.
       [``(B) Counted families defined.--
       [``(i) In general.--In subparagraph (A), the term `counted 
     family' means, with respect to a State and a month, a family 
     that includes a work-eligible individual and that receives 
     assistance in the month under the State program funded under 
     this part, subject to clause (ii).
       [``(ii) State option to exclude certain families.--At the 
     option of a State, the term `counted family' shall not 
     include--

       [``(I) a family in the first month for which the family 
     receives assistance from a State program funded under this 
     part on the basis of the most recent application for such 
     assistance; or
       [``(II) on a case-by-case basis, a family in which the 
     youngest child has not attained 12 months of age.

       [``(iii) State option to include individuals receiving 
     assistance under a tribal family assistance plan or tribal 
     work program.--At the option of a State, the term `counted 
     family' may include families in the State that are receiving 
     assistance under a tribal family assistance plan approved 
     under section 412 or under a tribal work program to which 
     funds are provided under this part.
       [``(C) Work-eligible individual defined.--In this section, 
     the term `work-eligible individual' means an individual--
       [``(i) who is married or a single head of household; and
       [``(ii) whose needs are (or, but for sanctions under this 
     part that have been in effect for more than 3 months (whether 
     or not consecutive) in the preceding 12 months or under part 
     D, would be) included in determining the amount of cash 
     assistance to be provided to the family under the State 
     program funded under this part.''.
       [(c) Recalibration of Caseload Reduction Credit.--
       [(1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C. 
     607(b)(3)(A)(ii)) is amended to read as follows:
       [``(ii) the average monthly number of families that 
     received assistance under the State program funded under this 
     part during the base year.''.
       [(2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C. 
     607(b)(3)(B)) is amended by striking ``and eligibility 
     criteria'' and all that follows through the close parenthesis 
     and inserting ``and the eligibility criteria in effect during 
     the then applicable base year''.
       [(3) Base year defined.--Section 407(b)(3) (42 U.S.C. 
     607(b)(3)) is amended by adding at the end the following:
       [``(C) Base year defined.--In this paragraph, the term 
     `base year' means, with respect to a fiscal year--

       [``(I) if the fiscal year is fiscal year 2004, fiscal year 
     1996;
       [``(II) if the fiscal year is fiscal year 2005, fiscal year 
     1998;
       [``(III) if the fiscal year is fiscal year 2006, fiscal 
     year 2001; or
       [``(IV) if the fiscal year is fiscal year 2007 or any 
     succeeding fiscal year, the then 4th preceding fiscal 
     year.''.

       [(d) Superachiever Credit.--Section 407(b) (42 U.S.C. 
     607(b)) is amended by striking paragraphs (4) and (5) and 
     inserting the following:
       [``(4) Superachiever credit.--
       [``(A) In general.--The participation rate, determined 
     under paragraphs (1) and (2) of this subsection, of a 
     superachiever State for a fiscal year shall be increased by 
     the lesser of--
       [``(i) the amount (if any) of the superachiever credit 
     applicable to the State; or
       [``(ii) the number of percentage points (if any) by which 
     the minimum participation rate required by subsection (a) for 
     the fiscal year exceeds 50 percent.
       [``(B) Superachiever state.--For purposes of subparagraph 
     (A), a State is a superachiever State if the State caseload 
     for fiscal year 2001 has declined by at least 60 percent from 
     the State caseload for fiscal year 1995.
       [``(C) Amount of credit.--The superachiever credit 
     applicable to a State is the number of percentage points (if 
     any) by which the decline referred to in subparagraph (B) 
     exceeds 60 percent.
       [``(D) Definitions.--In this paragraph:
       [``(i) State caseload for fiscal year 2001.--The term 
     `State caseload for fiscal year 2001' means the average 
     monthly number of families that received assistance during 
     fiscal year 2001 under the State program funded under this 
     part.
       [``(ii) State caseload for fiscal year 1995.--The term 
     `State caseload for fiscal year 1995' means the average 
     monthly number of families that received aid under the State 
     plan approved under part A (as in effect on September 30, 
     1995) during fiscal year 1995.''.
       [(e) Countable Hours.--Section 407 of such Act (42 U.S.C. 
     607) is amended by striking subsections (c) and (d) and 
     inserting the following:
       [``(c) Countable Hours.--
       [``(1) Definition.--In subsection (b)(2), the term 
     `countable hours' means, with respect to a family for a 
     month, the total number of hours in the month in which any 
     member of the family who is a work-eligible individual is 
     engaged in a direct work activity or other activities 
     specified by the State (excluding an activity that does not 
     address a purpose specified in section 401(a)), subject to 
     the other provisions of this subsection.
       [``(2) Limitations.--Subject to such regulations as the 
     Secretary may prescribe:
       [``(A) Minimum weekly average of 24 hours of direct work 
     activities required.--If the work-eligible individuals in a 
     family are engaged in a direct work activity for an average 
     total of fewer than 24 hours per week in a month, then the 
     number of countable hours with respect to the family for the 
     month shall be zero.
       [``(B) Maximum weekly average of 16 hours of other 
     activities.--An average of not more than 16 hours per week of 
     activities specified by the State (subject to the exclusion 
     described in paragraph (1)) may be considered countable hours 
     in a month with respect to a family.
       [``(3) Special rules.--For purposes of paragraph (1):
       [``(A) Participation in qualified activities.--
       [``(i) In general.--If, with the approval of the State, the 
     work-eligible individuals in a family are engaged in 1 or 
     more qualified activities for an average total of at least 24 
     hours per week in a month, then all such engagement in the 
     month shall be considered engagement in a direct work 
     activity, subject to clause (iii).
       [``(ii) Qualified activity defined.--The term `qualified 
     activity' means an activity specified by the State (subject 
     to the exclusion described in paragraph (1)) that meets such 
     standards and criteria as the State may specify, including--

       [``(I) substance abuse counseling or treatment;
       [``(II) rehabilitation treatment and services;
       [``(III) work-related education or training directed at 
     enabling the family member to work;
       [``(IV) job search or job readiness assistance; and

       [``(V) any other activity that addresses a purpose 
     specified in section 401(a).

       [``(iii) Limitation.--

       [``(I) In general.--Except as provided in subclause (II), 
     clause (i) shall not apply to a family for more than 3 months 
     in any period of 24 consecutive months.
       [``(II) Special rule applicable to education and 
     training.--A State may, on a case-by-case basis, apply clause 
     (i) to a work-eligible individual so that participation by 
     the individual in education or training, if needed to permit 
     the individual to complete a certificate program or other 
     work-related education or training directed at enabling the 
     individual to fill a known job need in a local area, may be 
     considered countable hours with respect to the family of the 
     individual for not more than 4 months in any period of 24 
     consecutive months.

       [``(B) School attendance by teen head of household.--The 
     work-eligible members of a

[[Page 5406]]

     family shall be considered to be engaged in a direct work 
     activity for an average of 40 hours per week in a month if 
     the family includes an individual who is married, or is a 
     single head of household, who has not attained 20 years of 
     age, and the individual--
       [``(i) maintains satisfactory attendance at secondary 
     school or the equivalent in the month; or
       [``(ii) participates in education directly related to 
     employment for an average of at least 20 hours per week in 
     the month.
       [``(d) Direct Work Activity.--In this section, the term 
     `direct work activity' means--
       [``(1) unsubsidized employment;
       [``(2) subsidized private sector employment;
       [``(3) subsidized public sector employment;
       [``(4) on-the-job training;
       [``(5) supervised work experience; or
       [``(6) supervised community service.''.
       [(f) Penalties Against Individuals.--Section 407(e)(1) (42 
     U.S.C. 607(e)(1)) is amended to read as follows:
       [``(1) Reduction or termination of assistance.--
       [``(A) In general.--Except as provided in paragraph (2), if 
     an individual in a family receiving assistance under a State 
     program funded under this part fails to engage in activities 
     required in accordance with this section, or other activities 
     required by the State under the program, and the family does 
     not otherwise engage in activities in accordance with the 
     self-sufficiency plan established for the family pursuant to 
     section 408(b), the State shall--
       [``(i) if the failure is partial or persists for not more 
     than 1 month--

       [``(I) reduce the amount of assistance otherwise payable to 
     the family pro rata (or more, at the option of the State) 
     with respect to any period during a month in which the 
     failure occurs; or
       [``(II) terminate all assistance to the family, subject to 
     such good cause exceptions as the State may establish; or

       [``(ii) if the failure is total and persists for at least 2 
     consecutive months, terminate all cash payments to the family 
     including qualified State expenditures (as defined in section 
     409(a)(7)(B)(i)) for at least 1 month and thereafter until 
     the State determines that the individual has resumed full 
     participation in the activities, subject to such good cause 
     exceptions as the State may establish.
       [``(B) Special rule.--
       [``(i) In general.--In the event of a conflict between a 
     requirement of clause (i)(II) or (ii) of subparagraph (A) and 
     a requirement of a State constitution, or of a State statute 
     that, before 1966, obligated local government to provide 
     assistance to needy parents and children, the State 
     constitutional or statutory requirement shall control.
       [``(ii) Limitation.--Clause (i) of this subparagraph shall 
     not apply after the 1-year period that begins with the date 
     of the enactment of this subparagraph.''.
       [(g) Conforming Amendments.--
       [(1) Section 407(f) (42 U.S.C. 607(f)) is amended in each 
     of paragraphs (1) and (2) by striking ``work activity 
     described in subsection (d)'' and inserting ``direct work 
     activity''.
       [(2) The heading of section 409(a)(14) (42 U.S.C. 
     609(a)(14)) is amended by inserting ``or refusing to engage 
     in activities under a family self-sufficiency plan'' after 
     ``work''.
       [(h) Effective Date.--The amendments made by this section 
     (other than subsection (a)) shall take effect on October 1, 
     2003.

     [SEC. 111. MAINTENANCE OF EFFORT.

       [(a) In General.--Section 409(a)(7) (42 U.S.C. 609(a)(7)) 
     is amended--
       [(1) in subparagraph (A) by striking ``fiscal year 1998, 
     1999, 2000, 2001, 2002, or 2003'' and inserting ``fiscal year 
     2003, 2004, 2005, 2006, 2007, 2008, or 2009''; and
       [(2) in subparagraph (B)(ii)--
       [(A) by inserting ``preceding'' before ``fiscal year''; and
       [(B) by striking ``for fiscal years 1997 through 2002,''.
       [(b) State Spending on Promoting Healthy Marriage.--
       [(1) In general.--Section 404 (42 U.S.C. 604) is amended by 
     adding at the end the following:
       [``(l) Marriage Promotion.--A State, territory, or tribal 
     organization to which a grant is made under section 403(a)(2) 
     may use a grant made to the State, territory, or tribal 
     organization under any other provision of section 403 for 
     marriage promotion activities, and the amount of any such 
     grant so used shall be considered State funds for purposes of 
     section 403(a)(2).''.
       [(2) Federal tanf funds used for marriage promotion 
     disregarded for purposes of maintenance of effort 
     requirement.--Section 409(a)(7)(B)(i) (42 U.S.C. 
     609(a)(7)(B)(i)), as amended by section 103(c) of this Act, 
     is amended by adding at the end the following:

       [``(VI) Exclusion of federal tanf funds used for marriage 
     promotion activities.--Such term does not include the amount 
     of any grant made to the State under section 403 that is 
     expended for a marriage promotion activity.''.

     [SEC. 112. PERFORMANCE IMPROVEMENT.

       [(a) State Plans.--Section 402(a) (42 U.S.C. 602(a)) is 
     amended--
       [(1) in paragraph (1)--
       [(A) in subparagraph (A)--
       [(i) by redesignating clause (vi) and clause (vii) (as 
     added by section 103(a) of this Act) as clauses (vii) and 
     (viii), respectively; and
       [(ii) by striking clause (v) and inserting the following:
       [``(v) The document shall--

       [``(I) describe how the State will pursue ending dependence 
     of needy families on government benefits and reducing poverty 
     by promoting job preparation and work;
       [``(II) describe how the State will encourage the formation 
     and maintenance of healthy 2-parent married families, 
     encourage responsible fatherhood, and prevent and reduce the 
     incidence of out-of-wedlock pregnancies;
       [``(III) include specific, numerical, and measurable 
     performance objectives for accomplishing subclauses (I) and 
     (II), and with respect to subclause (I), include objectives 
     consistent with the criteria used by the Secretary in 
     establishing performance targets under section 403(a)(4)(B) 
     if available; and
       [``(IV) describe the methodology that the State will use to 
     measure State performance in relation to each such objective.

       [``(vi) Describe any strategies and programs the State may 
     be undertaking to address--

       [``(I) employment retention and advancement for recipients 
     of assistance under the program, including placement into 
     high-demand jobs, and whether the jobs are identified using 
     labor market information;
       [``(II) efforts to reduce teen pregnancy;
       [``(III) services for struggling and noncompliant families, 
     and for clients with special problems; and
       [``(IV) program integration, including the extent to which 
     employment and training services under the program are 
     provided through the One-Stop delivery system created under 
     the Workforce Investment Act of 1998, and the extent to which 
     former recipients of such assistance have access to 
     additional core, intensive, or training services funded 
     through such Act.''; and

       [(B) in subparagraph (B), by striking clause (iii) (as so 
     redesignated by section 107(b)(1) of this Act) and inserting 
     the following:
       [``(iii) The document shall describe strategies and 
     programs the State is undertaking to engage religious 
     organizations in the provision of services funded under this 
     part and efforts related to section 104 of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996.
       [``(iv) The document shall describe strategies to improve 
     program management and performance.''; and
       [(2) in paragraph (4), by inserting ``and tribal'' after 
     ``that local''.
       [(b) Consultation With State Regarding Plan and Design of 
     Tribal Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is 
     amended--
       [(1) by striking ``and'' at the end of subparagraph (E);
       [(2) by striking the period at the end of subparagraph (F) 
     and inserting ``; and''; and
       [(3) by adding at the end the following:
       [``(G) provides an assurance that the State in which the 
     tribe is located has been consulted regarding the plan and 
     its design.''.
       [(c) Performance Measures.--Section 413 (42 U.S.C. 613) is 
     amended by adding at the end the following:
       [``(k) Performance Improvement.--The Secretary, in 
     consultation with the States, shall develop uniform 
     performance measures designed to assess the degree of 
     effectiveness, and the degree of improvement, of State 
     programs funded under this part in accomplishing the purposes 
     of this part.''.
       [(d) Annual Ranking of States.--Section 413(d)(1) (42 
     U.S.C. 613(d)(1)) is amended by striking ``long-term private 
     sector jobs'' and inserting ``private sector jobs, the 
     success of the recipients in retaining employment, the 
     ability of the recipients to increase their wages''.

     [SEC. 113. DATA COLLECTION AND REPORTING.

       [(a) Contents of Report.--Section 411(a)(1)(A) (42 U.S.C. 
     611(a)(1)(A)) is amended--
       [(1) in the matter preceding clause (i), by inserting ``and 
     on families receiving assistance under State programs funded 
     with other qualified State expenditures (as defined in 
     section 409(a)(7)(B))'' before the colon;
       [(2) in clause (vii), by inserting ``and minor parent'' 
     after ``of each adult'';
       [(3) in clause (viii), by striking ``and educational 
     level'';
       [(4) in clause (ix), by striking ``, and if the latter 2, 
     the amount received'';
       [(5) in clause (x)--
       [(A) by striking ``each type of''; and
       [(B) by inserting before the period ``and, if applicable, 
     the reason for receipt of the assistance for a total of more 
     than 60 months'';
       [(6) in clause (xi), by striking the subclauses and 
     inserting the following:

       [``(I) Subsidized private sector employment.
       [``(II) Unsubsidized employment.
       [``(III) Public sector employment, supervised work 
     experience, or supervised community service.
       [``(IV) On-the-job training.
       [``(V) Job search and placement.
       [``(VI) Training.

[[Page 5407]]

       [``(VII) Education.
       [``(VIII) Other activities directed at the purposes of this 
     part, as specified in the State plan submitted pursuant to 
     section 402.'';

       [(7) in clause (xii), by inserting ``and progress toward 
     universal engagement'' after ``participation rates'';
       [(8) in clause (xiii), by striking ``type and'' before 
     ``amount of assistance'';
       [(9) in clause (xvi), by striking subclause (II) and 
     redesignating subclauses (III) through (V) as subclauses (II) 
     through (IV), respectively; and
       [(10) by adding at the end the following:
       [``(xviii) The date the family first received assistance 
     from the State program on the basis of the most recent 
     application for such assistance.
       [``(xix) Whether a self-sufficiency plan is established for 
     the family in accordance with section 408(b).
       [``(xx) With respect to any child in the family, the 
     marital status of the parents at the birth of the child, and 
     if the parents were not then married, whether the paternity 
     of the child has been established.''.
       [(b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 
     611(a)(1)(B)) is amended--
       [(1) in clause (i)--
       [(A) by striking ``a sample'' and inserting ``samples''; 
     and
       [(B) by inserting before the period ``, except that the 
     Secretary may designate core data elements that must be 
     reported on all families''; and
       [(2) in clause (ii), by striking ``funded under this part'' 
     and inserting ``described in subparagraph (A)''.
       [(c) Report on Families That Become Ineligible To Receive 
     Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
       [(1) by striking paragraph (5);
       [(2) by redesignating paragraph (6) as paragraph (5); and
       [(3) by inserting after paragraph (5) (as so redesignated) 
     the following:
       [``(6) Report on families that become ineligible to receive 
     assistance.--The report required by paragraph (1) for a 
     fiscal quarter shall include for each month in the quarter 
     the number of families and total number of individuals that, 
     during the month, became ineligible to receive assistance 
     under the State program funded under this part (broken down 
     by the number of families that become so ineligible due to 
     earnings, changes in family composition that result in 
     increased earnings, sanctions, time limits, or other 
     specified reasons).''.
       [(d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) 
     is amended--
       [(1) by inserting ``and to collect the necessary data'' 
     before ``with respect to which reports'';
       [(2) by striking ``subsection'' and inserting ``section''; 
     and
       [(3) by striking ``in defining the data elements'' and all 
     that follows and inserting ``, the National Governors' 
     Association, the American Public Human Services Association, 
     the National Conference of State Legislatures, and others in 
     defining the data elements.''.
       [(e) Additional Reports by States.--Section 411 (42 U.S.C. 
     611) is amended--
       [(1) by redesignating subsection (b) as subsection (e); and
       [(2) by inserting after subsection (a) the following:
       [``(b) Annual Reports on Program Characteristics.--Not 
     later than 90 days after the end of fiscal year 2004 and each 
     succeeding fiscal year, each eligible State shall submit to 
     the Secretary a report on the characteristics of the State 
     program funded under this part and other State programs 
     funded with qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i)). The report shall include, with 
     respect to each such program, the program name, a description 
     of program activities, the program purpose, the program 
     eligibility criteria, the sources of program funding, the 
     number of program beneficiaries, sanction policies, and any 
     program work requirements.
       [``(c) Monthly Reports on Caseload.--Not later than 3 
     months after the end of a calendar month that begins 1 year 
     or more after the enactment of this subsection, each eligible 
     State shall submit to the Secretary a report on the number of 
     families and total number of individuals receiving assistance 
     in the calendar month under the State program funded under 
     this part.
       [``(d) Annual Report on Performance Improvement.--Beginning 
     with fiscal year 2005, not later than January 1 of each 
     fiscal year, each eligible State shall submit to the 
     Secretary a report on achievement and improvement during the 
     preceding fiscal year under the numerical performance goals 
     and measures under the State program funded under this part 
     with respect to each of the matters described in section 
     402(a)(1)(A)(v).''.
       [(f) Annual Reports to Congress by the Secretary.--Section 
     411(e), as so redesignated by subsection (e) of this section, 
     is amended--
       [(1) in the matter preceding paragraph (1), by striking 
     ``and each fiscal year thereafter'' and inserting ``and by 
     July 1 of each fiscal year thereafter'';
       [(2) in paragraph (2), by striking ``families applying for 
     assistance,'' and by striking the last comma; and
       [(3) in paragraph (3), by inserting ``and other programs 
     funded with qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i))'' before the semicolon.
       [(g) Increased Analysis of State Single Audit Reports.--
     Section 411 (42 U.S.C. 611) is amended by adding at the end 
     the following:
       [``(f) Increased Analysis of State Single Audit Reports.--
       [``(1) In general.--Within 3 months after a State submits 
     to the Secretary a report pursuant to section 7502(a)(1)(A) 
     of title 31, United States Code, the Secretary shall analyze 
     the report for the purpose of identifying the extent and 
     nature of problems related to the oversight by the State of 
     nongovernmental entities with respect to contracts entered 
     into by such entities with the State program funded under 
     this part, and determining what additional actions may be 
     appropriate to help prevent and correct the problems.
       [``(2) Inclusion of program oversight section in annual 
     report to the congress.--The Secretary shall include in each 
     report under subsection (e) a section on oversight of State 
     programs funded under this part, including findings on the 
     extent and nature of the problems referred to in paragraph 
     (1), actions taken to resolve the problems, and to the extent 
     the Secretary deems appropriate make recommendations on 
     changes needed to resolve the problems.''.

     [SEC. 114. DIRECT FUNDING AND ADMINISTRATION BY INDIAN 
                   TRIBES.

       [(a) Tribal Family Assistance Grant.--Section 412(a)(1)(A) 
     (42 U.S.C. 612(a)(1)(A)) is amended by striking ``1997, 1998, 
     1999, 2000, 2001, and 2002'' and inserting ``2004 through 
     2008''.
       [(b) Grants for Indian Tribes That Received JOBS Funds.--
     Section 412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by 
     striking ``1997, 1998, 1999, 2000, 2001, and 2002'' and 
     inserting ``2004 through 2008''.

     [SEC. 115. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

       [(a) Secretary's Fund for Research, Demonstrations, and 
     Technical Assistance.--Section 413 (42 U.S.C. 613), as 
     amended by section 112(c) of this Act, is further amended by 
     adding at the end the following:
       [``(l) Funding for Research, Demonstrations, and Technical 
     Assistance.--
       [``(1) Appropriation.--
       [``(A) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated $102,000,000 for each of fiscal years 2003 
     through 2008, which shall be available to the Secretary for 
     the purpose of conducting and supporting research and 
     demonstration projects by public or private entities, and 
     providing technical assistance to States, Indian tribal 
     organizations, and such other entities as the Secretary may 
     specify that are receiving a grant under this part, which 
     shall be expended primarily on activities described in 
     section 403(a)(2)(B), and which shall be in addition to any 
     other funds made available under this part.
       [``(B) Extended availability of fy 2003 funds.--Funds 
     appropriated under this paragraph for fiscal year 2003 shall 
     remain available to the Secretary through fiscal year 2004, 
     for use in accordance with this paragraph for fiscal year 
     2003.
       [``(2) Set aside for demonstration projects for 
     coordination of provision of child welfare and tanf services 
     to tribal families at risk of child abuse or neglect.--
       [``(A) In general.--Of the amounts made available under 
     paragraph (1) for a fiscal year, $2,000,000 shall be awarded 
     on a competitive basis to fund demonstration projects 
     designed to test the effectiveness of tribal governments or 
     tribal consortia in coordinating the provision to tribal 
     families at risk of child abuse or neglect of child welfare 
     services and services under tribal programs funded under this 
     part.
       [``(B) Use of funds.--A grant made to such a project shall 
     be used--
       [``(i) to improve case management for families eligible for 
     assistance from such a tribal program;
       [``(ii) for supportive services and assistance to tribal 
     children in out-of-home placements and the tribal families 
     caring for such children, including families who adopt such 
     children; and
       [``(iii) for prevention services and assistance to tribal 
     families at risk of child abuse and neglect.
       [``(C) Reports.--The Secretary may require a recipient of 
     funds awarded under this paragraph to provide the Secretary 
     with such information as the Secretary deems relevant to 
     enable the Secretary to facilitate and oversee the 
     administration of any project for which funds are provided 
     under this paragraph.''.
       [(b) Funding of Studies and Demonstrations.--Section 
     413(h)(1) (42 U.S.C. 613(h)(1)) is amended in the matter 
     preceding subparagraph (A) by striking ``1997 through 2002'' 
     and inserting ``2004 through 2008''.
       [(c) Report on Enforcement of Certain Affidavits of Support 
     and Sponsor Deeming.--Not later than March 31, 2004, the 
     Secretary of Health and Human Services, in consultation with 
     the Attorney General, shall submit to the Congress a report 
     on the enforcement of affidavits of support and sponsor 
     deeming as required by section 421, 422,

[[Page 5408]]

      and 432 of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996.
       [(d) Report on Coordination.--Not later than 6 months after 
     the date of the enactment of this Act, the Secretary of 
     Health and Human Services and the Secretary of Labor shall 
     jointly submit a report to the Congress describing common or 
     conflicting data elements, definitions, performance measures, 
     and reporting requirements in the Workforce Investment Act of 
     1998 and part A of title IV of the Social Security Act, and, 
     to the degree each Secretary deems appropriate, at the 
     discretion of either Secretary, any other program 
     administered by the respective Secretary, to allow greater 
     coordination between the welfare and workforce development 
     systems.

     [SEC. 116. STUDIES BY THE CENSUS BUREAU AND THE GENERAL 
                   ACCOUNTING OFFICE.

       [(a) Census Bureau Study.--
       [(1) In general.--Section 414(a) (42 U.S.C. 614(a)) is 
     amended to read as follows:
       [``(a) In General.--The Bureau of the Census shall 
     implement or enhance a longitudinal survey of program 
     participation, developed in consultation with the Secretary 
     and made available to interested parties, to allow for the 
     assessment of the outcomes of continued welfare reform on the 
     economic and child well-being of low-income families with 
     children, including those who received assistance or services 
     from a State program funded under this part, and, to the 
     extent possible, shall provide State representative samples. 
     The content of the survey should include such information as 
     may be necessary to examine the issues of out-of-wedlock 
     childbearing, marriage, welfare dependency and compliance 
     with work requirements, the beginning and ending of spells of 
     assistance, work, earnings and employment stability, and the 
     well-being of children.''.
       [(2) Appropriation.--Section 414(b) (42 U.S.C. 614(b)) is 
     amended--
       [(A) by striking ``1996,'' and all that follows through 
     ``2002'' and inserting ``2004 through 2008''; and
       [(B) by adding at the end the following: ``Funds 
     appropriated under this subsection shall remain available 
     through fiscal year 2008 to carry out subsection (a).''.
       [(b) GAO Study.--
       [(1) In general.--The Comptroller General of the United 
     States shall conduct a study to determine the combined effect 
     of the phase-out rates for Federal programs and policies 
     which provide support to low-income families and individuals 
     as they move from welfare to work, at all earning levels up 
     to $35,000 per year, for at least 5 States including 
     Wisconsin and California, and any potential disincentives the 
     combined phase-out rates create for families to achieve 
     independence or to marry.
       [(2) Report.--Not later than 1 year after the date of the 
     enactment of this subsection, the Comptroller General shall 
     submit a report to Congress containing the results of the 
     study conducted under this section and, as appropriate, any 
     recommendations consistent with the results.

     [SEC. 117. DEFINITION OF ASSISTANCE.

       [(a) In General.--Section 419 (42 U.S.C. 619) is amended by 
     adding at the end the following:
       [``(6) Assistance.--
       [``(A) In general.--The term `assistance' means payment, by 
     cash, voucher, or other means, to or for an individual or 
     family for the purpose of meeting a subsistence need of the 
     individual or family (including food, clothing, shelter, and 
     related items, but not including costs of transportation or 
     child care).
       [``(B) Exception.--The term `assistance' does not include a 
     payment described in subparagraph (A) to or for an individual 
     or family on a short-term, nonrecurring basis (as defined by 
     the State in accordance with regulations prescribed by the 
     Secretary).''.
       [(b) Conforming Amendments.--
       [(1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by 
     striking ``assistance'' and inserting ``aid''.
       [(2) Section 404(f) (42 U.S.C. 604(f)) is amended by 
     striking ``assistance'' and inserting ``benefits or 
     services''.
       [(3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is 
     amended in the heading by striking ``assistance'' and 
     inserting ``aid''.
       [(4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by 
     striking ``assistance'' and inserting ``aid''.

     [SEC. 118. TECHNICAL CORRECTIONS.

       [(a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by 
     inserting a comma after ``appropriate''.
       [(b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 
     611(a)(1)(A)(ii)(III)) is amended by striking the last close 
     parenthesis.
       [(c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is 
     amended by striking ``section'' and inserting ``sections''.
       [(d)(1) Section 413 (42 U.S.C. 613) is amended by striking 
     subsection (g) and redesignating subsections (h) through (j) 
     and subsections (k) and (l) (as added by sections 112(c) and 
     115(a) of this Act, respectively) as subsections (g) through 
     (k), respectively.
       [(2) Each of the following provisions is amended by 
     striking ``413(j)'' and inserting ``413(i)'':
       [(A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
     603(a)(5)(A)(ii)(III)).
       [(B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
       [(C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
       [(D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

     [SEC. 119. FATHERHOOD PROGRAM.

       [(a) Short Title.--This section may be cited as the 
     ``Promotion and Support of Responsible Fatherhood and Healthy 
     Marriage Act of 2003''.
       [(b) Fatherhood Program.--
       [(1) In general.--Title I of the Personal Responsibility 
     and Work Opportunity Reconciliation Act of 1996 (Public Law 
     104-193) is amended by adding at the end the following:

     [``SEC. 117. FATHERHOOD PROGRAM.

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

                     [```PART C--FATHERHOOD PROGRAM

     [```SEC. 441. FINDINGS AND PURPOSES.

       [```(a) Findings.--The Congress finds that there is 
     substantial evidence strongly indicating the urgent need to 
     promote and support involved, committed, and responsible 
     fatherhood, and to encourage and support healthy marriages 
     between parents raising children, including data 
     demonstrating the following:
       [```(1) In approximately 90 percent of cases where a parent 
     is absent, that parent is the father.
       [```(2) By some estimates, 60 percent of children born in 
     the 1990's will spend a significant portion of their 
     childhood in a home without a father.
       [```(3) Nearly 75 percent of children in single-parent 
     homes will experience poverty before they are 11 years old, 
     compared with only 20 percent of children in 2-parent 
     families.
       [```(4) Low income is positively correlated with children's 
     difficulties with education, social adjustment, and 
     delinquency, and single-parent households constitute a 
     disproportionate share of low-income households.
       [```(5) Where families (whether intact or with a parent 
     absent) are living in poverty, a significant factor is the 
     father's lack of job skills.
       [```(6) Children raised in 2-parent married families, on 
     average, fare better as a group in key areas, including 
     better school performance, reduced rates of substance abuse, 
     crime, and delinquency, fewer health, emotional, and 
     behavioral problems, lower rates of teenage sexual activity, 
     less risk of abuse or neglect, and lower risk of teen 
     suicide.
       [```(7) Committed and responsible fathering during infancy 
     and early childhood contributes to the development of 
     emotional security, curiosity, and math and verbal skills.
       [```(8) An estimated 24,000,000 children (33.5 percent) 
     live apart from their biological father.
       [```(9) A recent national survey indicates that of children 
     under age 18 not living with their biological father, 37 
     percent had not seen their father even once in the last 12 
     months.
       [```(b) Purposes.--The purposes of this part are:
       [```(1) To provide for projects and activities by public 
     entities and by nonprofit community entities, including 
     religious organizations, designed to test promising 
     approaches to accomplishing the following objectives:
       [```(A) Promoting responsible, caring, and effective 
     parenting through counseling, mentoring, and parenting 
     education, dissemination of educational materials and 
     information on parenting skills, encouragement of positive 
     father involvement, including the positive involvement of 
     nonresident fathers, and other methods.
       [```(B) Enhancing the abilities and commitment of 
     unemployed or low-income fathers to provide material support 
     for their families and to avoid or leave welfare programs by 
     assisting them to take full advantage of education, job 
     training, and job search programs, to improve work habits and 
     work skills, to secure career advancement by activities such 
     as outreach and information dissemination, coordination, as 
     appropriate, with employment services and job training 
     programs, including the One-Stop delivery system established 
     under title I of the Workforce Investment Act of 1998, 
     encouragement and support of timely payment of current child 
     support and regular payment toward past due child support 
     obligations in appropriate cases, and other methods.
       [```(C) Improving fathers' ability to effectively manage 
     family business affairs by means such as education, 
     counseling, and mentoring in matters including household 
     management, budgeting, banking, and handling of financial 
     transactions, time management, and home maintenance.
       [```(D) Encouraging and supporting healthy marriages and 
     married fatherhood through such activities as premarital 
     education, including the use of premarital inventories, 
     marriage preparation programs, skills-based marriage 
     education programs, marital therapy, couples counseling, 
     divorce education and reduction programs, divorce mediation 
     and counseling, relationship skills enhancement programs, 
     including those designed to reduce child abuse and domestic 
     violence, and dissemination of information about the benefits 
     of marriage for both parents and children.

[[Page 5409]]

       [```(2) Through the projects and activities described in 
     paragraph (1), to improve outcomes for children with respect 
     to measures such as increased family income and economic 
     security, improved school performance, better health, 
     improved emotional and behavioral stability and social 
     adjustment, and reduced risk of delinquency, crime, substance 
     abuse, child abuse and neglect, teen sexual activity, and 
     teen suicide.
       [```(3) To evaluate the effectiveness of various approaches 
     and to disseminate findings concerning outcomes and other 
     information in order to encourage and facilitate the 
     replication of effective approaches to accomplishing these 
     objectives.

     [```SEC. 442. DEFINITIONS.

       [```In this part, the terms ``Indian tribe'' and ``tribal 
     organization'' have the meanings given them in subsections 
     (e) and (l), respectively, of section 4 of the Indian Self-
     Determination and Education Assistance Act.

     [```SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

       [```(a) In General.--The Secretary may make grants for 
     fiscal years 2004 through 2008 to public and nonprofit 
     community entities, including religious organizations, and to 
     Indian tribes and tribal organizations, for demonstration 
     service projects and activities designed to test the 
     effectiveness of various approaches to accomplish the 
     objectives specified in section 441(b)(1).
       [```(b) Eligibility Criteria for Full Service Grants.--In 
     order to be eligible for a grant under this section, except 
     as specified in subsection (c), an entity shall submit an 
     application to the Secretary containing the following:
       [```(1) Project description.--A statement including--
       [```(A) a description of the project and how it will be 
     carried out, including the geographical area to be covered 
     and the number and characteristics of clients to be served, 
     and how it will address each of the 4 objectives specified in 
     section 441(b)(1); and
       [```(B) a description of the methods to be used by the 
     entity or its contractor to assess the extent to which the 
     project was successful in accomplishing its specific 
     objectives and the general objectives specified in section 
     441(b)(1).
       [```(2) Experience and qualifications.--A demonstration of 
     ability to carry out the project, by means such as 
     demonstration of experience in successfully carrying out 
     projects of similar design and scope, and such other 
     information as the Secretary may find necessary to 
     demonstrate the entity's capacity to carry out the project, 
     including the entity's ability to provide the non-Federal 
     share of project resources.
       [```(3) Addressing child abuse and neglect and domestic 
     violence.--A description of how the entity will assess for 
     the presence of, and intervene to resolve, domestic violence 
     and child abuse and neglect, including how the entity will 
     coordinate with State and local child protective service and 
     domestic violence programs.
       [```(4) Addressing concerns relating to substance abuse and 
     sexual activity.--A commitment to make available to each 
     individual participating in the project education about 
     alcohol, tobacco, and other drugs, and about the health risks 
     associated with abusing such substances, and information 
     about diseases and conditions transmitted through substance 
     abuse and sexual contact, including HIV/AIDS, and to 
     coordinate with providers of services addressing such 
     problems, as appropriate.
       [```(5) Coordination with specified programs.--An 
     undertaking to coordinate, as appropriate, with State and 
     local entities responsible for the programs under parts A, B, 
     and D of this title, including programs under title I of the 
     Workforce Investment Act of 1998 (including the One-Stop 
     delivery system), and such other programs as the Secretary 
     may require.
       [```(6) Records, reports, and audits.--An agreement to 
     maintain such records, make such reports, and cooperate with 
     such reviews or audits as the Secretary may find necessary 
     for purposes of oversight of project activities and 
     expenditures.
       [```(7) Self-initiated evaluation.--If the entity elects to 
     contract for independent evaluation of the project (part or 
     all of the cost of which may be paid for using grant funds), 
     a commitment to submit to the Secretary a copy of the 
     evaluation report within 30 days after completion of the 
     report and not more than 1 year after completion of the 
     project.
       [```(8) Cooperation with secretary's oversight and 
     evaluation.--An agreement to cooperate with the Secretary's 
     evaluation of projects assisted under this section, by means 
     including random assignment of clients to service recipient 
     and control groups, if determined by the Secretary to be 
     appropriate, and affording the Secretary access to the 
     project and to project-related records and documents, staff, 
     and clients.
       [```(c) Eligibility Criteria for Limited Purpose Grants.--
     In order to be eligible for a grant under this section in an 
     amount under $25,000 per fiscal year, an entity shall submit 
     an application to the Secretary containing the following:
       [```(1) Project description.--A description of the project 
     and how it will be carried out, including the number and 
     characteristics of clients to be served, the proposed 
     duration of the project, and how it will address at least 1 
     of the 4 objectives specified in section 441(b)(1).
       [```(2) Qualifications.--Such information as the Secretary 
     may require as to the capacity of the entity to carry out the 
     project, including any previous experience with similar 
     activities.
       [```(3) Coordination with related programs.--As required by 
     the Secretary in appropriate cases, an undertaking to 
     coordinate and cooperate with State and local entities 
     responsible for specific programs relating to the objectives 
     of the project including, as appropriate, jobs programs and 
     programs serving children and families.
       [```(4) Records, reports, and audits.--An agreement to 
     maintain such records, make such reports, and cooperate with 
     such reviews or audits as the Secretary may find necessary 
     for purposes of oversight of project activities and 
     expenditures.
       [```(5) Cooperation with secretary's oversight and 
     evaluation.--An agreement to cooperate with the Secretary's 
     evaluation of projects assisted under this section, by means 
     including affording the Secretary access to the project and 
     to project-related records and documents, staff, and clients.
       [```(d) Considerations in Awarding Grants.--
       [```(1) Diversity of projects.--In awarding grants under 
     this section, the Secretary shall seek to achieve a balance 
     among entities of differing sizes, entities in differing 
     geographic areas, entities in urban and in rural areas, and 
     entities employing differing methods of achieving the 
     purposes of this section, including working with the State 
     agency responsible for the administration of part D to help 
     fathers satisfy child support arrearage obligations.
       [```(2) Preference for projects serving low-income 
     fathers.--In awarding grants under this section, the 
     Secretary may give preference to applications for projects in 
     which a majority of the clients to be served are low-income 
     fathers.
       [```(e) Federal Share.--
       [```(1) In general.--Grants for a project under this 
     section for a fiscal year shall be available for a share of 
     the cost of such project in such fiscal year equal to--
       [```(A) up to 80 percent (or up to 90 percent, if the 
     entity demonstrates to the Secretary's satisfaction 
     circumstances limiting the entity's ability to secure non-
     Federal resources) in the case of a project under subsection 
     (b); and
       [```(B) up to 100 percent, in the case of a project under 
     subsection (c).
       [```(2) Non-federal share.--The non-Federal share may be in 
     cash or in kind. In determining the amount of the non-Federal 
     share, the Secretary may attribute fair market value to 
     goods, services, and facilities contributed from non-Federal 
     sources.

     [```SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

       [```(a) In General.--The Secretary may make grants under 
     this section for fiscal years 2004 through 2008 to eligible 
     entities (as specified in subsection (b)) for 2 multicity, 
     multistate projects demonstrating approaches to achieving the 
     objectives specified in section 441(b)(1). One of the 
     projects shall test the use of married couples to deliver 
     program services.
       [```(b) Eligible Entities.--An entity eligible for a grant 
     under this section must be a national nonprofit fatherhood 
     promotion organization that meets the following requirements:
       [```(1) Experience with fatherhood programs.--The 
     organization must have substantial experience in designing 
     and successfully conducting programs that meet the purposes 
     described in section 441.
       [```(2) Experience with multicity, multistate programs and 
     government coordination.--The organization must have 
     experience in simultaneously conducting such programs in more 
     than 1 major metropolitan area in more than 1 State and in 
     coordinating such programs, where appropriate, with State and 
     local government agencies and private, nonprofit agencies 
     (including community-based and religious organizations), 
     including State or local agencies responsible for child 
     support enforcement and workforce development.
       [```(c) Application Requirements.--In order to be eligible 
     for a grant under this section, an entity must submit to the 
     Secretary an application that includes the following:
       [```(1) Qualifications.--
       [```(A) Eligible entity.--A demonstration that the entity 
     meets the requirements of subsection (b).
       [```(B) Other.--Such other information as the Secretary may 
     find necessary to demonstrate the entity's capacity to carry 
     out the project, including the entity's ability to provide 
     the non-Federal share of project resources.
       [```(2) Project description.--A description of and 
     commitments concerning the project design, including the 
     following:
       [```(A) In general.--A detailed description of the proposed 
     project design and how it will be carried out, which shall--
       [```(i) provide for the project to be conducted in at least 
     3 major metropolitan areas;
       [```(ii) state how it will address each of the 4 objectives 
     specified in section 441(b)(1);

[[Page 5410]]

       [```(iii) demonstrate that there is a sufficient number of 
     potential clients to allow for the random selection of 
     individuals to participate in the project and for comparisons 
     with appropriate control groups composed of individuals who 
     have not participated in such projects; and
       [```(iv) demonstrate that the project is designed to direct 
     a majority of project resources to activities serving low-
     income fathers (but the project need not make services 
     available on a means-tested basis).
       [```(B) Oversight, evaluation, and adjustment component.--
     An agreement that the entity--
       [```(i) in consultation with the evaluator selected 
     pursuant to section 445, and as required by the Secretary, 
     will modify the project design, initially and (if necessary) 
     subsequently throughout the duration of the project, in order 
     to facilitate ongoing and final oversight and evaluation of 
     project operation and outcomes (by means including, to the 
     maximum extent feasible, random assignment of clients to 
     service recipient and control groups), and to provide for 
     mid-course adjustments in project design indicated by interim 
     evaluations;
       [```(ii) will submit to the Secretary revised descriptions 
     of the project design as modified in accordance with clause 
     (i); and
       [```(iii) will cooperate fully with the Secretary's ongoing 
     oversight and ongoing and final evaluation of the project, by 
     means including affording the Secretary access to the project 
     and to project-related records and documents, staff, and 
     clients.
       [```(3) Addressing child abuse and neglect and domestic 
     violence.--A description of how the entity will assess for 
     the presence of, and intervene to resolve, domestic violence 
     and child abuse and neglect, including how the entity will 
     coordinate with State and local child protective service and 
     domestic violence programs.
       [```(4) Addressing concerns relating to substance abuse and 
     sexual activity.--A commitment to make available to each 
     individual participating in the project education about 
     alcohol, tobacco, and other drugs, and about the health risks 
     associated with abusing such substances, and information 
     about diseases and conditions transmitted through substance 
     abuse and sexual contact, including HIV/AIDS, and to 
     coordinate with providers of services addressing such 
     problems, as appropriate.
       [```(5) Coordination with specified programs.--An 
     undertaking to coordinate, as appropriate, with State and 
     local entities responsible for the programs funded under 
     parts A, B, and D of this title, programs under title I of 
     the Workforce Investment Act of 1998 (including the One-Stop 
     delivery system), and such other programs as the Secretary 
     may require.
       [```(6) Records, reports, and audits.--An agreement to 
     maintain such records, make such reports, and cooperate with 
     such reviews or audits (in addition to those required under 
     the preceding provisions of paragraph (2)) as the Secretary 
     may find necessary for purposes of oversight of project 
     activities and expenditures.
       [```(d) Federal Share.--
       [```(1) In general.--Grants for a project under this 
     section for a fiscal year shall be available for up to 80 
     percent of the cost of such project in such fiscal year.
       [```(2) Non-federal share.--The non-Federal share may be in 
     cash or in kind. In determining the amount of the non-Federal 
     share, the Secretary may attribute fair market value to 
     goods, services, and facilities contributed from non-Federal 
     sources.

     [```SEC. 445. EVALUATION.

       [```(a) In General.--The Secretary, directly or by contract 
     or cooperative agreement, shall evaluate the effectiveness of 
     service projects funded under sections 443 and 444 from the 
     standpoint of the purposes specified in section 441(b)(1).
       [```(b) Evaluation Methodology.--Evaluations under this 
     section shall--
       [```(1) include, to the maximum extent feasible, random 
     assignment of clients to service delivery and control groups 
     and other appropriate comparisons of groups of individuals 
     receiving and not receiving services;
       [```(2) describe and measure the effectiveness of the 
     projects in achieving their specific project goals; and
       [```(3) describe and assess, as appropriate, the impact of 
     such projects on marriage, parenting, domestic violence, 
     child abuse and neglect, money management, employment and 
     earnings, payment of child support, and child well-being, 
     health, and education.
       [```(c) Evaluation Reports.--The Secretary shall publish 
     the following reports on the results of the evaluation:
       [```(1) An implementation evaluation report covering the 
     first 24 months of the activities under this part to be 
     completed by 36 months after initiation of such activities.
       [```(2) A final report on the evaluation to be completed by 
     September 30, 2011.

     [```SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

       [```The Secretary is authorized, by grant, contract, or 
     cooperative agreement, to carry out projects and activities 
     of national significance relating to fatherhood promotion, 
     including--
       [```(1) Collection and dissemination of information.--
     Assisting States, communities, and private entities, 
     including religious organizations, in efforts to promote and 
     support marriage and responsible fatherhood by collecting, 
     evaluating, developing, and making available (through the 
     Internet and by other means) to all interested parties 
     information regarding approaches to accomplishing the 
     objectives specified in section 441(b)(1).
       [```(2) Media campaign.--Developing, promoting, and 
     distributing to interested States, local governments, public 
     agencies, and private nonprofit organizations, including 
     charitable and religious organizations, a media campaign that 
     promotes and encourages involved, committed, and responsible 
     fatherhood and married fatherhood.
       [```(3) Technical assistance.--Providing technical 
     assistance, including consultation and training, to public 
     and private entities, including community organizations and 
     faith-based organizations, in the implementation of local 
     fatherhood promotion programs.
       [```(4) Research.--Conducting research related to the 
     purposes of this part.

     [```SEC. 447. NONDISCRIMINATION.

       [```The projects and activities assisted under this part 
     shall be available on the same basis to all fathers and 
     expectant fathers able to benefit from such projects and 
     activities, including married and unmarried fathers and 
     custodial and noncustodial fathers, with particular attention 
     to low-income fathers, and to mothers and expectant mothers 
     on the same basis as to fathers.

     [```SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION 
                   FOR CERTAIN PURPOSE.

       [```(a) Authorization.--There are authorized to be 
     appropriated $20,000,000 for each of fiscal years 2004 
     through 2008 to carry out the provisions of this part.
       [```(b) Reservation.--Of the amount appropriated under this 
     section for each fiscal year, not more than 15 percent shall 
     be available for the costs of the multicity, multicounty, 
     multistate demonstration projects under section 444, 
     evaluations under section 445, and projects of national 
     significance under section 446.'.
       [``(b) Inapplicability of Effective Date Provisions.--
     Section 116 shall not apply to the amendment made by 
     subsection (a) of this section.''.
       [(2) Clerical amendment.--Section 2 of such Act is amended 
     in the table of contents by inserting after the item relating 
     to section 116 the following new item:

[``Sec. 117. Fatherhood program.''.

     [SEC. 120. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY 
                   PARTNERS WITH ONE-STOP EMPLOYMENT TRAINING 
                   CENTERS.

       [Section 408 of the Social Security Act (42 U.S.C. 608) is 
     amended by adding at the end the following:
       [``(h) State Option to Make TANF Programs Mandatory 
     Partners With One-Stop Employment Training Centers.--For 
     purposes of section 121(b) of the Workforce Investment Act of 
     1998, a State program funded under part A of title IV of the 
     Social Security Act shall be considered a program referred to 
     in paragraph (1)(B) of such section, unless, after the date 
     of the enactment of this subsection, the Governor of the 
     State notifies the Secretaries of Health and Human Services 
     and Labor in writing of the decision of the Governor not to 
     make the State program a mandatory partner.''.

     [SEC. 121. SENSE OF THE CONGRESS.

       [It is the sense of the Congress that a State welfare-to-
     work program should include a mentoring program.

     [SEC. 122. EXTENSION THROUGH FISCAL YEAR 2003.

       [Except as otherwise provided in this Act and the 
     amendments made by this Act, activities authorized by part A 
     of title IV of the Social Security Act, and by section 
     1108(b) of the Social Security Act, shall continue through 
     September 30, 2003, in the manner authorized, and at the 
     level provided, for fiscal year 2002.

                         [TITLE II--CHILD CARE

     [SEC. 201. SHORT TITLE.

       [This title may be cited as the ``Caring for Children Act 
     of 2003''.

     [SEC. 202. GOALS.

       [(a) Goals.--Section 658A(b) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9801 note) is 
     amended--
       [(1) in paragraph (3) by striking ``encourage'' and 
     inserting ``assist'',
       [(2) by amending paragraph (4) to read as follows:
       [``(4) to assist States to provide child care to low-income 
     parents;'',
       [(3) by redesignating paragraph (5) as paragraph (7), and
       [(4) by inserting after paragraph (4) the following:
       [``(5) to encourage States to improve the quality of child 
     care available to families;
       [``(6) to promote school readiness by encouraging the 
     exposure of young children in child care to nurturing 
     environments and developmentally-appropriate activities, 
     including activities to foster early cognitive and literacy 
     development; and''.
       [(b) Conforming Amendment.--Section 658E(c)(3)(B) of the 
     Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
     9858c(c)(3)(B)) is amended by striking ``through (5)'' and 
     inserting ``through (7)''.

[[Page 5411]]



     [SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       [Section 658B of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858) is amended--
       [(1) by striking ``is'' and inserting ``are'', and
       [(2) by striking ``$1,000,000,000 for each of the fiscal 
     years 1996 through 2002'' and inserting ``$2,100,000,000 for 
     fiscal year 2003, $2,300,000,000 for fiscal year 2004, 
     $2,500,000,000 for fiscal year 2005, $2,700,000,000 for 
     fiscal year 2006, $2,900,000,000 for fiscal year 2007, and 
     $3,100,000,000 for fiscal year 2008''.

     [SEC. 204. APPLICATION AND PLAN.

       [Section 658E(c)(2) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--
       [(1) by amending subparagraph (D) to read as follows:
       [``(D) Consumer and child care provider education 
     information.--Certify that the State will collect and 
     disseminate, through resource and referral services and other 
     means as determined by the State, to parents of eligible 
     children, child care providers, and the general public, 
     information regarding--
       [``(i) the promotion of informed child care choices, 
     including information about the quality and availability of 
     child care services;
       [``(ii) research and best practices on children's 
     development, including early cognitive development;
       [``(iii) the availability of assistance to obtain child 
     care services; and
       [``(iv) other programs for which families that receive 
     child care services for which financial assistance is 
     provided under this subchapter may be eligible, including the 
     food stamp program, the WIC program under section 17 of the 
     Child Nutrition Act of 1966, the child and adult care food 
     program under section 17 of the Richard B. Russell National 
     School Lunch Act, and the medicaid and SCHIP programs under 
     titles XIX and XXI of the Social Security Act.'', and
       [(2) by inserting after subparagraph (H) the following:
       [``(I) Coordination with other early child care services 
     and early childhood education programs.--Demonstrate how the 
     State is coordinating child care services provided under this 
     subchapter with Head Start, Early Reading First, Even Start, 
     Ready-To-Learn Television, State pre-kindergarten programs, 
     and other early childhood education programs to expand 
     accessibility to and continuity of care and early education 
     without displacing services provided by the current early 
     care and education delivery system.
       [``(J) Public-private partnerships.--Demonstrate how the 
     State encourages partnerships with private and other public 
     entities to leverage existing service delivery systems of 
     early childhood education and increase the supply and quality 
     of child care services.
       [``(K) Child care service quality.--
       [``(i) Certification.--For each fiscal year after fiscal 
     year 2004, certify that during the then preceding fiscal year 
     the State was in compliance with section 658G and describe 
     how funds were used to comply with such section during such 
     preceding fiscal year.
       [``(ii) Strategy.--For each fiscal year after fiscal year 
     2004, contain an outline of the strategy the State will 
     implement during such fiscal year for which the State plan is 
     submitted, to address the quality of child care services in 
     the State available to low-income parents from eligible child 
     care providers, and include in such strategy--

       [``(I) a statement specifying how the State will address 
     the activities described in paragraphs (1), (2), and (3) of 
     section 658G;
       [``(II) a description of quantifiable, objective measures 
     for evaluating the quality of child care services separately 
     with respect to the activities listed in each of such 
     paragraphs that the State will use to evaluate its progress 
     in improving the quality of such child care services;
       [``(III) a list of State-developed child care service 
     quality targets for such fiscal year quantified on the basis 
     of such measures; and
       [``(IV) for each fiscal year after fiscal year 2004, a 
     report on the progress made to achieve such targets during 
     the then preceding fiscal year.

       [``(iii) Rule of construction.--Nothing in this 
     subparagraph shall be construed to require that the State 
     apply measures for evaluating quality to specific types of 
     child care providers.
       [``(L) Access to care for certain populations.--Demonstrate 
     how the State is addressing the child care needs of parents 
     eligible for child care services for which financial 
     assistance is provided under this subchapter who have 
     children with special needs, work nontraditional hours, or 
     require child care services for infants or toddlers.''.

     [SEC. 205. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

       [Section 658G of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858e) is amended to read as follows:

     [``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE 
                   SERVICES.

       [``A State that receives funds to carry out this subchapter 
     for a fiscal year, shall use not less than 6 percent of the 
     amount of such funds for activities provided through resource 
     and referral services or other means, that are designed to 
     improve the quality of child care services in the State 
     available to low-income parents from eligible child care 
     providers. Such activities include--
       [``(1) programs that provide training, education, and other 
     professional development activities to enhance the skills of 
     the child care workforce, including training opportunities 
     for caregivers in informal care settings;
       [``(2) activities within child care settings to enhance 
     early learning for young children, to promote early literacy, 
     and to foster school readiness;
       [``(3) initiatives to increase the retention and 
     compensation of child care providers, including tiered 
     reimbursement rates for providers that meet quality standards 
     as defined by the State; or
       [``(4) other activities deemed by the State to improve the 
     quality of child care services provided in such State.''.

     [SEC. 206. REPORT BY SECRETARY.

       [Section 658L of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858j) is amended to read as follows:

     [``SEC. 658L. REPORT BY SECRETARY.

       [``(a) Report Required.--Not later than October 1, 2005, 
     and biennially thereafter, the Secretary shall prepare and 
     submit to the Committee on Education and the Workforce of the 
     House of Representatives and the Committee on Health, 
     Education, Labor and Pensions of the Senate a report that 
     contains the following:
       [``(1) A summary and analysis of the data and information 
     provided to the Secretary in the State reports submitted 
     under section 658K.
       [``(2) Aggregated statistics on the supply of, demand for, 
     and quality of child care, early education, and non-school-
     hours programs.
       [``(3) An assessment, and where appropriate, 
     recommendations for the Congress concerning efforts that 
     should be undertaken to improve the access of the public to 
     quality and affordable child care in the United States.
       [``(b) Collection of Information.--The Secretary may 
     utilize the national child care data system available through 
     resource and referral organizations at the local, State, and 
     national level to collect the information required by 
     subsection (a)(2).

     [SEC. 207. DEFINITIONS.

       [Section 658P(4)(B) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858N(4)(B)) is amended by 
     striking ``85 percent of the State median income'' and 
     inserting ``income levels as established by the State, 
     prioritized by need,''.

     [SEC. 208. ENTITLEMENT FUNDING.

       [Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--
       [(1) by striking ``and'' at the end of subparagraph (E);
       [(2) by striking the period at the end of subparagraph (F) 
     and inserting ``; and''; and
       [(3) by adding at the end the following:
       [``(G) $2,917,000,000 for each of fiscal years 2004 through 
     2008.''.

                       [TITLE III--CHILD SUPPORT

     [SEC. 301. FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF 
                   CHILD SUPPORT PAYMENTS TO FAMILIES RECEIVING 
                   TANF.

       [(a) In General.--Section 457(a) (42 U.S.C. 657(a)) is 
     amended--
       [(1) in paragraph (1)(A), by inserting ``subject to 
     paragraph (7)'' before the semicolon; and
       [(2) by adding at the end the following:
       [``(7) Federal matching funds for limited pass through of 
     child support payments to families receiving tanf.--
     Notwithstanding paragraph (1), a State shall not be required 
     to pay to the Federal Government the Federal share of an 
     amount collected during a month on behalf of a family that is 
     a recipient of assistance under the State program funded 
     under part A, to the extent that--
       [``(A) the State distributes the amount to the family;
       [``(B) the total of the amounts so distributed to the 
     family during the month--
       [``(i) exceeds the amount (if any) that, as of December 31, 
     2001, was required under State law to be distributed to a 
     family under paragraph (1)(B); and
       [``(ii) does not exceed the greater of--

       [``(I) $100; or
       [``(II) $50 plus the amount described in clause (i); and

       [``(C) the amount is disregarded in determining the amount 
     and type of assistance provided to the family under the State 
     program funded under part A.''.
       [(b) Effective Date.--The amendments made by subsection (a) 
     shall apply to amounts distributed on or after October 1, 
     2005.

     [SEC. 302. STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT 
                   PAYMENTS TO FAMILIES THAT FORMERLY RECEIVED 
                   TANF.

       [(a) In General.--Section 457(a) (42 U.S.C. 657(a)), as 
     amended by section 301(a) of this Act, is amended--
       [(1) in paragraph (2)(B), in the matter preceding clause 
     (i), by inserting ``, except as provided in paragraph (8),'' 
     after ``shall''; and
       [(2) by adding at the end the following:
       [``(8) State option to pass through all child support 
     payments to families that formerly received tanf.--In lieu of 
     applying paragraph (2) to any family described in

[[Page 5412]]

     paragraph (2), a State may distribute to the family any 
     amount collected during a month on behalf of the family.''.
       [(b) Effective Date.--The amendments made by subsection (a) 
     shall apply to amounts distributed on or after October 1, 
     2005.

     [SEC. 303. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT 
                   ORDERS FOR FAMILIES RECEIVING TANF.

       [(a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C. 
     666(a)(10)(A)(i)) is amended--
       [(1) by striking ``parent, or,'' and inserting ``parent 
     or''; and
       [(2) by striking ``upon the request of the State agency 
     under the State plan or of either parent,''.
       [(b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2005.

     [SEC. 304. MANDATORY FEE FOR SUCCESSFUL CHILD SUPPORT 
                   COLLECTION FOR FAMILY THAT HAS NEVER RECEIVED 
                   TANF.

       [(a) In General.--Section 454(6)(B) (42 U.S.C. 654(6)(B)) 
     is amended--
       [(1) by inserting ``(i)'' after ``(B)'';
       [(2) by redesignating clauses (i) and (ii) as subclauses 
     (I) and (II), respectively;
       [(3) by adding ``and'' after the semicolon; and
       [(4) by adding after and below the end the following new 
     clause:
       [``(ii) in the case of an individual who has never received 
     assistance under a State program funded under part A and for 
     whom the State has collected at least $500 of support, the 
     State shall impose an annual fee of $25 for each case in 
     which services are furnished, which shall be retained by the 
     State from support collected on behalf of the individual (but 
     not from the 1st $500 so collected), paid by the individual 
     applying for the services, recovered from the absent parent, 
     or paid by the State out of its own funds (the payment of 
     which from State funds shall not be considered as an 
     administrative cost of the State for the operation of the 
     plan, and such fees shall be considered income to the 
     program);''.
       [(b) Conforming Amendment.--Section 457(a)(3) (42 U.S.C. 
     657(a)(3)) is amended to read as follows:
       [``(3) Families that never received assistance.--In the 
     case of any other family, the State shall distribute to the 
     family the portion of the amount so collected that remains 
     after withholding any fee pursuant to section 
     454(6)(B)(ii).''.
       [(c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     [SEC. 305. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

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

     [SEC. 306. USE OF NEW HIRE INFORMATION TO ASSIST IN 
                   ADMINISTRATION OF UNEMPLOYMENT COMPENSATION 
                   PROGRAMS.

       [(a) In General.--Section 453(j) (42 U.S.C. 653(j)) is 
     amended by adding at the end the following:
       [``(7) Information comparisons and disclosure to assist in 
     administration of unemployment compensation programs.--
       [``(A) In general.--If a State agency responsible for the 
     administration of an unemployment compensation program under 
     Federal or State law transmits to the Secretary the name and 
     social security account number of an individual, the 
     Secretary shall, if the information in the National Directory 
     of New Hires indicates that the individual may be employed, 
     disclose to the State agency the name, address, and employer 
     identification number of any putative employer of the 
     individual, subject to this paragraph.
       [``(B) Condition on disclosure.--The Secretary shall make a 
     disclosure under subparagraph (A) only to the extent that the 
     Secretary determines that the disclosure would not interfere 
     with the effective operation of the program under this part.
       [``(C) Use of information.--A State agency may use 
     information provided under this paragraph only for purposes 
     of administering a program referred to in subparagraph 
     (A).''.
       [(b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2004.

     [SEC. 307. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE 
                   TRIGGERING PASSPORT DENIAL.

       [(a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) 
     is amended by striking ``$5,000'' and inserting ``$2,500''.
       [(b) Conforming Amendment.--Section 454(31) (42 U.S.C. 
     654(31)) is amended by striking ``$5,000'' and inserting 
     ``$2,500''.
       [(c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     [SEC. 308. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT 
                   PAST-DUE CHILD SUPPORT ON BEHALF OF CHILDREN 
                   WHO ARE NOT MINORS.

       [(a) In General.--Section 464 (42 U.S.C. 664) is amended--
       [(1) in subsection (a)(2)(A), by striking ``(as that term 
     is defined for purposes of this paragraph under subsection 
     (c))''; and
       [(2) in subsection (c)--
       [(A) in paragraph (1)--
       [(i) by striking ``(1) Except as provided in paragraph (2), 
     as used in'' and inserting ``In''; and
       [(ii) by inserting ``(whether or not a minor)'' after ``a 
     child'' each place it appears; and
       [(B) by striking paragraphs (2) and (3).
       [(b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2005.

     [SEC. 309. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR 
                   SERVICE-CONNECTED DISABILITIES IN ORDER TO 
                   ENFORCE CHILD SUPPORT OBLIGATIONS.

       [(a) In General.--Section 459(h) (42 U.S.C. 659(h)) is 
     amended--
       [(1) in paragraph (1)(A)(ii)(V), by striking all that 
     follows ``Armed Forces'' and inserting a semicolon; and
       [(2) by adding at the end the following:
       [``(3) Limitations with respect to compensation paid to 
     veterans for service-connected disabilities.--Notwithstanding 
     any other provision of this section:
       [``(A) Compensation described in paragraph (1)(A)(ii)(V) 
     shall not be subject to withholding pursuant to this 
     section--
       [``(i) for payment of alimony; or
       [``(ii) for payment of child support if the individual is 
     fewer than 60 days in arrears in payment of the support.
       [``(B) Not more than 50 percent of any payment of 
     compensation described in paragraph (1)(A)(ii)(V) may be 
     withheld pursuant to this section.''.
       [(b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2005.

     [SEC. 310. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

       [(a) In General.--Section 3716(h)(3) of title 31, United 
     States Code, is amended to read as follows:
       [``(3) In applying this subsection with respect to any debt 
     owed to a State, other than past due support being enforced 
     by the State, subsection (c)(3)(A) shall not apply. 
     Subsection (c)(3)(A) shall apply with respect to past due 
     support being enforced by the State notwithstanding any other 
     provision of law, including sections 207 and 1631(d)(1) of 
     the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), 
     section 413(b) of Public law 91-173 (30 U.S.C. 923(b)), and 
     section 14 of the Act of August 29, 1935 (45 U.S.C. 231m).''.
       [(b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2004.

     [SEC. 311. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

       [Section 452(j) (42 U.S.C. 652(j)) is amended by inserting 
     ``or the amount appropriated under this paragraph for fiscal 
     year 2002, whichever is greater,'' before ``which shall be 
     available''.

     [SEC. 312. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE 
                   FUNDING.

       [Section 453(o) (42 U.S.C. 653(o)) is amended--
       [(1) in the 1st sentence, by inserting ``or the amount 
     appropriated under this paragraph for fiscal year 2002, 
     whichever is greater,'' before ``which shall be available''; 
     and
       [(2) in the 2nd sentence, by striking ``for each of fiscal 
     years 1997 through 2001''.

                        [TITLE IV--CHILD WELFARE

     [SEC. 401. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION 
                   PROJECTS.

       [Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by 
     striking ``2002'' and inserting ``2008''.

     [SEC. 402. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS.

       [Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by 
     striking ``not more than 10''.

     [SEC. 403. ELIMINATION OF LIMITATION ON NUMBER OF STATES THAT 
                   MAY BE GRANTED WAIVERS TO CONDUCT DEMONSTRATION 
                   PROJECTS ON SAME TOPIC.

       [Section 1130 (42 U.S.C. 1320a-9) is amended by adding at 
     the end the following:
       [``(h) No Limit on Number of States That May Be Granted 
     Waivers To Conduct Same or Similar Demonstration Projects.--
     The Secretary shall not refuse to grant a waiver to a State 
     under this section on the grounds that a purpose of the 
     waiver or of the demonstration project for which the waiver 
     is necessary would be the same as or similar to a purpose of 
     another waiver or project that is or may be conducted under 
     this section.''.

     [SEC. 404. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS 
                   THAT MAY BE GRANTED TO A SINGLE STATE FOR 
                   DEMONSTRATION PROJECTS.

       [Section 1130 (42 U.S.C. 1320a-9) is further amended by 
     adding at the end the following:
       [``(i) No Limit on Number of Waivers Granted to, or 
     Demonstration Projects That May Be Conducted by, a Single

[[Page 5413]]

     State.--The Secretary shall not impose any limit on the 
     number of waivers that may be granted to a State, or the 
     number of demonstration projects that a State may be 
     authorized to conduct, under this section.''.

     [SEC. 405. STREAMLINED PROCESS FOR CONSIDERATION OF 
                   AMENDMENTS TO AND EXTENSIONS OF DEMONSTRATION 
                   PROJECTS REQUIRING WAIVERS.

       [Section 1130 (42 U.S.C. 1320a-9) is further amended by 
     adding at the end the following:
       [``(j) Streamlined Process for Consideration of Amendments 
     and Extensions.--The Secretary shall develop a streamlined 
     process for consideration of amendments and extensions 
     proposed by States to demonstration projects conducted under 
     this section.''.

     [SEC. 406. AVAILABILITY OF REPORTS.

       [Section 1130 (42 U.S.C. 1320a-9) is further amended by 
     adding at the end the following:
       [``(k) Availability of Reports.--The Secretary shall make 
     available to any State or other interested party any report 
     provided to the Secretary under subsection (f)(2), and any 
     evaluation or report made by the Secretary with respect to a 
     demonstration project conducted under this section, with a 
     focus on information that may promote best practices and 
     program improvements.''.

     [SEC. 407. TECHNICAL CORRECTION.

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

                 [TITLE V--SUPPLEMENTAL SECURITY INCOME

     [SEC. 501. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY 
                   DETERMINATIONS.

       [Section 1633 (42 U.S.C. 1383b) is amended by adding at the 
     end the following:
       [``(e)(1) The Commissioner of Social Security shall review 
     determinations, made by State agencies pursuant to subsection 
     (a) in connection with applications for benefits under this 
     title on the basis of blindness or disability, that 
     individuals who have attained 18 years of age are blind or 
     disabled as of a specified onset date. The Commissioner of 
     Social Security shall review such a determination before any 
     action is taken to implement the determination.
       [``(2)(A) In carrying out paragraph (1), the Commissioner 
     of Social Security shall review--
       [``(i) at least 20 percent of all determinations referred 
     to in paragraph (1) that are made in fiscal year 2004;
       [``(ii) at least 40 percent of all such determinations that 
     are made in fiscal year 2005; and
       [``(iii) at least 50 percent of all such determinations 
     that are made in fiscal year 2006 or thereafter.
       [``(B) In carrying out subparagraph (A), the Commissioner 
     of Social Security shall, to the extent feasible, select for 
     review the determinations which the Commissioner of Social 
     Security identifies as being the most likely to be 
     incorrect.''.

                 [TITLE VI--STATE AND LOCAL FLEXIBILITY

     [SEC. 601. PROGRAM COORDINATION DEMONSTRATION PROJECTS.

       [(a) Purpose.--The purpose of this section is to establish 
     a program of demonstration projects in a State or portion of 
     a State to coordinate multiple public assistance, workforce 
     development, and other programs, for the purpose of 
     supporting working individuals and families, helping families 
     escape welfare dependency, promoting child well-being, or 
     helping build stronger families, using innovative approaches 
     to strengthen service systems and provide more coordinated 
     and effective service delivery.
       [(b) Definitions.--In this section:
       [(1) Administering secretary.--The term ``administering 
     Secretary'' means, with respect to a qualified program, the 
     head of the Federal agency responsible for administering the 
     program.
       [(2) Qualified program.--The term ``qualified program'' 
     means--
       [(A) a program under part A of title IV of the Social 
     Security Act;
       [(B) the program under title XX of such Act;
       [(C) activities funded under title I of the Workforce 
     Investment Act of 1998, except subtitle C of such title;
       [(D) a demonstration project authorized under section 505 
     of the Family Support Act of 1988;
       [(E) activities funded under the Wagner-Peyser Act;
       [(F) activities funded under the Adult Education and Family 
     Literacy Act;
       [(G) activities funded under the Child Care and Development 
     Block Grant Act of 1990;
       [(H) activities funded under the United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.), except that such term shall 
     not include--
       [(i) any program for rental assistance under section 8 of 
     such Act (42 U.S.C. 1437f); and
       [(ii) the program under section 7 of such Act (42 U.S.C. 
     1437e) for designating public housing for occupancy by 
     certain populations;
       [(I) activities funded under title I, II, III, or IV of the 
     McKinney-Vento Homeless Assistance Act (42 U.S.C. 11301 et 
     seq.); or
       [(J) the food stamp program as defined in section 3(h) of 
     the Food Stamp Act of 1977 (7 U.S.C. 2012(h)).
       [(c) Application Requirements.--The head of a State entity 
     or of a sub-State entity administering 2 or more qualified 
     programs proposed to be included in a demonstration project 
     under this section shall (or, if the project is proposed to 
     include qualified programs administered by 2 or more such 
     entities, the heads of the administering entities (each of 
     whom shall be considered an applicant for purposes of this 
     section) shall jointly) submit to the administering Secretary 
     of each such program an application that contains the 
     following:
       [(1) Programs included.--A statement identifying each 
     qualified program to be included in the project, and 
     describing how the purposes of each such program will be 
     achieved by the project.
       [(2) Population served.--A statement identifying the 
     population to be served by the project and specifying the 
     eligibility criteria to be used.
       [(3) Description and justification.--A detailed description 
     of the project, including--
       [(A) a description of how the project is expected to 
     improve or enhance achievement of the purposes of the 
     programs to be included in the project, from the standpoint 
     of quality, of cost-effectiveness, or of both; and
       [(B) a description of the performance objectives for the 
     project, including any proposed modifications to the 
     performance measures and reporting requirements used in the 
     programs.
       [(4) Waivers requested.--A description of the statutory and 
     regulatory requirements with respect to which a waiver is 
     requested in order to carry out the project, and a 
     justification of the need for each such waiver.
       [(5) Cost neutrality.--Such information and assurances as 
     necessary to establish to the satisfaction of the 
     administering Secretary, in consultation with the Director of 
     the Office of Management and Budget, that the proposed 
     project is reasonably expected to meet the applicable cost 
     neutrality requirements of subsection (d)(4).
       [(6) Evaluation and reports.--An assurance that the 
     applicant will conduct ongoing and final evaluations of the 
     project, and make interim and final reports to the 
     administering Secretary, at such times and in such manner as 
     the administering Secretary may require.
       [(7) Public housing agency plan.--In the case of an 
     application proposing a demonstration project that includes 
     activities referred to in subsection (b)(2)(H) of this 
     section--
       [(A) a certification that the applicable annual public 
     housing agency plan of any agency affected by the project 
     that is approved under section 5A of the United States 
     Housing Act of 1937 (42 U.S.C. 1437c-1) by the Secretary 
     includes the information specified in paragraphs (1) through 
     (4) of this subsection; and
       [(B) any resident advisory board recommendations, and other 
     information, relating to the project that, pursuant to 
     section 5A(e)(2) of the United States Housing Act of 1937 (42 
     U.S.C. 1437c-1(e)(2), is required to be included in the 
     public housing agency plan of any public housing agency 
     affected by the project.
       [(8) Other information and assurances.--Such other 
     information and assurances as the administering Secretary may 
     require.
       [(d) Approval of Applications.--
       [(1) In general.--The administering Secretary with respect 
     to a qualified program that is identified in an application 
     submitted pursuant to subsection (c) may approve the 
     application and, except as provided in paragraph (2), waive 
     any requirement applicable to the program, to the extent 
     consistent with this section and necessary and appropriate 
     for the conduct of the demonstration project proposed in the 
     application, if the administering Secretary determines that 
     the project--
       [(A) has a reasonable likelihood of achieving the 
     objectives of the programs to be included in the project;
       [(B) may reasonably be expected to meet the applicable cost 
     neutrality requirements of paragraph (4), as determined by 
     the Director of the Office of Management and Budget; and
       [(C) includes the coordination of 2 or more qualified 
     programs.
       [(2) Provisions excluded from waiver authority.--A waiver 
     shall not be granted under paragraph (1)--
       [(A) with respect to any provision of law relating to--
       [(i) civil rights or prohibition of discrimination;
       [(ii) purposes or goals of any program;
       [(iii) maintenance of effort requirements;
       [(iv) health or safety;
       [(v) labor standards under the Fair Labor Standards Act of 
     1938; or
       [(vi) environmental protection;
       [(B) with respect to section 241(a) of the Adult Education 
     and Family Literacy Act;
       [(C) in the case of a program under the United States 
     Housing Act of 1937 (42 U.S.C. 1437 et seq.), with respect to 
     any requirement under section 5A of such Act (42 U.S.C. 
     1437c-1; relating to public housing agency plans and resident 
     advisory boards);
       [(D) in the case of a program under the Workforce 
     Investment Act, with respect to any requirement the waiver of 
     which would violate section 189(i)(4)(A)(i) of such Act;
       [(E) in the case of the food stamp program (as defined in 
     section 3(h) of the Food Stamp

[[Page 5414]]

     Act of 1977 (7 U.S.C. 2012(h)), with respect to any 
     requirement under--
       [(i) section 6 (if waiving a requirement under such section 
     would have the effect of expanding eligibility for the 
     program), 7(b) or 16(c) of the Food Stamp Act of 1977 (7 
     U.S.C. 2011 et seq.); or
       [(ii) title IV of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (8 U.S.C. 1601 et 
     seq.);
       [(F) with respect to any requirement that a State pass 
     through to a sub-State entity part or all of an amount paid 
     to the State;
       [(G) if the waiver would waive any funding restriction or 
     limitation provided in an appropriations Act, or would have 
     the effect of transferring appropriated funds from 1 
     appropriations account to another; or
       [(H) except as otherwise provided by statute, if the waiver 
     would waive any funding restriction applicable to a program 
     authorized under an Act which is not an appropriations Act 
     (but not including program requirements such as application 
     procedures, performance standards, reporting requirements, or 
     eligibility standards), or would have the effect of 
     transferring funds from a program for which there is direct 
     spending (as defined in section 250(c)(8) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985) to another 
     program.
       [(3) Agreement of each administering secretary required.--
       [(A) In general.--An applicant may not conduct a 
     demonstration project under this section unless each 
     administering Secretary with respect to any program proposed 
     to be included in the project has approved the application to 
     conduct the project.
       [(B) Agreement with respect to funding and 
     implementation.--Before approving an application to conduct a 
     demonstration project under this section, an administering 
     Secretary shall have in place an agreement with the applicant 
     with respect to the payment of funds and responsibilities 
     required of the administering Secretary with respect to the 
     project.
       [(4) Cost-neutrality requirement.--
       [(A) General rule.--Notwithstanding any other provision of 
     law (except subparagraph (B)), the total of the amounts that 
     may be paid by the Federal Government for a fiscal year with 
     respect to the programs in the State in which an entity 
     conducting a demonstration project under this section is 
     located that are affected by the project shall not exceed the 
     estimated total amount that the Federal Government would have 
     paid for the fiscal year with respect to the programs if the 
     project had not been conducted, as determined by the Director 
     of the Office of Management and Budget.
       [(B) Special rule.--If an applicant submits to the Director 
     of the Office of Management and Budget a request to apply the 
     rules of this subparagraph to the programs in the State in 
     which the applicant is located that are affected by a 
     demonstration project proposed in an application submitted by 
     the applicant pursuant to this section, during such period of 
     not more than 5 consecutive fiscal years in which the project 
     is in effect, and the Director determines, on the basis of 
     supporting information provided by the applicant, to grant 
     the request, then, notwithstanding any other provision of 
     law, the total of the amounts that may be paid by the Federal 
     Government for the period with respect to the programs shall 
     not exceed the estimated total amount that the Federal 
     Government would have paid for the period with respect to the 
     programs if the project had not been conducted.
       [(5) 90-day approval deadline.--
       [(A) In general.--If an administering Secretary receives an 
     application to conduct a demonstration project under this 
     section and does not disapprove the application within 90 
     days after the receipt, then--
       [(i) the administering Secretary is deemed to have approved 
     the application for such period as is requested in the 
     application, except to the extent inconsistent with 
     subsection (e); and
       [(ii) any waiver requested in the application which applies 
     to a qualified program that is identified in the application 
     and is administered by the administering Secretary is deemed 
     to be granted, except to the extent inconsistent with 
     paragraph (2) or (4) of this subsection.
       [(B) Deadline extended if additional information is 
     sought.--The 90-day period referred to in subparagraph (A) 
     shall not include any period that begins with the date the 
     Secretary requests the applicant to provide additional 
     information with respect to the application and ends with the 
     date the additional information is provided.
       [(e) Duration of Projects.--A demonstration project under 
     this section may be approved for a term of not more than 5 
     years.
       [(f) Reports to Congress.--
       [(1) Report on disposition of applications.--Within 90 days 
     after an administering Secretary receives an application 
     submitted pursuant to this section, the administering 
     Secretary shall submit to each Committee of the Congress 
     which has jurisdiction over a qualified program identified in 
     the application notice of the receipt, a description of the 
     decision of the administering Secretary with respect to the 
     application, and the reasons for approving or disapproving 
     the application.
       [(2) Reports on projects.--Each administering Secretary 
     shall provide annually to the Congress a report concerning 
     demonstration projects approved under this section, 
     including--
       [(A) the projects approved for each applicant;
       [(B) the number of waivers granted under this section, and 
     the specific statutory provisions waived;
       [(C) how well each project for which a waiver is granted is 
     improving or enhancing program achievement from the 
     standpoint of quality, cost-effectiveness, or both;
       [(D) how well each project for which a waiver is granted is 
     meeting the performance objectives specified in subsection 
     (c)(3)(B);
       [(E) how each project for which a waiver is granted is 
     conforming with the cost-neutrality requirements of 
     subsection (d)(4); and
       [(F) to the extent the administering Secretary deems 
     appropriate, recommendations for modification of programs 
     based on outcomes of the projects.
       [(g) Amendment to United States Housing Act of 1937.--
     Section 5A(d) of the United States Housing Act of 1937 (42 
     U.S.C. 1437c-1(d)) is amended--
       [(1) by redesignating paragraph (18) as paragraph (19); and
       [(2) by inserting after paragraph (17) the following new 
     paragraph:
       [``(18) Program coordination demonstration projects.--In 
     the case of an agency that administers an activity referred 
     to in section 701(b)(2)(H) of the Personal Responsibility, 
     Work, and Family Promotion Act of 2003 that, during such 
     fiscal year, will be included in a demonstration project 
     under section 701 of such Act, the information that is 
     required to be included in the application for the project 
     pursuant to paragraphs (1) through (4) of section 701(b) of 
     such Act.''.

     [SEC. 602. STATE FOOD ASSISTANCE BLOCK GRANT DEMONSTRATION 
                   PROJECT.

       [The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is 
     amended by adding at the end the following:

     [``SEC. 28. STATE FOOD ASSISTANCE BLOCK GRANT DEMONSTRATION 
                   PROJECT.

       [``(a) Establishment.--The Secretary shall establish a 
     program to make grants to States in accordance with this 
     section to provide--
       [``(1) food assistance to needy individuals and families 
     residing in the State;
       [``(2) funds to operate an employment and training program 
     under subsection (g) for needy individuals under the program; 
     and
       [``(3) funds for administrative costs incurred in providing 
     the assistance.
       [``(b) Election.--
       [``(1) In general.--A State may elect to participate in the 
     program established under subsection (a).
       [``(2) Election revocable.--A State that elects to 
     participate in the program established under subsection (a) 
     may subsequently reverse the election of the State only once 
     thereafter. Following the reversal, the State shall only be 
     eligible to participate in the food stamp program in 
     accordance with the other sections of this Act and shall not 
     receive a block grant under this section.
       [``(3) Program exclusive.--A State that is participating in 
     the program established under subsection (a) shall not be 
     subject to, or receive any benefit under, this Act except as 
     provided in this section.
       [``(c) Lead Agency.--
       [``(1) Designation.--A State desiring to participate in the 
     program established under subsection (a) shall designate, in 
     an application submitted to the Secretary under subsection 
     (d)(1), an appropriate State agency that complies with 
     paragraph (2) to act as the lead agency for the State.
       [``(2) Duties.--The lead agency shall--
       [``(A) administer, either directly, through other State 
     agencies, or through local agencies, the assistance received 
     under this section by the State;
       [``(B) develop the State plan to be submitted to the 
     Secretary under subsection (d)(1); and
       [``(C) coordinate the provision of food assistance under 
     this section with other Federal, State, and local programs.
       [``(d) Application and Plan.--
       [``(1) Application.--To be eligible to receive assistance 
     under this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary shall by 
     regulation require, including--
       [``(A) an assurance that the State will comply with the 
     requirements of this section;
       [``(B) a State plan that meets the requirements of 
     paragraph (2); and
       [``(C) an assurance that the State will comply with the 
     requirements of the State plan under paragraph (2).
       [``(2) Requirements of plan.--
       [``(A) Lead agency.--The State plan shall identify the lead 
     agency.
       [``(B) Use of block grant funds.--The State plan shall 
     provide that the State shall use the amounts provided to the 
     State for each fiscal year under this section--
       [``(i) to provide food assistance to needy individuals and 
     families residing in the State, other than residents of 
     institutions who are ineligible for food stamps under section 
     3(i);
       [``(ii) to administer an employment and training program 
     under subsection (g) for

[[Page 5415]]

     needy individuals under the program and to provide 
     reimbursements to needy individuals and families as would be 
     allowed under section 16(h)(3); and
       [``(iii) to pay administrative costs incurred in providing 
     the assistance.
       [``(C) Assistance for entire state.--The State plan shall 
     provide that benefits under this section shall be available 
     throughout the entire State.
       [``(D) Notice and hearings.--The State plan shall provide 
     that an individual or family who applies for, or receives, 
     assistance under this section shall be provided with notice 
     of, and an opportunity for a hearing on, any action under 
     this section that adversely affects the individual or family.
       [``(E) Other assistance.--
       [``(i) Coordination.--The State plan may coordinate 
     assistance received under this section with assistance 
     provided under the State program funded under part A of title 
     IV of the Social Security Act (42 U.S.C. 601 et seq.).
       [``(ii) Penalties.--If an individual or family is penalized 
     for violating part A of title IV of the Act, the State plan 
     may reduce the amount of assistance provided under this 
     section or otherwise penalize the individual or family.
       [``(F) Eligibility limitations.--The State plan shall 
     describe the income and resource eligibility limitations that 
     are established for the receipt of assistance under this 
     section.
       [``(G) Receiving benefits in more than 1 jurisdiction.--The 
     State plan shall establish a system to verify and otherwise 
     ensure that no individual or family shall receive benefits 
     under this section in more than 1 jurisdiction within the 
     State.
       [``(H) Privacy.--The State plan shall provide for 
     safeguarding and restricting the use and disclosure of 
     information about any individual or family receiving 
     assistance under this section.
       [``(I) Other information.--The State plan shall contain 
     such other information as may be required by the Secretary.
       [``(3) Approval of application and plan.--During fiscal 
     years 2004 through 2008, the Secretary may approve the 
     applications and State plans that satisfy the requirements of 
     this section of not more than 5 States for a term of not more 
     than 5 years.
       [``(e) Construction of Facilities.--No funds made available 
     under this section shall be expended for the purchase or 
     improvement of land, or for the purchase, construction, or 
     permanent improvement of any building or facility.
       [``(f) Benefits for Aliens.--No individual shall be 
     eligible to receive benefits under a State plan approved 
     under subsection (d)(3) if the individual is not eligible to 
     participate in the food stamp program under title IV of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996 (8 U.S.C. 1601 et seq.).
       [``(g) Employment and Training.--Each State shall implement 
     an employment and training program for needy individuals 
     under the program.
       [``(h) Enforcement.--
       [``(1) Review of compliance with state plan.--The Secretary 
     shall review and monitor State compliance with this section 
     and the State plan approved under subsection (d)(3).
       [``(2) Noncompliance.--
       [``(A) In general.--If the Secretary, after reasonable 
     notice to a State and opportunity for a hearing, finds that--
       [``(i) there has been a failure by the State to comply 
     substantially with any provision or requirement set forth in 
     the State plan approved under subsection (d)(3); or
       [``(ii) in the operation of any program or activity for 
     which assistance is provided under this section, there is a 
     failure by the State to comply substantially with any 
     provision of this section, the Secretary shall notify the 
     State of the finding and that no further payments will be 
     made to the State under this section (or, in the case of 
     noncompliance in the operation of a program or activity, that 
     no further payments to the State will be made with respect to 
     the program or activity) until the Secretary is satisfied 
     that there is no longer any failure to comply or that the 
     noncompliance will be promptly corrected.
       [``(B) Other sanctions.--In the case of a finding of 
     noncompliance made pursuant to subparagraph (A), the 
     Secretary may, in addition to, or in lieu of, imposing the 
     sanctions described in subparagraph (A), impose other 
     appropriate sanctions, including recoupment of money 
     improperly expended for purposes prohibited or not authorized 
     by this section and disqualification from the receipt of 
     financial assistance under this section.
       [``(C) Notice.--The notice required under subparagraph (A) 
     shall include a specific identification of any additional 
     sanction being imposed under subparagraph (B).
       [``(3) Issuance of regulations.--The Secretary shall 
     establish by regulation procedures for--
       [``(A) receiving, processing, and determining the validity 
     of complaints concerning any failure of a State to comply 
     with the State plan or any requirement of this section; and
       [``(B) imposing sanctions under this section.
       [``(i) Payments.--
       [``(1) In general.--For each fiscal year, the Secretary 
     shall pay to a State that has an application approved by the 
     Secretary under subsection (d)(3) an amount that is equal to 
     the allotment of the State under subsection (l)(2) for the 
     fiscal year.
       [``(2) Method of payment.--The Secretary shall make 
     payments to a State for a fiscal year under this section by 
     issuing 1 or more letters of credit for the fiscal year, with 
     necessary adjustments on account of overpayments or 
     underpayments, as determined by the Secretary.
       [``(3) Spending of funds by state.--
       [``(A) In general.--Except as provided in subparagraph (B), 
     payments to a State from an allotment under subsection (l)(2) 
     for a fiscal year may be expended by the State only in the 
     fiscal year.
       [``(B) Carryover.--The State may reserve up to 10 percent 
     of an allotment under subsection (l)(2) for a fiscal year to 
     provide assistance under this section in subsequent fiscal 
     years, except that the reserved funds may not exceed 30 
     percent of the total allotment received under this section 
     for a fiscal year.
       [``(4) Provision of food assistance.--A State may provide 
     food assistance under this section in any manner determined 
     appropriate by the State to provide food assistance to needy 
     individuals and families in the State, such as electronic 
     benefits transfer limited to food purchases, coupons limited 
     to food purchases, or direct provision of commodities.
       [``(5) Definition of food assistance.--In this section, the 
     term `food assistance' means assistance that may be used only 
     to obtain food, as defined in section 3(g).
       [``(j) Audits.--
       [``(1) Requirement.--After the close of each fiscal year, a 
     State shall arrange for an audit of the expenditures of the 
     State during the program period from amounts received under 
     this section.
       [``(2) Independent auditor.--An audit under this section 
     shall be conducted by an entity that is independent of any 
     agency administering activities that receive assistance under 
     this section and be in accordance with generally accepted 
     auditing principles.
       [``(3) Payment accuracy.--Each annual audit under this 
     section shall include an audit of payment accuracy under this 
     section that shall be based on a statistically valid sample 
     of the caseload in the State.
       [``(4) Submission.--Not later than 30 days after the 
     completion of an audit under this section, the State shall 
     submit a copy of the audit to the legislature of the State 
     and to the Secretary.
       [``(5) Repayment of amounts.--Each State shall repay to the 
     United States any amounts determined through an audit under 
     this section to have not been expended in accordance with 
     this section or to have not been expended in accordance with 
     the State plan, or the Secretary may offset the amounts 
     against any other amount paid to the State under this 
     section.
       [``(k) Nondiscrimination.--
       [``(1) In general.--The Secretary shall not provide 
     financial assistance for any program, project, or activity 
     under this section if any person with responsibilities for 
     the operation of the program, project, or activity 
     discriminates with respect to the program, project, or 
     activity because of race, religion, color, national origin, 
     sex, or disability.
       [``(2) Enforcement.--The powers, remedies, and procedures 
     set forth in title VI of the Civil Rights Act of 1964 (42 
     U.S.C. 2000d et seq.) may be used by the Secretary to enforce 
     paragraph (1).
       [``(l) Allotments.--
       [``(1) Definition of state.--In this section, the term 
     'State' means each of the 50 States, the District of 
     Columbia, Guam, and the Virgin Islands of the United States.
       [``(2) State allotment.--
       [``(A) In general.--Except as provided in subparagraph (B), 
     from the amounts made available under section 18 of this Act 
     for each fiscal year, the Secretary shall allot to each State 
     participating in the program established under subsection (a) 
     an amount that is equal to the sum of--
       [``(i) the greater of, as determined by the Secretary--

       [``(I) the total dollar value of all benefits issued under 
     the food stamp program established under this Act by the 
     State during fiscal year 2003; or
       [``(II) the average per fiscal year of the total dollar 
     value of all benefits issued under the food stamp program by 
     the State during each of fiscal years 2001 through 2003; and

       [``(ii) the greater of, as determined by the Secretary--

       [``(I) the total amount received by the State for 
     administrative costs and the employment and training program 
     under subsections (a) and (h), respectively, of section 16 of 
     this Act for fiscal year 2003; or
       [``(II) the average per fiscal year of the total amount 
     received by the State for administrative costs and the 
     employment and training program under subsections (a) and 
     (h), respectively, of section 16 of this Act for each of 
     fiscal years 2001 through 2003.

       [``(B) Insufficient funds.--If the Secretary finds that the 
     total amount of allotments to which States would otherwise be 
     entitled for a fiscal year under subparagraph

[[Page 5416]]

     (A) will exceed the amount of funds that will be made 
     available to provide the allotments for the fiscal year, the 
     Secretary shall reduce the allotments made to States under 
     this subsection, on a pro rata basis, to the extent necessary 
     to allot under this subsection a total amount that is equal 
     to the funds that will be made available.''.

                    [TITLE VII--ABSTINENCE EDUCATION

     [SEC. 701. EXTENSION OF ABSTINENCE EDUCATION PROGRAM.

       [(a) Extension of Appropriations.--Section 510(d) (42 
     U.S.C. 710(d)) is amended by striking ``2002'' and inserting 
     ``2008''.
       [(b) Allotment of Funds.--Section 510(a) (42 U.S.C. 710(a)) 
     is amended--
       [(1) in the matter preceding paragraph (1), by striking 
     ``an application for the fiscal year under section 505(a)'' 
     and inserting ``, for the fiscal year, an application under 
     section 505(a), and an application under this section (in 
     such form and meeting such terms and conditions as determined 
     appropriate by the Secretary),''; and
       [(2) in paragraph (2), to read as follows:
       [``(2) the percentage that would be determined for the 
     State under section 502(c)(1)(B)(ii) if the calculation under 
     such section took into consideration only those States that 
     transmitted both such applications for such fiscal year.''.
       [(c) Reallotment of Funds.--Section 510 (42 U.S.C. 710(a)) 
     is amended by adding at the end the following new subsection:
       [``(e)(1) With respect to allotments under subsection (a) 
     for fiscal year 2004 and subsequent fiscal years, the amount 
     of any allotment to a State for a fiscal year that the 
     Secretary determines will not be required to carry out a 
     program under this section during such fiscal year or the 
     succeeding fiscal year shall be available for reallotment 
     from time to time during such fiscal years on such dates as 
     the Secretary may fix, to other States that the Secretary 
     determines--
       [``(A) require amounts in excess of amounts previously 
     allotted under subsection (a) to carry out a program under 
     this section; and
       [``(B) will use such excess amounts during such fiscal 
     years.
       [``(2) Reallotments under paragraph (1) shall be made on 
     the basis of such States' applications under this section, 
     after taking into consideration the population of low-income 
     children in each such State as compared with the population 
     of low-income children in all such States with respect to 
     which a determination under paragraph (1) has been made by 
     the Secretary.
       [``(3) Any amount reallotted under paragraph (1) to a State 
     is deemed to be part of its allotment under subsection 
     (a).''.
       [(d) Effective Date.--The amendments made by this section 
     shall be effective with respect to the program under section 
     510 for fiscal years 2004 and succeeding fiscal years.

              [TITLE VIII--TRANSITIONAL MEDICAL ASSISTANCE

     [SEC. 801. EXTENSION OF MEDICAID TRANSITIONAL MEDICAL 
                   ASSISTANCE PROGRAM THROUGH FISCAL YEAR 2004.

       [(a) In General.--Section 1925(f) (42 U.S.C. 1396r-6(f)) is 
     amended by striking ``2002'' and inserting ``2004''.
       [(b) Conforming Amendment.--Section 1902(e)(1)(B) (42 
     U.S.C. 1396a(e)(1)(B)) is amended by striking ``September 30, 
     2002'' and inserting ``the last date (if any) on which 
     section 1925 applies under subsection (f) of that section''.
       [(c) Effective Date.--The amendments made by this section 
     shall take effect October 1, 2003.

     [SEC. 802. ADJUSTMENT TO PAYMENTS FOR MEDICAID ADMINISTRATIVE 
                   COSTS TO PREVENT DUPLICATIVE PAYMENTS AND TO 
                   FUND EXTENSION OF TRANSITIONAL MEDICAL 
                   ASSISTANCE.

       [Section 1903 (42 U.S.C. 1396b) is amended--
       [(1) in subsection (a)(7), by striking ``section 
     1919(g)(3)(B)'' and inserting ``subsection (x) and section 
     1919(g)(3)(C)''; and
       [(2) by adding at the end the following:
       [``(x) Adjustments to Payments for Administrative Costs To 
     Fund Extension of Transitional Medical Assistance.--
       [``(1) Reductions in payments for administrative costs.--
     Effective for each calendar quarter in fiscal year 2004 and 
     fiscal year 2005, the Secretary shall reduce the amount paid 
     under subsection (a)(7) to each State by an amount equal to 
     45 percent for fiscal year 2004, and 80 percent for fiscal 
     year 2005, of one-quarter of the annualized amount determined 
     for the medicaid program under section 16(k)(2)(B) of the 
     Food Stamp Act of 1977 (7 U.S.C. 2025(k)(2)(B)).
       [``(2) Allocation of administrative costs.--None of the 
     funds or expenditures described in section 16(k)(5)(B) of the 
     Food Stamp Act of 1977 (7 U.S.C. 2025(k)(5)(B)) may be used 
     to pay for costs--
       [``(A) eligible for reimbursement under subsection (a)(7) 
     (or costs that would have been eligible for reimbursement but 
     for this subsection); and
       [``(B) allocated for reimbursement to the program under 
     this title under a plan submitted by a State to the Secretary 
     to allocate administrative costs for public assistance 
     programs;

     except that, for purposes of subparagraph (A), the reference 
     in clause (iii) of that section to `subsection (a)' is deemed 
     a reference to subsection (a)(7) and clause (iv)(II) of that 
     section shall be applied as if `medicaid program' were 
     substituted for `food stamp program'.''.

                       [TITLE IX--EFFECTIVE DATE

     [SEC. 901. EFFECTIVE DATE.

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

     SECTION 1. SHORT TITLE.

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

     SEC. 2. TABLE OF CONTENTS.

       The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.

                             TITLE I--TANF

Sec. 101. State plan.
Sec. 102. Family assistance grants.
Sec. 103. Promotion of family formation and healthy marriage.
Sec. 104. Supplemental grant for population increases in certain 
              States.
Sec. 105. Bonus to reward employment achievement.
Sec. 106. Contingency fund.
Sec. 107. Use of funds.
Sec. 108. Repeal of Federal loan for State welfare programs.
Sec. 109. Work participation requirements.
Sec. 110. Universal engagement and family self-sufficiency plan 
              requirements; other prohibitions and requirements.
Sec. 111. Penalties.
Sec. 112. Data collection and reporting.
Sec. 113. Direct funding and administration by Indian tribes.
Sec. 114. Research, evaluations, and national studies.
Sec. 115. Study by the Census Bureau.
Sec. 116. Funding for child care.
Sec. 117. Definitions.
Sec. 118. Responsible fatherhood program.
Sec. 119. Additional grants.
Sec. 120. Technical corrections.

                     TITLE II--ABSTINENCE EDUCATION

Sec. 201. Extension of abstinence education program.

                        TITLE III--CHILD SUPPORT

Sec. 301. Distribution of child support collected by States on behalf 
              of children receiving certain welfare benefits.
Sec. 302. Mandatory review and adjustment of child support orders for 
              families receiving TANF.
Sec. 303. Report on undistributed child support payments.
Sec. 304. Use of new hire information to assist in administration of 
              unemployment compensation programs.
Sec. 305. Decrease in amount of child support arrearage triggering 
              passport denial.
Sec. 306. Use of tax refund intercept program to collect past-due child 
              support on behalf of children who are not minors.
Sec. 307. Garnishment of compensation paid to veterans for service-
              connected disabilities in order to enforce obligations.
Sec. 308. Improving Federal debt collection practices.
Sec. 309. Maintenance of technical assistance funding.
Sec. 310. Maintenance of Federal parent locator service funding.
Sec. 311. Identification and seizure of assets held by multistate 
              financial institutions.
Sec. 312. Information comparisons with insurance data.
Sec. 313. Tribal access to the Federal parent locator service.
Sec. 314. Reimbursement of Secretary's costs of information comparisons 
              and disclosure for enforcement of obligations on Higher 
              Education Act loans and grants.
Sec. 315. Technical amendment relating to cooperative agreements 
              between States and Indian tribes.
Sec. 316. Claims upon longshore and harbor workers' compensation for 
              child support.
Sec. 317. State option to use statewide automated data processing and 
              information retrieval system for interstate cases.
Sec. 318. Interception of gambling winnings for child support.
Sec. 319. State law requirement concerning the Uniform Interstate 
              Family Support Act (UIFSA).
Sec. 320. Grants to States for access and visitation programs.

[[Page 5417]]

Sec. 321. Timing of corrective action year for State noncompliance with 
              child support enforcement program requirements.

                        TITLE IV--CHILD WELFARE

Sec. 401. Extension of authority to approve demonstration projects.
Sec. 402. Removal of Commonwealth of Puerto Rico foster care funds from 
              limitation on payments.
Sec. 403. Technical correction.

                 TITLE V--SUPPLEMENTAL SECURITY INCOME

Sec. 501. Review of State agency blindness and disability 
              determinations.

               TITLE VI--TRANSITIONAL MEDICAL ASSISTANCE

Sec. 601. Extension and simplification of the transitional medical 
              assistance program (TMA).
Sec. 602. Prohibition against covering childless adults with SCHIP 
              funds.

                       TITLE VII--EFFECTIVE DATE

Sec. 701. Effective date.

     SEC. 3. 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 
     amendment or repeal shall be considered to be made to a 
     section or other provision of the Social Security Act.

                             TITLE I--TANF

     SEC. 101. STATE PLAN.

       (a) Performance Improvement.--Section 402(a) (42 U.S.C. 
     602(a)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) by redesignating clause (vi) as clause (vii); and
       (ii) by striking clause (v) and inserting the following:
       ``(v) Establish specific measurable performance objectives 
     for pursuing the purposes of the program under this part as 
     described in section 401(a), including by--

       ``(I) establishing objectives consistent (as determined by 
     the State) with the criteria used by the Secretary in 
     establishing performance targets under section 403(a)(4)(C) 
     (including with respect to workplace attachment and 
     advancement), and with such additional criteria related to 
     other purposes of the program under this part as described in 
     section 401(a) as the Secretary, in consultation with the 
     National Governors' Association and the American Public Human 
     Services Association, shall establish; and
       ``(II) describing the methodology that the State will use 
     to measure State performance in relation to each such 
     objective.

       ``(vi) Describe any strategies and programs the State plans 
     to use to address--

       ``(I) employment retention and advancement for recipients 
     of assistance under the program, including placement into 
     high-demand jobs, and whether the jobs are identified using 
     labor market information;
       ``(II) efforts to reduce teen pregnancy;
       ``(III) services for struggling and noncompliant families, 
     and for clients with special problems; and
       ``(IV) program integration, including the extent to which 
     employment and training services under the program are 
     provided through the One-Stop delivery system created under 
     the Workforce Investment Act of 1998, and the extent to which 
     former recipients of such assistance have access to 
     additional core, intensive, or training services funded 
     through such Act.''; and

       (B) in subparagraph (B)--
       (i) by striking clauses (i) and (iv);
       (ii) by redesignating clauses (ii) and (iii) as clauses (i) 
     and (ii), respectively; and
       (iii) by inserting after clause (ii) (as so redesignated by 
     clause (ii)) the following:
       ``(iii) If the State is undertaking any strategies or 
     programs to engage faith-based organizations in the provision 
     of services funded under this part, or that otherwise relate 
     to section 104 of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996, the document shall 
     describe such strategies and programs.
       ``(iv) The document shall describe strategies to improve 
     program management and performance.
       ``(v) The document shall include a performance report which 
     details State progress toward full engagement for all adult 
     or minor child head of household recipients of assistance.'';
       (2) in paragraph (4), by inserting ``and tribal'' after 
     ``that local''; and
       (3) by adding at the end the following:
       ``(8) Certification of consultation on provision of 
     transportation aid.--In the case of a State that provides 
     transportation aid under the State program, a certification 
     by the chief executive officer of the State that State and 
     local transportation agencies and planning bodies have been 
     consulted in the development of the plan.''.
       (b) Procedures for Submitting and Amending State Plans.--
       (1) In general.--Subsection (b) of section 402 (42 U.S.C. 
     602(b)) is amended to read as follows:
       ``(b) Procedures for Submitting and Amending State Plans.--
       ``(1) Standard state plan format.--The Secretary shall, 
     after notice and public comment, develop a proposed Standard 
     State Plan Form to be used by States under subsection (a). 
     Such form shall be finalized by the Secretary for use by 
     States not later than 9 months after the date of enactment of 
     the Personal Responsibility and Individual Development for 
     Everyone Act.
       ``(2) Requirement for completed plan using standard state 
     plan format by fiscal year 2005.--Notwithstanding any other 
     provision of law, each State shall submit a complete State 
     plan, using the Standard State Plan Form developed under 
     paragraph (1), not later than October 1, 2004.
       ``(3) Public notice and comment.--Prior to submitting a 
     State plan to the Secretary under this section, the State 
     shall--
       ``(A) make the proposed State plan available to the public 
     through an appropriate State maintained Internet website and 
     through other means as the State determines appropriate;
       ``(B) allow for a reasonable public comment period of not 
     less than 45 days; and
       ``(C) make comments received concerning such plan or, at 
     the discretion of the State, a summary of the comments 
     received available to the public through such website and 
     through other means as the State determines appropriate.
       ``(4) Public availability of state plan.--A State shall 
     ensure that the State plan that is in effect for any fiscal 
     year is available to the public through an appropriate State 
     maintained Internet website and through other means as the 
     State determines appropriate.
       ``(5) Amending the state plan.--A State shall file an 
     amendment to the State plan with the Secretary if the State 
     determines that there has been a material change in any 
     information required to be included in the State plan or any 
     other information that the State has included in the plan, 
     including substantial changes in the use of funding. Prior to 
     submitting an amendment to the State plan to the Secretary, 
     the State shall--
       ``(A) make the proposed amendment available to the public 
     as provided for in paragraph (3)(A);
       ``(B) allow for a reasonable public comment period of not 
     less than 45 days; and
       ``(C) make the comments available as provided for in 
     paragraph (3)(C).''.
       (2) Conforming amendment.--Section 402 (42 U.S.C. 602) is 
     amended by striking subsection (c).
       (c) Consultation With State Regarding Plan and Design of 
     Tribal Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is 
     amended--
       (1) in subparagraph (E), by striking ``and'' at the end;
       (2) in subparagraph (F), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(G) provides an assurance that the State in which the 
     tribe is located has been consulted regarding the plan and 
     its design.''.
       (d) Performance Measures.--Section 413 (42 U.S.C. 613) is 
     amended by adding at the end the following:
       ``(k) Performance Improvement.--The Secretary, in 
     consultation with the States, shall develop uniform 
     performance measures designed to assess the degree of 
     effectiveness, and the degree of improvement, of State 
     programs funded under this part in accomplishing the purposes 
     of this part.''.
       (e) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C. 
     613(d)(1)) is amended to read as follows:
       ``(1) Annual ranking of states.--
       ``(A) In general.--The Secretary shall rank annually the 
     States to which grants are paid under section 403 in the 
     order of their success in--
       ``(i) placing recipients of assistance under the State 
     program funded under this part into private sector jobs;
       ``(ii) the success of the recipients in retaining 
     employment;
       ``(iii) the ability of the recipients to increase their 
     wages;
       ``(iv) the degree to which recipients have workplace 
     attachment and advancement;
       ``(v) reducing the overall welfare caseload; and
       ``(vi) when a practicable method for calculating this 
     information becomes available, diverting individuals from 
     formally applying to the State program and receiving 
     assistance.
       ``(B) Consideration of other factors.--In ranking States 
     under this paragraph, the Secretary shall take into account 
     the average number of minor children living at home in 
     families in the State that have incomes below the poverty 
     line and the amount of funding provided each State under this 
     part for such families.''.

     SEC. 102. FAMILY ASSISTANCE GRANTS.

       (a) Extension of Authority.--Section 403(a)(1) (42 U.S.C. 
     603(a)(1)(A)), as amended by section 3(a) of the Welfare 
     Reform Extension Act of 2003 (Public Law 108-040, 117 Stat. 
     836), is amended--
       (1) in subparagraph (A)--
       (A) by striking ``1996, 1997, 1998, 1999, 2000, 2001, 2002, 
     and 2003'' and inserting ``2004 through 2008''; and
       (B) by inserting ``payable to the State for the fiscal 
     year'' before the period; and
       (2) in subparagraph (C), by striking ``for fiscal year 
     2003'' and all that follows through the period, and inserting 
     ``for each of fiscal years 2004 through 2008, $16,566,542,000 
     for grants under this paragraph.''.
       (b) Matching Grants for the Territories.--Section 
     1108(b)(2) (42 U.S.C. 1308(b)(2)), as amended by section 3(b) 
     of the Welfare Reform Extension Act of 2003 (Public Law 108-
     040, 117 Stat. 836), is amended by striking ``1997 through 
     2003'' and inserting ``2004 through 2008''.

     SEC. 103. PROMOTION OF FAMILY FORMATION AND HEALTHY MARRIAGE.

       (a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 
     602(a)(1)(A)), as amended by section

[[Page 5418]]

     101(a), is amended by adding at the end the following:
       ``(viii) Encourage equitable treatment of healthy 2-parent 
     married families under the program referred to in clause 
     (i).''.
       (b) Healthy Marriage Promotion Grants; Repeal of Bonus for 
     Reduction of Illegitimacy Ratio.--Section 403(a)(2) (42 
     U.S.C. 603(a)(2)) is amended to read as follows:
       ``(2) Healthy marriage promotion grants.--
       ``(A) Authority.--
       ``(i) In general.--The Secretary shall award competitive 
     grants to States, territories, and Indian tribes and tribal 
     organizations for not more than 50 percent of the cost of 
     developing and implementing innovative programs to promote 
     and support healthy 2-parent married families.
       ``(ii) Use of other tanf funds.--A State or Indian tribe 
     with an approved tribal family assistance plan may use funds 
     provided under other grants made under this part for all or 
     part of the expenditures incurred for the remainder of the 
     costs described in clause (i). In the case of a State, any 
     such funds expended shall not be considered qualified State 
     expenditures for purposes of section 409(a)(7).
       ``(B) Healthy marriage promotion activities.--Funds 
     provided under subparagraph (A) shall be used to support any 
     of the following programs or activities:
       ``(i) Public advertising campaigns on the value of marriage 
     and the skills needed to increase marital stability and 
     health.
       ``(ii) Education in high schools on the value of marriage, 
     relationship skills, and budgeting.
       ``(iii) Marriage education, marriage skills, and 
     relationship skills programs, that may include parenting 
     skills, financial management, conflict resolution, and job 
     and career advancement, for non-married pregnant women, non-
     married expectant fathers, and non-married recent parents.
       ``(iv) Pre-marital education and marriage skills training 
     for engaged couples and for couples or individuals interested 
     in marriage.
       ``(v) Marriage enhancement and marriage skills training 
     programs for married couples.
       ``(vi) Divorce reduction programs that teach relationship 
     skills.
       ``(vii) Marriage mentoring programs which use married 
     couples as role models and mentors.
       ``(viii) Programs to reduce the disincentives to marriage 
     in means-tested aid programs, if offered in conjunction with 
     any activity described in this subparagraph.
       ``(C) Voluntary participation.--Participation in programs 
     or activities described in any of clauses (iii) through (vii) 
     shall be voluntary.
       ``(D) General rules governing use of funds.--The rules of 
     section 404, other than subsection (b) of that section, shall 
     not apply to a grant made under this paragraph.
       ``(E) Requirements for receipt of funds.--A State, 
     territory, or Indian tribe or tribal organization may not be 
     awarded a grant under this paragraph unless the State, 
     territory, Indian tribe or tribal organization, as a 
     condition of receiving funds under such a grant--
       ``(i) consults with experts in domestic violence or with 
     relevant community domestic violence coalitions in developing 
     such programs or activities; and
       ``(ii) describes in the application for a grant under this 
     paragraph--

       ``(I) how the programs or activities proposed to be 
     conducted will address, as appropriate, issues of domestic 
     violence; and
       ``(II) what the State, territory, or Indian tribe or tribal 
     organization, will do, to the extent relevant, to ensure that 
     participation in such programs or activities is voluntary, 
     and to inform potential participants that their involvement 
     is voluntary.

       ``(F) Appropriation.--
       ``(i) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated for each of fiscal years 2004 through 2008, 
     $100,000,000 for grants under this paragraph.
       ``(ii) Extended availability of funds.--

       ``(I) In general.--Funds appropriated under clause (i) for 
     each of fiscal years 2004 through 2008 shall remain available 
     to the Secretary until expended.
       ``(II) Authority for grant recipients.--A State, territory, 
     or Indian tribe or tribal organization may use funds made 
     available under a grant awarded under this paragraph without 
     fiscal year limitation pursuant to the terms of the grant.''.

       (c) Counting of Spending on Non-Eligible Families To 
     Prevent and Reduce Incidence of Out-of-Wedlock Births, 
     Encourage Formation and Maintenance of Healthy 2-Parent 
     Married Families, or Encourage Responsible Fatherhood.--
     Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)) is 
     amended by adding at the end the following:

       ``(V) Counting of spending on non-eligible families to 
     prevent and reduce incidence of out-of-wedlock births, 
     encourage formation and maintenance of healthy 2-parent 
     married families, or encourage responsible fatherhood.--
     Subject to subclauses (II) and (III), the term `qualified 
     State expenditures' includes the total expenditures by the 
     State during the fiscal year under all State programs for a 
     purpose described in paragraph (3) or (4) of section 
     401(a).''.

       (d) Purposes.--Section 401(a)(4) (42 U.S.C. 601(a)(4)) is 
     amended by striking ``two-parent families'' and inserting 
     ``healthy 2-parent married families, and encourage 
     responsible fatherhood''.

     SEC. 104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN 
                   CERTAIN STATES.

        Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)), as amended 
     by section 3(d) of the Welfare Reform Extension Act of 2003 
     (Public Law 108-040), 117 Stat. 837), is amended--
       (1) in clause (i), by striking ``2002 and 2003'' and 
     inserting ``2004 through 2007'';
       (2) in clause (ii), by striking ``2003'' and inserting 
     ``2007''; and
       (3) in clause (iii), by striking ``2002 and 2003'' and 
     inserting ``2004 through 2007''.

     SEC. 105. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

       (a) Bonus To Reward Employment Achievement.--Section 
     403(a)(4) (42 U.S.C. 603(a)(4)) is amended to read as 
     follows:
       ``(4) Bonus to reward employment achievement.--
       ``(A) In general.--The Secretary shall make a grant 
     pursuant to this paragraph to each State for each bonus year 
     for which the State is an employment achievement State.
       ``(B) Amount of grant.--
       ``(i) In general.--Subject to clause (ii), the Secretary 
     shall determine the amount of the grant payable under this 
     paragraph to an employment achievement State for a bonus 
     year, which shall be based on the performance of the State as 
     determined under subparagraph (D)(i) for the fiscal year that 
     immediately precedes the bonus year.
       ``(ii) Limitation.--The amount payable to a State under 
     this paragraph for a bonus year shall not exceed 5 percent of 
     the State family assistance grant.
       ``(C) Formula for measuring state performance.--
       ``(i) In general.--Subject to clause (ii), not later than 
     October 1, 2004, the Secretary, in consultation with the 
     States, shall develop a formula for measuring State 
     performance in operating the State program funded under this 
     part so as to achieve the goals of employment entry, job 
     retention, increased earnings from employment, and workplace 
     attachment and advancement for families receiving assistance 
     under the program, as measured on an absolute basis and on 
     the basis of improvement in State performance.
       ``(ii) Special rule for bonus years 2004 and 2005.--For the 
     purposes of awarding a bonus under this paragraph for bonus 
     year 2004 or 2005, the Secretary may measure the performance 
     of a State in fiscal year 2003 or 2004 (as the case may be) 
     using the job entry rate, job retention rate, and earnings 
     gain rate components of the formula developed under section 
     403(a)(4)(C) as in effect immediately before the effective 
     date of this paragraph.
       ``(D) Determination of state performance.--For each bonus 
     year, the Secretary shall--
       ``(i) use the formula developed under subparagraph (C) to 
     determine the performance of each eligible State for the 
     fiscal year that precedes the bonus year; and
       ``(ii) prescribe performance standards in such a manner so 
     as to ensure that--

       ``(I) the average annual total amount of grants to be made 
     under this paragraph for each bonus year equals $100,000,000; 
     and
       ``(II) the total amount of grants to be made under this 
     paragraph for all bonus years equals $600,000,000.

       ``(E) Definitions.--In this paragraph:
       ``(i) Bonus year.--The term `bonus year' means each of 
     fiscal years 2004 through 2009.
       ``(ii) Employment achievement state.--The term `employment 
     achievement State' means, with respect to a bonus year, an 
     eligible State whose performance determined pursuant to 
     subparagraph (D)(i) for the fiscal year preceding the bonus 
     year equals or exceeds the performance standards prescribed 
     under subparagraph (D)(ii) for such preceding fiscal year.
       ``(F) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for the period of fiscal years 2004 through 
     2009, $600,000,000 for grants under this paragraph.
       ``(G) Grants for tribal organizations.--This paragraph 
     shall apply with respect to tribal organizations in the same 
     manner in which this paragraph applies with respect to 
     States. In determining the criteria under which to make 
     grants to tribal organizations under this paragraph, the 
     Secretary shall consult with tribal organizations.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2003.

     SEC. 106. CONTINGENCY FUND.

       (a) Contingency Funding Available to Needy States.--Section 
     403(b) (42 U.S.C. 603(b)) is amended--
       (1) by striking paragraphs (1) through (3) and inserting 
     the following:
       ``(1) Contingency fund grants.--
       ``(A) Payments.--Subject to subparagraph (C), and out of 
     funds appropriated under subparagraph (E), each State shall 
     receive a contingency fund grant for each eligible month in 
     which the State is a needy State under paragraph (3).
       ``(B) Monthly contingency fund grant amount.--For each 
     eligible month in which a State is a needy State, the State 
     shall receive a contingency fund grant equal to the product 
     of--
       ``(i) the applicable percentage (as defined under 
     subparagraph (D)(i)) of the applicable benefit level (as 
     defined in subparagraph (D)(ii)); and
       ``(ii) the amount by which the total number of families 
     that received assistance under the State

[[Page 5419]]

     program funded under this part in the most recently concluded 
     3-month period for which data are available from the State 
     exceeds a 5-percent increase in the number of such families 
     in the corresponding 3-month period in either of the 2 most 
     recent preceding fiscal years and that was due, in large 
     measure, to economic conditions rather than State policy 
     changes.
       ``(C) Limitation.--The total amount paid to a single State 
     under subparagraph (A) during a fiscal year shall not exceed 
     the amount equal to 10 percent of the State family assistance 
     grant (as defined under subparagraph (B) of subsection 
     (a)(1)).
       ``(D) Definitions.--In this paragraph:
       ``(i) Applicable percentage.--The term `applicable 
     percentage' means the Federal medical assistance percentage 
     for the State (as defined in section 1905(b)).
       ``(ii) Applicable benefit level.--

       ``(I) In general.--Subject to subclause (II), the term 
     `applicable benefit level' means the amount equal to the 
     maximum cash assistance grant for a family consisting of 3 
     individuals under the State program funded under this part.
       ``(II) Rule for states with more than 1 maximum level.--In 
     the case of a State that has more than 1 maximum cash 
     assistance grant level for families consisting of 3 
     individuals, the basic assistance cost shall be the amount 
     equal to the maximum cash assistance grant level applicable 
     to the largest number of families consisting of 3 individuals 
     receiving assistance under the State program funded under 
     this part.

       ``(E) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there is 
     appropriated for the period of fiscal years 2004 through 
     2008, such sums as are necessary for making contingency fund 
     grants under this subsection in a total amount not to exceed 
     $2,000,000,000.'';
       (2) by redesignating paragraph (4) as paragraph (2); and
       (3) in paragraph (2), as so redesignated--
       (A) by striking ``(3)(A)'' and inserting ``(1)''; and
       (B) by striking ``2-month period that begins with any'' and 
     inserting ``fiscal year quarter that includes a''.
       (b) Modification of Definition of Needy State.--Section 
     403(b), as amended by subsection (a), (42 U.S.C. 603(b)) is 
     further amended--
       (1) by striking paragraphs (5) and (6);
       (2) by redesignating paragraphs (7) and (8) as paragraphs 
     (5) and (6), respectively; and
       (3) by inserting after paragraph (2) (as redesignated by 
     subsection (a)(2)) the following:
       ``(3) Initial determination of whether a state qualifies as 
     a needy state.--
       ``(A) In general.--For purposes of paragraph (1), subject 
     to paragraph (4), a State will be initially determined to be 
     a needy State for a month if, as determined by the 
     Secretary--
       ``(i) the monthly average of the unduplicated number of 
     families that received assistance under the State program 
     funded under this part in the most recently concluded 3-month 
     period for which data are available from the State increased 
     by at least 5 percent over the number of such families that 
     received such benefits in the corresponding 3-month period in 
     either of the 2 most recent preceding fiscal years;
       ``(ii) the increase in the number of such families for the 
     State was due, in large measure, to economic conditions 
     rather than State policy changes; and
       ``(iii) the State satisfies any of the following criteria:

       ``(I) The average rate of total unemployment in the State 
     (seasonally adjusted) for the period consisting of the most 
     recent 3 months for which data are available has increased by 
     the lesser of 1.5 percentage points or by 50 percent over the 
     corresponding 3-month period in either of the 2 most recent 
     preceding fiscal years.
       ``(II) The average insured unemployment rate for the most 
     recent 13 weeks for which data are available has increased by 
     1 percentage point over the corresponding 13-week period in 
     either of the 2 most recent preceding fiscal years.
       ``(III) As determined by the Secretary of Agriculture, the 
     monthly average number of households (as of the last day of 
     each month) that participated in the food stamp program in 
     the State in the then most recently concluded 3- month period 
     for which data are available exceeds by at least 15 percent 
     the monthly average number of households (as of the last day 
     of each month) in the State that participated in the food 
     stamp program in the corresponding 3-month period in either 
     of the 2 most recent preceding fiscal years, but only if the 
     Secretary and the Secretary of Agriculture concur in the 
     determination that the State's increased caseload was due, in 
     large measure, to economic conditions rather than changes in 
     Federal or State policies related to the food stamp program.

       ``(B) Duration.--A State that qualifies as a needy State--
       ``(i) under subclause (I) or (II) of subparagraph (A)(iii), 
     shall be considered a needy State until the State's average 
     rate of total unemployment or the State's insured 
     unemployment rate, respectively, falls below the level 
     attained in the applicable period that was first used to 
     determine that the State qualified as a needy State under 
     that subparagraph (and in the case of the insured 
     unemployment rate, without regard to any declines in the rate 
     that are the result of seasonal variation); and
       ``(ii) under subclause (III) of subparagraph (A)(iii), 
     shall be considered a needy State so long as the State meets 
     the criteria for being considered a needy State under that 
     subparagraph.
       ``(4) Exceptions.--
       ``(A) Unexpended balances.--
       ``(i) In general.--Notwithstanding paragraph (3), a State 
     that has unexpended TANF balances in an amount that exceeds 
     30 percent of the total amount of grants received by the 
     State under subsection (a) for the most recently completed 
     fiscal year (other than welfare-to-work grants made under 
     paragraph (5) of that subsection prior to fiscal year 2000), 
     shall not be a needy State under this subsection.
       ``(ii) Definition of unexpended tanf balances.--In clause 
     (i), the term `unexpended TANF balances' means the lessor 
     of--

       ``(I) the total amount of grants made to the State 
     (regardless of the fiscal year in which such funds were 
     awarded) under subsection (a) (other than welfare-to-work 
     grants made under paragraph (5) of that subsection prior to 
     fiscal year 2000) but not yet expended as of the end of the 
     fiscal year preceding the fiscal year for which the State 
     would, in the absence of this subparagraph, be considered a 
     needy State under this subsection; and
       ``(II) the total amount of grants made to the State under 
     subsection (a) (other than welfare-to-work grants made under 
     paragraph (5) of that subsection prior to fiscal year 2000) 
     but not yet expended as of the end of such preceding fiscal 
     year, plus the difference between--

       ``(aa) the pro rata share of the current fiscal year grant 
     to be made under subsection (a) to the State; and
       ``(bb) current year expenditures of the total amount of 
     grants made to the State under subsection (a) (regardless of 
     the fiscal year in which such funds were awarded) (other than 
     such welfare-to-work grants) through the end of the most 
     recent calendar quarter.
       ``(B) Failure to satisfy maintenance of effort 
     requirement.--Notwithstanding paragraph (3), a State that 
     fails to satisfy the requirement of section 409(a)(7) with 
     respect to a fiscal year shall not be a needy State under 
     this subsection for that fiscal year.''.
       (c) Clarification of Reporting Requirements.--Paragraph (6) 
     of section 403(b) (42 U.S.C. 603(b)), as redesignated by 
     subsection (b)(2), is amended by striking ``on the status of 
     the Fund'' and inserting ``on the States that qualified for 
     contingency funds and the amount of funding awarded under 
     this subsection''.
       (d) Elimination of Penalty for Failure To Maintain 100 
     Percent Maintenance of Effort.--
       (1) In general.--Section 409(a) (42 U.S.C. 609(a)) is 
     amended--
       (A) by striking paragraph (10); and
       (B) by redesignating paragraphs (11) through (14) as 
     paragraphs (10) through (13), respectively.
       (2) Conforming amendments.--Section 409 (42 U.S.C. 609) is 
     amended--
       (A) in subsection (a)(7)(B)(i)(III), by striking ``(12)'' 
     and inserting ``(11)'';
       (B) in subsection (b)(2), by striking ``(10), (12), or 
     (13)'' and inserting ``(11), or (12)''; and
       (C) in subsection (c)(4), by striking ``(10), (12), or 
     (13)'' and inserting ``(11), or (12)''.

     SEC. 107. USE OF FUNDS.

       (a) Treatment of Interstate Immigrants.--Section 404 (42 
     U.S.C. 604) is amended by striking subsection (c).
       (b) Restoration of Authority To Transfer Up to 10 Percent 
     of TANF Funds to the Social Services Block Grant.--Section 
     404(d)(2) (42 U.S.C. 604(d)(2)) is amended to read as 
     follows:
       ``(2) Limitation on amount transferable to title xx 
     programs.--A State may use not more than 10 percent of the 
     amount of any grant made to the State under section 403(a) 
     for a fiscal year to carry out State programs pursuant to 
     title XX.''.
       (c) Clarification of Authority of States To Use TANF Funds 
     Carried Over From Prior Years To Provide TANF Benefits and 
     Services.--Section 404(e) (42 U.S.C. 604(e)) is amended to 
     read as follows:
       ``(e) Authority To Carryover or Reserve Certain Amounts for 
     Benefits or Services or for Future Contingencies.--
       ``(1) Carryover.--A State or tribe may use a grant made to 
     the State or tribe under this part for any fiscal year to 
     provide, without fiscal year limitation, any benefit or 
     service that may be provided under the State or tribal 
     program funded under this part.
       ``(2) Contingency reserve.--A State or tribe may designate 
     any portion of a grant made to the State or tribe under this 
     part as a contingency reserve for future needs, and may use 
     any amount so designated to provide, without fiscal year 
     limitation, any benefit or service that may be provided under 
     the State or tribal program funded under this part. If a 
     State or tribe so designates a portion of such a grant, the 
     State or tribe shall include in its report under section 
     411(a) the amount so designated.''.
       (d) State Option To Establish Undergraduate Postsecondary 
     or Vocational Educational Program.--
       (1) In general.--Section 404 (42 U.S.C. 604) is amended by 
     adding at the end the following:
       ``(l) Authority To Establish Undergraduate Postsecondary or 
     Vocational Educational Program.--
       ``(1) In general.--Subject to the succeeding paragraphs of 
     this subsection, a State to which a grant is made under 
     section 403 may use the grant to establish a program under 
     which an eligible participant (as defined in paragraph (5)) 
     may be provided support services described in paragraph (7) 
     and, subject to paragraph (8), may have hours of 
     participation in such program counted as being engaged in 
     work for purposes of determining monthly participation rates 
     under section 407(b)(1)(B)(i).

[[Page 5420]]

       ``(2) State plan requirement.--In order to establish a 
     program under this subsection, a State shall describe (in an 
     addendum to the State plan submitted under section 402) the 
     applicable eligibility criteria that is designed to limit 
     participation in the program to only those individuals--
       ``(A) whose past earnings indicate that the individuals 
     cannot qualify for employment that pays enough to allow them 
     to obtain self-sufficiency (as determined by the State); and
       ``(B) for whom enrollment in the program will prepare the 
     individuals for higher-paying occupations in demand in the 
     State.
       ``(3) Limitation on enrollment.--The number of eligible 
     participants in a program established under this subsection 
     may not exceed 10 percent of the total number of families 
     receiving assistance under the State program funded under 
     this part.
       ``(4) No federal funds for tuition.--A State may not use 
     Federal funds provided under a grant made under section 403 
     to pay tuition for an eligible participant.
       ``(5) Definition of eligible participant.--In this 
     subsection, the term `eligible participant' means an 
     individual who receives assistance under the State program 
     funded under this part and satisfies the following 
     requirements:
       ``(i) The individual is enrolled in a postsecondary 2- or 
     4-year degree program or in a vocational educational training 
     program.
       ``(ii) During the period the individual participates in the 
     program, the individual maintains satisfactory academic 
     progress, as defined by the institution operating the 
     undergraduate postsecondary or vocational educational program 
     in which the individual is enrolled.
       ``(6) Required time periods for completion of degree or 
     vocational educational training program.--
       ``(A) In general.--Subject to subparagraph (B), an eligible 
     participant participating in a program established under this 
     subsection shall be required to complete the requirements of 
     a degree or vocational educational training program within 
     the normal timeframe for full-time students seeking the 
     particular degree or completing the vocational educational 
     training program.
       ``(B) Exception.--For good cause, the State may allow an 
     eligible participant to complete their degree requirements or 
     vocational educational training program within a period not 
     to exceed 1\1/2\ times the normal timeframe established under 
     subparagraph (A) (unless further modification is required by 
     the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 
     et seq.), or section 504 of the Rehabilitation Act of 1973 
     (29 U.S.C. 794)) and may modify the requirements applicable 
     to an individual participating in the program. For purposes 
     of the preceding sentence, good cause includes the case of an 
     eligible participant with 1 or more significant barriers to 
     normal participation, as determined by the State, such as the 
     need to care for a family member with special needs.
       ``(7) Support services described.--For purposes of 
     paragraph (1), the support services described in this 
     paragraph include any or all of the following during the 
     period the eligible participant is in the program established 
     under this subsection:
       ``(A) Child care.
       ``(B) Transportation services.
       ``(C) Payment for books and supplies.
       ``(D) Other services provided under policies determined by 
     the State to ensure coordination and lack of duplication with 
     other programs available to provide support services.
       ``(8) Rules for inclusion in monthly work participation 
     rates.--
       ``(A) Families counted as participating if they meet the 
     requirements of subparagraphs (b) or (c).--For each eligible 
     participant, a State may elect, for purposes of determining 
     monthly participation rates under section 407(b)(1)(B)(i), to 
     include such participant in the determination of such rates 
     in accordance with subparagraph (B) or (C).
       ``(B) Full or partial credit for hours of participation in 
     educational or related activities.--
       ``(i) In general.--Subject to clause (iv), an eligible 
     participant who participates in educational or related 
     activities (as determined by the State) under a program 
     established under this subsection shall be given credit for 
     the number of hours of such participation to the extent that 
     an adult recipient or minor child head of household would be 
     given credit under section 407(c) for being engaged in the 
     same number of hours of work activities described in 
     paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of 
     section 407(d).
       ``(ii) Related activities.--For purposes of clause (i), 
     related activities shall include--

       ``(I) work activities described in paragraph (1), (2), (3), 
     (4), (5), (6), (7), (8), or (12) of section 407(d);
       ``(II) work study, practicums, internships, clinical 
     placements, laboratory or field work, or such other 
     activities as will enhance the eligible participant's 
     employability in the participant's field of study, as 
     determined by the State; or
       ``(III) subject to clause (iii), study time.

       ``(iii) Limitation on inclusion of study time.--For 
     purposes of determining hours per week of participation by an 
     eligible participant under a program established under this 
     subsection, a State may not count study time of less than 1 
     hour for every hour of class time or more than 2 hours for 
     every hour of class time.
       ``(iv) Total number of hours limited to being counted as 1 
     family.--In no event may hours per week of participation by 
     an eligible participant under a program established under 
     this subsection be counted as more than 1 family for purposes 
     of determining monthly participation rates under section 
     407(b)(1)(B)(i).
       ``(C) Full credit for being engaged in direct work 
     activities for certain hours per week.--
       ``(i) In general.--A family that includes an eligible 
     participant who, in addition to complying with the full-time 
     educational participation requirements of the degree or 
     vocational educational training program they are enrolled in, 
     participates in an activity described in subclause (I), (II), 
     or (III) of subparagraph (B)(ii) for not less than the number 
     of hours required per week under clause (ii) shall be counted 
     as 1 family.
       ``(ii) Required hours per week.--For purposes of clause 
     (i), subject to clause (iii), the number of hours per week 
     are--

       ``(I) 6 hours per week during the first 12-month period 
     that an eligible participant participates in a program 
     established under this subsection;
       ``(II) 8 hours per week during the second 12-month period 
     of such participation;
       ``(II) 10 hours per week during the third 12-month period 
     of such participation; and
       ``(II) 12 hours per week during the fourth or any other 
     succeeding 12- month period of such participation.

       ``(iii) Modification of requirements for good cause.--A 
     State may modify the number of hours per week required under 
     clause (ii) for good cause. For purposes of the preceding 
     sentence, good cause includes the case of an eligible 
     participant with 1 or more significant barriers to normal 
     participation, as determined by the State, such as the need 
     to care for a family member with special needs.''.
       (2) Conforming amendment.--Section 407(d)(8) (42 U.S.C. 
     607(d)(8)) is amended by inserting ``other than an individual 
     participating in a program established under section 404(l)'' 
     after ``individual''.

     SEC. 108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.

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

     SEC. 109. WORK PARTICIPATION REQUIREMENTS.

       (a) Elimination of Separate Work Participation Rate for 2-
     Parent Families Beginning With Fiscal Year 2003.--
       (1) In general.--Section 407 (42 U.S.C. 607) is amended--
       (A) in subsection (a)--
       (i) in the heading, by striking ``Participation Rate 
     Requirements'' and all that follows through ``A State'' and 
     inserting ``Participation Rate Requirements.--A State''; and
       (ii) by striking paragraph (2);
       (B) in subsection (b)--
       (i) by striking paragraph (2);
       (ii) in paragraph (4), by striking ``paragraphs (1)(B) and 
     (2)(B)'' and inserting ``determining monthly participation 
     rates under paragraph (1)(B)''; and
       (iii) in paragraph (5), by striking ``rates'' and inserting 
     ``rate''; and
       (C) in subsection (c)--
       (i) in paragraph (1)--

       (I) by striking ``General rules.--'' and all that follows 
     through ``For purposes'' in subparagraph (A) and inserting 
     ``General rule.--For purposes''; and
       (II) by striking subparagraph (B); and

       (ii) in paragraph (2)(D)--

       (I) by striking ``paragraphs (1)(B)(i) and (2)(B) of 
     subsection (b)'' and inserting ``subsection (b)(1)(B)(i)''; 
     and
       (II) by striking ``and in 2-parent families, 
     respectively,''.

       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect as if enacted on October 1, 2002.
       (b) Minimum Participation Rates.--Section 407(a) (42 U.S.C. 
     607(a)), as amended by subsection (a)(1)(A), is amended to 
     read as follows:
       ``(a) Participation Rate Requirements.--
       ``(1) In general.--A State to which a grant is made under 
     section 403 for a fiscal year shall achieve a minimum 
     participation rate with respect to all families receiving 
     assistance under the State program funded under this part 
     that is equal to not less than--
       ``(A) 50 percent for fiscal year 2004;
       ``(B) 55 percent for fiscal year 2005;
       ``(C) 60 percent for fiscal year 2006;
       ``(D) 65 percent for fiscal year 2007; and
       ``(E) 70 percent for fiscal year 2008 and each succeeding 
     fiscal year.''.
       (c) Limitation on Reduction of Participation Rate Through 
     Application of Credits.--Section 407(a) (42 U.S.C. 607(b)), 
     as amended by subsection (b), is amended by adding at the end 
     the following:
       ``(2) Limitation on reduction of participation rate through 
     application of credits.--Notwithstanding any other provision 
     of this part, the net effect of any percentage reduction in 
     the minimum participation rate otherwise required under this 
     section with respect to families

[[Page 5421]]

     receiving assistance under the State program funded under 
     this part as a result of the application of any employment 
     credit, caseload reduction credit, or other credit against 
     such rate for a fiscal year, shall not exceed--
       ``(A) 40 percentage points, in the case of fiscal year 
     2004;
       ``(B) 35 percentage points, in the case of fiscal year 
     2005;
       ``(C) 30 percentage points, in the case of fiscal year 
     2006;
       ``(D) 25 percentage points, in the case of fiscal year 
     2007; or
       ``(E) 20 percentage points, in the case of fiscal year 2008 
     or any fiscal year thereafter.''.
       (d) Replacement of Caseload Reduction Credit With 
     Employment Credit.--
       (1) Employment credit to reward states in which families 
     leave welfare for work; additional credit for families with 
     higher earnings.--
       (A) In general.--Section 407(b) (42 U.S.C. 607(b)), as 
     amended by subsection (a)(1)(B)(i), is amended by inserting 
     after paragraph (1) the following:
       ``(2) Employment credit.--
       ``(A) In general.--Subject to subsection (a)(2), the 
     Secretary shall, by regulation, reduce the minimum 
     participation rate otherwise applicable to a State under this 
     subsection for a fiscal year by the number of percentage 
     points in the employment credit for the State for the fiscal 
     year, as determined by the Secretary--
       ``(i) using information in the National Directory of New 
     Hires;
       ``(ii) with respect to a recipient of assistance or former 
     recipient of assistance under the State program funded under 
     this part who is placed with an employer whose hiring 
     information is not reported to the National Directory of New 
     Hires, using quarterly wage information submitted by the 
     State to the Secretary not later than such date as the 
     Secretary shall prescribe in regulations; or
       ``(iii) with respect to families described in subclause 
     (II) or (III) of subparagraph (B)(ii), using such other data 
     as the Secretary may require in order to determine the 
     employment credit for a State under this paragraph.
       ``(B) Calculation of credit.--
       ``(i) In general.--The employment credit for a State for a 
     fiscal year is an amount equal to the sum of the amounts 
     determined under clause (ii), divided by the amount 
     determined under clause (iii).
       ``(ii) Numerator.--For purposes of clause (i), the amounts 
     determined under this clause are the following:

       ``(I) Twice the quarterly average unduplicated number of 
     families that include an adult or minor child head of 
     household recipient of assistance under the State program 
     funded under this part, that ceased to receive such 
     assistance for at least 2 consecutive months following the 
     date of the case closure for the family during the applicable 
     period (as defined in clause (v)), that did not receive 
     assistance under a separate State-funded program during such 
     2-month period, and that were employed during the calendar 
     quarter immediately succeeding the quarter in which the 
     assistance under the State program funded under this part 
     ceased.
       ``(II) At the option of the State, twice the quarterly 
     average number of families that received a nonrecurring 
     short-term benefit under the State program funded under this 
     part during the applicable period (as so defined), that were 
     employed during the calendar quarter immediately succeeding 
     the quarter in which the nonrecurring short-term benefit was 
     so received, and that earned at least $1,000 during the 
     applicable period (as so defined).
       ``(III) At the option of the State, twice the quarterly 
     average number of families that includes an adult who is 
     receiving substantial child care or transportation assistance 
     (as defined by the Secretary, in consultation with directors 
     of State programs funded under this part, which definition 
     shall specify for each type of assistance a threshold which 
     is a dollar value or a length of time over which the 
     assistance is received, and which takes account of large one-
     time transition payments)) during the applicable period (as 
     so defined).

       ``(iii) Denominator.--For purposes of clause (i), the 
     amount determined under this clause is the amount equal to 
     the sum of the following:

       ``(I) The average monthly number of families that include 
     an adult or minor child head of household who received 
     assistance under the State program funded under this part 
     during the applicable period (as defined under clause (v)).
       ``(II) If the State elected the option under clause 
     (ii)(II), twice the quarterly average number of families that 
     received a nonrecurring short-term benefit under the State 
     program funded under this part during the applicable period 
     (as so defined).
       ``(III) If the State elected the option under clause 
     (ii)(III), twice the quarterly average number of families 
     that includes an adult who is receiving substantial child 
     care or transportation assistance during the applicable 
     period (as so defined).

       ``(iv) Special rule for former recipients with higher 
     earnings.--In calculating the employment credit for a State 
     for a fiscal year, in the case of a family that includes an 
     adult or a minor child head of household that is to be 
     included in the amount determined under clause (ii)(I) and 
     that, with respect to the quarter in which the family's 
     earnings was examined during the applicable period, earned at 
     least 33 percent of the average quarterly earnings in the 
     State (determined on the basis of State unemployment data), 
     the family shall be considered to be 1.5 families.
       ``(v) Definition of applicable period.--For purposes of 
     this paragraph, the term `applicable period' means, with 
     respect to a fiscal year, the most recent 4 quarters for 
     which data are available to the Secretary providing 
     information on the work status of--

       ``(I) individuals in the quarter after the individuals 
     ceased receiving assistance under the State program funded 
     under this part;
       ``(II) at State option, individuals in the quarter after 
     the individuals received a short-term, nonrecurring benefit; 
     and
       ``(III) at State option, individuals in the quarter after 
     the individuals ceased receiving substantial child care or 
     transportation assistance.

       ``(C) Notification to state.--Not later than August 30 of 
     each fiscal year, the Secretary shall--
       ``(i) determine, on the basis of the applicable period, the 
     amount of the employment credit that will be used in 
     determining the minimum participation rate for a State under 
     subsection (a) for the immediately succeeding fiscal year; 
     and
       ``(ii) notify each State conducting a State program funded 
     under this part of the amount of the employment credit for 
     such program for the succeeding fiscal year.''.
       (B) Authority of secretary to use information in national 
     directory of new hires.--Section 453(i) (42 U.S.C. 653(i)) is 
     amended by adding at the end the following:
       ``(5) Calculation of employment credit for purposes of 
     determining state work participation rates under tanf.--The 
     Secretary may use the information in the National Directory 
     of New Hires for purposes of calculating State employment 
     credits pursuant to section 407(b)(2).''.
       (2) Elimination of caseload reduction credit.--Section 
     407(b) (42 U.S.C. 607(b)) is amended by striking paragraph 
     (3) and redesignating paragraphs (4) and (5) as paragraphs 
     (3) and (4), respectively.
       (3) Effective dates.--
       (A) In general.--Except as provided in subparagraphs (B) 
     and (C), the amendments made by this subsection shall take 
     effect on October 1, 2005.
       (B) State option to phase-in replacement of caseload 
     reduction credit with employment credit and delay 
     applicability of other provisions.--A State may elect to have 
     the amendments made by this subsection not apply to the State 
     program funded under part A of title IV of the Social 
     Security Act until October 1, 2006, and if the State makes 
     the election, then, in determining the participation rate of 
     the State for purposes of section 407 of the Social Security 
     Act for fiscal year 2006, the State shall be credited with 
     \1/2\ of the reduction in the rate that would otherwise 
     result from applying section 407(b)(2) of the Social Security 
     Act (as added by paragraph (1)(A)) to the State for fiscal 
     year 2006 and \1/2\ of the reduction in the rate that would 
     otherwise result from applying section 407(b)(3) of the 
     Social Security Act (as in effect with respect to fiscal year 
     2003) to the State for fiscal year 2006.
       (C) Authority to use information in the national directory 
     of new hires.--The amendment made by paragraph (1)(B) shall 
     take effect on October 1, 2003.
       (e) State Options for Participation Requirement 
     Exemptions.--Section 407(b)(4) (42 U.S.C. 607(b)(4)), as 
     amended by subsection (a)(1)(B)(iii) and redesignated by 
     subsection (d)(2), is amended to read as follows:
       ``(4) State options for participation requirement 
     exemptions.--At the option of a State, a State may, on a 
     case-by-case basis--
       ``(A) not include a family in the determination of the 
     monthly participation rate for the State in the first month 
     for which the family receives assistance from the State 
     program funded under this part on the basis of the most 
     recent application for such assistance; or
       ``(B) not require a family in which the youngest child has 
     not attained 12 months of age to engage in work, and may 
     disregard that family in determining the minimum 
     participation rate under subsection (a) for the State for not 
     more than 12 months.''.
       (f) Determination of Countable Hours Engaged in Work.--
       (1) In general.--Section 407(c) (42 U.S.C. 607(c)) is 
     amended to read as follows:
       ``(c) Determination of Countable Hours Engaged in Work.--
       ``(1) Single parent or relative with a child over age 6.--
       ``(A) Minimum average number of hours per week.--Subject to 
     the succeeding paragraphs of this subsection, a family in 
     which an adult recipient or minor child head of household in 
     the family is participating in work activities described in 
     subsection (d) shall be treated as engaged in work for 
     purposes of determining monthly participation rates under 
     subsection (b)(1)(B)(i) as follows:
       ``(i) In the case of a family in which the total number of 
     hours in which any adult recipient or minor child head of 
     household in the family is participating in such work 
     activities for an average of at least 20, but less than 24, 
     hours per week in a month, as 0.675 of a family.
       ``(ii) In the case of a family in which the total number of 
     hours in which any adult recipient or minor child head of 
     household in the family is participating in such work 
     activities for an average of at least 24, but less than 30, 
     hours per week in a month, as 0.75 of a family.
       ``(iii) In the case of a family in which the total number 
     of hours in which any adult recipient or minor child head of 
     household in the family is participating in such work 
     activities for an

[[Page 5422]]

     average of at least 30, but less than 34, hours per week in a 
     month, as 0.875 of a family.
       ``(iv) In the case of a family in which the total number of 
     hours in which any adult recipient or minor child head of 
     household in the family is participating in such work 
     activities for an average of at least 34, but less than 35, 
     hours per week in a month, as 1 family.
       ``(v) In the case of a family in which the total number of 
     hours in which any adult recipient or minor child head of 
     household in the family is participating in such work 
     activities for an average of at least 35, but less than 38, 
     hours per week in a month, as 1.05 families.
       ``(vi) In the case of a family in which the total number of 
     hours in which any adult recipient or minor child head of 
     household in the family is participating in such work 
     activities for an average of at least 38 hours per week in a 
     month, as 1.08 families.
       ``(B) Direct work activities required for an average of 24 
     hours per week.--Except as provided in subparagraph (C)(i), a 
     State may not count any hours of participation in work 
     activities specified in paragraph (9), (10), or (11) of 
     subsection (d) of any adult recipient or minor child head of 
     household in a family before the total number of hours of 
     participation by any adult recipient or minor child head of 
     household in the family in work activities described in 
     paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of 
     subsection (d) for the family for the month averages at least 
     24 hours per week.
       ``(C) State flexibility to count participation in certain 
     activities.--
       ``(i) Qualified activities for 3-months in any 24-month 
     period.--

       ``(I) 24-hours per week required.--Subject to subclauses 
     (III) and (IV), for purposes of determining hours under 
     subparagraph (A), a State may count the total number of hours 
     any adult recipient or minor child head of household in a 
     family engages in qualified activities described in subclause 
     (II) as a work activity described in subsection (d), without 
     regard to whether the recipient has satisfied the requirement 
     of subparagraph (B), but only if--

       ``(aa) the total number of hours of participation in such 
     qualified activities for the family for the month average at 
     least 24 hours per week; and
       ``(bb) engaging in such qualified activities is a 
     requirement of the family self-sufficiency plan.

       ``(II) Qualified activities described.--For purposes of 
     subclause (I), qualified activities described in this 
     subclause are any of the following:

       ``(aa) Postsecondary education.
       ``(bb) Adult literacy programs or activities.
       ``(cc) Substance abuse counseling or treatment.
       ``(dd) Programs or activities designed to remove barriers 
     to work, as defined by the State.
       ``(ee) Work activities authorized under any waiver for any 
     State that was continued under section 415 before the date of 
     enactment of the Personal Responsibility and Individual 
     Development for Everyone Act.

       ``(III) Limitation.--Except as provided in clause (ii), 
     subclause (I) shall not apply to a family for more than 3 
     months in any period of 24 consecutive months.
       ``(IV) Certain activities.--The Secretary may allow a State 
     to count the total hours of participation in qualified 
     activities described in subclause (II) for an adult recipient 
     or minor child head of household without regard to the 
     minimum 24 hour average per week of participation requirement 
     under subclause (I) if the State has demonstrated 
     conclusively that such activity is part of a substantial and 
     supervised program whose effectiveness in moving families to 
     self-sufficiency is superior to any alternative activity and 
     the effectiveness of the program in moving families to self-
     sufficiency would be substantially impaired if participating 
     individuals participated in additional, concurrent qualified 
     activities that enabled the individuals to achieve an average 
     of at least 24 hours per week of participation.

       ``(ii) Additional 3-month period permitted for certain 
     activities.--

       ``(I) Self-sufficiency plan requirement combined with 
     minimum number of hours.--A State may extend the 3-month 
     period under clause (i) for an additional 3 months in the 
     same period of 24 consecutive months in the case of an adult 
     recipient or minor child head of household who is receiving 
     qualified rehabilitative services described in subclause (II) 
     if--

       ``(aa) the total number of hours that the adult recipient 
     or minor child head of household engages in such qualified 
     rehabilitative services and, subject to subclause (III), a 
     work activity described in paragraph (1), (2), (3), (4), (5), 
     (6), (7), (8), or (12) of subsection (d) for the month 
     average at least 24 hours per week; and
       ``(bb) engaging in such qualified rehabilitative services 
     is a requirement of the family self-sufficiency plan.

       ``(II) Qualified rehabilitative services described.--For 
     purposes of subclause (I), qualified rehabilitative services 
     described in this subclause are any of the following:

       ``(aa) Adult literacy programs or activities.
       ``(bb) Participation in a program designed to increase 
     proficiency in the English language.
       ``(cc) In the case of an adult recipient or minor child 
     head of household who has been certified by a qualified 
     medical, mental health, or social services professional (as 
     defined by the State) as having a physical or mental 
     disability, substance abuse problem, or other problem that 
     requires a rehabilitative service, substance abuse treatment, 
     or mental health treatment, the service or treatment 
     determined necessary by the professional.

       ``(III) Nonapplication of limitations on job search and 
     vocational educational training.--An adult recipient or minor 
     child head of household who is receiving qualified 
     rehabilitative services described in subclause (II) may 
     engage in a work activity described in paragraph (6) or (8) 
     of subsection (d) for purposes of satisfying the minimum 24 
     hour average per week of participation requirement under 
     subclause (I)(aa) without regard to any limit that otherwise 
     applies to the activity (including the 30 percent limitation 
     on participation in vocational educational training under 
     paragraph (6)(C)).

       ``(iii) Hours in excess of an average of 24 work activity 
     hours per week.--If the total number of hours that any adult 
     recipient or minor child head of household in a family has 
     participated in a work activity described in paragraph (1), 
     (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d) 
     averages at least 24 hours per week in a month, a State, for 
     purposes of determining hours under subparagraph (A), may 
     count any hours an adult recipient or minor child head of 
     household in the family engages in--

       ``(I) any work activity described in subsection (d), 
     without regard to any limit that otherwise applies to the 
     activity (including the 30 percent limitation on 
     participation in vocational educational training under 
     paragraph (6)(C)); and
       ``(II) any qualified activity described in clause (i)(II), 
     as a work activity described in subsection (d).

       ``(2) Single parent or relative with a child under age 6.--
       ``(A) In general.--A family in which an adult recipient or 
     minor child head of household in the family is the only 
     parent or caretaker relative in the family of a child who has 
     not attained 6 years of age and who is participating in work 
     activities described in subsection (d) shall be treated as 
     engaged in work for purposes of determining monthly 
     participation rates under subsection (b)(1)(B)(i) as follows:
       ``(i) In the case of such a family in which the total 
     number of hours in which the adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 20, but less than 24, 
     hours per week in a month, as 0.675 of a family.
       ``(ii) In the case of such a family in which the total 
     number of hours in which the adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 24, but less than 35, 
     hours per week in a month, as 1 family.
       ``(iii) In the case of such a family in which the total 
     number of hours in which the adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 35, but less than 38, 
     hours per week in a month, as 1.05 families.
       ``(iv) In the case of such a family in which the total 
     number of hours in which the adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 38 hours per week in a 
     month, as 1.08 families.
       ``(B) Application of rules regarding direct work activities 
     and state flexibility to count participation in certain 
     activities.--Subparagraphs (B) and (C) of paragraph (1) apply 
     to a family described in subparagraph (A) in the same manner 
     as such subparagraphs apply to a family described in 
     paragraph (1)(A).
       ``(3) 2-parent families.--
       ``(A) In general.--Subject to paragraph (6)(A), a 2-parent 
     family in which an adult recipient or minor child head of 
     household in the family is participating in work activities 
     described in subsection (d) shall be treated as engaged in 
     work for purposes of determining monthly participation rates 
     under subsection (b)(1)(B)(i) as follows:
       ``(i) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 26, but less than 30, 
     hours per week in a month, as 0.675 of a family.
       ``(ii) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 30, but less than 35, 
     hours per week in a month, as 0.75 of a family.
       ``(iii) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 35, but less than 39, 
     hours per week in a month, as 0.875 of a family.
       ``(iv) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 39, but less than 40, 
     hours per week in a month, as 1 family.
       ``(v) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 40, but less than 43, 
     hours per week in a month, as 1.05 families.
       ``(vi) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 43 hours per week in a 
     month, as 1.08 families.
       ``(B) Application of rules regarding direct work activities 
     and state flexibility to count participation in certain 
     activities.--Subparagraphs (B) and (C) of paragraph

[[Page 5423]]

     (1) apply to a 2-parent family described in subparagraph (A) 
     in the same manner as such subparagraphs apply to a family 
     described in paragraph (1)(A), except that subparagraph (B) 
     of paragraph (1) shall be applied to a such a 2-parent family 
     by substituting `34' for `24' each place it appears.
       ``(4) 2-parent families that receive federally funded child 
     care.--
       ``(A) In general.--Subject to paragraph (6)(A), if a 2-
     parent family receives federally funded child care 
     assistance, an adult recipient or minor child head of 
     household in the family participating in work activities 
     described in subsection (d) shall be treated as engaged in 
     work for purposes of determining monthly participation rates 
     under subsection (b)(1)(B)(i) as follows:
       ``(i) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 40, but less than 45, 
     hours per week in a month, as 0.675 of a family.
       ``(ii) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 45, but less than 51, 
     hours per week in a month, as 0.75 of a family.
       ``(iii) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 51, but less than 55, 
     hours per week in a month, as 0.875 of a family.
       ``(iv) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 55, but less than 56, 
     hours per week in a month, as 1 family.
       ``(v) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 56, but less than 59, 
     hours per week in a month, as 1.05 families.
       ``(vi) In the case of such a family in which the total 
     number of hours in which any adult recipient or minor child 
     head of household in the family is participating in such work 
     activities for an average of at least 59 hours per week in a 
     month, as 1.08 families.
       ``(B) Application of rules regarding direct work activities 
     and state flexibility to count participation in certain 
     activities.--Subparagraphs (B) and (C) of paragraph (1) apply 
     to a 2-parent family described in subparagraph (A) in the 
     same manner as such subparagraphs apply to a family described 
     in paragraph (1)(A), except that subparagraph (B) of 
     paragraph (1) shall be applied to a such a 2-parent family by 
     substituting `50' for `24' each place it appears.
       ``(5) Calculation of hours per week.--The number of hours 
     per week that a family is engaged in work is the quotient 
     of--
       ``(A) the total number of hours per month that the family 
     is engaged in work; divided by
       ``(B) 4.
       ``(6) Special rules.--
       ``(A) Family with a disabled parent not treated as a 2-
     parent family.--A family that includes a disabled parent 
     shall not be considered a 2-parent family for purposes of 
     paragraph (3) or (4).
       ``(B) Number of weeks for which job search counts as 
     work.--An individual shall not be considered to be engaged in 
     work for a month by virtue of participation in an activity 
     described in subsection (d)(6) of a State program funded 
     under this part, after the individual has participated in 
     such an activity for 6 weeks (or, if the unemployment rate of 
     the State is at least 50 percent greater than the 
     unemployment rate of the United States, or the State meets 
     the criteria of subclause (I), (II), or (III) of section 
     403(b)(3)(A)(iii) or satisfies the applicable duration 
     requirement of section 403(b)(3)(B)), 12 weeks).
       ``(C) Single teen head of household or married teen who 
     maintains satisfactory school attendance deemed to count as 1 
     family.--For purposes of determining hours under the 
     preceding paragraphs of this subsection, with respect to a 
     month, a State shall count a recipient who is married or a 
     head of household and who has not attained 20 years of age as 
     1 family if the recipient--
       ``(i) maintains satisfactory attendance at secondary school 
     or the equivalent during the month; or
       ``(ii) participates in education directly related to 
     employment for an average of at least 20 hours per week 
     during the month.
       ``(D) Limitation on number of persons who may be treated as 
     engaged in work by reason of participation in educational 
     activities.--Except as provided in paragraph (1)(C)(ii)(I), 
     for purposes of subsection (b)(1)(B)(i), not more than 30 
     percent of the number of individuals in all families in a 
     State who are treated as engaged in work for a month may 
     consist of individuals who are--
       ``(i) determined (without regard to individuals 
     participating in a program established under section 404(l)) 
     to be engaged in work for the month by reason of 
     participation in vocational educational training (but only 
     with respect to such training that does not exceed 12 months 
     with respect to any individual); or
       ``(ii) deemed to be engaged in work for the month by reason 
     of subparagraph (C) of this paragraph.
       ``(E) State option to deem single parent caring for a child 
     or adult dependent for care with a physical or mental 
     impairment to be meeting all or part of a family's work 
     participation requirements for a month.--
       ``(i) In general.--A State may count the number of hours 
     per week that an adult recipient or minor child head of 
     household who is the only parent or caretaker relative for a 
     child or adult dependent for care with a physical or mental 
     impairment engages in providing substantial ongoing care for 
     such child or adult dependent for care if the State 
     determines that--

       ``(I) the child or adult dependent for care has been 
     verified through a medically acceptable clinical or 
     diagnostic technique as having a significant physical or 
     mental impairment or combination of impairments that require 
     substantial ongoing care;
       ``(II) the adult recipient or minor child head of household 
     providing such care is the most appropriate means, as 
     determined by the State, by which such care can be provided 
     to the child or adult dependent for care;
       ``(III) for each month in which this subparagraph applies 
     to the adult recipient or minor child head of household, the 
     adult recipient or minor child head of household is in 
     compliance with the requirements of the family's self-
     sufficiency plan; and
       ``(IV) the recipient is unable to participate fully in work 
     activities, after consideration of whether there are supports 
     accessible and available to the family for the care of the 
     child or adult dependent for care.

       ``(ii) Total number of hours limited to being counted as 1 
     family.--In no event may a family that includes a recipient 
     to which clause (i) applies be counted as more than 1 family 
     for purposes of determining monthly participation rates under 
     subsection (b)(1)(B)(i).
       ``(iii) State requirements.--In the case of a recipient to 
     which clause (i) applies, the State shall--

       ``(I) conduct regular, periodic evaluations of the family 
     of the adult recipient or minor child head of household; and
       ``(II) include as part of the family's self-sufficiency 
     plan, regular updates on what special needs of the child or 
     the adult dependent for care, including substantial ongoing 
     care, could be accommodated either by individuals other than 
     the adult recipient or minor child head of household outside 
     of the home.

       ``(iv) Rule of construction.--Nothing in this subparagraph 
     shall be construed as prohibiting a State from including in a 
     recipient's self-sufficiency plan a requirement to engage in 
     work activities described in subsection (d).
       ``(F) Optional modification of work requirements for 
     recipients residing in areas of indian country or an alaskan 
     native village with high joblessness.--If a State has 
     included in the State plan a description of the State's 
     policies in areas of Indian country or an Alaskan Native 
     village described in section 408(a)(7)(D), the State may 
     define the activities that the State will treat as being work 
     activities described in subsection (d) that a recipient who 
     resides in such an area and who is participating in such 
     activities in accordance with a self-sufficiency plan under 
     section 408(b) may engage in for purposes of satisfying work 
     requirements under the State program and for purposes of 
     determining monthly participation rates under subsection 
     (b)(1)(B)(i).''.
       (2) Conforming amendment relating to authority to deem 
     single parent of a child or adult dependent for care with a 
     physical or mental impairment deemed to be meeting all or 
     part of a family's work participation requirements for a 
     month.--Section 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)), as 
     amended by section 101(a)(1)(B), is amended by adding at the 
     end the following:
       ``(vi) The document shall set forth the criteria for 
     applying section 407(c)(6)(E) to an adult recipient or minor 
     child head of household who is the only parent or caretaker 
     relative for a child or adult dependent for care.''.

     SEC. 110. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY 
                   PLAN REQUIREMENTS; OTHER PROHIBITIONS AND 
                   REQUIREMENTS.

       (a) Universal Engagement and Family Self-Sufficiency Plan 
     Requirements.--
       (1) Modification of state plan requirements.--Section 
     402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by striking 
     clauses (ii) and (iii) and inserting the following:
       ``(ii) Require a parent or caretaker receiving assistance 
     under the program to engage in work or alternative self-
     sufficiency activities (as defined by the State), consistent 
     with section 407(e)(2).
       ``(iii) Require families receiving assistance under the 
     program to engage in activities in accordance with family 
     self-sufficiency plans developed pursuant to section 
     408(b).''.
       (2) Establishment of family self-sufficiency plans.--
       (A) In general.--Section 408(b) (42 U.S.C. 608(b)) is 
     amended to read as follows:
       ``(b) Family Self-Sufficiency Plans.--
       ``(1) In general.--A State to which a grant is made under 
     section 403 shall--
       ``(A) make an initial screening and assessment, in the 
     manner deemed appropriate by the State, of the skills, prior 
     work experience, education obtained, work readiness, barriers 
     to work, and employability of each adult or minor child head 
     of household recipient of assistance in the family who--
       ``(i) has attained age 18; or
       ``(ii) has not completed high school or obtained a 
     certificate of high school equivalency and is not attending 
     secondary school;

[[Page 5424]]

       ``(B) assess, in the manner deemed appropriate by the 
     State, the work support and other assistance and family 
     support services for which each family receiving assistance 
     is eligible; and
       ``(C) assess, in the manner deemed appropriate by the 
     State, the well-being of the children in the family, and, 
     where appropriate, activities or resources to improve the 
     well-being of the children.
       ``(2) Contents of plans.--The State shall, in the manner 
     deemed appropriate by the State--
       ``(A) establish for each family that includes an individual 
     described in paragraph (1)(A), in consultation as the State 
     deems appropriate with the individual, a self-sufficiency 
     plan that--
       ``(i) specifies activities described in the State plan 
     submitted pursuant to section 402, including work activities 
     described in paragraph (1), (2), (3), (4), (5), (6), (7), 
     (8), or (12) of section 407(d), as appropriate;
       ``(ii) is designed to assist the family in achieving their 
     maximum degree of self-sufficiency, and
       ``(iii) provides for the ongoing participation of the 
     individual in the activities specified in the plan;
       ``(B) requires, at a minimum, each such individual to 
     participate in activities in accordance with the self-
     sufficiency plan;
       ``(C) sets forth the appropriate supportive services the 
     State intends to provide for the family;
       ``(D) establishes for the family a plan that addresses the 
     issue of child well-being and, when appropriate, adolescent 
     well-being, and that may include services such as domestic 
     violence counseling, mental health referrals, and parenting 
     courses; and
       ``(E) includes a section designed to assist the family by 
     informing the family, in such manner as deemed appropriate by 
     the State, of the work support and other assistance for which 
     the family may be eligible including (but not limited to)--
       ``(i) the food stamp program established under the Food 
     Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
       ``(ii) the medicaid program funded under title XIX;
       ``(iii) the State children's health insurance program 
     funded under title XXI;
       ``(iv) Federal or State funded child care, including child 
     care funded under the Child Care Development Block Grant Act 
     of 1990 (42 U.S.C. 9858 et seq.) and funds made available 
     under this title or title XX;
       ``(v) the earned income tax credit under section 32 of the 
     Internal Revenue Code of 1986;
       ``(vi) the low-income home energy assistance program 
     established under the Low-Income Home Energy Assistance Act 
     of 1981 (42 U.S.C. 8621 et seq.);
       ``(vii) the special supplemental nutrition program for 
     women, infants, and children established under section 17 of 
     the Child Nutrition Act of 1966 (42 U.S.C. 1786);
       ``(viii) programs conducted under the Workforce Investment 
     Act of 1998 (29 U.S.C. 2801 et seq.); and
       ``(ix) low-income housing assistance programs.
       ``(3) Review.--
       ``(A) Regular review.--A State to which a grant is made 
     under section 403 shall--
       ``(i) monitor the participation of each adult recipient or 
     minor child head of household in the activities specified in 
     the self-sufficiency plan, and regularly review the progress 
     of the family toward self-sufficiency; and
       ``(ii) upon such a review, revise the plan and activities 
     required under the plan as the State deems appropriate in 
     consultation with the family.
       ``(B) Prior to the imposition of a sanction.--Prior to 
     imposing a sanction against an adult recipient, minor child 
     head of household, or a family for failure to comply with a 
     requirement of the self-sufficiency plan or the State program 
     funded under this part, the State shall, to the extent 
     determined appropriate by the State--
       ``(i) review the self-sufficiency plan; and
       ``(ii) make a good faith effort (as defined by the State) 
     to consult with the family.
       ``(4) State discretion.--A State shall have sole 
     discretion, consistent with section 407, to define and design 
     activities for families for purposes of this subsection, to 
     develop methods for monitoring and reviewing progress 
     pursuant to this subsection, and to make modifications to the 
     plan as the State deems appropriate to assist the individual 
     in increasing their degree of self-sufficiency.
       ``(5) Application to partially-sanctioned families.--The 
     requirements of this subsection shall apply in the case of a 
     family that includes an adult or minor child head of 
     household recipient of assistance who is subject to a partial 
     sanction.
       ``(6) Timing.--The State shall initiate screening and 
     assessment and the establishment of a family self-sufficiency 
     plan in accordance with the requirements of this subsection--
       ``(A) in the case of a family that, as of the date of 
     enactment of the Personal Responsibility and Individual 
     Development for Everyone Act, is not receiving assistance 
     from the State program funded under this part, not later than 
     the later of--
       ``(i) 1 year after such date of enactment; or
       ``(ii) 60 days after the family first receives assistance 
     on the basis of the most recent application for assistance; 
     and
       ``(B) in the case of a family that, as of such date, is 
     receiving assistance under the State program funded under 
     this part, not later than 1 year after such date of 
     enactment.
       ``(7) Rule of interpretation.--Nothing in this subsection 
     shall preclude a State from--
       ``(A) requiring participation in work and any other 
     activities the State deems appropriate for helping families 
     achieve self-sufficiency and improving child well-being; or
       ``(B) using job search or other appropriate job readiness 
     or work activities to assess the employability of individuals 
     and to determine appropriate future engagement activities.''.
       (B) Penalty for failure to comply with family self-
     sufficiency plan requirements.--
       (i) In general.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is 
     amended--

       (I) in the paragraph heading, by inserting ``or comply with 
     family self-sufficiency plan requirements'' after ``rates'';
       (II) in subparagraph (A), by inserting ``or 408(b)'' after 
     ``407(a)''; and
       (III) by striking subparagraph (C) and inserting the 
     following:

       ``(C) Penalty based on severity of failure.--
       ``(i) Failure to satisfy minimum participation rate.--If, 
     with respect to fiscal year 2005 or any fiscal year 
     thereafter, the Secretary finds that a State has failed or is 
     failing to substantially comply with the requirements of 
     section 407(a) for that fiscal year, the Secretary shall 
     impose reductions under subparagraph (A) with respect to the 
     immediately succeeding fiscal year based on the degree of 
     substantial noncompliance. In assessing the degree of 
     substantial noncompliance under section 407(a) for a fiscal 
     year, the Secretary shall take into account factors such as--

       ``(I) the degree to which the State missed the minimum 
     participation rate for that fiscal year;
       ``(II) the change in the number of individuals who are 
     engaged in work in the State since the prior fiscal year; and
       ``(III) the number of consecutive fiscal years in which the 
     State failed to reach the minimum participation rate.

       ``(ii) Failure to comply with self-sufficiency plan 
     requirements.--If, with respect to fiscal year 2005 or any 
     fiscal year thereafter, the Secretary finds that a State has 
     failed or is failing to substantially comply with the 
     requirements of section 408(b) for that fiscal year, the 
     Secretary shall impose reductions under subparagraph (A) with 
     respect to the immediately succeeding fiscal year based on 
     the degree of substantial noncompliance. In assessing the 
     degree of substantial noncompliance under section 408(b), the 
     Secretary shall take into account factors such as--

       ``(I) the number or percentage of families for which a 
     self-sufficiency plan is not established in a timely fashion 
     for that fiscal year;
       ``(II) the duration of the delays in establishing a self-
     sufficiency plan during that fiscal year;
       ``(III) whether the failures are isolated and nonrecurring; 
     and
       ``(IV) the existence of systems designed to ensure that 
     self-sufficiency plans are established for all families in a 
     timely fashion and that families' progress under such plans 
     is monitored.

       ``(iii) Authority to reduce the penalty.--The Secretary may 
     reduce the penalty that would otherwise apply under this 
     paragraph if the substantial noncompliance is due to 
     circumstances that caused the State to meet the criteria of 
     subclause (I), (II), or (III) of section 403(b)(3)(A)(iii) or 
     to satisfy the applicable duration requirement of section 
     403(b)(3)(B) during the fiscal year, or if the noncompliance 
     is due to extraordinary circumstances such as a natural 
     disaster or regional recession. The Secretary shall provide a 
     written report to Congress to justify any waiver or penalty 
     reduction due to such extraordinary circumstances.''.
       (ii) Effective date.--The amendments made by this 
     subparagraph take effect on October 1, 2004.
       (3) GAO evaluation and report.--Not later than September 
     30, 2005, the Comptroller General of the United States shall 
     submit a report to the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate evaluating the implementation of the universal 
     engagement provisions under the temporary assistance to needy 
     families program under part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.), as added by the 
     amendments made by this subsection.
       (4) Rules of Construction.--Nothing in this subsection or 
     the amendments made by this subsection shall be construed--
       (A) as establishing a private right or cause of action 
     against a State for failure to comply with the requirements 
     imposed under this subsection or the amendments made by this 
     subsection; or
       (B) as limiting claims that may be available under other 
     Federal or State laws.
       (b) Transitional Compliance for Teen Parents.--
       (1) In general.--Section 408(a)(5) (42 U.S.C. 608(a)(5)) is 
     amended--
       (A) in subparagraph (A)(i), by striking ``subparagraph 
     (B)'' and inserting ``subparagraphs (B) and (C)''; and
       (B) by adding at the end the following:
       ``(C) Authority to provide temporary assistance.--A State 
     may use any part of a grant made under section 403 to provide 
     assistance to an individual described in clause (ii) of 
     subparagraph (A) who would otherwise be prohibited from 
     receiving such assistance under clause (i) of that 
     subparagraph, subparagraph (B), or section 408(a)(4) for not 
     more than a single 60-day period in order to assist the 
     individual in meeting the requirement of clause (i) of 
     subparagraph (A), subparagraph (B), or section 408(a)(4) for 
     receipt of such assistance.''.

[[Page 5425]]

       (2) Inclusion of transitional living youth projects as a 
     form of adult-supervised setting.--Clause (i) of section 
     408(a)(5)(A) (42 U.S.C. 608(a)(5)(A)(i)), as amended by 
     paragraph (1), is amended--
       (A) by striking ``do not reside in a place of'' and 
     inserting ``do not reside in a--

       ``(I) place of'';

       (B) by striking the period and inserting ``; or''; and
       (C) by adding at the end the following:

       ``(II) transitional living youth project funded under a 
     grant made under section 321 of the Runaway and Homeless 
     Youth Act (42 U.S.C. 5714-1).''.

     SEC. 111. PENALTIES.

       Section 409(a)(7) (42 U.S.C. 609(a)(7)), as amended by 
     section 3(g) of the Welfare Reform Extension Act of 2003 
     (Public Law 108-040, 117 Stat. 837) is amended--
       (1) in subparagraph (A) by striking ``fiscal year 1998, 
     1999, 2000, 2001, 2002, 2003, or 2004'' and inserting 
     ``fiscal year 2004, 2005, 2006, 2007, 2008, or 2009''; and
       (2) in subparagraph (B)(ii)--
       (A) by inserting ``preceding'' before ``fiscal year''; and
       (B) by striking ``for fiscal years 1997 through 2003,''.

     SEC. 112. DATA COLLECTION AND REPORTING.

       (a) Contents of Report.--Section 411(a)(1)(A) (42 U.S.C. 
     611(a)(1)(A)) is amended--
       (1) in the matter preceding clause (i), by inserting ``and 
     on families receiving assistance under State programs funded 
     with other qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i))'' before the colon;
       (2) in clause (vii), by inserting ``and minor parent'' 
     after ``of each adult'';
       (3) in clause (viii), by striking ``and educational 
     level'';
       (4) in clause (ix), by striking ``, and if the latter 2, 
     the amount received'';
       (5) in clause (x)--
       (A) by striking ``each type of''; and
       (B) by inserting before the period ``and, if applicable, 
     the reason for receipt of the assistance for a total of more 
     than 60 months'';
       (6) in clause (xi), by striking subclauses (I) through 
     (VII) and inserting the following:

       ``(I) Subsidized private sector employment.
       ``(II) Unsubsidized employment.
       ``(III) Public sector employment, supervised work 
     experience, or supervised community service.
       ``(IV) On-the-job training.
       ``(V) Job search and placement.
       ``(VI) Training.
       ``(VII) Education.
       ``(VIII) Other activities directed at the purposes of this 
     part, as specified in the State plan submitted pursuant to 
     section 402.'';

       (7) in clause (xii), by inserting ``and progress toward 
     universal engagement'' after ``participation rates'';
       (8) in clause (xiii), by striking ``type and'' before 
     ``amount of assistance'';
       (9) in clause (xvi), by striking subclause (II) and 
     redesignating subclauses (III) through (V) as subclauses (II) 
     through (IV), respectively; and
       (10) by adding at the end the following:
       ``(xviii) The date the family first received assistance 
     from the State program on the basis of the most recent 
     application for such assistance.
       ``(xix) Whether a self-sufficiency plan is established for 
     the family in accordance with section 408(b).
       ``(xx) With respect to any child in the family, the marital 
     status of the parents at the birth of the child, and if the 
     parents were not then married, whether the paternity of the 
     child has been established.''.
       (b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 
     611(a)(1)(B)) is amended--
       (1) in clause (i)--
       (A) by striking ``a sample'' and inserting ``samples''; and
       (B) by inserting before the period ``, except that the 
     Secretary may designate core data elements that must be 
     reported on all families''; and
       (2) in clause (ii), by striking ``funded under this part'' 
     and inserting ``described in subparagraph (A)''.
       (c) Report on Families That Become Ineligible To Receive 
     Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
       (1) by striking paragraph (5);
       (2) by redesignating paragraph (6) as paragraph (5); and
       (3) by inserting after paragraph (5) (as so redesignated) 
     the following:
       ``(6) Report on families that become ineligible to receive 
     assistance.--The report required by paragraph (1) for a 
     fiscal quarter shall include for each month in the quarter 
     the number of families and total number of individuals that, 
     during the month, became ineligible to receive assistance 
     under the State program funded under this part (broken down 
     by the number of families that become so ineligible due to 
     earnings, changes in family composition that result in 
     increased earnings, sanctions, time limits, or other 
     specified reasons).''.
       (d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) 
     is amended--
       (1) by inserting ``and to collect the necessary data'' 
     before ``with respect to which reports'';
       (2) by striking ``subsection'' and inserting ``section''; 
     and
       (3) by striking ``in defining the data elements'' and all 
     that follows and inserting ``, the National Governors' 
     Association, the American Public Human Services Association, 
     the National Conference of State Legislatures, and others in 
     defining the data elements.''.
       (e) Additional Reports by States.--Section 411 (42 U.S.C. 
     611) is amended--
       (1) by redesignating subsection (b) as subsection (e); and
       (2) by inserting after subsection (a) the following:
       ``(b) Annual Reports on Program Characteristics.--Not later 
     than 90 days after the end of fiscal year 2004 and each 
     succeeding fiscal year, each eligible State shall submit to 
     the Secretary a report on the characteristics of the State 
     program funded under this part and other State programs 
     funded with qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i)). The report shall include, with 
     respect to each such program, the program name, a description 
     of program activities, the program purpose, the program 
     eligibility criteria, the sources of program funding, the 
     number of program beneficiaries, sanction policies, and any 
     program work requirements.
       ``(c) Monthly Reports on Caseload.--Not later than 3 months 
     after the end of each calendar month that begins 1 year or 
     more after the date of enactment of this subsection, each 
     eligible State shall submit to the Secretary a report on the 
     number of families and total number of individuals receiving 
     assistance in the calendar month under the State program 
     funded under this part and under other State programs funded 
     with qualified State expenditures (as defined in section 
     409(a)(7)(B)(i)).
       ``(d) Annual Report on Performance Improvement.--Beginning 
     with fiscal year 2005, not later than January 1 of each 
     fiscal year, each eligible State shall submit to the 
     Secretary a report on achievement and improvement during the 
     preceding fiscal year under the performance goals and 
     measures under the State program funded under this part with 
     respect to each of the matters described in section 
     402(a)(1)(A)(v).''.
       (f) Annual Reports to Congress by the Secretary.--Section 
     411(e) (42 U.S.C. 611(e)), as so redesignated by subsection 
     (e) of this section, is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``and each fiscal year thereafter'' and inserting ``and not 
     later than July 1 of each fiscal year thereafter'';
       (2) in paragraph (2), by striking ``families applying for 
     assistance,'' and by striking the last comma; and
       (3) in paragraph (3), by inserting ``and other programs 
     funded with qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i))'' before the semicolon.

     SEC. 113. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

       (a) Funding for Tribal TANF programs.--
       (1) Reauthorization of tribal family assistance grants.--
     Section 412(a)(1)(A) (42 U.S.C. 612(a)(1)(A)), as amended by 
     section 3(h) of the Welfare Reform Extension Act of 2003, is 
     amended by striking ``1997, 1998, 1999, 2000, 2001, 2002, and 
     2003'' and inserting ``2004 through 2008''.
       (2) Grants for indian tribes that received jobs funds.--
     Section 412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)), as so amended, 
     is amended by striking ``1997, 1998, 1999, 2000, 2001, 2002, 
     and 2003'' and inserting ``2004 through 2008''.
       (b) Tribal TANF Improvement Fund.--Section 412(a) (42 
     U.S.C. 612(a)) is amended by adding at the end the following:
       ``(4) Tribal tanf improvement fund.--
       ``(A) Establishment.--The Secretary shall establish a fund 
     for purposes of carrying out any of the following activities:
       ``(i) Providing technical assistance to Indian tribes 
     considering applying to carry out, or that are carrying out, 
     a tribal family assistance plan under this section in order 
     to help such tribes establish and operate strong and 
     effective tribal family assistance plans under this section 
     that will allow families receiving assistance under such 
     plans achieve the highest measure of self-sufficiency.
       ``(ii) Awarding competitive grants directly to Indian 
     tribes carrying out a tribal family assistance plan under 
     this section for purposes of conducting programs and 
     activities that would substantially improve the operation and 
     effectiveness of such plans and the ability of such tribes to 
     achieve the purposes of the program under this part as 
     described in section 401(a).
       ``(iii) Awarding competitive grants directly to Indian 
     tribes carrying out a tribal family assistance plan under 
     this section to support tribal economic development 
     activities that would significantly assist families receiving 
     assistance under the State program funded under this part or 
     a tribal family assistance plan obtain employment and achieve 
     self-sufficiency.
       ``(iv) Conducting, directly or through grants, contracts, 
     or interagency agreements, research and development to 
     improve knowledge about tribal family assistance programs 
     conducted under this section and challenges faced by such 
     programs in order to improve the effectiveness of such 
     programs.
       ``(B) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary to carry out 
     this paragraph, $100,000,000 for each of fiscal years 2004 
     through 2008.''.

     SEC. 114. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

       (a) Secretary's Fund for Research, Demonstrations, and 
     Technical Assistance.--Section 413 (42 U.S.C. 613), as 
     amended by section 101(d), is further amended by adding at 
     the end the following:
       ``(l) Funding for Research, Demonstrations, and Technical 
     Assistance.--

[[Page 5426]]

       ``(1) Appropriation.--
       ``(A) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated $100,000,000 for each of fiscal years 2004 
     through 2008, which shall remain available to the Secretary 
     until expended.
       ``(B) Use of funds.--
       ``(i) In general.--Funds appropriated under subparagraph 
     (A) shall be used for the purpose of--

       ``(I) conducting or supporting research and demonstration 
     projects by public or private entities; or
       ``(II) providing technical assistance in connection with a 
     purpose of the program funded under this part, as described 
     in section 401(a), to States, Indian tribal organizations, 
     sub-State entities, and such other entities as the Secretary 
     may specify.

       ``(ii) Requirement.--Not less than 80 percent of the funds 
     appropriated under subparagraph (A) for a fiscal year shall 
     be expended for the purpose of conducting or supporting 
     research and demonstration projects, or for providing 
     technical assistance, in connection with activities described 
     in section 403(a)(2)(B). Funds appropriated under 
     subparagraph (A) and expended in accordance with this clause 
     shall be in addition to any other funds made available under 
     this part for activities described in section 403(a)(2)(B).
       ``(2) Secretary's authority.--The Secretary may conduct 
     activities authorized by this subsection directly or through 
     grants, contracts, or interagency agreements with public or 
     private entities.
       ``(3) Requirement for use of funds.--The Secretary shall 
     not pay any funds appropriated under paragraph (1)(A) to an 
     entity for the purpose of conducting or supporting research 
     and demonstration projects involving activities described in 
     section 403(a)(2)(B) unless the entity complies with the 
     requirements of section 403(a)(2)(E).''.
       (b) Funding of Studies and Demonstrations.--Section 
     413(h)(1) (42 U.S.C. 613(h)(1)) is amended in the matter 
     preceding subparagraph (A) by striking ``1997 through 2002'' 
     and inserting ``2004 through 2008''.
       (c) Program Coordination Demonstration Projects.--
       (1) Purpose.--The purpose of this subsection is to 
     establish a program of demonstration projects in a State or 
     portion of a State to coordinate assistance provided under 
     qualified programs for the purpose of supporting working 
     individuals and families, helping families escape welfare 
     dependency, promoting child well-being, or helping build 
     stronger families, using innovative approaches to strengthen 
     service systems and provide more coordinated and effective 
     service delivery.
       (2) Definitions.--In this subsection:
       (A) Qualified program.--The term ``qualified program'' 
     means--
       (i) a program under part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.);
       (ii) the program under title XX of the Social Security Act 
     (42 U.S.C. 1397 et seq.); and
       (iii) child care assistance funded under section 418 of the 
     Social Security Act (42 U.S.C. 618).
       (B) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (3) Application requirements.--The head of a State entity 
     or of a sub-State entity administering 2 or more qualified 
     programs proposed to be included in a demonstration project 
     under this subsection shall (or, if the project is proposed 
     to include qualified programs administered by 2 or more such 
     entities, the heads of the administering entities (each of 
     whom shall be considered an applicant for purposes of this 
     subsection) shall jointly) submit to the Secretary an 
     application that contains the following:
       (A) Programs included.--A statement identifying each 
     qualified program to be included in the project, and 
     describing how the purposes of each such program will be 
     achieved by the project.
       (B) Population served.--A statement identifying the 
     population to be served by the project and specifying the 
     eligibility criteria to be used.
       (C) Description and justification.--A detailed description 
     of the project, including--
       (i) a description of how the project is expected to improve 
     or enhance achievement of the purposes of the programs to be 
     included in the project, from the standpoint of quality, of 
     cost-effectiveness, or of both; and
       (ii) a description of the performance objectives for the 
     project, including any proposed modifications to the 
     performance measures and reporting requirements used in the 
     programs.
       (D) Waivers requested.--A description of the statutory and 
     regulatory requirements with respect to which a waiver is 
     requested in order to carry out the project, and a 
     justification of the need for each such waiver.
       (E) Cost neutrality.--Such information and assurances as 
     necessary to establish to the satisfaction of the Secretary, 
     in consultation with the Director of the Office of Management 
     and Budget, that the proposed project is reasonably expected 
     to meet the applicable cost neutrality requirements of 
     paragraph (4)(E).
       (F) Evaluation and reports.--An assurance that the 
     applicant will--
       (i) obtain an evaluation by an independent contractor of 
     the effectiveness of the project using an evaluation design 
     that, to the maximum extent feasible, includes random 
     assignment of clients (or entities serving such clients) to 
     service delivery and control groups; and
       (ii) make interim and final reports to the Secretary, at 
     such times and in such manner as the Secretary may require.
       (G) Other information and assurances.--Such other 
     information and assurances as the Secretary may require.
       (4) Approval of applications.--
       (A) In general.--The Secretary with respect to a qualified 
     program that is identified in an application submitted 
     pursuant to subsection (c) may approve the application and, 
     except as provided in subparagraph (B), waive any requirement 
     applicable to the program, to the extent consistent with this 
     subsection and necessary and appropriate for the conduct of 
     the demonstration project proposed in the application, if the 
     Secretary determines that the project--
       (i) has a reasonable likelihood of achieving the objectives 
     of the programs to be included in the project;
       (ii) may reasonably be expected to meet the applicable cost 
     neutrality requirements of subparagraph (E), as determined by 
     the Director of the Office of Management and Budget;
       (iii) includes the coordination of 2 or more qualified 
     programs; and
       (iv) provides for an independent evaluation that includes 
     random assignment to the maximum extent feasible, as 
     described in paragraph (3)(F), and which the Secretary 
     determines to be appropriate for assessing the effectiveness 
     of the project.
       (B) Provisions excluded from waiver authority.--A waiver 
     shall not be granted under subparagraph (A)--
       (i) with respect to any provision of law relating to--

       (I) civil rights or prohibition of discrimination;
       (II) purposes or goals of any program;
       (III) maintenance of effort requirements;
       (IV) health or safety;
       (V) labor standards under the Fair Labor Standards Act of 
     1938; or
       (VI) environmental protection;

       (ii) in the case of child care assistance funded under 
     section 418 of the Social Security Act (42 U.S.C. 618), with 
     respect to the requirement under the first sentence of 
     subsection (b)(1) of that section that funds received by a 
     State under that section shall only be used to provide child 
     care assistance;
       (iii) with respect to any requirement that a State pass 
     through to a sub-State entity part or all of an amount paid 
     to the State;
       (iv) if the waiver would waive any funding restriction or 
     limitation provided in an appropriations Act, or would have 
     the effect of transferring appropriated funds from 1 
     appropriations account to another; or
       (v) except as otherwise provided by statute, if the waiver 
     would waive any funding restriction applicable to a program 
     authorized under an Act which is not an appropriations Act 
     (but not including program requirements such as application 
     procedures, performance standards, reporting requirements, or 
     eligibility standards), or would have the effect of 
     transferring funds from a program for which there is direct 
     spending (as defined in section 250(c)(8) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985) to another 
     program.
       (C) 10 state limitation.--The Director of the Office of 
     Management and Budget shall establish a procedure for 
     ensuring that not more than 10 States (including any portion 
     of a State) conduct a demonstration project under this 
     subsection.
       (D) Agreement of secretary required.--
       (i) In general.--An applicant may not conduct a 
     demonstration project under this subsection unless the 
     Secretary, with respect to each qualified program proposed to 
     be included in the project, has approved the application to 
     conduct the project.
       (ii) Agreement with respect to funding and 
     implementation.--Before approving an application to conduct a 
     demonstration project under this subsection, the Secretary 
     shall have in place an agreement with the applicant with 
     respect to the payment of funds and responsibilities required 
     of the Secretary with respect to the project.
       (E) Cost-neutrality requirement.--
       (i) General rule.--Notwithstanding any other provision of 
     law (except as provided in clause (ii)), the total of the 
     amounts that may be paid by the Federal Government for a 
     fiscal year with respect to the programs in the State in 
     which an entity conducting a demonstration project under this 
     subsection is located that are affected by the project shall 
     not exceed the estimated total amount that the Federal 
     Government would have paid for the fiscal year with respect 
     to the programs if the project had not been conducted, as 
     determined by the Director of the Office of Management and 
     Budget.
       (ii) Special rule.--If an applicant submits to the Director 
     of the Office of Management and Budget a request to apply the 
     rules of this clause to the programs in the State in which 
     the applicant is located that are affected by a demonstration 
     project proposed in an application submitted by the applicant 
     pursuant to this section, during such period of not more than 
     5 consecutive fiscal years in which the project is in effect, 
     and the Director determines, on the basis of supporting 
     information provided by the applicant, to grant the request, 
     then, notwithstanding any other provision of law, the total 
     of the amounts that may be paid by the Federal Government for 
     the period with respect to the programs shall not exceed the 
     estimated total amount that the Federal Government would have 
     paid for the period with respect to the programs if the 
     project had not been conducted.
       (F) 90-day approval deadline.--
       (i) In general.--If the Secretary receives an application 
     to conduct a demonstration project under this subsection and 
     does not disapprove the application within 90 days after the 
     receipt,

[[Page 5427]]

     then, subject to the 10 State limitation under paragraph 
     (3)--

       (I) the Secretary is deemed to have approved the 
     application for such period as is requested in the 
     application, except to the extent inconsistent with paragraph 
     (5); and
       (II) any waiver requested in the application which applies 
     to a qualified program that is identified in the application 
     and is administered by the Secretary is deemed to be granted, 
     except to the extent inconsistent with subparagraph (B) or 
     (E) of this paragraph.

       (ii) Deadline extended if additional information is 
     sought.--The 90-day period referred to in clause (i) shall 
     not include any period that begins with the date the 
     Secretary requests the applicant to provide additional 
     information with respect to the application and ends with the 
     date the additional information is provided.
       (5) Duration of projects.--A demonstration project under 
     this subsection may be approved for a term of not more than 5 
     years.
       (6) Reports to congress.--
       (A) Report on disposition of applications.--Within 90 days 
     after the date the Secretary receives an application 
     submitted pursuant to this subsection, the Secretary shall 
     submit to the Committee on Finance of the Senate and the 
     Committee on Ways and Means of the House of Representatives 
     notice of the receipt, a description of the decision of the 
     Secretary with respect to the application, and the reasons 
     for approving or disapproving the application.
       (B) Reports on projects.--The Secretary shall provide 
     annually to Congress a report concerning demonstration 
     projects approved under this subsection, including--
       (i) the projects approved for each applicant;
       (ii) the number of waivers granted under this subsection, 
     and the specific statutory provisions waived;
       (iii) how well each project for which a waiver is granted 
     is improving or enhancing program achievement from the 
     standpoint of quality, cost-effectiveness, or both;
       (iv) how well each project for which a waiver is granted is 
     meeting the performance objectives specified in paragraph 
     (3)(C)(ii);
       (v) how each project for which a waiver is granted is 
     conforming with the cost-neutrality requirements of paragraph 
     (4)(E); and
       (vi) to the extent the Secretary deems appropriate, 
     recommendations for modification of programs based on 
     outcomes of the projects.

     SEC. 115. STUDY BY THE CENSUS BUREAU.

       (a) In General.--Section 414(a) (42 U.S.C. 614(a)) is 
     amended to read as follows:
       ``(a) In General.--The Bureau of the Census shall implement 
     or enhance a longitudinal survey of program participation, 
     developed in consultation with the Secretary and made 
     available to interested parties, to allow for the assessment 
     of the outcomes of continued welfare reform on the economic 
     and child well-being of low-income families with children, 
     including those who received assistance or services from a 
     State program funded under this part, and, to the extent 
     possible, shall provide State representative samples. The 
     content of the survey should include such information as may 
     be necessary to examine the issues of out-of-wedlock 
     childbearing, marriage, welfare dependency and compliance 
     with work requirements, the beginning and ending of spells of 
     assistance, work, earnings and employment stability, and the 
     well-being of children.''.
       (b) Reports on the Well-Being of Children and Families.--
     Section 414 (42 U.S.C. 614), as amended by subsection (a), is 
     amended--
       (1) by redesignating subsection (b) as subsection (c); and
       (2) by inserting after subsection (a) the following:
       ``(b) Reports on the Well-Being of Children and Families.--
       ``(1) In general.--Not later than 24 months after the date 
     of enactment of the Personal Responsibility and Individual 
     Development for Everyone Act, the Secretary of Commerce shall 
     prepare and submit to the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate a report on the well-being of children and families 
     using data collected under subsection (a).
       ``(2) Second report.--Not later than 60 months after such 
     date of enactment, the Secretary of Commerce shall submit a 
     second report to the Committee on Ways and Means of the House 
     of Representatives and the Committee on Finance of the Senate 
     on the well-being of children and families using data 
     collected under subsection (a).
       ``(3) Inclusion of comparable measures.--Where comparable 
     measures for data collected under subsection (a) exist in 
     surveys previously administered by the Bureau of the Census, 
     appropriate comparisons shall be made and included in each 
     report required under this subsection on the well-being of 
     children and families to assess changes in such measures.''.
       (c) Appropriation.--Section 414(c) (42 U.S.C. 614(c)), as 
     redesignated by subsection (b)(1) and as amended by section 
     3(i) of the Welfare Reform Extension Act of 2003 (Public Law 
     108-040, 117 Stat. 837), is amended by striking ``1996,'' and 
     all that follows through the period and inserting ``2004 
     through 2008 for payment to the Bureau of the Census to carry 
     out this section. Funds appropriated under this subsection 
     for a fiscal year shall remain available through fiscal year 
     2008 to carry out this section.''.

     SEC. 116. FUNDING FOR CHILD CARE.

       (a) Increase in Mandatory Funding.--Section 418(a)(3) (42 
     U.S.C. 618(a)(3)), as amended by section 4 of the Welfare 
     Reform Extension Act of 2003 (Public Law 108-040, 117 Stat. 
     837), is amended--
       (1) by striking ``and'' at the end of subparagraph (E);
       (2) by striking the period at the end of subparagraph (F) 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(G) $2,917,000,000 for each of fiscal years 2004 through 
     2008.''.
       (b) Inclusion of Commonwealth of Puerto Rico in Reservation 
     of Child Care Funds.--
       (1) In general.--Section 418(a)(4) (42 U.S.C. 618(a)(4)) is 
     amended--
       (A) in the paragraph heading, by striking ``Indian tribes'' 
     and inserting ``Amounts reserved'';
       (B) by striking ``The Secretary'' and inserting the 
     following:
       ``(A) Indian tribes.--The Secretary''; and
       (C) by adding at the end the following:
       ``(B) Puerto rico.--The Secretary shall reserve $10,000,000 
     of the amount appropriated under paragraph (3) for each 
     fiscal year for payments to the Commonwealth of Puerto Rico 
     for each such fiscal year for the purpose of providing child 
     care assistance.''.
       (2) Conforming amendment.--Section 1108(a)(2) (42 U.S.C. 
     1308(a)(2)), as amended by section 108(b)(3), is amended by 
     striking ``or 413(f)'' and inserting ``413(f), or 
     418(a)(4)(B)''.

     SEC. 117. DEFINITIONS.

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

     SEC. 118. RESPONSIBLE FATHERHOOD PROGRAM.

       (a) Responsible Fatherhood Program.--
       (1) Findings.--Congress makes the following findings:
       (A) Nearly 24,000,000 children in the United States, or 34 
     percent of all such children, live apart from their 
     biological father.
       (B) Sixty percent of couples who divorce have at least 1 
     child.
       (C) The number of children living with only a mother 
     increased from just over 5,000,000 in 1960 to 17,000,000 in 
     1999, and between 1981 and 1991 the percentage of children 
     living with only 1 parent increased from 19 percent to 25 
     percent.
       (D) Forty percent of children who live in households 
     without a father have not seen their father in at least 1 
     year and 50 percent of such children have never visited their 
     father's home.
       (E) The most important factor in a child's upbringing is 
     whether the child is brought up in a loving, healthy, 
     supportive environment.
       (F) Children who live without contact with their biological 
     father are, in comparison to children who have such contact--
       (i) 5 times more likely to live in poverty;
       (ii) more likely to bring weapons and drugs into the 
     classroom;
       (iii) twice as likely to commit crime;
       (iv) twice as likely to drop out of school;
       (v) more likely to commit suicide;
       (vi) more than twice as likely to abuse alcohol or drugs; 
     and
       (vii) more likely to become pregnant as teenagers.
       (G) Violent criminals are overwhelmingly males who grew up 
     without fathers.
       (H) Between 20 and 30 percent of families in poverty are 
     headed by women who have suffered domestic violence during 
     the past year, and between 40 and 60 percent of women with 
     children receiving welfare were abused sometime during their 
     life.
       (I) Responsible fatherhood includes active participation in 
     financial support and child care, as well as the formation 
     and maintenance of a positive, healthy, and nonviolent 
     relationship between father and child and a cooperative 
     relationship between parents.
       (J) States should be encouraged to implement programs that 
     provide support for responsible fatherhood, promote marriage, 
     and increase the incidence of marriage, and should not be 
     restricted from implementing such programs.
       (K) Fatherhood programs should promote and provide support 
     services for--
       (i) loving and healthy relationships between parents and 
     children; and

[[Page 5428]]

       (ii) cooperative parenting.
       (L) There is a social need to reconnect children and 
     fathers.
       (M) The promotion of responsible fatherhood and 
     encouragement of healthy 2-parent married families should 
     not--
       (i) denigrate the standing or parenting efforts of single 
     mothers or other caregivers;
       (ii) lessen the protection of children from abusive 
     parents; or
       (iii) compromise the safety or health of the custodial 
     parent;
     but should increase the chance that children will have 2 
     caring parents to help them grow up healthy and secure.
       (N) The promotion of responsible fatherhood must always 
     recognize and promote the values of nonviolence.
       (O) For the future of the United States and the future of 
     our children, Congress, States, and local communities should 
     assist parents to become more actively involved in their 
     children's lives.
       (P) Child support is an important means by which a parent 
     can take financial responsibility for a child and emotional 
     support is an important means by which a parent can take 
     social responsibility for a child.
       (2) Fatherhood program.--Title I of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996 (Public Law 104-193) is amended by adding at the end the 
     following:

     ``SEC. 117. FATHERHOOD PROGRAM.

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

               ```PART C--RESPONSIBLE FATHERHOOD PROGRAM

      ```SEC. 441. RESPONSIBLE FATHERHOOD GRANTS.

       ```(a) Grants to States To Conduct Demonstration 
     Programs.--
       ```(1) Authority to award grants.--
       ```(A) In general.--The Secretary shall award grants to up 
     to 10 eligible States to conduct demonstration programs to 
     carry out the purposes described in paragraph (2).
       ```(B) Eligible state.--For purposes of this subsection, an 
     eligible State is a State that submits to the Secretary the 
     following:
       ```(i) Application.--An application for a grant under this 
     subsection, at such time, in such manner, and containing such 
     information as the Secretary may require.
       ```(ii) State plan.--A State plan that includes the 
     following:

       ```(I) Project description.--A description of the programs 
     or activities the State will fund under the grant, including 
     a good faith estimate of the number and characteristics of 
     clients to be served under such projects and how the State 
     intends to achieve at least 2 of the purposes described in 
     paragraph (2).
       ```(II) Coordination efforts.--A description of how the 
     State will coordinate and cooperate with State and local 
     entities responsible for carrying out other programs that 
     relate to the purposes intended to be achieved under the 
     demonstration program, including as appropriate, entities 
     responsible for carrying out jobs programs and programs 
     serving children and families.
       ```(III) Records, reports, and audits.--An agreement to 
     maintain such records, submit such reports, and cooperate 
     with such reviews and audits as the Secretary finds necessary 
     for purposes of oversight of the demonstration program.

       ```(iii) Certifications.--The following certifications from 
     the chief executive officer of the State:

       ```(I) A certification that the State will use funds 
     provided under the grant to promote at least 2 of the 
     purposes described in paragraph (2).
       ```(II) A certification that the State will return any 
     unused funds to the Secretary in accordance with the 
     reconciliation process under paragraph (5).
       ```(III) A certification that the funds provided under the 
     grant will be used for programs and activities that target 
     low-income participants and that not less than 50 percent of 
     the participants in each program or activity funded under the 
     grant shall be--

       ```(aa) parents of a child who is, or within the past 24 
     months has been, a recipient of assistance or services under 
     a State program funded under part A, D, or E of this title, 
     title XIX, or the Food Stamp Act of 1977; or
       ```(bb) parents, including an expectant parent or a married 
     parent, whose income (after adjustment for court-ordered 
     child support paid or received) does not exceed 150 percent 
     of the poverty line.

       ```(IV) A certification that the State has or will comply 
     with the requirements of paragraph (4).
       ```(V) A certification that funds provided to a State under 
     this subsection shall not be used to supplement or supplant 
     other Federal, State, or local funds that are used to support 
     programs or activities that are related to the purposes 
     described in paragraph (2).

       ```(C) Preferences and factors of consideration.--In 
     awarding grants under this subsection, the Secretary shall 
     take into consideration the following:
       ```(i) Diversity of entities used to conduct programs and 
     activities.--The Secretary shall, to the extent practicable, 
     achieve a balance among the eligible States awarded grants 
     under this subsection with respect to the size, urban or 
     rural location, and employment of differing or unique methods 
     of the entities that the eligible States intend to use to 
     conduct the programs and activities funded under the grants.
       ```(ii) Priority for certain states.--The Secretary shall 
     give priority to awarding grants to eligible States that 
     have--

       ```(I) demonstrated progress in achieving at least 1 of the 
     purposes described in paragraph (2) through previous State 
     initiatives; or
       ```(II) demonstrated need with respect to reducing the 
     incidence of out-of-wedlock births or absent fathers in the 
     State.

       ```(2) Purposes.--The purposes described in this paragraph 
     are the following:
       ```(A) Promoting responsible fatherhood through marriage 
     promotion.--To promote marriage or sustain marriage through 
     activities such as counseling, mentoring, disseminating 
     information about the benefits of marriage and 2-parent 
     involvement for children, enhancing relationship skills, 
     education regarding how to control aggressive behavior, 
     disseminating information on the causes of domestic violence 
     and child abuse, marriage preparation programs, premarital 
     counseling, marital inventories, skills-based marriage 
     education, financial planning seminars, including improving a 
     family's ability to effectively manage family business 
     affairs by means such as education, counseling, or mentoring 
     on matters related to family finances, including household 
     management, budgeting, banking, and handling of financial 
     transactions and home maintenance, and divorce education and 
     reduction programs, including mediation and counseling.
       ```(B) Promoting responsible fatherhood through parenting 
     promotion.--To promote responsible parenting through 
     activities such as counseling, mentoring, and mediation, 
     disseminating information about good parenting practices, 
     skills-based parenting education, encouraging child support 
     payments, and other methods.
       ```(C) Promoting responsible fatherhood through fostering 
     economic stability of fathers.--To foster economic stability 
     by helping fathers improve their economic status by providing 
     activities such as work first services, job search, job 
     training, subsidized employment, job retention, job 
     enhancement, and encouraging education, including career-
     advancing education, dissemination of employment materials, 
     coordination with existing employment services such as 
     welfare-to-work programs, referrals to local employment 
     training initiatives, and other methods.
       ```(3) Restriction on use of funds.--No funds provided 
     under this subsection may be used for costs attributable to 
     court proceedings regarding matters of child visitation or 
     custody, or for legislative advocacy.
       ```(4) Requirements for receipt of funds.--A State may not 
     be awarded a grant under this section unless the State, as a 
     condition of receiving funds under such a grant--
       ```(A) consults with experts in domestic violence or with 
     relevant community domestic violence coalitions in developing 
     such programs or activities; and
       ```(B) describes in the application for a grant under this 
     section--
       ```(i) how the programs or activities proposed to be 
     conducted will address, as appropriate, issues of domestic 
     violence; and
       ```(ii) what the State will do, to the extent relevant, to 
     ensure that participation in such programs or activities is 
     voluntary, and to inform potential participants that their 
     involvement is voluntary.
       ```(5) Reconciliation process.--
       ```(A) 3-year availability of amounts allotted.--Each 
     eligible State that receives a grant under this subsection 
     for a fiscal year shall return to the Secretary any unused 
     portion of the grant for such fiscal year not later than the 
     last day of the second succeeding fiscal year, together with 
     any earnings on such unused portion.
       ```(B) Procedure for redistribution.--The Secretary shall 
     establish an appropriate procedure for redistributing to 
     eligible States that have expended the entire amount of a 
     grant made under this subsection for a fiscal year any amount 
     that is returned to the Secretary by eligible States under 
     subparagraph (A).
       ```(6) Amount of grants.--
       ```(A) In general.--Subject to subparagraph (B), the amount 
     of each grant awarded under this subsection shall be an 
     amount sufficient to implement the State plan submitted under 
     paragraph (1)(B)(ii).
       ```(B) Minimum amounts.--No eligible State shall--
       ```(i) in the case of the District of Columbia or a State 
     other than the Commonwealth of Puerto Rico, the United States 
     Virgin Islands, Guam, American Samoa, and the Commonwealth of 
     the Northern Mariana Islands, receive a grant for a fiscal 
     year in an amount that is less than $1,000,000; and
       ```(ii) in the case of the Commonwealth of Puerto Rico, the 
     United States Virgin Islands, Guam, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands, receive a grant 
     for a fiscal year in an amount that is less than $500,000.
       ```(7) Definition of state.--In this subsection the term 
     `State' means each of the 50 States, the District of 
     Columbia, the Commonwealth of Puerto Rico, the United States 
     Virgin Islands, Guam, American Samoa, and the Commonwealth of 
     the Northern Mariana Islands.
       ```(8) Authorization of appropriations.--There is 
     authorized to be appropriated $20,000,000 for each of fiscal 
     years 2004 through 2008 for purposes of making grants to 
     eligible States under this subsection.
       ```(b) Grants to Eligible Entities To Conduct Demonstration 
     Programs.--

[[Page 5429]]

       ```(1) Authority to award grants.--
       ```(A) In general.--The Secretary shall award grants to 
     eligible entities to conduct demonstration programs to carry 
     out the purposes described in subsection (a)(2).
       ```(B) Eligible entity.--For purposes of this subsection, 
     an eligible entity is a local government, local public 
     agency, community-based or nonprofit organization, or private 
     entity, including any charitable or faith-based organization, 
     or an Indian tribe (as defined in section 419(4)), that 
     submits to the Secretary the following:
       ```(i) Application.--An application for a grant under this 
     subsection, at such time, in such manner, and containing such 
     information as the Secretary may require.
       ```(ii) Project description.--A description of the programs 
     or activities the entity intends to carry out with funds 
     provided under the grant, including a good faith estimate of 
     the number and characteristics of clients to be served under 
     such programs or activities and how the entity intends to 
     achieve at least 2 of the purposes described in subsection 
     (a)(2).
       ```(iii) Coordination efforts.--A description of how the 
     entity will coordinate and cooperate with State and local 
     entities responsible for carrying out other programs that 
     relate to the purposes intended to be achieved under the 
     demonstration program, including as appropriate, entities 
     responsible for carrying out jobs programs and programs 
     serving children and families.
       ```(iv) Records, reports, and audits.--An agreement to 
     maintain such records, submit such reports, and cooperate 
     with such reviews and audits as the Secretary finds necessary 
     for purposes of oversight of the demonstration program.
       ```(v) Certifications.--The following certifications:

       ```(I) A certification that the entity will use funds 
     provided under the grant to promote at least 2 of the 
     purposes described in subsection (a)(2).
       ```(II) A certification that the entity will return any 
     unused funds to the Secretary in accordance with the 
     reconciliation process under paragraph (3).
       ```(III) A certification that the funds provided under the 
     grant will be used for programs and activities that target 
     low-income participants and that not less than 50 percent of 
     the participants in each program or activity funded under the 
     grant shall be--

       ```(aa) parents of a child who is, or within the past 24 
     months has been, a recipient of assistance or services under 
     a State program funded under part A, D, or E of this title, 
     title XIX, or the Food Stamp Act of 1977; or
       ```(bb) parents, including an expectant parent or a married 
     parent, whose income (after adjustment for court-ordered 
     child support paid or received) does not exceed 150 percent 
     of the poverty line.

       ```(IV) A certification that the entity has or will comply 
     with the requirements of paragraph (3).
       ```(V) A certification that funds provided to an entity 
     under this subsection shall not be used to supplement or 
     supplant other Federal, State, or local funds provided to the 
     entity that are used to support programs or activities that 
     are related to the purposes described in subsection (a)(2).

       ```(C) Preferences and factors of consideration.--In 
     awarding grants under this subsection, the Secretary shall, 
     to the extent practicable, achieve a balance among the 
     eligible entities awarded grants under this subsection with 
     respect to the size, urban or rural location, and employment 
     of differing or unique methods of the entities.
       ```(2) Restriction on use of funds.--No funds provided 
     under this subsection may be used for costs attributable to 
     court proceedings regarding matters of child visitation or 
     custody, or for legislative advocacy.
       ```(3) Requirements for use of funds.--The Secretary may 
     not award a grant under this subsection to an eligible entity 
     unless the entity, as a condition of receiving funds under 
     such a grant--
       ```(A) consults with experts in domestic violence or with 
     relevant community domestic violence coalitions in developing 
     the programs or activities to be conducted with such funds 
     awarded under the grant; and
       ```(B) describes in the application for a grant under this 
     section--
       ```(i) how the programs or activities proposed to be 
     conducted will address, as appropriate, issues of domestic 
     violence; and
       ```(ii) what the entity will do, to the extent relevant, to 
     ensure that participation in such programs or activities is 
     voluntary, and to inform potential participants that their 
     involvement is voluntary.
       ```(4) Reconciliation process.--
       ```(A) 3-year availability of amounts allotted.--Each 
     eligible entity that receives a grant under this subsection 
     for a fiscal year shall return to the Secretary any unused 
     portion of the grant for such fiscal year not later than the 
     last day of the second succeeding fiscal year, together with 
     any earnings on such unused portion.
       ```(B) Procedure for redistribution.--The Secretary shall 
     establish an appropriate procedure for redistributing to 
     eligible entities that have expended the entire amount of a 
     grant made under this subsection for a fiscal year any amount 
     that is returned to the Secretary by eligible entities under 
     subparagraph (A).
       ```(5) Authorization of appropriations.--There is 
     authorized to be appropriated $30,000,000 for each of fiscal 
     years 2004 through 2008 for purposes of making grants to 
     eligible entities under this subsection.

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

       ```(a) Media Campaign National Clearinghouse for 
     Responsible Fatherhood.--
       ```(1) In general.--From any funds appropriated under 
     subsection (c), the Secretary shall contract with a 
     nationally recognized, nonprofit fatherhood promotion 
     organization described in subsection (b) to--
       ```(A) develop, promote, and distribute to interested 
     States, local governments, public agencies, and private 
     entities a media campaign that encourages the appropriate 
     involvement of parents in the life of any child, with a 
     priority for programs that specifically address the issue of 
     responsible fatherhood; and
       ```(B) develop a national clearinghouse to assist States 
     and communities in efforts to promote and support marriage 
     and responsible fatherhood by collecting, evaluating, and 
     making available (through the Internet and by other means) to 
     other States information regarding the media campaigns 
     established under section 443.
       ```(2) Coordination with domestic violence programs.--The 
     Secretary shall ensure that the nationally recognized 
     nonprofit fatherhood promotion organization with a contract 
     under paragraph (1) coordinates the media campaign developed 
     under subparagraph (A) of such paragraph and the national 
     clearinghouse developed under subparagraph (B) of such 
     paragraph with national, State, or local domestic violence 
     programs.
       ```(b) Nationally Recognized, Nonprofit Fatherhood 
     Promotion Organization Described.--The nationally recognized, 
     nonprofit fatherhood promotion organization described in this 
     subsection is an organization that has at least 4 years of 
     experience in--
       ```(1) designing and disseminating a national public 
     education campaign, as evidenced by the production and 
     successful placement of television, radio, and print public 
     service announcements that promote the importance of 
     responsible fatherhood, a track record of service to Spanish-
     speaking populations and historically underserved or minority 
     populations, the capacity to fulfill requests for information 
     and a proven history of fulfilling such requests, and a 
     mechanism through which the public can request additional 
     information about the campaign; and
       ```(2) providing consultation and training to community-
     based organizations interested in implementing fatherhood 
     outreach, support, or skill development programs with an 
     emphasis on promoting married fatherhood as the ideal.
       ```(c) Authorization of Appropriations.--There is 
     authorized to be appropriated $5,000,000 for each of fiscal 
     years 2004 through 2008 to carry out this section.

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

       ```(a) Definitions.--In this section:
       ```(1) Broadcast advertisement.--The term `broadcast 
     advertisement' means a communication intended to be aired by 
     a television or radio broadcast station, including a 
     communication intended to be transmitted through a cable 
     channel.
       ```(2) Child at risk.--The term `child at risk' means each 
     young child whose family income does not exceed the poverty 
     line.
       ```(3) Poverty line.--The term `poverty line' has the 
     meaning given such term in section 673(2) of the Community 
     Services Block Grant Act (42 U.S.C. 9902(2)), including any 
     revision required by such section, that is applicable to a 
     family of the size involved.
       ```(4) Printed or other advertisement.--The term `printed 
     or other advertisement' includes any communication intended 
     to be distributed through a newspaper, magazine, outdoor 
     advertising facility, mailing, or any other type of general 
     public advertising, but does not include any broadcast 
     advertisement.
       ```(5) State.--The term `State' means each of the 50 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the United States Virgin Islands, Guam, American Samoa, 
     and the Commonwealth of the Northern Mariana Islands.
       ```(6) Young child.--The term `young child' means an 
     individual under age 5.
       ```(b) State Certifications.--Not later than October 1 of 
     each of fiscal year for which a State desires to receive an 
     allotment under this section, the chief executive officer of 
     the State shall submit to the Secretary a certification that 
     the State shall--
       ```(1) use such funds to promote the formation and 
     maintenance of healthy 2-parent married families, strengthen 
     fragile families, and promote responsible fatherhood through 
     media campaigns conducted in accordance with the requirements 
     of subsection (d);
       ```(2) return any unused funds to the Secretary in 
     accordance with the reconciliation process under subsection 
     (e); and
       ```(3) comply with the reporting requirements under 
     subsection (f).
       ```(c) Payments to States.--For each of fiscal years 2004 
     through 2008, the Secretary shall pay to each State that 
     submits a certification under subsection (b), from any funds 
     appropriated under subsection (i), for the fiscal year an 
     amount equal to the amount of the allotment determined for 
     the fiscal year under subsection (g).
       ```(d) Establishment of Media Campaigns.--Each State 
     receiving an allotment under this

[[Page 5430]]

     section for a fiscal year shall use the allotment to conduct 
     media campaigns as follows:
       ```(1) Conduct of media campaigns.--
       ```(A) Radio and television media campaigns.--
       ```(i) Production of broadcast advertisements.--At the 
     option of the State, to produce broadcast advertisements that 
     promote the formation and maintenance of healthy 2-parent 
     married families, strengthen fragile families, and promote 
     responsible fatherhood.
       ```(ii) Airtime challenge program.--At the option of the 
     State, to establish an airtime challenge program under which 
     the State may spend amounts allotted under this section to 
     purchase time from a broadcast station to air a broadcast 
     advertisement produced under clause (i), but only if the 
     State obtains an amount of time of the same class and during 
     a comparable period to air the advertisement using non-
     Federal contributions.
       ```(B) Other media campaigns.--At the option of the State, 
     to conduct a media campaign that consists of the production 
     and distribution of printed or other advertisements that 
     promote the formation and maintenance of healthy 2-parent 
     married families, strengthen fragile families, and promote 
     responsible fatherhood.
       ```(2) Administration of media campaigns.--A State may 
     administer media campaigns funded under this section directly 
     or through grants, contracts, or cooperative agreements with 
     public agencies, local governments, or private entities, 
     including charitable and faith-based organizations.
       ```(3) Consultation with domestic violence assistance 
     centers.--In developing broadcast and printed advertisements 
     to be used in the media campaigns conducted under paragraph 
     (1), the State or other entity administering the campaign 
     shall consult with representatives of State and local 
     domestic violence centers.
       ```(4) Non-federal contributions.--In this section, the 
     term `non-Federal contributions' includes contributions by 
     the State and by public and private entities. Such 
     contributions may be in cash or in kind. Such term does not 
     include any amounts provided by the Federal Government, or 
     services assisted or subsidized to any significant extent by 
     the Federal Government, or any amount expended by a State 
     before October 1, 2003.
       ```(e) Reconciliation Process.--
       ```(1) 3-year availability of amounts allotted.--Each State 
     that receives an allotment under this section shall return to 
     the Secretary any unused portion of the amount allotted to a 
     State for a fiscal year not later than the last day of the 
     second succeeding fiscal year together with any earnings on 
     such unused portion.
       ```(2) Procedure for redistribution of unused allotments.--
     The Secretary shall establish an appropriate procedure for 
     redistributing to States that have expended the entire amount 
     allotted under this section any amount that is--
       ```(A) returned to the Secretary by States under paragraph 
     (1); or
       ```(B) not allotted to a State under this section because 
     the State did not submit a certification under subsection (b) 
     by October 1 of a fiscal year.
       ```(f) Reporting Requirements.--
       ```(1) Monitoring and evaluation.--Each State receiving an 
     allotment under this section for a fiscal year shall monitor 
     and evaluate the media campaigns conducted using funds made 
     available under this section in such manner as the Secretary, 
     in consultation with the States, determines appropriate.
       ```(2) Annual reports.--Not less frequently than annually, 
     each State receiving an allotment under this section for a 
     fiscal year shall submit to the Secretary reports on the 
     media campaigns conducted using funds made available under 
     this section at such time, in such manner, and containing 
     such information as the Secretary may require.
       ```(g) Amount of Allotments.--
       ```(1) In general.--Except as provided in paragraph (2), of 
     the amount appropriated for the purpose of making allotments 
     under this section for a fiscal year, the Secretary shall 
     allot to each State that submits a certification under 
     subsection (b) for the fiscal year an amount equal to the sum 
     of--
       ```(A) the amount that bears the same ratio to 50 percent 
     of such funds as the number of young children in the State 
     (as determined by the Secretary based on the most current 
     reliable data available) bears to the number of such children 
     in all States; and
       ```(B) the amount that bears the same ratio to 50 percent 
     of such funds as the number of children at risk in the State 
     (as determined by the Secretary based on the most current 
     reliable data available) bears to the number of such children 
     in all States.
       ```(2) Minimum allotments.--No allotment for a fiscal year 
     under this section shall be less than--
       ```(A) in the case of the District of Columbia or a State 
     other than the Commonwealth of Puerto Rico, the United States 
     Virgin Islands, Guam, American Samoa, and the Commonwealth of 
     the Northern Mariana Islands, 1 percent of the amount 
     appropriated for the fiscal year under subsection (i); and
       ```(B) in the case of the Commonwealth of Puerto Rico, the 
     United States Virgin Islands, Guam, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands, 0.5 percent of 
     such amount.
       ```(3) Pro rata reductions.--The Secretary shall make such 
     pro rata reductions to the allotments determined under this 
     subsection as are necessary to comply with the requirements 
     of paragraph (2).
       ```(h) Evaluation.--
       ```(1) In general.--The Secretary shall conduct an 
     evaluation of the impact of the media campaigns funded under 
     this section.
       ```(2) Report.--Not later than December 31, 2006, the 
     Secretary shall report to Congress the results of the 
     evaluation under paragraph (1).
       ```(3) Funding.--Of the amount appropriated under 
     subsection (i) for fiscal year 2004, $1,000,000 of such 
     amount shall be transferred and made available for purposes 
     of conducting the evaluation required under this subsection, 
     and shall remain available until expended.
       ```(i) Authorization of Appropriations.--There is 
     authorized to be appropriated $20,000,000 for each of fiscal 
     years 2004 through 2008 for purposes of making allotments to 
     States under this section.'.
       ``(b) Inapplicability of Effective Date Provisions.--
     Section 116 shall not apply to the amendment made by 
     subsection (a) of this section.''.
       (b) Clerical Amendment.--Section 2 of such Act is amended 
     in the table of contents by inserting after the item relating 
     to section 116 the following new item:

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

     SEC. 119. ADDITIONAL GRANTS.

       (a) Grants To Capitalize and Develop Sustainable Social 
     Services.--Section 403(a) (42 U.S.C. 603(a)) is amended by 
     adding at the end the following:
       ``(6) Grants to capitalize and develop sustainable social 
     services.--
       ``(A) Authority to award grants.--The Secretary may award 
     grants to entities for the purpose of capitalizing and 
     developing the role of sustainable social services that are 
     critical to the success of moving recipients of assistance 
     under a State program funded under this part to work.
       ``(B) Application.--
       ``(i) In general.--An entity desiring a grant under this 
     paragraph shall submit an application to the Secretary, at 
     such time, in such manner, and, subject to clause (ii), 
     containing such information as the Secretary may require.
       ``(ii) Strategy for generation of revenue.--An application 
     for a grant under this paragraph shall include a description 
     of the capitalization strategy that the entity intends to 
     follow to develop a program that generates its own source of 
     ongoing revenue while assisting recipients of assistance 
     under a State program funded under this part.
       ``(C) Use of funds.--
       ``(i) In general.--Funds made available under a grant made 
     under this paragraph may be used for the acquisition, 
     construction, or renovation of facilities or buildings.
       ``(ii) General rules governing use of funds.--The rules of 
     section 404, other than subsection (b) of that section, shall 
     not apply to a grant made under this paragraph.
       ``(D) Evaluation and report.--The Secretary shall, by 
     grant, contract, or interagency agreement, conduct an 
     evaluation of the programs developed with grants awarded 
     under this paragraph and shall submit a report to Congress on 
     the results of such evaluation.
       ``(E) Authorization of appropriations.--Out of any money in 
     the Treasury of the United States not otherwise appropriated, 
     there is appropriated to the Secretary for the purpose of 
     carrying out this paragraph, $40,000,000 for each of fiscal 
     years 2004 through 2008.''.
       (b) Grants for Low-Income Car Ownership Programs.--Section 
     403(a) (42 U.S.C. 603(a)), as amended by subsection (a), is 
     further amended by adding at the end the following:
       ``(7) Grants for low-income car ownership programs.--
       ``(A) Purposes.--The purposes of this paragraph are to--
       ``(i) assist low-income families with children obtain 
     dependable, affordable automobiles to improve their 
     employment opportunities and access to training; and
       ``(ii) provide incentives to States, Indian tribes, 
     localities, and nonprofit entities to develop and administer 
     programs that provide assistance with automobile ownership 
     for low-income families.
       ``(B) Definitions.--In this paragraph:
       ``(i) Locality.--The term `locality' means a municipality 
     that does not administer a State program funded under this 
     part.
       ``(ii) Low-income family with children.--The term `low-
     income family with children' means a household that is 
     eligible for benefits or services funded under the State 
     program funded under this part or under a program funded with 
     qualified State expenditures (as defined in section 
     409(a)(7)(B)(i)).
       ``(iii) Nonprofit entity.--The term `nonprofit entity' 
     means a school, local agency, organization, or institution 
     owned and operated by 1 or more nonprofit corporations or 
     associations, no part of the net earnings of which inures, or 
     may lawfully inure, to the benefit of any private shareholder 
     or individual.
       ``(C) Authority to award grants.--The Secretary may award 
     grants to States, counties, localities, Indian tribes, and 
     nonprofit entities to promote improving access to dependable, 
     affordable automobiles by low-income families with children.
       ``(D) Grant approval criteria.--The Secretary shall 
     establish criteria for approval of an application for a grant 
     under this paragraph that include consideration of--
       ``(i) the extent to which the proposal, if funded, is 
     likely to improve access to training and employment 
     opportunities and child care services by low-income families 
     with children by means of car ownership;

[[Page 5431]]

       ``(ii) the level of innovation in the applicant's grant 
     proposal; and
       ``(iii) any partnerships between the public and private 
     sector in the applicant's grant proposal.
       ``(E) Use of funds.--
       ``(i) In general.--A grant awarded under this paragraph 
     shall be used to administer programs that assist low-income 
     families with children with dependable automobile ownership, 
     and maintenance of, or insurance for, the purchased 
     automobile.
       ``(ii) Supplement not supplant.--Funds provided to a State, 
     Indian tribe, county, or locality under a grant awarded under 
     this paragraph shall be used to supplement and not supplant 
     other State, county, or local public funds expended for car 
     ownership programs.
       ``(iii) General rules governing use of funds.--The rules of 
     section 404, other than subsection (b) of that section, shall 
     not apply to a grant made under this paragraph.
       ``(F) Application.--Each applicant desiring a grant under 
     this paragraph shall submit an application to the Secretary 
     at such time, in such manner, and accompanied by such 
     information as the Secretary may reasonably require.
       ``(G) Reversion of funds.--Any funds not expended by a 
     grantee within 3 years after the date the grant is awarded 
     under this paragraph shall be available for redistribution 
     among other grantees in such manner and amount as the 
     Secretary may determine, unless the Secretary extends by 
     regulation the time period to expend such funds.
       ``(H) Limitation on administrative costs of the 
     secretary.--Not more than an amount equal to 5 percent of the 
     funds appropriated to make grants under this paragraph for a 
     fiscal year shall be expended for administrative costs of the 
     Secretary in carrying out this paragraph.
       ``(I) Evaluation.--The Secretary shall, by grant, contract, 
     or interagency agreement, conduct an evaluation of the 
     programs administered with grants awarded under this 
     paragraph.
       ``(J) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary to make grants under this 
     paragraph, $25,000,000 for each of fiscal years 2004 through 
     2008.''.

     SEC. 120. TECHNICAL CORRECTIONS.

       (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by 
     inserting a comma after ``appropriate''.
       (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 
     611(a)(1)(A)(ii)(III)) is amended by striking the last close 
     parenthesis.
       (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is 
     amended by striking ``section'' and inserting ``sections''.
       (d)(1) Section 413 (42 U.S.C. 613) is amended by striking 
     subsection (g) and redesignating subsections (h) through (j) 
     and subsections (k) and (l) (as added by sections 112(c) and 
     115(a) of this Act, respectively) as subsections (g) through 
     (k), respectively.
       (2) Each of the following provisions is amended by striking 
     ``413(j)'' and inserting ``413(i)'':
       (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
     603(a)(5)(A)(ii)(III)).
       (B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
       (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
       (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

                     TITLE II--ABSTINENCE EDUCATION

     SEC. 201. EXTENSION OF ABSTINENCE EDUCATION PROGRAM.

       (a) Extension of Appropriations.--Section 510(d) (42 U.S.C. 
     710(d)), as amended by section 6 of the Welfare Reform 
     Extension Act of 2003 (Public Law 108-040, 117 Stat. 837), is 
     amended by striking ``2003'' and inserting ``2008''.
       (b) Allotment of Funds.--Section 510(a) (42 U.S.C. 710(a)) 
     is amended--
       (1) in the matter preceding paragraph (1), by striking ``an 
     application for the fiscal year under section 505(a)'' and 
     inserting ``, for the fiscal year, an application under 
     section 505(a), and an application under this section (in 
     such form and meeting such terms and conditions as determined 
     appropriate by the Secretary),''; and
       (2) in paragraph (2), to read as follows:
       ``(2) the percentage described in section 502(c)(1)(B)(ii) 
     that would be determined for the State under section 502(c) 
     if such determination took into consideration only those 
     States that transmitted both such applications for such 
     fiscal year.''.
       (c) Reallotment of Funds.--Section 510 (42 U.S.C. 710(a)) 
     is amended by adding at the end the following:
       ``(e)(1) With respect to allotments under subsection (a) 
     for fiscal year 2004 and subsequent fiscal years, the amount 
     of any allotment to a State for a fiscal year that the 
     Secretary determines will not be required to carry out a 
     program under this section during such fiscal year or the 
     succeeding fiscal year shall be available for reallotment 
     from time to time during such fiscal years on such dates as 
     the Secretary may fix, to other States that the Secretary 
     determines--
       ``(A) require amounts in excess of amounts previously 
     allotted under subsection (a) to carry out a program under 
     this section; and
       ``(B) will use such excess amounts during such fiscal 
     years.
       ``(2) Reallotments under paragraph (1) shall be made on the 
     basis of such States' applications under this section, after 
     taking into consideration the population of low-income 
     children in each such State as compared with the population 
     of low-income children in all such States with respect to 
     which a determination under paragraph (1) has been made by 
     the Secretary.
       ``(3) Any amount reallotted under paragraph (1) to a State 
     is deemed to be part of its allotment under subsection 
     (a).''.
       (d) Effective Date.--The amendments made by this section 
     shall be effective with respect to the program under section 
     510 for fiscal years 2004 and succeeding fiscal years.

                        TITLE III--CHILD SUPPORT

     SEC. 301. DISTRIBUTION OF CHILD SUPPORT COLLECTED BY STATES 
                   ON BEHALF OF CHILDREN RECEIVING CERTAIN WELFARE 
                   BENEFITS.

       (a) Modification of Rule Requiring Assignment of Support 
     Rights as a Condition of Receiving TANF.--Section 408(a)(3) 
     (42 U.S.C. 608(a)(3)) is amended to read as follows:
       ``(3) No assistance for families not assigning certain 
     support rights to the state.--A State to which a grant is 
     made under section 403 shall require, as a condition of 
     paying assistance to a family under the State program funded 
     under this part, that a member of the family assign to the 
     State any right the family member may have (on behalf of the 
     family member or of any other person for whom the family 
     member has applied for or is receiving such assistance) to 
     support from any other person, not exceeding the total amount 
     of assistance so paid to the family, which accrues during the 
     period that the family receives assistance under the 
     program.''.
       (b) Increasing Child Support Payments to Families and 
     Simplifying Child Support Distribution Rules.--
       (1) Distribution rules.--
       (A) In general.--Section 457(a) (42 U.S.C. 657(a)) is 
     amended to read as follows:
       ``(a) In General.--Subject to subsections (d) and (e), the 
     amounts collected on behalf of a family as support by a State 
     pursuant to a plan approved under this part shall be 
     distributed as follows:
       ``(1) Families receiving assistance.--In the case of a 
     family receiving assistance from the State, the State shall--
       ``(A) pay to the Federal Government the Federal share of 
     the amount collected, subject to paragraph (3)(A);
       ``(B) retain, or pay to the family, the State share of the 
     amount collected, subject to paragraph (3)(B); and
       ``(C) pay to the family any remaining amount.
       ``(2) Families that formerly received assistance.--In the 
     case of a family that formerly received assistance from the 
     State:
       ``(A) Current support.--To the extent that the amount 
     collected does not exceed the current support amount, the 
     State shall pay the amount to the family.
       ``(B) Arrearages.--Except as otherwise provided in an 
     election made under section 454(34), to the extent that the 
     amount collected exceeds the current support amount, the 
     State--
       ``(i) shall first pay to the family the excess amount, to 
     the extent necessary to satisfy support arrearages not 
     assigned pursuant to section 408(a)(3);
       ``(ii) if the amount collected exceeds the amount required 
     to be paid to the family under clause (i), shall--

       ``(I) pay to the Federal Government the Federal share of 
     the excess amount described in this clause, subject to 
     paragraph (3)(A); and
       ``(II) retain, or pay to the family, the State share of the 
     excess amount described in this clause, subject to paragraph 
     (3)(B); and

       ``(iii) shall pay to the family any remaining amount.
       ``(3) Limitations.--
       ``(A) Federal reimbursements.--The total of the amounts 
     paid by the State to the Federal Government under paragraphs 
     (1) and (2) of this subsection with respect to a family shall 
     not exceed the Federal share of the amount assigned with 
     respect to the family pursuant to section 408(a)(3).
       ``(B) State reimbursements.--The total of the amounts 
     retained by the State under paragraphs (1) and (2) of this 
     subsection with respect to a family shall not exceed the 
     State share of the amount assigned with respect to the family 
     pursuant to section 408(a)(3).
       ``(4) Families that never received assistance.--In the case 
     of any other family, the State shall pay the amount collected 
     to the family.
       ``(5) Families under certain agreements.--Notwithstanding 
     paragraphs (1) through (3), in the case of an amount 
     collected for a family in accordance with a cooperative 
     agreement under section 454(33), the State shall distribute 
     the amount collected pursuant to the terms of the agreement.
       ``(6) State financing options.--To the extent that the 
     State's share of the amount payable to a family pursuant to 
     paragraph (2)(B) of this subsection exceeds the amount that 
     the State estimates (under procedures approved by the 
     Secretary) would have been payable to the family pursuant to 
     former section 457(a)(2)(B) (as in effect for the State 
     immediately before the date this subsection first applies to 
     the State) if such former section had remained in effect, the 
     State may elect to have the payment considered a qualified 
     State expenditure for purposes of section 409(a)(7).
       ``(7) State option to pass through additional support with 
     federal financial participation.--
       ``(A) Families that formerly received assistance.--
     Notwithstanding paragraph (2), a State shall not be required 
     to pay to the Federal Government the Federal share of an 
     amount collected on behalf of a family that formerly received 
     assistance from the State to the extent that the State pays 
     the amount to the family.

[[Page 5432]]

       ``(B) Families that currently receive assistance.--
       ``(i) In general.--Notwithstanding paragraph (1), in the 
     case of a family that receives assistance from the State, a 
     State shall not be required to pay to the Federal Government 
     the Federal share of the excepted portion (as defined in 
     clause (ii)) of any amount collected on behalf of such family 
     during a month to the extent that--

       ``(I) the State pays the excepted portion to the family; 
     and
       ``(II) the excepted portion is disregarded in determining 
     the amount and type of assistance provided to the family 
     under such program.

       ``(ii) Excepted portion defined.--For purposes of this 
     subparagraph, the term `excepted portion' means that portion 
     of the amount collected on behalf of a family during a month 
     that does not exceed $400 per month, or in the case of a 
     family that includes 2 or more children, that does not exceed 
     an amount established by the State that is not more than $600 
     per month.
       ``(8) States with demonstration waivers.--Notwithstanding 
     the preceding paragraphs, in the case of a State that, on the 
     date of enactment of this paragraph, has had in effect since 
     October 1, 1997, a waiver under section 1115 permitting 
     passthrough payments of child support collections--
       ``(A) the State may continue to distribute such payments to 
     families without regard to the expiration date of such 
     waiver; and
       ``(B) the requirement under paragraph (1) to pay to the 
     Federal Government the Federal share of the amount collected 
     on behalf of a family shall not apply to the extent that--
       ``(i) the State distributes such amount to the family; and
       ``(ii) such amount is disregarded in determining the amount 
     and type of assistance paid to the family.''.
       (B) State plan to include election as to which rules to 
     apply in distributing child support arrearages collected on 
     behalf of families formerly receiving assistance.--Section 
     454 (42 U.S.C. 654) is amended--
       (i) by striking ``and'' at the end of paragraph (32);
       (ii) by striking the period at the end of paragraph (33) 
     and inserting ``; and''; and
       (iii) by inserting after paragraph (33) the following:
       ``(34) include an election by the State to apply section 
     457(a)(2)(B) of this Act or former section 457(a)(2)(B) of 
     this Act (as in effect for the State immediately before the 
     date this paragraph first applies to the State) to the 
     distribution of the amounts which are the subject of such 
     sections and, for so long as the State elects to so apply 
     such former section, the amendments made by section 301(d)(1) 
     of the Personal Responsibility and Individual Development for 
     Everyone Act shall not apply with respect to the State, 
     notwithstanding section 301(e) of that Act.''.
       (C) Approval of estimation procedures.--Not later than the 
     date that is 6 months after the date of enactment of this 
     Act, the Secretary of Health and Human Services, in 
     consultation with the States (as defined for purposes of part 
     D of title IV of the Social Security Act (42 U.S.C. 651 et 
     seq.)), shall establish the procedures to be used to make the 
     estimate described in section 457(a)(6) of such Act (42 
     U.S.C. 657(a)(6)).
       (2) Current support amount defined.--Section 457(c) (42 
     U.S.C. 657(c)) is amended by adding at the end the following:
       ``(5) Current support amount.--The term `current support 
     amount' means, with respect to amounts collected as support 
     on behalf of a family, the amount designated as the monthly 
     support obligation of the noncustodial parent in the order 
     requiring the support.''.
       (c) State Option To Discontinue Older Support 
     Assignments.--Section 457(b) (42 U.S.C. 657(b)) is amended to 
     read as follows:
       ``(b) Continuation of Assignments.--
       ``(1) State option to discontinue pre-1997 support 
     assignments.--
       ``(A) In general.--Any rights to support obligations 
     assigned to a State as a condition of receiving assistance 
     from the State under part A and in effect on September 30, 
     1997 (or such earlier date on or after August 22, 1996, as 
     the State may choose), may remain assigned after such date.
       ``(B) Distribution of amounts after assignment 
     discontinuation.--If a State chooses to discontinue the 
     assignment of a support obligation described in subparagraph 
     (A), the State may treat amounts collected pursuant to such 
     assignment as if such amounts had never been assigned and may 
     distribute such amounts to the family in accordance with 
     subsection (a)(4).
       ``(2) State option to discontinue post-1997 assignments.--
       ``(A) In general.--Any rights to support obligations 
     accruing before the date on which a family first receives 
     assistance under part A that are assigned to a State under 
     that part and in effect before the implementation date of 
     this section may remain assigned after such date.
       ``(B) Distribution of amounts after assignment 
     discontinuation.--If a State chooses to discontinue the 
     assignment of a support obligation described in subparagraph 
     (A), the State may treat amounts collected pursuant to such 
     assignment as if such amounts had never been assigned and may 
     distribute such amounts to the family in accordance with 
     subsection (a)(4).''.
       (d) Conforming Amendments.--
       (1) Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)), as 
     amended by section 103(c), is amended--
       (A) in subclause (I)(aa), by striking ``457(a)(1)(B)'' and 
     inserting ``457(a)(1)''; and
       (B) by adding at the end the following:

       ``(VI) Portions of certain child support payments collected 
     on behalf of and distributed to families no longer receiving 
     assistance.--Any amount paid by a State pursuant to clause 
     (i) or (ii) of section 457(a)(2)(B), but only to the extent 
     that the State properly elects under section 457(a)(6) to 
     have the payment considered a qualified State expenditure.''.

       (2) Section 6402(c) of the Internal Revenue Code of 1986 
     (relating to offset of past-due support against overpayments) 
     is amended--
       (A) in the first sentence, by striking ``the Social 
     Security Act.'' and inserting ``of such Act.''; and
       (B) by striking the third sentence and inserting the 
     following: ``The Secretary shall apply a reduction under this 
     subsection first to an amount certified by the State as past 
     due support under section 464 of the Social Security Act 
     before any other reductions allowed by law.''.
       (e) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     take effect on October 1, 2007, and shall apply to payments 
     under parts A and D of title IV of the Social Security Act 
     for calendar quarters beginning on or after such date, and 
     without regard to whether regulations to implement such 
     amendments (in the case of State programs operated under such 
     part D) are promulgated by such date.
       (2) State option to accelerate effective date.--In 
     addition, a State may elect to have the amendments made by 
     this section apply to the State and to amounts collected by 
     the State (and such payments under parts A and D), on and 
     after such date as the State may select that is after the 
     date of enactment of this Act and before October 1, 2007.

     SEC. 302. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT 
                   ORDERS FOR FAMILIES RECEIVING TANF.

       (a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C. 
     666(a)(10)(A)(i)) is amended--
       (1) by striking ``parent, or,'' and inserting ``parent 
     or''; and
       (2) by striking ``upon the request of the State agency 
     under the State plan or of either parent,''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2005.

     SEC. 303. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

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

     SEC. 304. USE OF NEW HIRE INFORMATION TO ASSIST IN 
                   ADMINISTRATION OF UNEMPLOYMENT COMPENSATION 
                   PROGRAMS.

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

[[Page 5433]]

     requests and data matching under this paragraph.
       ``(E) Reimbursement of costs.--A State agency shall 
     reimburse the Secretary, in accordance with subsection 
     (k)(3), for the costs incurred by the Secretary in furnishing 
     the information requested under this paragraph.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2004.

     SEC. 305. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE 
                   TRIGGERING PASSPORT DENIAL.

       (a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is 
     amended by striking ``$5,000'' and inserting ``$2,500''.
       (b) Conforming Amendment.--Section 454(31) (42 U.S.C. 
     654(31)) is amended by striking ``$5,000'' and inserting 
     ``$2,500''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2004.

     SEC. 306. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT 
                   PAST-DUE CHILD SUPPORT ON BEHALF OF CHILDREN 
                   WHO ARE NOT MINORS.

       (a) In General.--Section 464 (42 U.S.C. 664) is amended--
       (1) in subsection (a)(2)(A), by striking ``(as that term is 
     defined for purposes of this paragraph under subsection 
     (c))''; and
       (2) in subsection (c)--
       (A) in paragraph (1)--
       (i) by striking ``(1) Except as provided in paragraph (2), 
     as used in'' and inserting ``In''; and
       (ii) by inserting ``(whether or not a minor)'' after ``a 
     child'' each place it appears; and
       (B) by striking paragraphs (2) and (3).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2005.

     SEC. 307. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR 
                   SERVICE-CONNECTED DISABILITIES IN ORDER TO 
                   ENFORCE OBLIGATIONS.

       (a) In General.--Section 459(h)(1)(A)(ii)(V)) (42 U.S.C. 
     659(h)(1)(A)(ii)(V)) is amended by striking all that follows 
     ``Armed Forces'' and inserting ``, except that such 
     compensation shall not be subject to withholding pursuant to 
     this section for payment of alimony unless the former member 
     to whom it is payable is in receipt of retired or retainer 
     pay and has waived a portion of such pay in order to receive 
     such compensation;''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2005.

     SEC. 308. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

       (a) In General.--Section 3716(h)(3) of title 31, United 
     States Code, is amended to read as follows:
       ``(3)(A) Except as provided in subparagraph (B), in 
     applying this subsection with respect to any debt owed to a 
     State, subsection (c)(3)(A) shall not apply.
       ``(B) Subparagraph (A) shall not apply with respect to 
     payments owed to an individual under title II of the Social 
     Security Act, for purposes of an offset under this section of 
     such payments against past-due support (as defined in section 
     464(c) of the Social Security Act, without regard to 
     paragraphs (2) and (3) of such section 464(c)) that is being 
     enforced by a State agency administering a program under part 
     D of title IV of that Act.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2004.

     SEC. 309. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

       Section 452(j) (42 U.S.C. 652(j)) is amended by inserting 
     ``or the amount appropriated under this paragraph for fiscal 
     year 2002, whichever is greater'' before ``, which shall be 
     available''.

     SEC. 310. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE 
                   FUNDING.

       Section 453(o) (42 U.S.C. 653(o)) is amended--
       (1) in the first sentence, by inserting ``or the amount 
     appropriated under this paragraph for fiscal year 2002, 
     whichever is greater'' before ``, which shall be available''; 
     and
       (2) in the second sentence, by striking ``for each of 
     fiscal years 1997 through 2001''.

     SEC. 311. IDENTIFICATION AND SEIZURE OF ASSETS HELD BY 
                   MULTISTATE FINANCIAL INSTITUTIONS.

       (a) Duties of the Secretary.--Section 452(l) (42 U.S.C. 
     652(l)) is amended to read as follows:
       ``(l) Identification and seizure of assets held by 
     multistate Financial Institutions.--
       ``(1) In general.--The Secretary, through the Federal 
     Parent Locator Service, is authorized--
       ``(A) to assist State agencies operating programs under 
     this part and financial institutions doing business in 2 or 
     more States in reaching agreements regarding the receipt from 
     such institutions, and the transfer to the State agencies, of 
     information that may be provided pursuant to section 
     466(a)(17)(A)(i) or 469A(a);
       ``(B) to perform data matches comparing information from 
     such State agencies and financial institutions entering into 
     such Agreements with respect to individuals owing past-due 
     support; and
       ``(C) to seize assets, held by such financial institutions, 
     of individuals identified through such data matches who owe 
     past-due support, by--
       ``(i) issuing a notice of lien or levy to such financial 
     institutions requiring them to encumber such assets for 30 
     calendar days and to subsequently transfer such assets to the 
     Secretary (except that the Secretary shall promptly release 
     such lien or levy within such 30-day period upon request of 
     the State agencies responsible for collecting past-due 
     support from such individuals); and
       ``(ii) providing notice to such individuals of the lien or 
     levy upon their assets and informing them--

       ``(I) of their procedural due process rights, including the 
     opportunity to contest such lien or levy to the appropriate 
     State agency; and
       ``(II) in the case of jointly owned assets, of the process 
     by which other owners may secure their respective share of 
     such assets, according to such policies and procedures as the 
     Secretary may specify with respect to seizure of such assets.

       ``(2) Transfer of funds to states.--Assets seized from 
     individuals under paragraph (1)(C) shall be promptly 
     transferred by the Secretary to the State agencies 
     responsible for collecting past-due support from such 
     individuals for distribution pursuant to section 457.
       ``(3) Relationship to state laws.--Notwithstanding any 
     provision of State law, an individual receiving a notice 
     under paragraph (1)(C) shall have 21 calendar days from the 
     date of such notice to contest the lien or levy imposed under 
     such paragraph by requesting an administrative review by the 
     State agency responsible for collecting past-due support from 
     such individual.
       ``(4) Treatment of disclosures.--For purposes of section 
     1113(d) of the Right to Financial Privacy Act of 1978, a 
     disclosure pursuant to this subsection shall be considered a 
     disclosure pursuant to a Federal statute.''.
       (b) State Duties.--
       (1) Individuals with assets subject to federal seizure.--
     Section 454 (42 U.S.C. 654), as amended by section 
     301(b)(1)(B)(iii), is amended--
       (A) in paragraph (33), by striking ``and'' at the end;
       (B) in paragraph (34), by striking the period and inserting 
     ``; and''; and
       (C) by inserting after paragraph (34), the following:
       ``(35) provide that the State shall--
       ``(A) upon furnishing the Secretary with information under 
     section 452(l) with respect to individuals owing past-due 
     support, provide notice to such individuals that their assets 
     held in financial institutions shall be subject to seizure to 
     pay such past-due support, and shall--
       ``(i) instruct such individuals of the steps which may be 
     taken to contest the State's determination that past-due 
     support is owed or the amount of the past-due support; and
       ``(ii) include, in the case of jointly owned assets, a 
     description of the process by which other owners may secure 
     their share of such assets, in accordance with such policies 
     and procedures as the Secretary may specify with respect to 
     seizure of such assets;
       ``(B) promptly resolve cases in which such individuals 
     contest the State's determination with respect to past-due 
     support, and provide for expedited refund of any assets 
     erroneously seized and transferred to the State under such 
     section 452(l); and
       ``(C) except as otherwise specified under this paragraph or 
     by the Secretary, ensure that the due process protections 
     afforded under this paragraph to individuals whose assets are 
     subject to seizure under section 452(l) are generally 
     consistent with, and to the extent practicable conform to, 
     the due process protections afforded by the State to 
     individuals subject to offset of tax refunds under section 
     464.''.
       (2) Reimbursement of federal costs.--Section 453(k)(3) (42 
     U.S.C. 653(k)(3)) is amended--
       (A) in the paragraph heading, by inserting ``and 
     enforcement services'' after ``information''
       (B) by inserting ``or enforcement services'' after ``that 
     receives information'';
       (C) by inserting ``or section 452(l)'' after ``pursuant to 
     this section''; and
       (D) by striking ``in furnishing the information'' and 
     inserting ``in furnishing such information or enforcement 
     services''.
       (c) Conforming Amendments.--
       (1) State law requirements.--Section 466(a)(17) (42 U.S.C. 
     666(a)(17)) is amended--
       (A) in subparagraph (A)--
       (i) in clause (i), by inserting ``pursuant to section 
     452(l)'' after ``and the Federal Parent Locator Service''; 
     and
       (ii) in clause (ii), by inserting ``issued by the State 
     agency or by the Secretary under section 452(l)'' after ``in 
     response to a notice of lien or levy''; and
       (B) in subparagraph (C)--
       (i) in clause (i), by inserting ``or to the Federal Parent 
     Locator Service'' after ``to the State agency''; and
       (ii) in clause (ii), by striking ``issued by the State 
     agency''.
       (2) Non Liability for financial institutions.--Section 
     469A(a) (42 U.S.C. 669a(a)) is amended by inserting ``section 
     452(l) or'' before ``section 466(a)(17)(A)''.

     SEC. 312. INFORMATION COMPARISONS WITH INSURANCE DATA.

       (a) Duties of the Secretary.--Section 452 (42 U.S.C. 652) 
     is amended by adding at the end the following:
       ``(m) Comparisons With Insurance Information.--
       ``(1) In general.--The Secretary, through the Federal 
     Parent Locator Service, is authorized--
       ``(A) to compare information concerning individuals owing 
     past-due support with information maintained by insurers (or 
     their agents) concerning insurance claims, settlements, 
     awards, and payments, and
       ``(B) to furnish information resulting from such data 
     matches to the State agencies responsible for collecting 
     child support from such individuals.

[[Page 5434]]

       ``(2) Liability.--No insurer (including any agent of an 
     insurer) shall be liable under any Federal or State law to 
     any person for any disclosure provided for under this 
     subsection, or for any other action taken in good faith in 
     accordance with the provisions of this subsection.''.
       (b) State Reimbursement of Federal Costs.--Section 
     453(k)(3) (42 U.S.C. 653(k)(3)), as amended by section 
     312(b)(2), is amended by striking ``section 452(l)'' and 
     inserting ``subsection (l) or (m) of section 452''.

     SEC. 313. TRIBAL ACCESS TO THE FEDERAL PARENT LOCATOR 
                   SERVICE.

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

     SEC. 314. REIMBURSEMENT OF SECRETARY'S COSTS OF INFORMATION 
                   COMPARISONS AND DISCLOSURE FOR ENFORCEMENT OF 
                   OBLIGATIONS ON HIGHER EDUCATION ACT LOANS AND 
                   GRANTS.

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

     SEC. 315. TECHNICAL AMENDMENT RELATING TO COOPERATIVE 
                   AGREEMENTS BETWEEN STATES AND INDIAN TRIBES.

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

     SEC. 316. CLAIMS UPON LONGSHORE AND HARBOR WORKERS' 
                   COMPENSATION FOR CHILD SUPPORT.

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


           ``liens on compensation; child support enforcement

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

     SEC. 317. STATE OPTION TO USE STATEWIDE AUTOMATED DATA 
                   PROCESSING AND INFORMATION RETRIEVAL SYSTEM FOR 
                   INTERSTATE CASES.

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

     SEC. 318. INTERCEPTION OF GAMBLING WINNINGS FOR CHILD 
                   SUPPORT.

       (a) Interception of Gambling Winnings for Child Support.--
     Section 452 (42 U.S.C. 652), as amended by section 313, is 
     amended by adding at the end the following:
       ``(n) Interception of Gambling Winnings for Past-Due 
     Support.--
       ``(1) In general.--The Secretary, through the Federal 
     Parent Locator Service, is authorized, in accordance with 
     this subsection, to intercept gambling winnings of an 
     individual owing past-due support being enforced by a State 
     agency with a plan approved under this part, and to transmit 
     such winnings to the State agency for distribution pursuant 
     to section 457.
       ``(2) Requirements for gambling establishments.--A gambling 
     establishment subject to this subsection shall not pay to any 
     individual gambling winnings (as defined in paragraph (6)) 
     meeting the criteria for reporting to the Internal Revenue 
     Service pursuant to section 6041 of the Internal Revenue Code 
     of 1986 until the establishment--
       ``(A) has furnished to the Secretary--
       ``(i) the information required to be so reported with 
     respect to such individual and such winnings; and
       ``(ii) the net amount of such gambling winnings (hereafter 
     in this subsection referred to as the `net gambling 
     winnings') after withholding of amounts for Federal taxes as 
     required pursuant to section 3402(q) of the Internal Revenue 
     Code of 1986; and
       ``(B) has complied with the Secretary's instructions 
     pursuant to paragraph (3).
       ``(3) Data match and withholding.--The Secretary shall--
       ``(A) compare information furnished pursuant to paragraph 
     (2)(A) with information on individuals who owe past-due 
     support;
       ``(B) direct the gambling establishment to withhold from an 
     individual's net gambling winnings all amounts not exceeding 
     the total past-due support owed by the individual;
       ``(C) authorize the gambling establishment, in 
     reimbursement of its costs of complying with this subsection, 
     to withhold and retain from such net gambling winnings an 
     amount equal to 2 percent of the amount to be withheld 
     pursuant to subparagraph (B), which amount shall be taken 
     first from any excess of such net winnings above the amount 
     withheld pursuant to subparagraph (B), with any balance to be 
     taken from the amount so withheld; and
       ``(D) require the gambling establishment to furnish written 
     notice to the individual whose gambling winnings are withheld 
     pursuant to this subsection, that includes--
       ``(i) the amounts withheld pursuant to subparagraphs (B) 
     and (C);
       ``(ii) the reason and authority for the withholding; and
       ``(iii) an explanation of the individual's procedural due 
     process rights, including the right to contest such 
     withholding to the responsible State agency and information 
     necessary to contact such State agency.
       ``(4) Transfer of withheld amounts.--Net amounts withheld 
     for past-due support pursuant to subparagraphs (B) and (C) of 
     paragraph (3) shall--
       ``(A) be transferred by the gambling establishment to the 
     Secretary at the same time and in the same manner as amounts 
     withheld under section 3402(q) of the Internal Revenue Code 
     of 1986 would be transferred to the Internal Revenue Service, 
     together with the information described in paragraph 
     (2)(A)(i) with respect to the individuals whose winnings were 
     withheld under this subsection; and
       ``(B) be promptly transferred by the Secretary to the 
     appropriate State agency.
       ``(5) Nonliability of gambling establishments.--A gambling 
     establishment shall not be liable under any Federal or State 
     law to any person--
       ``(A) for any disclosure of information to the Secretary 
     under this subsection;
       ``(B) for withholding or surrendering gambling winnings in 
     accordance with this subsection; or
       ``(C) for any other action taken in good faith to comply 
     with this subsection.
       ``(6) Definition of gambling winnings.--In this subsection, 
     the term `gambling winnings' means the proceeds of a wager 
     that are subject to reporting under section 6041 of the 
     Internal Revenue Code of 1986.''.
       (b) Requirement for State Laws.--Section 466(a) (42 U.S.C. 
     666(a)) is amended by inserting after paragraph (19) the 
     following:
       ``(20) Interception of gambling winnings.--Procedures under 
     which--
       ``(A) gambling establishments subject to the laws of the 
     State are required to comply with the provisions of section 
     452(n), and are subject to sanctions for failure to comply, 
     which shall include liability in an amount equal to the 
     amount the establishment would have withheld if it so 
     complied;
       ``(B) noncustodial parents owing past-due support are 
     provided with written notice that gambling winnings may be 
     subject to withholding for past-due support under section 
     452(n); and
       ``(C) cases where such noncustodial parents contest the 
     State's determination with respect to past-due support are 
     promptly resolved, and expedited refund is made of any 
     amounts erroneously seized under such section 452(n).''.
       (c) State Reimbursement of Federal Costs.--Section 
     453(k)(3) (42 U.S.C.653(k)(3)), as amended by section 313(b), 
     is amended by striking ``or (m)'' and inserting ``(m), or 
     (n)''.
       (d) Requirement for Participating Indian Tribes.--Section 
     455(f) (42 U.S.C. 655(f)) is amended in the first sentence by 
     striking ``and location of absent parents'' and inserting 
     ``location of absent parents, and interception of gambling 
     winnings consistent with the requirements of sections 452(n) 
     and 466(a)(20)''.

     SEC. 319. STATE LAW REQUIREMENT CONCERNING THE UNIFORM 
                   INTERSTATE FAMILY SUPPORT ACT (UIFSA).

       (a) In General.--Section 466(f) (42 U.S.C. 666(f)) is 
     amended--
       (1) by striking ``and as in effect on August 22, 1996,''; 
     and
       (2) by striking ``adopted as of such date'' and inserting 
     ``adopted as of August, 2001''.
       (b) Full Faith and Credit for Child Support Orders.--
     Section 1738B of title 28, United States Code, is amended--
       (1) by striking subsection (d) and inserting the following:
       ``(d) Continuing Exclusive Jurisdiction.--
       ``(1) In general.--Subject to paragraph (2), a court of a 
     State that has made a child support order consistent with 
     this section has continuing, exclusive jurisdiction to modify 
     its order if the order is the controlling order and--
       ``(A) the State is the child's State or the residence of 
     any individual contestant; or
       ``(B) if the State is not the residence of the child or an 
     individual contestant, the contestants consent in a record or 
     in open court that the court may continue to exercise 
     jurisdiction to modify its order.
       ``(2) Requirement.--A court may not exercise its 
     continuing, exclusive jurisdiction to modify the order if the 
     court of another State, acting in accordance with subsections 
     (e) and (f), has made a modification of the order.'';
       (2) in subsection (e)(2)--
       (A) in subparagraph (A), by striking ``because'' and all 
     that follows through the semicolon and inserting ``pursuant 
     to paragraph (1) or (2) of subsection (d);'' and

[[Page 5435]]

       (B) in subparagraph (B), by inserting ``with jurisdiction 
     over at least 1 of the individual contestants or that is 
     located in the child's State'' after ``another State'';
       (3) in subsection (f)--
       (A) in the subsection heading, by striking ``Recognition 
     of'' and inserting ``Determination of Controlling'';
       (B) in the matter preceding paragraph (1), by striking 
     ``shall apply'' and all that follows through the colon and 
     inserting ``having personal jurisdiction over both individual 
     contestants shall apply the following rules and by order 
     shall determine which order controls:''
       (C) in paragraph (1), by striking ``must be'' and inserting 
     ``controls and must be so'';
       (D) in paragraph (2), by striking ``must be recognized'' 
     and inserting ``controls'';
       (E) in paragraph (3), by striking ``must be recognized'' 
     each place it appears and inserting ``controls'';
       (F) in paragraph (4)--
       (i) by striking ``may'' and inserting ``shall''; and
       (ii) by striking ``must be recognized'' and inserting 
     ``controls''; and
       (G) by striking paragraph (5);
       (4) by striking subsection (g) and inserting the following:
       ``(g) Enforcement of Modified Orders.--If a child support 
     order issued by a court of a State is modified by a court of 
     another State which properly assumed jurisdiction, the 
     issuing court--
       ``(1) may enforce its order that was modified only as to 
     arrears and interest accruing before the modification;
       ``(2) may provide appropriate relief for violations of its 
     order which occurred before the effective date of the 
     modification; and
       ``(3) shall recognize the modifying order of the other 
     State for the purpose of enforcement.'';
       (5) in subsection (h)--
       (A) in paragraph (1), by striking ``and (3)'' and inserting 
     ``, (3), and (4)'';
       (B) in paragraph (2), by inserting ``the computation and 
     payment of arrearages, and the accrual of interest on the 
     arrearages,'' after ``obligations of support,''; and
       (C) by adding at the end the following:
       ``(4) Prospective application.--After a court determines 
     which is the controlling order and issues an order 
     consolidating arrears, if any, a court shall prospectively 
     apply the law of the State issuing the controlling order, 
     including that State's law with respect to interest on 
     arrears, current and future support, and consolidated 
     arrears.''; and
       (6) in subsection (i), by inserting ``and subsection (d)(2) 
     does not apply'' after ``issuing State''.

     SEC. 320. GRANTS TO STATES FOR ACCESS AND VISITATION 
                   PROGRAMS.

       (a) Authority To Make Grants to Indian Tribes.--Section 
     469B (42 U.S.C. 669b) is amended--
       (1) in the section heading, by inserting ``AND INDIAN 
     TRIBES'' after ``STATES''; and
       (2) in subsection (a), by inserting ``and Indian tribes or 
     tribal organizations'' after ``to enable States''.
       (b) Amount of Grants.--Section 469B(b) (42 U.S.C. 669b(b)) 
     is amended to read as follows:
       ``(b) Amount of Grants.--
       ``(1) Grants to states.--The amount of the grant to be made 
     to a State under this section for a fiscal year shall be an 
     amount equal to the lesser of--
       ``(A) 90 percent of State expenditures during the fiscal 
     year for activities described in subsection (a); or
       ``(B) the allotment of the State under subsection (c) for 
     the fiscal year.
       ``(2) Grants to indian tribes.--An Indian tribe or tribal 
     organization operating a program under section 455 that has 
     operated such program throughout the preceding fiscal year 
     and has an application under this section approved by the 
     Secretary shall receive a grant under this section for a 
     fiscal year in an amount equal to the allotment of such 
     Indian tribe or tribal organization under subsection (c)(2) 
     for the fiscal year.''.
       (c) Allotments.--Section 469B(c) (42 U.S.C. 669b(c)) is 
     amended to read as follows:
       ``(c) Allotments.--
       ``(1) Allotments to states.--
       ``(A) In general.--Subject to the subparagraph (C), the 
     allotment of a State for a fiscal year is the amount that 
     bears the same ratio to the amount specified in subparagraph 
     (B) for such fiscal year as the number of children in the 
     State living with only 1 parent bears to the total number of 
     such children in all States.
       ``(B) Amount available for allotment.--For purposes of 
     subparagraph (A), the amount specified in this subparagraph 
     is the following amount, reduced by the total allotments to 
     Indian tribes or tribal organizations in accordance with 
     paragraph (2):
       ``(i) $12,000,000 for fiscal year 2004.
       ``(ii) $14,000,000 for fiscal year 2005.
       ``(iii) $16,000,000 for fiscal year 2006.
       ``(iv) $20,000,000 for fiscal year 2007 and each succeeding 
     fiscal year.
       ``(C) Minimum state allotment.--The Secretary shall adjust 
     allotments to States under subparagraph (A) as necessary to 
     ensure that no State is allotted less than--
       ``(i) $120,000 for fiscal year 2004;
       ``(ii) $140,000 for fiscal year 2005;
       ``(iii) $160,000 for fiscal year 2006; and
       ``(iv) $180,000 for fiscal year 2007 and each succeeding 
     fiscal year.
       ``(2) Allotments to indian tribes.--
       ``(A) In general.--Subject to subparagraph (C), the 
     allotment of an Indian tribe or tribal organization described 
     in subsection (b)(2) for a fiscal year is an amount that 
     bears the same ratio to the amount specified in subparagraph 
     (B) for such fiscal year as the number of children in the 
     Indian tribe or tribal organization living with only 1 parent 
     bears to the total number of such children in all Indian 
     tribes and tribal organizations eligible to receive grants 
     under this section for such year.
       ``(B) Amount available for allotment.--For purposes of 
     subparagraph (A), the amount available under this 
     subparagraph is an amount, deducted from the amount specified 
     in paragraph (1)(B), not to exceed--
       ``(i) $250,000 for fiscal year 2004;
       ``(ii) $600,000 for fiscal year 2005;
       ``(iii) $800,000 for fiscal year 2006; and
       ``(iv) $1,670,000 for fiscal year 2007 and each succeeding 
     year.
       ``(C) Minimum and maximum tribal allotment.--The Secretary 
     shall adjust allotments to Indian tribes and tribal 
     organizations under subparagraph (A) as necessary to ensure 
     that no Indian tribe or tribal organization is allotted, for 
     a fiscal year, an amount which is less than $10,000 or more 
     than the minimum State allotment for such fiscal year.''.
       (d) Administration.--Section 469B(e) (42 U.S.C. 669b(e)) is 
     amended to read as follows:
       ``(e) Administration.--
       ``(1) Grants to states.--Each State to which a grant is 
     made under this section--
       ``(A) may administer State programs funded with the grant, 
     directly or through grants to or contracts with courts, local 
     public agencies, or nonprofit private entities; and
       ``(B) shall not be required to operate such programs on a 
     statewide basis.
       ``(2) Grants to States or indian tribes.--Each State or 
     Indian tribe or tribal organization to which a grant is made 
     under this section shall monitor, evaluate, and report on 
     such programs in accordance with regulations prescribed by 
     the Secretary.''.

     SEC. 321. TIMING OF CORRECTIVE ACTION YEAR FOR STATE 
                   NONCOMPLIANCE WITH CHILD SUPPORT ENFORCEMENT 
                   PROGRAM REQUIREMENTS.

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

                        TITLE IV--CHILD WELFARE

     SEC. 401. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION 
                   PROJECTS.

       Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)), as amended by 
     section 5 of the Welfare Reform Extension Act of 2003 (Public 
     Law 108-040, 117 Stat. 837) is amended by striking ``2003'' 
     and inserting ``2008''.

     SEC. 402. REMOVAL OF COMMONWEALTH OF PUERTO RICO FOSTER CARE 
                   FUNDS FROM LIMITATION ON PAYMENTS.

       Section 1108(a)(2) (42 U.S.C. 1308(a)(2)), as amended by 
     section 116(b)(2), is amended--
       (1) by striking ``Paragraph (1)'' and inserting the 
     following:
       ``(A) In general.--Paragraph (1)'';
       (2) in subparagraph (A) (as added by paragraph (1)), by 
     striking ``or 418(a)(4)(B)'' and inserting ``418(a)(4)(B), 
     or, subject to clause (ii) of subparagraph (B), payments to 
     Puerto Rico described in clause (i) of that subparagraph'' 
     before the period; and
       (3) by adding at the end the following:
       ``(B) Certain payments to puerto rico.--
       ``(i) Payments described.--For purposes of subparagraph 
     (A), payments described in this subparagraph are payments 
     made to Puerto Rico under part E of title IV with respect to 
     the portion of foster care payments made to Puerto

[[Page 5436]]

     Rico for fiscal year 2005 or any fiscal year thereafter that 
     exceed the total amount of such payments for fiscal year 
     2002.
       ``(ii) Limitation.--The total amount of payments to Puerto 
     Rico described in clause (i) that are disregarded under 
     subparagraph (A) may not exceed $6,250,000 for each of fiscal 
     years 2005 through 2008.''.

     SEC. 403. TECHNICAL CORRECTION.

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

                 TITLE V--SUPPLEMENTAL SECURITY INCOME

     SEC. 501. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY 
                   DETERMINATIONS.

       Section 1633 (42 U.S.C. 1383b) is amended by adding at the 
     end the following:
       ``(e)(1) The Commissioner of Social Security shall review 
     determinations, made by State agencies pursuant to subsection 
     (a) in connection with applications for benefits under this 
     title on the basis of blindness or disability, that 
     individuals who have attained 18 years of age are blind or 
     disabled as of a specified onset date. The Commissioner of 
     Social Security shall review such a determination before any 
     action is taken to implement the determination.
       ``(2)(A) In carrying out paragraph (1), the Commissioner of 
     Social Security shall review--
       ``(i) at least 20 percent of all determinations referred to 
     in paragraph (1) that are made in fiscal year 2004;
       ``(ii) at least 40 percent of all such determinations that 
     are made in fiscal year 2005; and
       ``(iii) at least 50 percent of all such determinations that 
     are made in fiscal year 2006 or thereafter.
       ``(B) In carrying out subparagraph (A), the Commissioner of 
     Social Security shall, to the extent feasible, select for 
     review the determinations which the Commissioner of Social 
     Security identifies as being the most likely to be 
     incorrect.''.

               TITLE VI--TRANSITIONAL MEDICAL ASSISTANCE

     SEC. 601. EXTENSION AND SIMPLIFICATION OF THE TRANSITIONAL 
                   MEDICAL ASSISTANCE PROGRAM (TMA).

       (a) Option of Continuous Eligibility for 12 Months; Option 
     of Continuing Coverage for Up To an Additional Year.--
       (1) Option of continuous eligibility for 12 months by 
     making reporting requirements optional.--Section 1925(b) (42 
     U.S.C. 1396r-6(b)) is amended--
       (A) in paragraph (1), by inserting ``, at the option of a 
     State,'' after ``and which'';
       (B) in paragraph (2)(A), by inserting ``Subject to 
     subparagraph (C):'' after ``(A) Notices.--'';
       (C) in paragraph (2)(B), by inserting ``Subject to 
     subparagraph (C):'' after ``(B) Reporting requirements.--'';
       (D) by adding at the end the following:
       ``(C) State option to waive notice and reporting 
     requirements.--A State may waive some or all of the reporting 
     requirements under clauses (i) and (ii) of subparagraph (B). 
     Insofar as it waives such a reporting requirement, the State 
     need not provide for a notice under subparagraph (A) relating 
     to such requirement.''; and
       (E) in paragraph (3)(A)(iii), by inserting ``the State has 
     not waived under paragraph (2)(C) the reporting requirement 
     with respect to such month under paragraph (2)(B) and if'' 
     after ``6-month period if''.
       (2) State option to extend eligibility for low-income 
     individuals for up to 12 additional months.--Section 1925 (42 
     U.S.C. 1396r-6) is further amended--
       (A) by redesignating subsections (c) through (f) as 
     subsections (d) through (g), respectively; and
       (B) by inserting after subsection (b) the following:
       ``(c) State Option of Up To 12 Months of Additional 
     Eligibility.--
       ``(1) In general.--Notwithstanding any other provision of 
     this title, each State plan approved under this title may 
     provide, at the option of the State, that the State shall 
     offer to each family which received assistance during the 
     entire 6-month period under subsection (b) and which meets 
     the applicable requirement of paragraph (2), in the last 
     month of the period the option of extending coverage under 
     this subsection for the succeeding period not to exceed 12 
     months.
       ``(2) Income restriction.--The option under paragraph (1) 
     shall not be made available to a family for a succeeding 
     period unless the State determines that the family's average 
     gross monthly earnings (less such costs for such child care 
     as is necessary for the employment of the caretaker relative) 
     as of the end of the 6-month period under subsection (b) does 
     not exceed 185 percent of the official poverty line (as 
     defined by the Office of Management and Budget, and revised 
     annually in accordance with section 673(2) of the Omnibus 
     Budget Reconciliation Act of 1981) applicable to a family of 
     the size involved.
       ``(3) Application of extension rules.--The provisions of 
     paragraphs (2), (3), (4), and (5) of subsection (b) shall 
     apply to the extension provided under this subsection in the 
     same manner as they apply to the extension provided under 
     subsection (b)(1), except that for purposes of this 
     subsection--
       ``(A) any reference to a 6-month period under subsection 
     (b)(1) is deemed a reference to the extension period provided 
     under paragraph (1) and any deadlines for any notices or 
     reporting and the premium payment periods shall be modified 
     to correspond to the appropriate calendar quarters of 
     coverage provided under this subsection; and
       ``(B) any reference to a provision of subsection (a) or (b) 
     is deemed a reference to the corresponding provision of 
     subsection (b) or of this subsection, respectively.''.
       (b) State Option To Waive Receipt of Medicaid for 3 of 
     Previous 6 Months To Qualify for TMA.--Section 1925(a)(1) (42 
     U.S.C. 1396r-6(a)(1)) is amended by adding at the end the 
     following: ``A State may, at its option, also apply the 
     previous sentence in the case of a family that was receiving 
     such aid for fewer than 3 months, or that had applied for and 
     was eligible for such aid for fewer than 3 months, during the 
     6 immediately preceding months described in such sentence.''.
       (c) Extension of Sunset for TMA.--
       (1) In general.--Subsection (g) of section 1925 (42 U.S.C. 
     1396r-6), as so redesignated under subsection (a)(2)(A), and 
     as amended by section 7 of the Welfare Reform Extension Act 
     of 2003, is further redesignated as subsection (i) and is 
     amended by striking ``2003'' and inserting ``2008''.
       (2) Conforming amendment.--Section 1902(e)(1)(B) (42 U.S.C. 
     1396a(e)(1)(B)), as so amended, is amended by striking 
     ``September 30, 2003'' and inserting ``the last date (if any) 
     on which section 1925 applies under subsection (f) of that 
     section''.
       (d) CMS Report on Enrollment and Participation Rates Under 
     TMA.--Section 1925 (42 U.S.C. 1396r-6), as amended by 
     subsections (a)(2)(A) and (c)(1), is amended by inserting 
     after subsection (f) the following:
       ``(g) Additional Provisions.--
       ``(1) Collection and reporting of participation 
     information.--Each State shall--
       ``(A) collect and submit to the Secretary, in a format 
     specified by the Secretary, information on average monthly 
     enrollment and average monthly participation rates for adults 
     and children under this section; and
       ``(B) make such information publicly available.

     Such information shall be submitted under subparagraph (A) at 
     the same time and frequency in which other enrollment 
     information under this title is submitted to the Secretary. 
     Using such information, the Secretary shall submit to 
     Congress annual reports concerning such rates.''.
       (e) Coordination of Work.--Section 1925(g) (42 U.S.C. 
     1396r-6(g)), as added by subsection (d), is amended by adding 
     at the end the following:
       ``(2) Coordination with administration for children and 
     families.--The Administrator of the Centers for Medicare & 
     Medicaid Services, in carrying out this section, shall work 
     with the Assistant Secretary for the Administration for 
     Children and Families to develop guidance or other technical 
     assistance for States regarding best practices in 
     guaranteeing access to transitional medical assistance under 
     this section.''.
       (f) Elimination of TMA Requirement for States That Extend 
     Coverage to Children and Parents Through 185 Percent of 
     Poverty.--
       (1) In general.--Section 1925 (42 U.S.C. 1396r-6) is 
     amended by inserting after subsection (g), as added by 
     subsection (d), the following:
       ``(h) Provisions Optional for States That Extend Coverage 
     to Children and Parents Through 185 Percent of Poverty.--A 
     State may meet (but is not required to meet) the requirements 
     of subsections (a) and (b) if it provides for medical 
     assistance under section 1931 to families (including both 
     children and caretaker relatives) the average gross monthly 
     earning of which (less such costs for such child care as is 
     necessary for the employment of a caretaker relative) is at 
     or below a level that is at least 185 percent of the official 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Omnibus Budget Reconciliation Act of 1981) 
     applicable to a family of the size involved.''.
       (2) Conforming amendments.--Section 1925 (42 U.S.C. 1396r-
     6) is amended, in subsections (a)(1) and (b)(1), by inserting 
     ``, but subject to subsection (h),'' after ``Notwithstanding 
     any other provision of this title,'' each place it appears.
       (g) Requirement of Notice for All Families Losing TANF.--
     Subsection (a)(2) of section 1925 (42 U.S.C. 1396r-6) is 
     amended by adding at the end the following flush sentences:

     ``Each State shall provide, to families whose aid under part 
     A or E of title IV has terminated but whose eligibility for 
     medical assistance under this title continues, written notice 
     of their ongoing eligibility for such medical assistance. If 
     a State makes a determination that any member of a family 
     whose aid under part A or E of title IV is being terminated 
     is also no longer eligible for medical assistance under this 
     title, the notice of such determination shall be supplemented 
     by a 1-page notification form describing the different ways 
     in which individuals and families may qualify for such 
     medical assistance and explaining that individuals and 
     families do not have to be receiving aid under part A or E of 
     title IV in order to qualify for such medical assistance. 
     Such notice shall further be supplemented by information on 
     how to apply for child health assistance under the State 
     children's health insurance program under title XXI and how 
     to apply for medical assistance under this title.''.
       (h) Extending Use of Outstationed Workers To Accept 
     Applications for Transitional Medical Assistance.--Section 
     1902(a)(55) (42 U.S.C. 1396a(a)(55)) is amended by inserting 
     ``and under section 1931'' after ``(a)(10)(A)(ii)(IX)''.
       (i) Effective Dates.--

[[Page 5437]]

       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to calendar 
     quarters beginning on or after October 1, 2003, without 
     regard to whether or not final regulations to carry out such 
     amendments have been promulgated by such date.
       (2) Notice.--The amendment made by subsection (g) shall 
     take effect 6 months after the date of enactment of this Act.
       (3) Delay permitted for state plan amendment.--In the case 
     of a State plan for medical assistance under title XIX of the 
     Social Security Act which the Secretary of Health and Human 
     Services determines requires State legislation (other than 
     legislation appropriating funds) in order for the plan to 
     meet the additional requirements imposed by the amendments 
     made by this section, the State plan shall not be regarded as 
     failing to comply with the requirements of such title solely 
     on the basis of its failure to meet these additional 
     requirements before the first day of the first calendar 
     quarter beginning after the close of the first regular 
     session of the State legislature that begins after the date 
     of enactment of this Act. For purposes of the previous 
     sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.

     SEC. 602. PROHIBITION AGAINST COVERING CHILDLESS ADULTS WITH 
                   SCHIP FUNDS.

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

                       TITLE VII--EFFECTIVE DATE

     SEC. 701. EFFECTIVE DATE.

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

  The ACTING PRESIDENT pro tempore. The distinguished Senator from 
Nevada is recognized.

                          ____________________