[House Report 114-616]
[From the U.S. Government Publishing Office]


114th Congress }                                           { Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                           { 114-616

======================================================================
 
           SOCIAL IMPACT PARTNERSHIPS TO PAY FOR RESULTS ACT

                                _______
                                

 June 10, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 5170]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 5170) to encourage and support partnerships between 
the public and private sectors to improve our Nation's social 
programs, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. SUMMARY AND BACKGROUND..........................................11
          A. Purpose and Summary.................................    11
          B. Background and Need for Legislation.................    11
          C. Legislative History.................................    12
 II. EXPLANATION OF THE BILL.........................................12
          Section 1: Short Title.................................    12
          Section 2: Social Impact Partnerships to Pay For 
              Results............................................    13
III. VOTES OF THE COMMITTEE..........................................19
 IV. NEW BUDGET AUTHORITY AND TAX EXPENDITURES.......................20
  V. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE.......20
 VI. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......22
          A. Committee Oversight Findings and Recommendations....    22
          B. Statement of General Performance Goals and 
              Objectives.........................................    22
          C. Applicability of House Rule XXI 5(b)................    22
          D. Congressional Earmarks, Limited Tax Benefits, and 
              Limited Tariff Benefits............................    23
          E. Duplication of Federal Programs.....................    23
          F. Disclosure of Directed Rule Makings.................    23
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........23
          A. Text of Existing Law Amended or Repealed by the 
              Bill, as Reported..................................    23
          B. Changes in Existing Law Proposed by the Bill, as 
              Reported...........................................    47
VIII.ADDITIONAL AND DISSENTING VIEWS.................................85


    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Social Impact Partnerships to Pay for 
Results Act''.

SEC. 2. SOCIAL IMPACT PARTNERSHIPS TO PAY FOR RESULTS.

  Section 403 of the Social Security Act (42 U.S.C. 603) is amended by 
adding at the end the following:
  ``(c) Social Impact Demonstration Projects.--
          ``(1) Purposes.--The purposes of this subsection are the 
        following:
                  ``(A) To improve the lives of families and 
                individuals in need in the United States by funding 
                social programs that achieve real results.
                  ``(B) To redirect funds away from programs that, 
                based on objective data, are ineffective, and into 
                programs that achieve demonstrable, measurable results.
                  ``(C) To ensure Federal funds are used effectively on 
                social services to produce positive outcomes for both 
                service recipients and taxpayers.
                  ``(D) To establish the use of social impact 
                partnerships to address some of our Nation's most 
                pressing problems.
                  ``(E) To facilitate the creation of public-private 
                partnerships that bundle philanthropic or other private 
                resources with existing public spending to scale up 
                effective social interventions already being 
                implemented by private organizations, non-profits, 
                charitable organizations, and State and local 
                governments across the country.
                  ``(F) To bring pay-for-performance to the social 
                sector, allowing the United States to improve the 
                impact and effectiveness of vital social services 
                programs while redirecting inefficient or duplicative 
                spending.
                  ``(G) To incorporate outcomes measurement and 
                randomized controlled trials or other rigorous 
                methodologies for assessing program impact.
          ``(2) Social impact partnership application.--
                  ``(A) Notice.--Not later than 1 year after the date 
                of the enactment of this subsection, the Secretary of 
                the Treasury, in consultation with the Federal 
                Interagency Council on Social Impact Partnerships, 
                shall publish in the Federal Register a request for 
                proposals from States or local government for social 
                impact partnership projects in accordance with this 
                paragraph.
                  ``(B) Required outcomes for social impact partnership 
                project.--To qualify as a social impact partnership 
                project under this subsection, a project must produce 1 
                or more measurable, clearly defined outcomes that 
                result in social benefit and Federal savings through 
                any of the following:
                          ``(i) Increasing work and earnings by 
                        individuals who have been unemployed in the 
                        United States for more than 6 consecutive 
                        months.
                          ``(ii) Increasing employment and earnings of 
                        individuals who have attained 16 years of age 
                        but not 25 years of age.
                          ``(iii) Increasing employment among 
                        individuals receiving Federal disability 
                        benefits.
                          ``(iv) Reducing the dependence of low-income 
                        families on Federal means-tested benefits.
                          ``(v) Improving rates of high school 
                        graduation.
                          ``(vi) Reducing teen and unplanned 
                        pregnancies.
                          ``(vii) Improving birth outcomes and early 
                        childhood health and development among low-
                        income families and individuals.
                          ``(viii) Reducing rates of asthma, diabetes, 
                        or other preventable diseases among low-income 
                        families and individuals to reduce the 
                        utilization of emergency and other high-cost 
                        care.
                          ``(ix) Increasing the proportion of children 
                        living in 2-parent families.
                          ``(x) Reducing incidences and adverse 
                        consequences of child abuse and neglect.
                          ``(xi) Reducing the number of youth in foster 
                        care by increasing adoptions, permanent 
                        guardianship arrangements, reunification, or 
                        placement with a fit and willing relative, or 
                        by avoiding placing children in foster care by 
                        ensuring they can be cared for safely in their 
                        own homes.
                          ``(xii) Reducing the number of children and 
                        youth in foster care residing in group homes, 
                        child care institutions, agency-operated foster 
                        homes, or other non-family foster homes, unless 
                        it is determined that it is in the interest of 
                        the child's long-term health, safety, or 
                        psychological well-being to not be placed in a 
                        family foster home.
                          ``(xiii) Reducing the number of children 
                        returning to foster care.
                          ``(xiv) Reducing recidivism among juveniles, 
                        individuals released from prison, or other 
                        high-risk populations.
                          ``(xv) Reducing the rate of homelessness 
                        among our most vulnerable populations.
                          ``(xvi) Improving the health and well-being 
                        of those with mental, emotional, and behavioral 
                        health needs.
                          ``(xvii) Improving the educational outcomes 
                        of special-needs or low-income children.
                          ``(xviii) Improving the employment and well-
                        being of returning United States military 
                        members.
                          ``(xix) Increasing the financial stability of 
                        low-income families.
                          ``(xx) Increasing the independence and 
                        employability of individuals who are physically 
                        or mentally disabled.
                          ``(xxi) Other measurable outcomes defined by 
                        the State or local government that result in 
                        positive social outcomes and Federal savings.
                  ``(C) Application required.--The notice described in 
                subparagraph (A) shall require a State or local 
                government to submit an application for the social 
                impact partnership project that addresses the 
                following:
                          ``(i) The outcome goals of the project.
                          ``(ii) A description of each intervention in 
                        the project and anticipated outcomes of the 
                        intervention.
                          ``(iii) Rigorous evidence demonstrating that 
                        the intervention can be expected to produce the 
                        desired outcomes.
                          ``(iv) The target population that will be 
                        served by the project.
                          ``(v) The expected social benefits to 
                        participants who receive the intervention and 
                        others who may be impacted.
                          ``(vi) Projected Federal, State, and local 
                        government costs and other costs to conduct the 
                        project.
                          ``(vii) Projected Federal, State, and local 
                        government savings and other savings, including 
                        an estimate of the savings to the Federal 
                        Government, on a program-by-program basis and 
                        in the aggregate, if the project is implemented 
                        and the outcomes are achieved.
                          ``(viii) If savings resulting from the 
                        successful completion of the project are 
                        estimated to accrue to the State or local 
                        government, the likelihood of the State or 
                        local government to realize those savings.
                          ``(ix) A plan for delivering the intervention 
                        through a social impact partnership model.
                          ``(x) A description of the expertise of each 
                        service provider that will administer the 
                        intervention, including a summary of the 
                        experience of the service provider in 
                        delivering the proposed intervention or a 
                        similar intervention, or demonstrating that the 
                        service provider has the expertise necessary to 
                        deliver the proposed intervention.
                          ``(xi) An explanation of the experience of 
                        the State or local government, the 
                        intermediary, or the service provider in 
                        raising private and philanthropic capital to 
                        fund social service investments.
                          ``(xii) The detailed roles and 
                        responsibilities of each entity involved in the 
                        project, including any State or local 
                        government entity, intermediary, service 
                        provider, independent evaluator, investor, or 
                        other stakeholder.
                          ``(xiii) A summary of the experience of the 
                        service provider delivering the proposed 
                        intervention or a similar intervention, or a 
                        summary demonstrating the service provider has 
                        the expertise necessary to deliver the proposed 
                        intervention.
                          ``(xiv) A summary of the unmet need in the 
                        area where the intervention will be delivered 
                        or among the target population who will receive 
                        the intervention.
                          ``(xv) The proposed payment terms, the 
                        methodology used to calculate outcome payments, 
                        the payment schedule, and performance 
                        thresholds.
                          ``(xvi) The project budget.
                          ``(xvii) The project timeline.
                          ``(xviii) The criteria used to determine the 
                        eligibility of an individual for the project, 
                        including how selected populations will be 
                        identified, how they will be referred to the 
                        project, and how they will be enrolled in the 
                        project.
                          ``(xix) The evaluation design.
                          ``(xx) The metrics that will be used to 
                        determine whether the outcomes have been 
                        achieved and how the metrics will be measured.
                          ``(xxi) An explanation of how the metrics 
                        used to determine whether the outcomes have 
                        been achieved are independent, objective 
                        indicators of impact and are not subject to 
                        manipulation by the service provider, 
                        intermediary, or investor.
                          ``(xxii) A summary explaining the 
                        independence of the evaluator from the other 
                        entities involved in the project and the 
                        evaluator's experience in conducting rigorous 
                        evaluations of program effectiveness including, 
                        where available, well-implemented randomized 
                        controlled trials on the intervention or 
                        similar interventions.
                          ``(xxiii) The capacity of the service 
                        provider to deliver the intervention to the 
                        number of participants the State or local 
                        government proposes to serve in the project.
                  ``(D) Project intermediary information required.--The 
                application described in subparagraph (C) shall also 
                contain the following information about any 
                intermediary for the social impact partnership project 
                (whether an intermediary is a service provider or other 
                entity):
                          ``(i) Experience and capacity for providing 
                        or facilitating the provision of the type of 
                        intervention proposed.
                          ``(ii) The mission and goals.
                          ``(iii) Information on whether the 
                        intermediary is already working with service 
                        providers that provide this intervention or an 
                        explanation of the capacity of the intermediary 
                        to begin working with service providers to 
                        provide the intervention.
                          ``(iv) Experience working in a collaborative 
                        environment across government and 
                        nongovernmental entities.
                          ``(v) Previous experience collaborating with 
                        public or private entities to implement 
                        evidence-based programs.
                          ``(vi) Ability to raise or provide funding to 
                        cover operating costs (if applicable to the 
                        project).
                          ``(vii) Capacity and infrastructure to track 
                        outcomes and measure results, including--
                                  ``(I) capacity to track and analyze 
                                program performance and assess program 
                                impact; and
                                  ``(II) experience with performance-
                                based awards or performance-based 
                                contracting and achieving project 
                                milestones and targets.
                          ``(viii) Role in delivering the intervention.
                          ``(ix) How the intermediary would monitor 
                        program success, including a description of the 
                        interim benchmarks and outcome measures.
                  ``(E) Feasibility studies funded through other 
                sources.--The notice described in subparagraph (A) 
                shall permit a State or local government to submit an 
                application for social impact partnership funding that 
                contains information from a feasibility study developed 
                for purposes other than applying for funding under this 
                subsection.
          ``(3) Awarding social impact partnership agreements.--
                  ``(A) Timeline in awarding agreement.--Not later than 
                6 months after receiving an application in accordance 
                with paragraph (2), the Secretary, in consultation with 
                the Federal Interagency Council on Social Impact 
                Partnerships, shall determine whether to enter into an 
                agreement for a social impact partnership project with 
                a State or local government.
                  ``(B) Considerations in awarding agreement.--In 
                determining whether to enter into an agreement for a 
                social impact partnership project (the application for 
                which was submitted under paragraph (2)) the Secretary, 
                in consultation with the Federal Interagency Council on 
                Social Impact Partnerships (established by paragraph 
                (6)) and the head of any Federal agency administering a 
                similar intervention or serving a population similar to 
                that served by the project, shall consider each of the 
                following:
                          ``(i) The recommendations made by the 
                        Commission on Social Impact Partnerships.
                          ``(ii) The value to the Federal Government of 
                        the outcomes expected to be achieved if the 
                        outcomes specified in the agreement are 
                        achieved.
                          ``(iii) The likelihood, based on evidence 
                        provided in the application and other evidence, 
                        that the State or local government in 
                        collaboration with the intermediary and the 
                        service providers will achieve the outcomes.
                          ``(iv) The savings to the Federal Government 
                        if the outcomes specified in the agreement are 
                        achieved.
                          ``(v) The savings to the State and local 
                        governments if the outcomes specified in the 
                        agreement are achieved.
                          ``(vi) The expected quality of the evaluation 
                        that would be conducted with respect to the 
                        agreement.
                  ``(C) Agreement authority.--
                          ``(i) Agreement requirements.--In accordance 
                        with this paragraph, the Secretary, in 
                        consultation with the Federal Interagency 
                        Council on Social Impact Partnerships and the 
                        head of any Federal agency administering a 
                        similar intervention or serving a population 
                        similar to that served by the project, may 
                        enter into an agreement for a social impact 
                        partnership project with a State or local 
                        government if the Secretary, in consultation 
                        with the Federal Interagency Council on Social 
                        Impact Partnerships, determines that each of 
                        the following requirements are met:
                                  ``(I) The State or local government 
                                agrees to achieve 1 or more outcomes 
                                specified in the agreement in order to 
                                receive payment.
                                  ``(II) The Federal payment to the 
                                State or local government for each 
                                outcome specified is less than or equal 
                                to the value of the outcome to the 
                                Federal Government over a period not to 
                                exceed 10 years, as determined by the 
                                Secretary, in consultation with the 
                                State or local government.
                                  ``(III) The duration of the project 
                                does not exceed 10 years.
                                  ``(IV) The State or local government 
                                has demonstrated, through the 
                                application submitted under paragraph 
                                (2), that, based on prior rigorous 
                                experimental evaluations or rigorous 
                                quasi-experimental studies, the 
                                intervention can be expected to achieve 
                                each outcome specified in the 
                                agreement.
                                  ``(V) The State, local government, 
                                intermediary, or service provider has 
                                experience raising private or 
                                philanthropic capital to fund social 
                                service investments (if applicable to 
                                the project).
                                  ``(VI) The State or local government 
                                has shown that each service provider 
                                has experience delivering the 
                                intervention, a similar intervention, 
                                or has otherwise demonstrated the 
                                expertise necessary to deliver the 
                                intervention.
                          ``(ii) Payment.--The Secretary shall pay the 
                        State or local government only if the 
                        independent evaluator described in paragraph 
                        (5) determines that the social impact 
                        partnership project has met the requirements 
                        specified in the agreement and achieved an 
                        outcome specified in the agreement.
                  ``(D) Notice of agreement award.--Not later than 30 
                days after entering into an agreement under this 
                paragraph, the Secretary shall publish a notice in the 
                Federal Register that includes, with regard to the 
                agreement, the following:
                          ``(i) The outcome goals of the social impact 
                        partnership project.
                          ``(ii) A description of each intervention in 
                        the project.
                          ``(iii) The target population that will be 
                        served by the project.
                          ``(iv) The expected social benefits to 
                        participants who receive the intervention and 
                        others who may be impacted.
                          ``(v) The detailed roles, responsibilities, 
                        and purposes of each Federal, State, or local 
                        government entity, intermediary, service 
                        provider, independent evaluator, investor, or 
                        other stakeholder.
                          ``(vi) The payment terms, the methodology 
                        used to calculate outcome payments, the payment 
                        schedule, and performance thresholds.
                          ``(vii) The project budget.
                          ``(viii) The project timeline.
                          ``(ix) The project eligibility criteria.
                          ``(x) The evaluation design.
                          ``(xi) The metrics that will be used to 
                        determine whether the outcomes have been 
                        achieved and how these metrics will be 
                        measured.
                          ``(xii) The estimate of the savings to the 
                        Federal, State, and local government, on a 
                        program-by-program basis and in the aggregate, 
                        if the agreement is entered into and 
                        implemented and the outcomes are achieved.
                  ``(E) Authority to transfer administration of 
                agreement.--The Secretary may transfer to the head of 
                another Federal agency the authority to administer 
                (including making payments under) an agreement entered 
                into under subparagraph (C), and any funds necessary to 
                do so.
          ``(4) Feasibility study funding.--
                  ``(A) Requests for funding for feasibility studies.--
                The Secretary shall reserve a portion of the amount 
                reserved to carry out this subsection to assist States 
                or local governments in developing feasibility studies 
                to apply for social impact partnership funding under 
                paragraph (2). To be eligible to receive funding to 
                assist with completing a feasibility study, a State or 
                local government shall submit an application for 
                feasibility study funding addressing the following:
                          ``(i) A description of the outcome goals of 
                        the social impact partnership project.
                          ``(ii) A description of the intervention, 
                        including anticipated program design, target 
                        population, an estimate regarding the number of 
                        individuals to be served, and setting for the 
                        intervention.
                          ``(iii) Evidence to support the likelihood 
                        that the intervention will produce the desired 
                        outcomes.
                          ``(iv) A description of the potential metrics 
                        to be used.
                          ``(v) The expected social benefits to 
                        participants who receive the intervention and 
                        others who may be impacted.
                          ``(vi) Estimated costs to conduct the 
                        project.
                          ``(vii) Estimates of Federal, State, and 
                        local government savings and other savings if 
                        the project is implemented and the outcomes are 
                        achieved.
                          ``(viii) An estimated timeline for 
                        implementation and completion of the project, 
                        which shall not exceed 10 years.
                          ``(ix) With respect to a project for which 
                        the State or local government selects an 
                        intermediary to operate the project, any 
                        partnerships needed to successfully execute the 
                        project and the ability of the intermediary to 
                        foster the partnerships.
                          ``(x) The expected resources needed to 
                        complete the feasibility study for the State or 
                        local government to apply for social impact 
                        partnership funding under paragraph (2).
                  ``(B) Federal selection of applications for 
                feasibility study.--Not later than 6 months after 
                receiving an application for feasibility study funding 
                under subparagraph (A), the Secretary, in consultation 
                with the Federal Interagency Council on Social Impact 
                Partnerships and the head of any Federal agency 
                administering a similar intervention or serving a 
                population similar to that served by the project, shall 
                select State or local government feasibility study 
                proposals for funding based on the following:
                          ``(i) The recommendations made by the 
                        Commission on Social Impact Partnerships.
                          ``(ii) The likelihood that the proposal will 
                        achieve the desired outcomes.
                          ``(iii) The value of the outcomes expected to 
                        be achieved.
                          ``(iv) The potential savings to the Federal 
                        Government if the social impact partnership 
                        project is successful.
                          ``(v) The potential savings to the State and 
                        local governments if the project is successful.
                  ``(C) Public disclosure.--Not later than 30 days 
                after selecting a State or local government for 
                feasibility study funding under this paragraph, the 
                Secretary shall cause to be published on the website of 
                the Federal Interagency Council on Social Impact 
                Partnerships information explaining why a State or 
                local government was granted feasibility study funding.
                  ``(D) Funding restriction.--
                          ``(i) Feasibility study restriction.--The 
                        Secretary may not provide feasibility study 
                        funding under this paragraph for more than 50 
                        percent of the estimated total cost of the 
                        feasibility study reported in the State or 
                        local government application submitted under 
                        subparagraph (A).
                          ``(ii) Aggregate restriction.--Of the total 
                        amount reserved to carry out this subsection, 
                        the Secretary may not use more than $10,000,000 
                        to provide feasibility study funding to States 
                        or local governments under this paragraph.
                          ``(iii) No guarantee of funding.--The 
                        Secretary shall have the option to award no 
                        funding under this paragraph.
                  ``(E) Submission of feasibility study required.--Not 
                later than 9 months after the receipt of feasibility 
                study funding under this paragraph, a State or local 
                government receiving the funding shall complete the 
                feasibility study and submit the study to the Federal 
                Interagency Council on Social Impact Partnerships.
                  ``(F) Delegation of authority.--The Secretary may 
                transfer to the head of another Federal agency the 
                authorities provided in this paragraph and any funds 
                necessary to exercise the authorities.
          ``(5) Evaluations.--
                  ``(A) Authority to enter into agreements.--For each 
                State or local government awarded a social impact 
                partnership project approved by the Secretary under 
                this subsection, the head of the relevant agency, as 
                determined by the Federal Interagency Council on Social 
                Impact Partnerships, shall enter into an agreement with 
                the State or local government to pay for all or part of 
                the independent evaluation to determine whether the 
                State or local government project has met an outcome 
                specified in the agreement in order for the State or 
                local government to receive outcome payments under this 
                subsection.
                  ``(B) Evaluator qualifications.--The head of the 
                relevant agency may not enter into an agreement with a 
                State or local government unless the head determines 
                that the evaluator is independent of the other parties 
                to the agreement and has demonstrated substantial 
                experience in conducting rigorous evaluations of 
                program effectiveness including, where available and 
                appropriate, well-implemented randomized controlled 
                trials on the intervention or similar interventions.
                  ``(C) Methodologies to be used.--The evaluation used 
                to determine whether a State or local government will 
                receive outcome payments under this subsection shall 
                use experimental designs using random assignment or 
                other reliable, evidence-based research methodologies, 
                as certified by the Federal Interagency Council on 
                Social Impact Partnerships, that allow for the 
                strongest possible causal inferences when random 
                assignment is not feasible.
                  ``(D) Progress report.--
                          ``(i) Submission of report.--The independent 
                        evaluator shall--
                                  ``(I) not later than 2 years after a 
                                project has been approved by the 
                                Secretary and biannually thereafter 
                                until the project is concluded, submit 
                                to the head of the relevant agency and 
                                the Federal Interagency Council on 
                                Social Impact Partnerships a written 
                                report summarizing the progress that 
                                has been made in achieving each outcome 
                                specified in the agreement; and
                                  ``(II) before the scheduled time of 
                                the first outcome payment and before 
                                the scheduled time of each subsequent 
                                payment, submit to the head of the 
                                relevant agency and the Federal 
                                Interagency Council on Social Impact 
                                Partnerships a written report that 
                                includes the results of the evaluation 
                                conducted to determine whether an 
                                outcome payment should be made along 
                                with information on the unique factors 
                                that contributed to achieving or 
                                failing to achieve the outcome, the 
                                challenges faced in attempting to 
                                achieve the outcome, and information on 
                                the improved future delivery of this or 
                                similar interventions.
                          ``(ii) Submission to congress.--Not later 
                        than 30 days after receipt of the written 
                        report pursuant to clause (i)(II), the Federal 
                        Interagency Council on Social Impact 
                        Partnerships shall submit the report to each 
                        committee of jurisdiction in the House of 
                        Representatives and the Senate.
                  ``(E) Final report.--
                          ``(i) Submission of report.--Within 6 months 
                        after the social impact partnership project is 
                        completed, the independent evaluator shall--
                                  ``(I) evaluate the effects of the 
                                activities undertaken pursuant to the 
                                agreement with regard to each outcome 
                                specified in the agreement; and
                                  ``(II) submit to the head of the 
                                relevant agency and the Federal 
                                Interagency Council on Social Impact 
                                Partnerships a written report that 
                                includes the results of the evaluation 
                                and the conclusion of the evaluator as 
                                to whether the State or local 
                                government has fulfilled each 
                                obligation of the agreement, along with 
                                information on the unique factors that 
                                contributed to the success or failure 
                                of the project, the challenges faced in 
                                attempting to achieve the outcome, and 
                                information on the improved future 
                                delivery of this or similar 
                                interventions.
                          ``(ii) Submission to congress.--Not later 
                        than 30 days after receipt of the written 
                        report pursuant to clause (i)(II), the Federal 
                        Interagency Council on Social Impact 
                        Partnerships shall submit the report to each 
                        committee of jurisdiction in the House of 
                        Representatives and the Senate.
                  ``(F) Limitation on cost of evaluations.--Of the 
                amount reserved under this subsection for social impact 
                partnership projects, the Secretary may not obligate 
                more than 15 percent to evaluate the implementation and 
                outcomes of the projects.
                  ``(G) Delegation of authority.--The Secretary may 
                transfer to the head of another Federal agency the 
                authorities provided in this paragraph and any funds 
                necessary to exercise the authorities.
          ``(6) Federal interagency council on social impact 
        partnerships.--
                  ``(A) Establishment.--There is established the 
                Federal Interagency Council on Social Impact 
                Partnerships (in this paragraph referred to as the 
                `Council') to--
                          ``(i) coordinate the efforts of social impact 
                        partnership projects funded under this 
                        subsection;
                          ``(ii) advise and assist the Secretary in the 
                        development and implementation of the projects;
                          ``(iii) advise the Secretary on specific 
                        programmatic and policy matter related to the 
                        projects;
                          ``(iv) provide subject-matter expertise to 
                        the Secretary with regard to the projects;
                          ``(v) ensure that each State or local 
                        government that has entered into an agreement 
                        with the Secretary for a social impact 
                        partnership project under this subsection and 
                        each evaluator selected by the head of the 
                        relevant agency under paragraph (5) has access 
                        to Federal administrative data to assist the 
                        State or local government and the evaluator in 
                        evaluating the performance and outcomes of the 
                        project;
                          ``(vi) address issues that will influence the 
                        future of social impact partnership projects in 
                        the United States;
                          ``(vii) provide guidance to the executive 
                        branch on the future of social impact 
                        partnership projects in the United States;
                          ``(viii) review State and local government 
                        applications for social impact partnerships to 
                        ensure that agreements will only be awarded 
                        under this subsection when rigorous, 
                        independent data and reliable, evidence-based 
                        research methodologies support the conclusion 
                        that an agreement will yield savings to the 
                        Federal Government if the project outcomes are 
                        achieved before the applications are approved 
                        by the Secretary;
                          ``(ix) certify, in the case of each approved 
                        social impact partnership, that the project 
                        will yield a projected savings to the Federal 
                        Government if the project outcomes are 
                        achieved, and coordinate with the relevant 
                        Federal agency to produce an after-action 
                        accounting once the project is complete to 
                        determine the actual Federal savings realized, 
                        and the extent to which actual savings aligned 
                        with projected savings; and
                          ``(x) provide oversight of the actions of the 
                        Secretary and other Federal officials under 
                        this subsection and report periodically to 
                        Congress and the public on the implementation 
                        of this subsection.
                  ``(B) Composition of council.--The Council shall have 
                11 members, as follows:
                          ``(i) Chair.--The Chair of the Council shall 
                        be the Director of the Office of Management and 
                        Budget.
                          ``(ii) Other members.--The head of each of 
                        the following entities shall designate 1 
                        officer or employee of the entity to be a 
                        Council member:
                                  ``(I) The Department of Labor.
                                  ``(II) The Department of Health and 
                                Human Services.
                                  ``(III) The Social Security 
                                Administration.
                                  ``(IV) The Department of Agriculture.
                                  ``(V) The Department of Justice.
                                  ``(VI) The Department of Housing and 
                                Urban Development.
                                  ``(VII) The Department of Education.
                                  ``(VIII) The Department of Veterans 
                                Affairs.
                                  ``(IX) The Department of the 
                                Treasury.
                                  ``(X) The Corporation for National 
                                and Community Service.
          ``(7) Commission on social impact partnerships.--
                  ``(A) Establishment.--There is established the 
                Commission on Social Impact Partnerships (in this 
                paragraph referred to as the `Commission').
                  ``(B) Duties.--The duties of the Commission shall be 
                to--
                          ``(i) assist the Secretary and the Federal 
                        Interagency Council on Social Impact 
                        Partnerships in reviewing applications for 
                        funding under this subsection;
                          ``(ii) make recommendations to the Secretary 
                        and the Federal Interagency Council on Social 
                        Impact Partnerships regarding the funding of 
                        social impact partnership agreements and 
                        feasibility studies; and
                          ``(iii) provide other assistance and 
                        information as requested by the Secretary or 
                        the Federal Interagency Council on Social 
                        Impact Partnerships.
                  ``(C) Composition.--The Commission shall be composed 
                of 9 members, of whom--
                          ``(i) 1 shall be appointed by the President, 
                        who will serve as the Chair of the Commission;
                          ``(ii) 1 shall be appointed by the Majority 
                        Leader of the Senate;
                          ``(iii) 1 shall be appointed by the Minority 
                        Leader of the Senate;
                          ``(iv) 1 shall be appointed by the Speaker of 
                        the House of Representatives;
                          ``(v) 1 shall be appointed by the Minority 
                        Leader of the House of Representatives;
                          ``(vi) 1 shall be appointed by the Chairman 
                        of the Committee on Finance of the Senate;
                          ``(vii) 1 shall be appointed by the ranking 
                        member of the Committee on Finance of the 
                        Senate;
                          ``(viii) 1 member shall be appointed by the 
                        Chairman of the Committee on Ways and Means of 
                        the House of Representatives; and
                          ``(ix) 1 shall be appointed by the ranking 
                        member of the Committee on Ways and Means of 
                        the House of Representatives.
                  ``(D) Qualifications of commission members.--The 
                members of the Commission shall--
                          ``(i) be experienced in finance, economics, 
                        pay for performance, or program evaluation;
                          ``(ii) have relevant professional or personal 
                        experience in a field related to 1 or more of 
                        the outcomes listed in this subsection; or
                          ``(iii) be qualified to review applications 
                        for social impact partnership projects to 
                        determine whether the proposed metrics and 
                        evaluation methodologies are appropriately 
                        rigorous and reliant upon independent data and 
                        evidence-based research.
                  ``(E) Timing of appointments.--The appointments of 
                the members of the Commission shall be made not later 
                than 120 days after the date of the enactment of this 
                subsection, or, in the event of a vacancy, not later 
                than 90 days after the date the vacancy arises. If a 
                member of Congress fails to appoint a member by that 
                date, the President may select a member of the 
                President's choice on behalf of the member of Congress. 
                Notwithstanding the preceding sentence, if not all 
                appointments have been made to the Commission as of 
                that date, the Commission may operate with no fewer 
                than 5 members until all appointments have been made.
                  ``(F) Term of appointments.--
                          ``(i) In general.--The members appointed 
                        under subparagraph (C) shall serve as follows:
                                  ``(I) 3 members shall serve for 2 
                                years.
                                  ``(II) 3 members shall serve for 3 
                                years.
                                  ``(III) 3 members (1 of which shall 
                                be Chair of the Commission appointed by 
                                the President) shall serve for 4 years.
                          ``(ii) Assignment of terms.--The Commission 
                        shall designate the term length that each 
                        member appointed under subparagraph (C) shall 
                        serve by unanimous agreement. In the event that 
                        unanimous agreement cannot be reached, term 
                        lengths shall be assigned to the members by a 
                        random process.
                  ``(G) Vacancies.--Subject to subparagraph (E), in the 
                event of a vacancy in the Commission, whether due to 
                the resignation of a member, the expiration of a 
                member's term, or any other reason, the vacancy shall 
                be filled in the manner in which the original 
                appointment was made and shall not affect the powers of 
                the Commission.
                  ``(H) Appointment power.--Members of the Commission 
                appointed under subparagraph (C) shall not be subject 
                to confirmation by the Senate.
          ``(8) Limitation on use of funds.--Of the amounts reserved to 
        carry out this subsection, the Secretary may not use more than 
        $2,000,000 in any fiscal year to support the review, approval, 
        and oversight of social impact partnership projects, including 
        activities conducted by--
                  ``(A) the Federal Interagency Council on Social 
                Impact Partnerships; and
                  ``(B) any other agency consulted by the Secretary 
                before approving a social impact partnership project or 
                a feasibility study under paragraph (4).
          ``(9) No federal funding for credit enhancements.--No amount 
        reserved to carry out this subsection may be used to provide 
        any insurance, guarantee, or other credit enhancement to a 
        State or local government under which a Federal payment would 
        be made to a State or local government as the result of a State 
        or local government failing to achieve an outcome specified in 
        a contract.
          ``(10) Availability of funds.--Amounts reserved to carry out 
        this subsection shall remain available until 10 years after the 
        date of the enactment of this subsection.
          ``(11) Website.--The Federal Interagency Council on Social 
        Impact Partnerships shall establish and maintain a public 
        website that shall display the following:
                  ``(A) A copy of, or method of accessing, each notice 
                published regarding a social impact partnership project 
                pursuant to this subsection.
                  ``(B) A copy of each feasibility study funded under 
                this subsection.
                  ``(C) For each State or local government that has 
                entered into an agreement with the Secretary for a 
                social impact partnership project, the website shall 
                contain the following information:
                          ``(i) The outcome goals of the project.
                          ``(ii) A description of each intervention in 
                        the project.
                          ``(iii) The target population that will be 
                        served by the project.
                          ``(iv) The expected social benefits to 
                        participants who receive the intervention and 
                        others who may be impacted.
                          ``(v) The detailed roles, responsibilities, 
                        and purposes of each Federal, State, or local 
                        government entity, intermediary, service 
                        provider, independent evaluator, investor, or 
                        other stakeholder.
                          ``(vi) The payment terms, methodology used to 
                        calculate outcome payments, the payment 
                        schedule, and performance thresholds.
                          ``(vii) The project budget.
                          ``(viii) The project timeline.
                          ``(ix) The project eligibility criteria.
                          ``(x) The evaluation design.
                          ``(xi) The metrics used to determine whether 
                        the proposed outcomes have been achieved and 
                        how these metrics are measured.
                  ``(D) A copy of the progress reports and the final 
                reports relating to each social impact partnership 
                project.
                  ``(E) An estimate of the savings to the Federal, 
                State, and local government, on a program-by-program 
                basis and in the aggregate, resulting from the 
                successful completion of the social impact partnership 
                project.
          ``(12) Regulations.--The Secretary, in consultation with the 
        Federal Interagency Council on Social Impact Partnerships, may 
        issue regulations as necessary to carry out this subsection.
          ``(13) Definitions.--In this subsection:
                  ``(A) Agency.--The term `agency' has the meaning 
                given that term in section 551 of title 5, United 
                States Code.
                  ``(B) Intervention.--The term `intervention' means a 
                specific service delivered to achieve an impact through 
                a social impact partnership project.
                  ``(C) Secretary.--The term `Secretary' means the 
                Secretary of the Treasury.
                  ``(D) Social impact partnership project.--The term 
                `social impact partnership project' means a project 
                that finances social services using a social impact 
                partnership model.
                  ``(E) Social impact partnership model.--The term 
                `social impact partnership model' means a method of 
                financing social services in which--
                          ``(i) Federal funds are awarded to a State or 
                        local government only if a State or local 
                        government achieves certain outcomes agreed on 
                        by the State or local government and the 
                        Secretary; and
                          ``(ii) the State or local government 
                        coordinates with service providers, investors 
                        (if applicable to the project), and (if 
                        necessary) an intermediary to identify--
                                  ``(I) an intervention expected to 
                                produce the outcome;
                                  ``(II) a service provider to deliver 
                                the intervention to the target 
                                population; and
                                  ``(III) investors to fund the 
                                delivery of the intervention.
                  ``(F) State.--The term `State' means each State of 
                the United States, the District of Columbia, each 
                commonwealth, territory or possession of the United 
                States, and each federally recognized Indian tribe.
          ``(14) Funding.--Of the amounts made available to carry out 
        subsection (b) for fiscal year 2017, the Secretary shall 
        reserve $100,000,000 to carry out this subsection.''.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    H.R. 5170 as amended, the ``Social Impact Partnerships to 
Pay for Results Act,'' as ordered by reported by the Committee 
on Ways and Means on May 11, 2016, reserves a portion of 
existing welfare funds to support innovative and effective 
social programs that deliver measurable results for people in 
need.

                 B. Background and Need for Legislation

    Each year, the federal government spends hundreds of 
billions of dollars on more than 80 programs designed to assist 
children and families with limited resources. While each 
program was created with a goal of making a real difference in 
the lives of those in need, few programs have been proven to 
produce better outcomes for the low-income families and 
individuals they serve. In many cases, these programs have 
never been evaluated to determine if they are working as 
intended. Most programs cannot demonstrate they achieve better 
outcomes for poor families. According to two former White House 
officials, one Democrat and one Republican, ``based on our 
rough calculations, less than $1 out of every $100 of 
government spending is backed by even the most basic evidence 
that the money is being spent wisely.''\1\ Instead, many 
decisions on program design and funding are made based on poor 
quality studies, anecdotes or testimonials, or well-meaning 
program operators who believe their program will be effective. 
Even when programs are evaluated, most don't work.
---------------------------------------------------------------------------
    \1\John Bridgeland and Peter Orszag, Can Government Play Moneyball? 
How a new era of fiscal scarcity could make Washington work better. The 
Atlantic, July/August 2013 issue. Available online: http://
www.theatlantic.com/magazine/archive/2013/07/can-government-play-
moneyball/309389/.
---------------------------------------------------------------------------
    Low-income individuals and taxpayers alike deserve programs 
that are effective in helping people improve their lives and 
get ahead. Given the current fiscal climate, it is also 
critical that Congress ensure taxpayer dollars are spent on 
programs that work. Social Impact financing is one mechanism 
designed to improve the way taxpayer funds are spent on social 
services by ensuring money is only spent on programs that 
deliver results. At its core, this financing structure 
represents a way to fund effective social programs and ensure 
government only pays for success. Under this model, government 
identifies a desired social outcome and agrees to pay for that 
outcome. Next, investors agree to a contract to be paid for 
that outcome and identify and fund a service provider to 
achieve it. If the outcome is achieved, the government repays 
investors. If the outcome is not achieved, the government does 
not pay.
    Social impact financing shifts the risk of achieving the 
outcome from government to the private sector, as taxpayer 
funds are only spent if desired outcomes are achieved. As a 
result, this funding structure helps drive innovation and 
competition in the social service sector, as funding will be 
available to reward those who demonstrate effectiveness. This 
financing structure also provides more flexibility to service 
providers to focus on achieving outcomes--instead of focusing 
on compliance with cumbersome federal rules.

                         C. Legislative History


Background

    H.R. 5170, the ``Social Impact Partnerships to Pay for 
Results Act,'' was introduced on May 6, 2016, by Representative 
Todd Young and Representative John Delaney, and was referred to 
the Committee on Ways and Means.
    The bill represents the result of over two years of 
legislative work to include feedback from a variety of 
stakeholders. A proposal was released for public comment on 
April 29, 2014, and many groups provided feedback on the 
initial draft. After incorporating this feedback into a new 
draft, the bill was introduced on June 18, 2014, and Mr. Young 
and Mr. Delaney continued to solicit input in the months 
following the bill introduction. The sponsors continued to 
consider comments and suggestions through March 4, 2015, when 
the bill was reintroduced incorporating additional suggestions. 
The proposal was further refined when it was included as part 
of a Ways and Means discussion draft to reauthorize the 
Temporary Assistance for Needy Families (TANF) program on July 
17, 2015. The latest version, introduced May 6, 2016, includes 
further feedback, including input from every major stakeholder, 
including Republicans, Democrats, and the White House.

Committee hearings

    The Ways and Means Human Resources Subcommittee held a 
hearing on the bill on September 9, 2014. This hearing 
highlighted how few federal social programs are evaluated to 
determine whether they are effective, and how some state and 
local governments are providing funding through ``pay for 
results'' or ``social impact'' contracts to only pay for social 
services that produce results.

Committee action

    The Committee on Ways and Means marked up H.R. 5170, the 
``Social Impact Partnerships to Pay for Results Act,'' on May 
11, 2016. The bill, H.R. 5170, was ordered favorably reported 
to the House of Representatives as amended by a voice vote 
(with a quorum being present).

                      II. EXPLANATION OF THE BILL


                         Section 1: Short Title


Present law

    No provision.

Explanation of provision

    This section contains the short title of the bill, the 
``Social Impact Partnerships to Pay for Results Act.''

Reason for change

    The Committee believes that the short title reflects the 
policy actions included in the legislation.

Effective date

    The provision is effective October 1, 2016.

        Section 2: Social Impact Partnerships To Pay for Results


Present law

    No provision.

Explanation of provision

    The ``Social Impact Partnerships to Pay for Results Act'' 
would establish Social Impact Partnership demonstration 
projects. The bill would authorize the Secretary of the 
Treasury to enter into agreements with state or local 
governments to conduct projects where the federal government 
would make a payment to the state or local government if the 
project met the requirements of the agreement and achieved one 
or more of the outcomes specified in the contract (pay for 
performance) as determined by an independent evaluator.
    A Federal Interagency Council on Social Impact Partnerships 
would be established to:
           Coordinate the efforts of projects funded 
        under the demonstration;
           Advise and assist the Secretary of the 
        Treasury on the implementation and development of 
        projects;
           Advise the Secretary on specific 
        programmatic and policy matters;
           Provide subject matter expertise;
           Ensure access to federal administrative data 
        to evaluate the project;
           Address issues that will influence, and 
        provide guidance to the executive branch on, the future 
        of social impact partnerships;
           Review applications for social impact 
        partnership projects;
           Certify that each approved project will 
        yield projected savings to the federal government; and
           Provide oversight for projects in the 
        demonstration.
    The council would be composed of 11 members. The bill would 
designate the Director of the Office of Management and Budget 
to be chair, and would require the remaining ten members to be 
designated by the following federal agencies, with each federal 
agency designating one officer or employee: the Department of 
Labor, Department of Health and Human Services, Social Security 
Administration, Department of Agriculture, Department of 
Justice, Department of Housing and Urban Development, 
Department of Education, Department of Veterans Affairs, 
Department of the Treasury, and the Corporation for National 
and Community Service.
    The social impact demonstration has seven enumerated 
purposes:
          1. Improve the lives of families and individuals in 
        need in the United States by funding social programs 
        that achieve real results;
          2. Redirect funds away from programs that are 
        ineffective and into programs that achieve 
        demonstrable, measurable results;
          3. Ensure the federal funds are used effectively on 
        social services to produce positive outcomes for both 
        recipients and taxpayers;
          4. Establish the use of social impact partnerships to 
        address some national problems;
          5. Facilitate the creation of public-private 
        partnerships;
          6. Bring pay-for-performance to the social sector; 
        and
          7. Incorporate outcome measurement and randomized 
        control trials or other rigorous methods for assessing 
        program impacts.
    The bill would require a social impact partnership project 
to produce one or more measurable outcomes that result in 
social benefit and federal savings through any of the following 
enumerated outcomes:
          1. Increasing work or earnings of those who have been 
        unemployed for more than six consecutive months;
          2. Increasing employment and earnings of youth aged 
        16 through 24;
          3. Increasing employment among individuals receiving 
        federal disability benefits;
          4. Reducing dependence of low-income families on 
        means-tested benefits;
          5. Improving high school graduation rates;
          6. Reducing teen and unplanned pregnancies;
          7. Improving birth outcomes and early childhood 
        health and development for low-income families and 
        individuals;
          8. Reducing rates of asthma, diabetes, or other 
        preventable diseases among low-income families and 
        reducing the use of emergency and high cost health 
        care;
          9. Increasing the proportion of children living in 
        two-parent families;
          10. Reducing the incidence and adverse consequences 
        of child abuse and neglect;
          11. Reducing the number of youth in foster care;
          12. Reducing the number of youth in foster care 
        living in non-family environments (e.g., group homes);
          13. Reducing the number of children returning to 
        foster care;
          14. Reducing recidivism among juveniles, individuals 
        released from prison, or other high risk populations;
          15. Reducing homelessness;
          16. Improving the health and well-being of those with 
        mental, emotional, and behavioral health needs;
          17. Improving the educational outcomes of special-
        needs or low-income children;
          18. Improving the employment and well-being of 
        returning U.S. military members;
          19. Increasing the financial stability of low-income 
        families;
          20. Increasing the independence and employability of 
        those with physical or mental disabilities; and
          21. Other positive social outcomes and federal 
        savings.
    Not later than one year after enactment, the Secretary of 
the Treasury, in consultation with the Federal Interagency 
Council on Social Impact Partnerships, would be required to 
publish in the Federal Register a notice that seeks proposals 
from state or local governments for social impact partnership 
projects. A state or local government would be required to 
submit an application for the social impact partnership 
project.
    The application would be required to, among other things, 
describe the intervention, unmet needs addressed by the 
intervention, target population, criteria for determining 
eligibility and enrollment in the project, and a plan for 
delivering the intervention. In the application, the state or 
local government would be required to address project outcome 
goals; demonstrate with certain types of evidence that the 
intervention can be expected to produce the desired outcome; 
include projections of federal, state, and local government 
costs of the project; and include projections of federal, 
state, and local government savings from a successful 
implementation of the project. The application would be 
required to also include a description of the experience of the 
state and local government in raising private and philanthropic 
capital to fund social services; the experience of the service 
provider in delivering the proposed intervention; certain 
information about the intermediary for the social impact 
partnership project, including the intermediary's experience 
and capacity, mission and goals, and other categories of 
information. The application would also be required to address 
the project's evaluation, metrics used in its assessment, and 
the terms for payment if the program succeeds in producing its 
desired outcome.
    A Commission on Social Impact Partnerships would be 
established to assist the Secretary of the Treasury and the 
Federal Interagency Council on Social Impact Partnerships in 
reviewing applications for funding, make recommendations to the 
Secretary of the Treasury and the Council on Social Impact 
Partnerships regarding funding for agreements and feasibility 
studies, and provide other assistance and information. The 
commission would be composed of nine members: a chair appointed 
by the President and eight members selected by designated 
Members of Congress.
    Under the demonstration, federal funds could provide up to 
50% of the cost of a feasibility study to apply for social 
impact partnership funding. Applications would be able to also 
include information drawn from feasibility studies funded 
through other sources. However, state and local governments 
would not be guaranteed federal funding for these studies. 
Applications for funding for feasibility study funding would be 
required to be submitted by state or local governments, and 
would be required to address:
           A description of the outcome goals of the 
        project;
           A description of the intervention;
           Evidence supporting the likelihood that the 
        intervention will produce desired outcomes;
           A description of the potential metrics to be 
        used;
           Expected social benefits to participants 
        receiving the intervention;
           Estimated costs to conduct the project;
           Estimated savings to the federal government 
        if the outcomes are achieved;
           Estimated timeline for completion;
           Any partnership needed to successfully 
        execute the project; and
           Expected resources needed to complete the 
        feasibility study.
    The Secretary of the Treasury would be required to make a 
determination about whether to award funding for a feasibility 
study to an eligible application not later than six months 
after receiving an application for feasibility study funding. 
In making this determination, the Secretary of the Treasury 
would be required to consult with the Federal Interagency 
Council on Social Impact Partnerships and the heads of certain 
federal agencies. When considering an award of feasibility 
study funding, the Secretary of the Treasury would be required 
to consider the recommendations made by the Commission on 
Social Impact Partnerships, the likelihood that the proposal 
will achieve the desired outcomes, the value of the expected 
outcomes, and the potential savings to the federal government 
and to state and local governments if the project was 
successful.
    The Secretary of the Treasury would be required to make a 
determination about whether to enter into an agreement with an 
eligible applicant not later than six months after receiving a 
project application. In making this determination, the 
Secretary of the Treasury would be required to consult with the 
Federal Interagency Council on Social Impact Partnerships and 
the head of any federal agency administering a similar 
intervention or serving a population similar to the one 
described in the project application, and to consider several 
factors before making a determination on whether to enter into 
an agreement. These factors would be the recommendations made 
by the Commission on Social Impact Partnerships; the value of 
the expected outcomes; the likelihood, based on evidence 
provided in the application, that the state or local government 
will achieve the expected outcomes; savings to the federal 
government; savings to state and local governments; and the 
expected quality of the evaluation that is associated with the 
agreement.
    Under the demonstration project, the Secretary of the 
Treasury would be authorized (in consultation with the Federal 
Interagency Council on Social Impact Partnerships and the head 
of any federal agency administering a similar intervention or 
serving a population similar to the one described in the 
project), to enter into an agreement with a state or local 
government for the social impact partnership project. The 
Secretary of the Treasury would be authorized to transfer to 
the head of another federal agency the authority to administer 
an agreement entered into by the Secretary of the Treasury and 
any funds necessary to do so. The state or local government 
would be required to agree to achieve one or more outcomes 
specified in the agreement. The federal payment for each 
outcome specified would be required to be less than the value 
of the outcome to the federal government within a period of up 
to 10 years; and the duration of the project could not exceed 
10 years. Federal payment to the state and local government 
would be made if an independent evaluator had determined that 
the project has met the requirements of, and achieved an 
outcome specified in, the agreement. The Secretary of the 
Treasury would be required to publish a notice of agreement 
award not later than 30 days after entering into an agreement.
    The independent evaluation used to determine payments to 
state and local governments for project outcomes would be 
required to use experimental designs using random assignment, 
or certain other research methodologies when random assignment 
is not feasible, that allow for the strongest possible causal 
inferences. Progress reports would be due from the evaluator 
within two years of the approval of the project, and biannually 
thereafter. A report would also be due before the scheduled 
time of the first outcome payment, as well as a final report 
within six months of the completion of the social impact 
partnership project.
    To carry out these provisions, the Committee bill would 
direct the Secretary of the Treasury to reserve $100 million of 
amounts made available for the Contingency Fund for State 
Welfare Programs for FY2017.

Reason for change

    There is bipartisan support to use federal funds to pay for 
programs that produce real results. Groups ranging from 
conservative think tanks to liberal advocacy organizations have 
recommended funding programs on a ``pay-for-outcomes'' basis. 
States and local governments are testing this strategy now, but 
without federal participation their ability to pay for outcomes 
is limited as a substantial amount of funding for social 
services is provided by the federal government. By allowing the 
federal government to partner with states and local governments 
to pay for outcomes, more approaches can be tested and 
evaluated to determine whether they deliver real results for 
people in need.
    Social impact financing allows the government to contract 
for the delivery of services, but in a way that prevents those 
contracting with the government from negotiating contract terms 
where they would receive payment regardless of results. A key 
feature of social impact financing is that the government and 
investors jointly identify objective, quantifiable outcomes 
that must be met for payment to be made and an independent 
evaluator determines if the goals are met. By selecting an 
objective outcome goal instead of some other metric, the 
government is less likely to pay for things that don't produce 
the outcome they are seeking (such as clients served, classes 
taught, or costs incurred). In addition, the outcome for 
individuals served will be compared with the outcomes for a 
control group to confirm the services provided are responsible 
for producing the outcome.
    Social impact financing also aligns the interests of the 
government, investors, and service providers. In a traditional 
contract, the government agrees to pay for various inputs, 
processes, facilities, or services, which encourages providers 
to increase those factors--regardless of whether they improve 
the outcome or not. In a social impact financing structure, 
government only pays if the project achieves the desired 
outcomes. As a result, investors have a strong incentive to 
produce the positive social outcome and manage the project to 
ensure it succeeds.
    Social impact financing is not a way to privatize social 
services, but a way to improve how social services are funded. 
Under a social impact financing model, traditional service 
providers are the ones providing the services. However, instead 
of government paying for the delivery of these services, 
investors pay these costs during the life of the project. 
Service providers are still accountable to the government for 
achieving results, and investors must still report to the 
government on their progress toward achieving the project 
goals. In a Ways and Means Human Resources Subcommittee hearing 
in September of 2014, one social service provider participating 
in a social impact contract spoke about the advantages of this 
type of funding over traditional funding, saying ``[r]eceiving 
these resources upfront, on a quarterly basis, allows CEO to 
concentrate on providing excellent services and alleviates the 
burden of fundraising.''\2\
---------------------------------------------------------------------------
    \2\Sam Schaeffer, CEO and Executive Director, Center for Employment 
Opportunities. Testimony before the House Committee on Ways and Means, 
Subcommittee on Human Resources, September 9, 2014. Available online: 
http://waysandmeans.house.gov/UploadedFiles/
Sam_Schaeffer_Testimony_090914_HR14.pdf.
---------------------------------------------------------------------------
    Some believe government should simply pay for ``proven'' 
programs instead of contracting for these services through a 
social impact mechanism where government only pays if they 
produce results. However, there are a number of reasons why 
government may want to fund a ``proven'' program through social 
impact financing instead of directly operating the program or 
using traditional contracts to deliver the service to 
individuals in need:
    1. Transfer Risk: By paying only for outcomes, the 
government can transfer risk to investors. This includes the 
risk that replicating a program in a new area won't work, that 
the program won't be implemented correctly, or that some 
external event will limit the program's impact.
    2. Continue Improvement/Innovation: When running programs 
directly or funding them through traditional contracts, 
governments will implement policies and practices to ensure the 
program model is followed with fidelity. While this ensures 
uniformity, it can also keep service providers from innovating 
in ways that improve the program over time. Under a social 
impact financing model, investors are continually focused on 
the performance of the program and have the ability to make 
ongoing adjustments to ensure the outcomes are realized.
    3. Reduce Bureaucracy: When the federal government runs a 
social program directly, they are responsible for developing 
the program policy and regulations, hiring and managing staff, 
operating physical facilities where services are delivered, and 
paying for the delivery of the service itself. When the 
government runs a program via contract, it must still negotiate 
each of these same elements with the contractor. However, under 
a social impact financing model, the government only needs to 
determine the value of a specific social outcome and agree to 
pay if it is achieved. Other aspects of the program--the 
selection of the appropriate intervention, raising funds to 
operate the project, hiring of staff, managing of facilities, 
and delivery of program services--can be done by individuals 
outside of government, reducing the need for a large government 
bureaucracy to deliver services.
    4. Provide Predictable Funding for Service Providers: Under 
a social impact financing model, investors agree to fund 
services up front for as long as the project lasts. This allows 
service providers to make long-term budget plans and focus on 
delivering high-quality services, instead of devoting time to 
fundraising or negotiating government budgets on an annual 
basis.
    This proposal has garnered support from dozens of members 
of the House, Republican and Democrat, and a similar proposal 
has been included in recent Obama Administration budgets. The 
approach has garnered over 40 bipartisan House cosponsors, and 
a companion bill has also been introduced in the Senate by 
Senators Hatch (R-UT) and Bennett (D-CO). As a result, the 
Committee believes the federal government should further test 
this social impact financing approach to help more individuals 
in need and to ensure taxpayer dollars are only spent when 
programs deliver results.
    To fund social impact partnership projects, the bill 
reserves $100 million in FY 2017 from the $608 million TANF 
Contingency Fund. The FY 2017 President's Budget recommends 
repurposing these funds, stating ``[t]he current TANF 
Contingency Fund is not structured in a way that effectively 
assists states during periods of economic distress. . . . The 
Budget proposes to repurpose this funding for demonstrations 
that will better serve low-income families.''\3\ Social impact 
partnerships will better serve families in need, as federal 
funds will only be spent on programs and services that have 
been proved to make a real difference in the lives of those in 
need.
---------------------------------------------------------------------------
    \3\U.S. Department of Health and Human Services, FY 2017 Budget In 
Brief. Available online: http://www.hhs.gov/about/budget/fy2017/budget-
in-brief/acf/mandatory/index.html#contingency.
---------------------------------------------------------------------------

Effective date

    The provision is effective on October 1, 2016.

                      III. VOTES OF THE COMMITTEE

    In compliance with the Rules of the House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 5170, the ``Social Impact Partnerships to 
Pay for Results Act,'' on May 11, 2016.
    An amendment in the nature of a substitute was offered by 
Chairman Brady and adopted by voice vote (with a quorum being 
present).
    The vote on the amendment offered by Mr. Doggett to the 
amendment in the nature of a substitute to H.R. 5170, which 
would mandate a minimum share of program funding be used for 
projects benefiting children, was not agreed to by a roll call 
vote of 15 yeas to 24 nays (with a quorum being present). The 
vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady......................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Nunes......................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. Tiberi.....................  ........        X   .........  Mr. Lewis........        X   ........  .........
Mr. Reichert...................  ........        X   .........  Mr. Neal.........        X   ........  .........
Mr. Boustany...................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. Roskam.....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. Price......................  ........        X   .........  Mr. Thompson.....        X   ........  .........
Mr. Buchanan...................  ........        X   .........  Mr. Larson.......        X   ........  .........
Mr. Smith (NE).................  ........        X   .........  Mr. Blumenauer...        X   ........  .........
Ms. Jenkins....................  ........        X   .........  Mr. Kind.........        X   ........  .........
Mr. Paulsen....................  ........        X   .........  Mr. Pascrell.....        X   ........  .........
Mr. Marchant...................  ........        X   .........  Mr. Crowley......        X   ........  .........
Ms. Black......................  ........        X   .........  Mr. Davis........        X   ........  .........
Mr. Reed.......................  ........        X   .........  Ms. Sanchez......        X   ........  .........
Mr. Young......................  ........        X
Mr. Kelly......................  ........        X
Mr. Renacci....................  ........        X
Mr. Meehan.....................  ........        X
Ms. Noem.......................  ........        X
Mr. Holding....................  ........        X
Mr. Smith (MO).................  ........        X
Mr. Dold.......................  ........        X
Mr. Rice.......................  ........        X
----------------------------------------------------------------------------------------------------------------

    The bill was ordered favorably reported to the House of 
Representatives as amended by a voice vote (with a quorum being 
present).

             IV. NEW BUDGET AUTHORITY AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new budget authority or tax expenditure budget 
authority.

      V. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET OFFICE

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the Committee sets forth the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 16, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5170, the 
Partnering for Results Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman.
            Sincerely,
                                                        Keith Hall.

H.R. 5170--Partnering for Results Act

    Summary: H.R. 5170 would amend title IV of the Social 
Security Act to provide funding to states and local governments 
to support partnership projects. Such projects would have to 
identify a social problem that states or localities hope to 
address, such as improving high school graduation rates or 
increasing employment among recipients of disability benefits. 
Furthermore, the projects would have to be designed by states 
or localities to produce measurable goals. The legislation also 
would establish the Federal Interagency Council on Social 
Impact Partnerships and the Commission on Social Impact 
Partnerships to assist the Department of the Treasury in 
implementing the projects. Finally, H.R. 5170 would reserve 
$100 million of the $608 million already appropriated for the 
Temporary Assistance for Needy Families (TANF) contingency fund 
in 2017 to support the partnership projects.
    CBO estimates that enacting this legislation would reduce 
direct spending, on net, by $10 million over the 2017-2026 
period. Because enacting the legislation would affect direct 
spending, pay-as-you-go procedures apply. Enacting H.R. 5170 
would not affect revenues. CBO estimates that enacting H.R. 
5170 would not increase net direct spending or on-budget 
deficits in any of the four consecutive 10-year periods 
beginning in 2027.
    H.R. 5170 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of this legislation is shown in the following 
table. The impacts of this legislation fall within budget 
function 600 (income security).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, in millions of dollars--
                                                           ---------------------------------------------------------------------------------------------
                                                              2017    2018   2019   2020   2021   2022   2023   2024   2025   2026  2017-2021  2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
Estimated Budget Authority................................      -87     -3      5      5      5      5      5     10     20     25       -75        -10
Estimated Outlays.........................................      -87     -3      5      5      5      5      5     10     20     25       -75        -10
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: Under current law, CBO estimates that 
outlays for the TANF contingency fund for 2017 will total $608 
million over the 2017-2018 period. CBO estimates that the 
spending associated with the partnership projects, as provided 
for under the bill, would occur at a slower rate. Of the $100 
million that would be reserved for partnership projects, up to 
$10 million could be used for feasibility studies developed by 
states to apply for project funding; the remaining funds could 
be used by the Treasury to evaluate the projects and to provide 
payments to states or localities if the projects meet certain 
goals. Such funding would be available for 10 years following 
enactment. Because there is uncertainty as to the extent states 
conducting the projects will achieve the measureable outcomes 
required for federal reimbursement, CBO estimates that not all 
of the finds reserved for the program will be spent. In total, 
we estimate that enacting this legislation would decrease net 
direct spending from the contingency fund by $10 million over 
the 2017-2026 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

            CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5170 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON MAY 11, 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   By fiscal year in millions of dollars--
                                                    ----------------------------------------------------------------------------------------------------
                                                      2016    2017    2018   2019   2020   2021   2022   2023   2024   2025   2026  2016-2021  2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      NET INCREASES OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact.....................      0      -87     -3      5      5      5      5      5     10     20     25       -75        -10
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting the legislation would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    Intergovernmental and private-sector impact: H.R. 5170 
contains no intergovernmental or private-sector mandates as 
defined in the UMRA. Any costs to states associated with the 
demonstration projects authorized in the bill would be incurred 
voluntarily as conditions of assistance.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman; 
Impact on State, Local, and Tribal Governments: Leo Lex; Impact 
on the Private Sector: Paige Piper/Bach.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

     VI. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
description portions of this report.

        B. Statement of General Performance Goals and Objectives

    With respect to the requirement of clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, the 
performance goals and objectives of this legislation are to 
provide federal funding to pay only for social services that 
deliver results beginning October 1, 2016.

                C. Applicability of House Rule XXI 5(b)

    Rule XXI 5(b) of the Rules of the House of Representatives 
provides, in part, that ``A bill or joint resolution, 
amendment, or conference report carrying a Federal income tax 
rate increase may not be considered as passed or agreed to 
unless so determined by a vote of not less than three-fifths of 
the Members voting, a quorum being present.'' The Committee has 
carefully reviewed the bill, and states that the bill does not 
involve any Federal income tax rate increases within the 
meaning of the rule.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program; 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139; or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                 F. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED


  A. Text of Existing Law Amended or Repealed by the Bill, as Reported

    In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

SOCIAL SECURITY ACT

           *       *       *       *       *       *       *


TITLE IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH 
                CHILDREN AND FOR CHILD-WELFARE SERVICES

   PART A--BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY 
FAMILIES

           *       *       *       *       *       *       *


SEC. 403. GRANTS TO STATES.

  (a) Grants.--
          (1) Family assistance grant.--
                  (A) In general.--Each eligible State shall be 
                entitled to receive from the Secretary, for 
                fiscal year 2012, a grant in an amount equal to 
                the State family assistance grant.
                  (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 in 
                effect just before the enactment of the Welfare 
                Integrity and Data Improvement Act) as the 
                amount required to be paid to the State under 
                this paragraph (as so in effect) 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 fiscal 
                year 2012 $16,566,542,000 for grants under this 
                paragraph.
          (2) Healthy marriage promotion and responsible 
        fatherhood grants.--
                  (A) In general.--
                          (i) Use of funds.--Subject to 
                        subparagraphs (B), (C), and (E), the 
                        Secretary may use the funds made 
                        available under subparagraph (D) for 
                        the purpose of conducting and 
                        supporting research and demonstration 
                        projects by public or private entities, 
                        and providing technical assistance to 
                        States, Indian tribes and tribal 
                        organizations, and such other entities 
                        as the Secretary may specify that are 
                        receiving a grant under another 
                        provision of this part.
                          (ii) Limitations.--The Secretary may 
                        not award funds made available under 
                        this paragraph on a noncompetitive 
                        basis, and may not provide any such 
                        funds to an entity for the purpose of 
                        carrying out healthy marriage promotion 
                        activities or for the purpose of 
                        carrying out activities promoting 
                        responsible fatherhood unless the 
                        entity has submitted to the Secretary 
                        an application (or, in the case of an 
                        entity seeking funding to carry out 
                        healthy marriage promotion activities 
                        and activities promoting responsible 
                        fatherhood, a combined application that 
                        contains assurances that the entity 
                        will carry out such activities under 
                        separate programs and shall not combine 
                        any funds awarded to carry out either 
                        such activities) which--
                                  (I) describes--
                                          (aa) how the programs 
                                        or activities proposed 
                                        in the application will 
                                        address, as 
                                        appropriate, issues of 
                                        domestic violence; and
                                          (bb) what the 
                                        applicant will do, to 
                                        the extent relevant, to 
                                        ensure that 
                                        participation in the 
                                        programs or activities 
                                        is voluntary, and to 
                                        inform potential 
                                        participants that their 
                                        participation is 
                                        voluntary; and
                                  (II) contains a commitment by 
                                the entity--
                                          (aa) to not use the 
                                        funds for any other 
                                        purpose; and
                                          (bb) to consult with 
                                        experts in domestic 
                                        violence or relevant 
                                        community domestic 
                                        violence coalitions in 
                                        developing the programs 
                                        and activities.
                          (iii) Healthy marriage promotion 
                        activities.--In clause (ii), the term 
                        ``healthy marriage promotion 
                        activities'' means the following:
                                  (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.
                                  (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.
                  (B) Limitation on use of funds for 
                demonstration projects for coordination of 
                provision of child welfare and tanf services to 
                tribal families at risk of child abuse or 
                neglect.--
                          (i) In general.--Of the amounts made 
                        available under subparagraph (D) for a 
                        fiscal year, the Secretary may not 
                        award more than $2,000,000 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.
                          (ii) Limitation on use of funds.--A 
                        grant made pursuant to clause (i) to 
                        such a project shall not be used for 
                        any purpose other than--
                                  (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.
                          (iii) Reports.--The Secretary may 
                        require a recipient of funds awarded 
                        under this subparagraph 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 
                        subparagraph.
                  (C) Limitation on use of funds for activities 
                promoting responsible fatherhood.--
                          (i) In general.--Of the amounts made 
                        available under subparagraph (D) for a 
                        fiscal year, the Secretary may not 
                        award more than $75,000,000 on a 
                        competitive basis to States, 
                        territories, Indian tribes and tribal 
                        organizations, and public and nonprofit 
                        community entities, including religious 
                        organizations, for activities promoting 
                        responsible fatherhood.
                          (ii) Activities promoting responsible 
                        fatherhood.--In this paragraph, the 
                        term ``activities promoting responsible 
                        fatherhood'' means the following:
                                  (I) Activities 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.
                                  (II) Activities 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.
                                  (III) Activities 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.
                                  (IV) Activities to promote 
                                responsible fatherhood that are 
                                conducted through a contract 
                                with a nationally recognized, 
                                nonprofit fatherhood promotion 
                                organization, such as the 
                                development, promotion, and 
                                distribution of a media 
                                campaign to encourage the 
                                appropriate involvement of 
                                parents in the life of any 
                                child and specifically the 
                                issue of responsible 
                                fatherhood, and the development 
                                of a national clearinghouse to 
                                assist States and communities 
                                in efforts to promote and 
                                support marriage and 
                                responsible fatherhood.
                  (D) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                year 2012 for expenditure in accordance with 
                this paragraph--
                          (i) $75,000,000 for awarding funds 
                        for the purpose of carrying out healthy 
                        marriage promotion activities; and
                          (ii) $75,000,000 for awarding funds 
                        for the purpose of carrying out 
                        activities promoting responsible 
                        fatherhood.
                If the Secretary makes an award under 
                subparagraph (B)(i) for fiscal year 2012, the 
                funds for such award shall be taken in equal 
                portion from the amounts appropriated under 
                clauses (i) and (ii).
                  (E) Preference.--In awarding funds under this 
                paragraph for fiscal year 2011, the Secretary 
                shall give preference to entities that were 
                awarded funds under this paragraph for any 
                prior fiscal year and that have demonstrated 
                the ability to successfully carry out the 
                programs funded under this paragraph.
          (3) Supplemental grant for population increases in 
        certain states.--
                  (A) In general.--Each qualifying State shall, 
                subject to subparagraph (F), be entitled to 
                receive from the Secretary--
                          (i) for fiscal year 1998 a grant in 
                        an amount equal to 2.5 percent of the 
                        total amount required to be paid to the 
                        State under former section 403 (as in 
                        effect during fiscal year 1994) for 
                        fiscal year 1994; and
                          (ii) for each of fiscal years 1999, 
                        2000, and 2001, a grant in an amount 
                        equal to the sum of--
                                  (I) the amount (if any) 
                                required to be paid to the 
                                State under this paragraph for 
                                the immediately preceding 
                                fiscal year; and
                                  (II) 2.5 percent of the sum 
                                of--
                                          (aa) the total amount 
                                        required to be paid to 
                                        the State under former 
                                        section 403 (as in 
                                        effect during fiscal 
                                        year 1994) for fiscal 
                                        year 1994; and
                                          (bb) the amount (if 
                                        any) required to be 
                                        paid to the State under 
                                        this paragraph for the 
                                        fiscal year preceding 
                                        the fiscal year for 
                                        which the grant is to 
                                        be made.
                  (B) Preservation of grant without increases 
                for states failing to remain qualifying 
                states.--Each State that is not a qualifying 
                State for a fiscal year specified in 
                subparagraph (A)(ii) but was a qualifying State 
                for a prior fiscal year shall, subject to 
                subparagraph (F), be entitled to receive from 
                the Secretary for the specified fiscal year, a 
                grant in an amount equal to the amount required 
                to be paid to the State under this paragraph 
                for the most recent fiscal year for which the 
                State was a qualifying State.
                  (C) Qualifying state.--
                          (i) In general.--For purposes of this 
                        paragraph, a State is a qualifying 
                        State for a fiscal year if--
                                  (I) the level of welfare 
                                spending per poor person by the 
                                State for the immediately 
                                preceding fiscal year is less 
                                than the national average level 
                                of State welfare spending per 
                                poor person for such preceding 
                                fiscal year; and
                                  (II) the population growth 
                                rate of the State (as 
                                determined by the Bureau of the 
                                Census) for the most recent 
                                fiscal year for which 
                                information is available 
                                exceeds the average population 
                                growth rate for all States (as 
                                so determined) for such most 
                                recent fiscal year.
                          (ii) State must qualify in fiscal 
                        year 1998.--Notwithstanding clause (i), 
                        a State shall not be a qualifying State 
                        for any fiscal year after 1998 by 
                        reason of clause (i) if the State is 
                        not a qualifying State for fiscal year 
                        1998 by reason of clause (i).
                          (iii) Certain states deemed 
                        qualifying states.--For purposes of 
                        this paragraph, a State is deemed to be 
                        a qualifying State for fiscal years 
                        1998, 1999, 2000, and 2001 if--
                                  (I) the level of welfare 
                                spending per poor person by the 
                                State for fiscal year 1994 is 
                                less than 35 percent of the 
                                national average level of State 
                                welfare spending per poor 
                                person for fiscal year 1994; or
                                  (II) the population of the 
                                State increased by more than 10 
                                percent from April 1, 1990 to 
                                July 1, 1994, according to the 
                                population estimates in 
                                publication CB94-204 of the 
                                Bureau of the Census.
                  (D) Definitions.--As used in this paragraph:
                          (i) Level of welfare spending per 
                        poor person.--The term ``level of State 
                        welfare spending per poor person'' 
                        means, with respect to a State and a 
                        fiscal year--
                                  (I) the sum of--
                                          (aa) the total amount 
                                        required to be paid to 
                                        the State under former 
                                        section 403 (as in 
                                        effect during fiscal 
                                        year 1994) for fiscal 
                                        year 1994; and
                                          (bb) the amount (if 
                                        any) paid to the State 
                                        under this paragraph 
                                        for the immediately 
                                        preceding fiscal year; 
                                        divided by
                                  (II) the number of 
                                individuals, according to the 
                                1990 decennial census, who were 
                                residents of the State and 
                                whose income was below the 
                                poverty line.
                          (ii) National average level of state 
                        welfare spending per poor person.--The 
                        term ``national average level of State 
                        welfare spending per poor person'' 
                        means, with respect to a fiscal year, 
                        an amount equal to--
                                  (I) the total amount required 
                                to be paid to the States under 
                                former section 403 (as in 
                                effect during fiscal year 1994) 
                                for fiscal year 1994; divided 
                                by
                                  (II) the number of 
                                individuals, according to the 
                                1990 decennial census, who were 
                                residents of any State and 
                                whose income was below the 
                                poverty line.
                          (iii) State.--The term ``State'' 
                        means each of the 50 States of the 
                        United States and the District of 
                        Columbia.
                  (E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                years 1998, 1999, 2000, and 2001 such sums as 
                are necessary for grants under this paragraph, 
                in a total amount not to exceed $800,000,000.
                  (F) Grants reduced pro rata if insufficient 
                appropriations.--If the amount appropriated 
                pursuant to this paragraph for a fiscal year 
                (or portion of a fiscal year) is less than the 
                total amount of payments otherwise required to 
                be made under this paragraph for the fiscal 
                year (or portion of the fiscal year), then the 
                amount otherwise payable to any State for the 
                fiscal year (or portion of the fiscal year) 
                under this paragraph shall be reduced by a 
                percentage equal to the amount so appropriated 
                divided by such total amount.
                  (G) Budget scoring.--Notwithstanding section 
                257(b)(2) of the Balanced Budget and Emergency 
                Deficit Control Act of 1985, the baseline shall 
                assume that no grant shall be made under this 
                paragraph after fiscal year 2001.
                  (H) Reauthorization.--Notwithstanding any 
                other provision of this paragraph--
                          (i) any State that was a qualifying 
                        State under this paragraph for fiscal 
                        year 2001 or any prior fiscal year 
                        shall be entitled to receive from the 
                        Secretary for each of fiscal years 2002 
                        and 2003 a grant in an amount equal to 
                        the amount required to be paid to the 
                        State under this paragraph for the most 
                        recent fiscal year in which the State 
                        was a qualifying State;
                          (ii) subparagraph (G) shall be 
                        applied as if ``fiscal year 2011'' were 
                        substituted for ``fiscal year 2001'';
                          (iii) out of any money in the 
                        Treasury of the United States not 
                        otherwise appropriated, there are 
                        appropriated for each of fiscal years 
                        2002 and 2003 such sums as are 
                        necessary for grants under this 
                        subparagraph.
          (4) Bonus to reward high performance states.--
                  (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 a 
                high performing 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 a high performing State for a bonus 
                        year, which shall be based on the score 
                        assigned to the State 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.--Not later than 1 year after the 
                date of the enactment of the Personal 
                Responsibility and Work Opportunity 
                Reconciliation Act of 1996, the Secretary, in 
                consultation with the National Governors' 
                Association and the American Public Welfare 
                Association, shall develop a formula for 
                measuring State performance in operating the 
                State program funded under this part so as to 
                achieve the goals set forth in section 401(a).
                  (D) Scoring of state performance; setting of 
                performance thresholds.--For each bonus year, 
                the Secretary shall--
                          (i) use the formula developed under 
                        subparagraph (C) to assign a score to 
                        each eligible State for the fiscal year 
                        that immediately precedes the bonus 
                        year; and
                          (ii) prescribe a performance 
                        threshold 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 $200,000,000; 
                                and
                                  (II) the total amount of 
                                grants to be made under this 
                                paragraph for all bonus years 
                                equals $1,000,000,000.
                  (E) Definitions.--As used in this paragraph:
                          (i) Bonus year.--The term ``bonus 
                        year'' means fiscal years 1999, 2000, 
                        2001, 2002, and 2003.
                          (ii) High performing state.--The term 
                        ``high performing State'' means, with 
                        respect to a bonus year, an eligible 
                        State whose score assigned pursuant to 
                        subparagraph (D)(i) for the fiscal year 
                        immediately preceding the bonus year 
                        equals or exceeds the performance 
                        threshold 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 fiscal 
                years 1999 through 2003 $1,000,000,000 for 
                grants under this paragraph.
          (5) Welfare-to-work grants.--
                  (A) Formula grants.--
                          (i) Entitlement.--A State shall be 
                        entitled to receive from the Secretary 
                        of Labor a grant for each fiscal year 
                        specified in subparagraph (H) of this 
                        paragraph for which the State is a 
                        welfare-to-work State, in an amount 
                        that does not exceed the lesser of--
                                  (I) 2 times the total of the 
                                expenditures by the State 
                                (excluding qualified State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(i)) and 
                                any expenditure described in 
                                subclause (I), (II), or (IV) of 
                                section 409(a)(7)(B)(iv)) 
                                during the period permitted 
                                under subparagraph (C)(vii) of 
                                this paragraph for the 
                                expenditure of funds under the 
                                grant for activities described 
                                in subparagraph (C)(i) of this 
                                paragraph; or
                                  (II) the allotment of the 
                                State under clause (iii) of 
                                this subparagraph for the 
                                fiscal year.
                          (ii) Welfare-to-work state.--A State 
                        shall be considered a welfare-to-work 
                        State for a fiscal year for purposes of 
                        this paragraph if the Secretary of 
                        Labor determines that the State meets 
                        the following requirements:
                                  (I) The State has submitted 
                                to the Secretary of Labor and 
                                the Secretary of Health and 
                                Human Services (in the form of 
                                an addendum to the State plan 
                                submitted under section 402) a 
                                plan which--
                                          (aa) describes how, 
                                        consistent with this 
                                        subparagraph, the State 
                                        will use any funds 
                                        provided under this 
                                        subparagraph during the 
                                        fiscal year;
                                          (bb) specifies the 
                                        formula to be used 
                                        pursuant to clause (vi) 
                                        to distribute funds in 
                                        the State, and 
                                        describes the process 
                                        by which the formula 
                                        was developed;
                                          (cc) contains 
                                        evidence that the plan 
                                        was developed in 
                                        consultation and 
                                        coordination with 
                                        appropriate entitites 
                                        in sub-State areas;
                                          (dd) contains 
                                        assurances by the 
                                        Governor of the State 
                                        that the private 
                                        industry council (and 
                                        any alternate agency 
                                        designated by the 
                                        Governor under item 
                                        (ee)) for a service 
                                        delivery area in the 
                                        State will coordinate 
                                        the expenditure of any 
                                        funds provided under 
                                        this subparagraph for 
                                        the benefit of the 
                                        service delivery area 
                                        with the expenditure of 
                                        the funds provided to 
                                        the State under section 
                                        403(a)(1);
                                          (ee) if the Governor 
                                        of the State desires to 
                                        have an agency other 
                                        than a private industry 
                                        council administer the 
                                        funds provided under 
                                        this subparagraph for 
                                        the benefit of 1 or 
                                        more service delivery 
                                        areas in the State, 
                                        contains an application 
                                        to the Secretary of 
                                        Labor for a waiver of 
                                        clause (vii)(I) with 
                                        respect to the area or 
                                        areas in order to 
                                        permit an alternate 
                                        agency designated by 
                                        the Governor to so 
                                        administer the funds; 
                                        and
                                          (ff) describes how 
                                        the State will ensure 
                                        that a private industry 
                                        council to which 
                                        information is 
                                        disclosed pursuant to 
                                        section 403(a)(5)(K) or 
                                        454A(f)(5) has 
                                        procedures for 
                                        safeguarding the 
                                        information and for 
                                        ensuring that the 
                                        information is used 
                                        solely for the purpose 
                                        described in that 
                                        section.
                                  (II) The State has provided 
                                to the Secretary of Labor an 
                                estimate of the amount that the 
                                State intends to expend during 
                                the period permitted under 
                                subparagraph (C)(vii) of this 
                                paragraph for the expenditure 
                                of funds under the grant 
                                (excluding expenditures 
                                described in section 
                                409(a)(7)(B)(iv) (other than 
                                subclause (III) thereof)) 
                                pursuant to this paragraph.
                                  (III) The State has agreed to 
                                negotiate in good faith with 
                                the Secretary of Health and 
                                Human Services with respect to 
                                the substance and funding of 
                                any evaluation under section 
                                413(j), and to cooperate with 
                                the conduct of any such 
                                evaluation.
                                  (IV) The State is an eligible 
                                State for the fiscal year.
                                  (V) The State certifies that 
                                qualified State expenditures 
                                (within the meaning of section 
                                409(a)(7)) for the fiscal year 
                                will be not less than the 
                                applicable percentage of 
                                historic State expenditures 
                                (within the meaning of section 
                                409(a)(7)) with respect to the 
                                fiscal year.
                          (iii) Allotments to welfare-to-work 
                        states.--
                                  (I) In general.--Subject to 
                                this clause, the allotment of a 
                                welfare-to-work State for a 
                                fiscal year shall be the 
                                available amount for the fiscal 
                                year, multiplied by the State 
                                percentage for the fiscal year.
                                  (II) Minimum allotment.--The 
                                allotment of a welfare-to-work 
                                State (other than Guam, the 
                                Virgin Islands, or American 
                                Samoa) for a fiscal year shall 
                                not be less than 0.25 percent 
                                of the available amount for the 
                                fiscal year.
                                  (III) Pro rata reduction.--
                                Subject to subclause (II), the 
                                Secretary of Labor shall make 
                                pro rata reductions in the 
                                allotments to States under this 
                                clause for a fiscal year as 
                                necessary to ensure that the 
                                total of the allotments does 
                                not exceed the available amount 
                                for the fiscal year.
                          (iv) Available amount.--As used in 
                        this subparagraph, the term ``available 
                        amount'' means, for a fiscal year, the 
                        sum of--
                                  (I) 75 percent of the sum 
                                of--
                                          (aa) the amount 
                                        specified in 
                                        subparagraph (H) for 
                                        the fiscal year, minus 
                                        the total of the 
                                        amounts reserved 
                                        pursuant to 
                                        subparagraphs (E), (F), 
                                        and (G) for the fiscal 
                                        year; and
                                          (bb) any amount 
                                        reserved pursuant to 
                                        subparagraph (E) for 
                                        the immediately 
                                        preceding fiscal year 
                                        that has not been 
                                        obligated; and
                                  (II) any available amount for 
                                the immediately preceding 
                                fiscal year that has not been 
                                obligated by a State, other 
                                than funds reserved by the 
                                State for distribution under 
                                clause (vi)(III) and funds 
                                distributed pursuant to clause 
                                (vi)(I) in any State in which 
                                the service delivery area is 
                                the State.
                          (v) State percentage.--As used in 
                        clause (iii), the term ``State 
                        percentage'' means, with respect to a 
                        fiscal year, \1/2\ of the sum of--
                                  (I) the percentage 
                                represented by the number of 
                                individuals in the State whose 
                                income is less than the poverty 
                                line divided by the number of 
                                such individuals in the United 
                                States; and
                                  (II) the percentage 
                                represented by the number of 
                                adults who are recipients of 
                                assistance under the State 
                                program funded under this part 
                                divided by the number of adults 
                                in the United States who are 
                                recipients of assistance under 
                                any State program funded under 
                                this part.
                          (vi) Procedure for distribution of 
                        funds within states.--
                                  (I) Allocation formula.--A 
                                State to which a grant is made 
                                under this subparagraph shall 
                                devise a formula for allocating 
                                not less than 85 percent of the 
                                amount of the grant among the 
                                service delivery areas in the 
                                State, which--
                                          (aa) determines the 
                                        amount to be allocated 
                                        for the benefit of a 
                                        service delivery area 
                                        in proportion to the 
                                        number (if any) by 
                                        which the population of 
                                        the area with an income 
                                        that is less than the 
                                        poverty line exceeds 
                                        7.5 percent of the 
                                        total population of the 
                                        area, relative to such 
                                        number for all such 
                                        areas in the State with 
                                        such an excess, and 
                                        accords a weight of not 
                                        less than 50 percent to 
                                        this factor;
                                          (bb) may determine 
                                        the amount to be 
                                        allocated for the 
                                        benefit of such an area 
                                        in proportion to the 
                                        number of adults 
                                        residing in the area 
                                        who have been 
                                        recipients of 
                                        assistance under the 
                                        State program funded 
                                        under this part 
                                        (whether in effect 
                                        before or after the 
                                        amendments made by 
                                        section 103(a) of the 
                                        Personal Responsibility 
                                        and Work Opportunity 
                                        Reconciliation Act of 
                                        1996 first applied to 
                                        the State) for at least 
                                        30 months (whether or 
                                        not consecutive) 
                                        relative to the number 
                                        of such adults residing 
                                        in the State; and
                                          (cc) may determine 
                                        the amount to be 
                                        allocated for the 
                                        benefit of such an area 
                                        in proportion to the 
                                        number of unemployed 
                                        individuals residing in 
                                        the area relative to 
                                        the number of such 
                                        individuals residing in 
                                        the State.
                                  (II) Distribution of funds.--
                                          (aa) In general.--If 
                                        the amount allocated by 
                                        the formula to a 
                                        service delivery area 
                                        is at least $100,000, 
                                        the State shall 
                                        distribute the amount 
                                        to the entity 
                                        administering the grant 
                                        in the area.
                                          (bb) Special rule.--
                                        If the amount allocated 
                                        by the formula to a 
                                        service delivery area 
                                        is less than $100,000, 
                                        the sum shall be 
                                        available for 
                                        distribution in the 
                                        State under subclause 
                                        (III) during the fiscal 
                                        year.
                                  (III) Projects to help long-
                                term recipients of assistance 
                                enter unsubsidized jobs.--The 
                                Governor of a State to which a 
                                grant is made under this 
                                subparagraph may distribute not 
                                more than 15 percent of the 
                                grant funds (plus any amount 
                                required to be distributed 
                                under this subclause by reason 
                                of subclause (II)(bb)) to 
                                projects that appear likely to 
                                help long-term recipients of 
                                assistance under the State 
                                program funded under this part 
                                (whether in effect before or 
                                after the amendments made by 
                                section 103(a) of the Personal 
                                Responsibility and Work 
                                Opportunity Reconciliation Act 
                                of 1996 first applied to the 
                                State) enter unsubsidized 
                                employment.
                          (vii) Administration.--
                                  (I) Private industry 
                                councils.--The private industry 
                                council for a service delivery 
                                area in a State shall have sole 
                                authority, in coordination with 
                                the chief elected official (as 
                                defined in section 3 of the 
                                Workforce Innovation and 
                                Opportunity Act) of the area, 
                                to expend the amounts 
                                distributed under clause 
                                (vi)(II)(aa) for the benefit of 
                                the service delivery area, in 
                                accordance with the assurances 
                                described in clause (ii)(I)(dd) 
                                provided by the Governor of the 
                                State.
                                  (II) Enforcement of 
                                coordination of expenditures 
                                with other expenditures under 
                                this part.--Notwithstanding 
                                subclause (I) of this clause, 
                                on a determination by the 
                                Governor of a State that a 
                                private industry council (or an 
                                alternate agency described in 
                                clause (ii)(I)(dd)) has used 
                                funds provided under this 
                                subparagraph in a manner 
                                inconsistent with the 
                                assurances described in clause 
                                (ii)(I)(dd)--
                                          (aa) the private 
                                        industry council (or 
                                        such alternate agency) 
                                        shall remit the funds 
                                        to the Governor; and
                                          (bb) the Governor 
                                        shall apply to the 
                                        Secretary of Labor for 
                                        a waiver of subclause 
                                        (I) of this clause with 
                                        respect to the service 
                                        delivery area or areas 
                                        involved in order to 
                                        permit an alternate 
                                        agency designated by 
                                        the Governor to 
                                        administer the funds in 
                                        accordance with the 
                                        assurances.
                                  (III) Authority to permit use 
                                of alternate administering 
                                agency.--The Secretary of Labor 
                                shall approve an application 
                                submitted under clause 
                                (ii)(I)(ee) or subclause 
                                (II)(bb) of this clause to 
                                waive subclause (I) of this 
                                clause with respect to 1 or 
                                more service delivery areas if 
                                the Secretary determines that 
                                the alternate agency designated 
                                in the application would 
                                improve the effectiveness or 
                                efficiency of the 
                                administration of amounts 
                                distributed under clause 
                                (vi)(II)(aa) for the benefit of 
                                the area or areas.
                          (viii) Data to be used in determining 
                        the number of adult tanf recipients.--
                        For purposes of this subparagraph, the 
                        number of adult recipients of 
                        assistance under a State program funded 
                        under this part for a fiscal year shall 
                        be determined using data for the most 
                        recent 12-month period for which such 
                        data is available before the beginning 
                        of the fiscal year.
                          (ix) Reversion of unallotted formula 
                        funds.--If at the end of any fiscal 
                        year any funds available under this 
                        subparagraph have not been allotted due 
                        to a determination by the Secretary 
                        that any State has not met the 
                        requirements of clause (ii), such funds 
                        shall be transferred to the General 
                        Fund of the Treasury of the United 
                        States.
                  (B) Competitive grants.--
                          (i) In general.--The Secretary of 
                        Labor shall award grants in accordance 
                        with this subparagraph, in fiscal years 
                        1998 and 1999, for projects proposed by 
                        eligible applicants, based on the 
                        following:
                                  (I) The effectiveness of the 
                                proposal in--
                                          (aa) expanding the 
                                        base of knowledge about 
                                        programs aimed at 
                                        moving recipients of 
                                        assistance under State 
                                        programs funded under 
                                        this part who are least 
                                        job ready into 
                                        unsubsidized 
                                        employment.
                                          (bb) moving 
                                        recipients of 
                                        assistance under State 
                                        programs funded under 
                                        this part who are least 
                                        job ready into 
                                        unsubsidized 
                                        employment; and
                                          (cc) moving 
                                        recipients of 
                                        assistance under State 
                                        programs funded under 
                                        this part who are least 
                                        job ready into 
                                        unsubsidized 
                                        employment, even in 
                                        labor markets that have 
                                        a shortage of low-skill 
                                        jobs.
                                  (II) At the discretion of the 
                                Secretary of Labor, any of the 
                                following:
                                          (aa) The history of 
                                        success of the 
                                        applicant in moving 
                                        individuals with 
                                        multiple barriers into 
                                        work.
                                          (bb) Evidence of the 
                                        applicant's ability to 
                                        leverage private, 
                                        State, and local 
                                        resources.
                                          (cc) Use by the 
                                        applicant of State and 
                                        local resources beyond 
                                        those required by 
                                        subparagraph (A).
                                          (dd) Plans of the 
                                        applicant to coordinate 
                                        with other 
                                        organizations at the 
                                        local and State level.
                                          (ee) Use by the 
                                        applicant of current or 
                                        former recipients of 
                                        assistance under a 
                                        State program funded 
                                        under this part as 
                                        mentors, case managers, 
                                        or service providers.
                          (ii) Eligible applicants.--As used in 
                        clause (i), the term ``eligible 
                        applicant'' means a private industry 
                        council for a service delivery area in 
                        a State, a political subdivision of a 
                        State, or a private entity applying in 
                        conjunction with the private industry 
                        council for such a service delivery 
                        area or with such a political 
                        subdivision, that submits a proposal 
                        developed in consultation with the 
                        Governor of the State.
                          (iii) Determination of grant 
                        amount.--In determining the amount of a 
                        grant to be made under this 
                        subparagraph for a project proposed by 
                        an applicant, the Secretary of Labor 
                        shall provide the applicant with an 
                        amount sufficient to ensure that the 
                        project has a reasonable opportunity to 
                        be successful, taking into account the 
                        number of long-term recipients of 
                        assistance under a State program funded 
                        under this part, the level of 
                        unemployment, the job opportunities and 
                        job growth, the poverty rate, and such 
                        other factors as the Secretary of Labor 
                        deems appropriate, in the area to be 
                        served by the project.
                          (iv) Consideration of needs of rural 
                        areas and cities with large 
                        concentrations of poverty.--In making 
                        grants under this subparagraph, the 
                        Secretary of Labor shall consider the 
                        needs of rural areas and cities with 
                        large concentrations of residents with 
                        an income that is less than the poverty 
                        line.
                          (v) Funding.--For grants under this 
                        subparagraph for each fiscal year 
                        specified in subparagraph (H), there 
                        shall be available to the Secretary of 
                        Labor an amount equal to the sum of--
                                  (I) 25 percent of the sum 
                                of--
                                          (aa) the amount 
                                        specified in 
                                        subparagraph (H) for 
                                        the fiscal year, minus 
                                        the total of the 
                                        amounts reserved 
                                        pursuant to 
                                        subparagraphs (E), (F), 
                                        and (G) for the fiscal 
                                        year; and
                                          (bb) any amount 
                                        reserved pursuant to 
                                        subparagraph (E) for 
                                        the immediately 
                                        preceding fiscal year 
                                        that has not been 
                                        obligated; and
                                  (II) any amount available for 
                                grants under this subparagraph 
                                for the immediately preceding 
                                fiscal year that has not been 
                                obligated.
                  (C) Limitations on use of funds.--
                          (i) Allowable activities.--An entity 
                        to which funds are provided under this 
                        paragraph shall use the funds to move 
                        individuals into and keep individuals 
                        in lasting unsubsidized employment by 
                        means of any of the following:
                                  (I) The conduct and 
                                administration of community 
                                service or work experience 
                                programs.
                                  (II) Job creation through 
                                public or private sector 
                                employment wage subsidies.
                                  (III) On-the-job training.
                                  (IV) Contracts with public or 
                                private providers of readiness, 
                                placement, and post-employment 
                                services, or if the entity is 
                                not a private industry council 
                                or workforce investment board, 
                                the direct provision of such 
                                services.
                                  (V) Job vouchers for 
                                placement, readiness, and 
                                postemployment services.
                                  (VI) Job retention or support 
                                services if such services are 
                                not otherwise available.
                                  (VII) Not more than 6 months 
                                of vocational educational or 
                                job training.
                        Contracts or vouchers for job placement 
                        services supported by such funds must 
                        require that at least \1/2\ of the 
                        payment occur after an eligible 
                        individual placed into the workforce 
                        has been in the workforce for 6 months.
                          (ii) General eligibility.--An entity 
                        that operates a project with funds 
                        provided under this paragraph may 
                        expend funds provided to the project 
                        for the benefit of recipients of 
                        assistance under the program funded 
                        under this part of the State in which 
                        the entity is located who--
                                  (I) has received assistance 
                                under the State program funded 
                                under this part (whether in 
                                effect before or after the 
                                amendments made by section 103 
                                of the Personal Responsibility 
                                and Work Opportunity 
                                Reconciliation Act of 1996 
                                first apply to the State) for 
                                at least 30 months (whether or 
                                not consecutive); or
                                  (II) within 12 months, will 
                                become ineligible for 
                                assistance under the State 
                                program funded under this part 
                                by reason of a durational limit 
                                on such assistance, without 
                                regard to any exemption 
                                provided pursuant to section 
                                408(a)(7)(C) that may apply to 
                                the individual.
                          (iii) Noncustodial parents.--An 
                        entity that operates a project with 
                        funds provided under this paragraph may 
                        use the funds to provide services in a 
                        form described in clause (i) to 
                        noncustodial parents with respect to 
                        whom the requirements of the following 
                        subclauses are met:
                                  (I) The noncustodial parent 
                                is unemployed, underemployed, 
                                or having difficulty in paying 
                                child support obligations.
                                  (II) At least 1 of the 
                                following applies to a minor 
                                child of the noncustodial 
                                parent (with preference in the 
                                determination of the 
                                noncustodial parents to be 
                                provided services under this 
                                paragraph to be provided by the 
                                entity to those noncustodial 
                                parents with minor children who 
                                meet, or who have custodial 
                                parents who meet, the 
                                requirements of item (aa)):
                                          (aa) The minor child 
                                        or the custodial parent 
                                        of the minor child 
                                        meets the requirements 
                                        of subclause (I) or 
                                        (II) of clause (ii).
                                          (bb) The minor child 
                                        is eligible for, or is 
                                        receiving, benefits 
                                        under the program 
                                        funded under this part.
                                          (cc) The minor child 
                                        received benefits under 
                                        the program funded 
                                        under this part in the 
                                        12-month period 
                                        preceding the date of 
                                        the determination but 
                                        no longer receives such 
                                        benefits.
                                          (dd) The minor child 
                                        is eligible for, or is 
                                        receiving, assistance 
                                        under the Food and 
                                        Nutrition Act of 2008, 
                                        benefits under the 
                                        supplemental security 
                                        income program under 
                                        title XVI of this Act, 
                                        medical assistance 
                                        under title XIX of this 
                                        Act, or child health 
                                        assistance under title 
                                        XXI of this Act.
                                  (III) In the case of a 
                                noncustodial parent who becomes 
                                enrolled in the project on or 
                                after the date of the enactment 
                                of this clause, the 
                                noncustodial parent is in 
                                compliance with the terms of an 
                                oral or written personal 
                                responsibility contract entered 
                                into among the noncustodial 
                                parent, the entity, and (unless 
                                the entity demonstrates to the 
                                Secretary that the entity is 
                                not capable of coordinating 
                                with such agency) the agency 
                                responsible for administering 
                                the State plan under part D, 
                                which was developed taking into 
                                account the employment and 
                                child support status of the 
                                noncustodial parent, which was 
                                entered into not later than 30 
                                (or, at the option of the 
                                entity, not later than 90) days 
                                after the noncustodial parent 
                                was enrolled in the project, 
                                and which, at a minimum, 
                                includes the following:
                                          (aa) A commitment by 
                                        the noncustodial parent 
                                        to cooperate, at the 
                                        earliest opportunity, 
                                        in the establishment of 
                                        the paternity of the 
                                        minor child, through 
                                        voluntary 
                                        acknowledgement or 
                                        other procedures, and 
                                        in the establishment of 
                                        a child support order.
                                          (bb) A commitment by 
                                        the noncustodial parent 
                                        to cooperate in the 
                                        payment of child 
                                        support for the minor 
                                        child, which may 
                                        include a modification 
                                        of an existing support 
                                        order to take into 
                                        account the ability of 
                                        the noncustodial parent 
                                        to pay such support and 
                                        the participation of 
                                        such parent in the 
                                        project.
                                          (cc) A commitment by 
                                        the noncustodial parent 
                                        to participate in 
                                        employment or related 
                                        activities that will 
                                        enable the noncustodial 
                                        parent to make regular 
                                        child support payments, 
                                        and if the noncustodial 
                                        parent has not attained 
                                        20 years of age, such 
                                        related activities may 
                                        include completion of 
                                        high school, a general 
                                        equivalency degree, or 
                                        other education 
                                        directly related to 
                                        employment.
                                          (dd) A description of 
                                        the services to be 
                                        provided under this 
                                        paragraph, and a 
                                        commitment by the 
                                        noncustodial parent to 
                                        participate in such 
                                        services, that are 
                                        designed to assist the 
                                        noncustodial parent 
                                        obtain and retain 
                                        employment, increase 
                                        earnings, and enhance 
                                        the financial and 
                                        emotional contributions 
                                        to the well-being of 
                                        the minor child.
                                In order to protect custodial 
                                parents and children who may be 
                                at risk of domestic violence, 
                                the preceding provisions of 
                                this subclause shall not be 
                                construed to affect any other 
                                provision of law requiring a 
                                custodial parent to cooperate 
                                in establishing the paternity 
                                of a child or establishing or 
                                enforcing a support order with 
                                respect to a child, or 
                                entitling a custodial parent to 
                                refuse, for good cause, to 
                                provide such cooperation as a 
                                condition of assistance or 
                                benefit under any program, 
                                shall not be construed to 
                                require such cooperation by the 
                                custodial parent as a condition 
                                of participation of either 
                                parent in the program 
                                authorized under this 
                                paragraph, and shall not be 
                                construed to require a 
                                custodial parent to cooperate 
                                with or participate in any 
                                activity under this clause. The 
                                entity operating a project 
                                under this clause with funds 
                                provided under this paragraph 
                                shall consult with domestic 
                                violence prevention and 
                                intervention organizations in 
                                the development of the project.
                          (iv) Targeting of hard to employ 
                        individuals with characteristics 
                        associated with long-term welfare 
                        dependence.--An entity that operates a 
                        project with funds provided under this 
                        paragraph may expend not more than 30 
                        percent of all funds provided to the 
                        project for programs that provide 
                        assistance in a form described in 
                        clause (i)--
                                  (I) to recipients of 
                                assistance under the program 
                                funded under this part of the 
                                State in which the entity is 
                                located who have 
                                characteristics associated with 
                                long-term welfare dependence 
                                (such as school dropout, teen 
                                pregnancy, or poor work 
                                history), including, at the 
                                option of the State, by 
                                providing assistance in such 
                                form as a condition of 
                                receiving assistance under the 
                                State program funded under this 
                                part;
                                  (II) to children--
                                          (aa) who have 
                                        attained 18 years of 
                                        age but not 25 years of 
                                        age; and
                                          (bb) who, before 
                                        attaining 18 years of 
                                        age, were recipients of 
                                        foster care maintenance 
                                        payments (as defined in 
                                        section 475(4)) under 
                                        part E or were in 
                                        foster care under the 
                                        responsibility of a 
                                        State;
                                  (III) to recipients of 
                                assistance under the State 
                                program funded under this part, 
                                determined to have significant 
                                barriers to self-sufficiency, 
                                pursuant to criteria 
                                established by the local 
                                private industry council; or
                                  (IV) to custodial parents 
                                with incomes below 100 percent 
                                of the poverty line (as defined 
                                in section 673(2) of the 
                                Omnibus Budget Reconciliation 
                                Act of 1981, including any 
                                revision required by such 
                                section, applicable to a family 
                                of the size involved).
                        To the extent that the entity does not 
                        expend such funds in accordance with 
                        the preceding sentence, the entity 
                        shall expend such funds in accordance 
                        with clauses (ii) and (iii) and, as 
                        appropriate, clause (v).
                          (v) Authority to provide work-related 
                        services to individuals who have 
                        reached the 5 year limit.--An entity 
                        that operates a project with funds 
                        provided under this paragraph may use 
                        the funds to provide assistance in a 
                        form described in clause (i) of this 
                        subparagraph to, or for the benefit of, 
                        individuals who (but for section 
                        408(a)(7)) would be eligible for 
                        assistance under the program funded 
                        under this part of the State in which 
                        the entity is located.
                          (vi) Relationship to other provisions 
                        of this part.--
                                  (I) Rules governing use of 
                                funds.--The rules of section 
                                404, other than subsections 
                                (b), (f), and (h) of section 
                                404, shall not apply to a grant 
                                made under this paragraph.
                                  (II) Rules governing payments 
                                to states.--The Secretary of 
                                Labor shall carry out the 
                                functions otherwise assigned by 
                                section 405 to the Secretary of 
                                Health and Human Services with 
                                respect to the grants payable 
                                under this paragraph.
                                  (III) Administration.--
                                Section 416 shall not apply to 
                                the programs under this 
                                paragraph.
                          (vii) Prohibition against use of 
                        grant funds for any other fund matching 
                        requirement.--An entity to which funds 
                        are provided under this paragraph shall 
                        not use any part of the funds, nor any 
                        part of State expenditures made to 
                        match the funds, to fulfill any 
                        obligation of any State, political 
                        subdivision, or private industry 
                        council to contribute funds under 
                        section 403(b) or 418 or any other 
                        provision of this Act or other Federal 
                        law.
                          (viii) Deadline for expenditure.--An 
                        entity to which funds are provided 
                        under this paragraph shall remit to the 
                        Secretary of Labor any part of the 
                        funds that are not expended within 5 
                        years after the date the funds are so 
                        provided.
                          (ix) Regulations.--Within 90 days 
                        after the date of the enactment of this 
                        paragraph, the Secretary of Labor, 
                        after consultation with the Secretary 
                        of Health and Human Services and the 
                        Secretary of Housing and Urban 
                        Development, shall prescribe such 
                        regulations as may be necessary to 
                        implement this paragraph.
                          (x) Reporting requirements.--The 
                        Secretary of Labor, in consultation 
                        with the Secretary of Health and Human 
                        Services, States, and organizations 
                        that represent State or local 
                        governments, shall establish 
                        requirements for the collection and 
                        maintenance of financial and 
                        participant information and the 
                        reporting of such information by 
                        entities carrying out activities under 
                        this paragraph.
                  (D) Definitions.--
                          (i) Individuals with income less than 
                        the poverty line.--For purposes of this 
                        paragraph, the number of individuals 
                        with an income that is less than the 
                        poverty line shall be determined for a 
                        fiscal year--
                                  (I) based on the methodology 
                                used by the Bureau of the 
                                Census to produce and publish 
                                intercensal poverty data for 
                                States and counties (or, in the 
                                case of Puerto Rico, the Virgin 
                                Islands, Guam, and American 
                                Samoa, other poverty data 
                                selected by the Secretary of 
                                Labor); and
                                  (II) using data for the most 
                                recent year for which such data 
                                is available before the 
                                beginning of the fiscal year.
                          (ii) Private industry council.--As 
                        used in this paragraph, the term 
                        ``private industry council'' means, 
                        with respect to a service delivery 
                        area, the private industry council or 
                        local workforce development board 
                        established for the local workforce 
                        development area pursuant to title I of 
                        the Workforce Innovation and 
                        Opportunity Act, as appropriate.
                          (iii) Service delivery area.--As used 
                        in this paragraph, the term ``service 
                        delivery area'' shall have the meaning 
                        given such term for purposes of the Job 
                        Training Partnership Act or.
                  (E) Funding for indian tribes.--1 percent of 
                the amount specified in subparagraph (H) for 
                fiscal year 1998 and $15,000,000 of the amount 
                so specified for fiscal year 1999 shall be 
                reserved for grants to Indian tribes under 
                section 412(a)(3).
                  (F) Funding for evaluations of welfare-to-
                work programs.--0.6 percent of the amount 
                specified in subparagraph (H) for fiscal year 
                1998 and $9,000,000 of the amount so specified 
                for fiscal year 1999 shall be reserved for use 
                by the Secretary to carry out section 413(j).
                  (G) Funding for evaluation of abstinence 
                education programs.--
                          (i) In general.--0.2 percent of the 
                        amount specified in subparagraph (H) 
                        for fiscal year 1998 and $3,000,000 of 
                        the amount so specified for fiscal year 
                        1999 shall be reserved for use by the 
                        Secretary to evaluate programs under 
                        section 510, directly or through 
                        grants, contracts, or interagency 
                        agreements.
                          (ii) Authority to use funds for 
                        evaluations of welfare-to-work 
                        programs.--Any such amount not required 
                        for such evaluations shall be available 
                        for use by the Secretary to carry out 
                        section 413(j).
                          (iii) Deadline for outlays.--Outlays 
                        from funds used pursuant to clause (i) 
                        for evaluation of programs under 
                        section 510 shall not be made after 
                        fiscal year 2005.
                          (iv) Interim report.--Not later than 
                        January 1, 2002, the Secretary shall 
                        submit to the Congress an interim 
                        report on the evaluations referred to 
                        in clause (i).
                  (H) Appropriations.--
                          (i) In general.--Out of any money in 
                        the Treasury of the United States not 
                        otherwise appropriated, there are 
                        appropriated for grants under this 
                        paragraph--
                                  (I) $1,500,000,000 for fiscal 
                                year 1998; and
                                  (II) $1,400,000,000 for 
                                fiscal year 1999.
                          (ii) Availability.--The amounts made 
                        available pursuant to clause (i) shall 
                        remain available for such period as is 
                        necessary to make the grants provided 
                        for in this paragraph.
                  (I) Worker protections.--
                          (i) Nondisplacement in work 
                        activities.--
                                  (I) General prohibition.--
                                Subject to this clause, an 
                                adult in a family receiving 
                                assistance attributable to 
                                funds provided under this 
                                paragraph may fill a vacant 
                                employment position in order to 
                                engage in a work activity.
                                  (II) Prohibition against 
                                violation of contracts.--A work 
                                activity engaged in under a 
                                program operated with funds 
                                provided under this paragraph 
                                shall not violate an existing 
                                contract for services or a 
                                collective bargaining 
                                agreement, and such a work 
                                activity that would violate a 
                                collective bargaining agreement 
                                shall not be undertaken without 
                                the written concurrence of the 
                                labor organization and employer 
                                concerned.
                                  (III) Other prohibitions.--An 
                                adult participant in a work 
                                activity engaged in under a 
                                program operated with funds 
                                provided under this paragraph 
                                shall not be employed or 
                                assigned--
                                          (aa) when any other 
                                        individual is on layoff 
                                        from the same or any 
                                        substantially 
                                        equivalent job;
                                          (bb) if the employer 
                                        has terminated the 
                                        employment of any 
                                        regular employee or 
                                        otherwise caused an 
                                        involuntary reduction 
                                        in its workforce with 
                                        the intention of 
                                        filling the vacancy so 
                                        created with the 
                                        participant; or
                                          (cc) if the employer 
                                        has caused an 
                                        involuntary reduction 
                                        to less than full time 
                                        in hours of any 
                                        employee in the same or 
                                        a substantially 
                                        equivalent job.
                          (ii) Health and safety.--Health and 
                        safety standards established under 
                        Federal and State law otherwise 
                        applicable to working conditions of 
                        employees shall be equally applicable 
                        to working conditions of other 
                        participants engaged in a work activity 
                        under a program operated with funds 
                        provided under this paragraph.
                          (iii) Nondiscrimination.--In addition 
                        to the protections provided under the 
                        provisions of law specified in section 
                        408(c), an individual may not be 
                        discriminated against by reason of 
                        gender with respect to participation in 
                        work activities engaged in under a 
                        program operated with funds provided 
                        under this paragraph.
                          (iv) Grievance procedure.--
                                  (I) In general.--Each State 
                                to which a grant is made under 
                                this paragraph shall establish 
                                and maintain a procedure for 
                                grievances or complaints from 
                                employees alleging violations 
                                of clause (i) and participants 
                                in work activities alleging 
                                violations of clause (i), (ii), 
                                or (iii).
                                  (II) Hearing.--The procedure 
                                shall include an opportunity 
                                for a hearing.
                                  (III) Remedies.--The 
                                procedure shall include 
                                remedies for violation of 
                                clause (i), (ii), or (iii), 
                                which may continue during the 
                                pendency of the procedure, and 
                                which may include--
                                          (aa) suspension or 
                                        termination of payments 
                                        from funds provided 
                                        under this paragraph;
                                          (bb) prohibition of 
                                        placement of a 
                                        participant with an 
                                        employer that has 
                                        violated clause (i), 
                                        (ii), or (iii);
                                          (cc) where 
                                        applicable, 
                                        reinstatement of an 
                                        employee, payment of 
                                        lost wages and 
                                        benefits, and 
                                        reestablishment of 
                                        other relevant terms, 
                                        conditions and 
                                        privileges of 
                                        employment; and
                                          (dd) where 
                                        appropriate, other 
                                        equitable relief.
                                  (IV) Appeals.--
                                          (aa) Filing.--Not 
                                        later than 30 days 
                                        after a grievant or 
                                        complainant receives an 
                                        adverse decision under 
                                        the procedure 
                                        established pursuant to 
                                        subclause (I), the 
                                        grievant or complainant 
                                        may appeal the decision 
                                        to a State agency 
                                        designated by the State 
                                        which shall be 
                                        independent of the 
                                        State or local agency 
                                        that is administering 
                                        the programs operated 
                                        with funds provided 
                                        under this paragraph 
                                        and the State agency 
                                        administering, or 
                                        supervising the 
                                        administration of, the 
                                        State program funded 
                                        under this part.
                                          (bb) Final 
                                        determination.--Not 
                                        later than 120 days 
                                        after the State agency 
                                        designated under item 
                                        (aa) receives a 
                                        grievance or complaint 
                                        made under the 
                                        procedure established 
                                        by a State pursuant to 
                                        subclause (I), the 
                                        State agency shall make 
                                        a final determination 
                                        on the appeal.
                          (v) Rule of interpretation.--This 
                        subparagraph shall not be construed to 
                        affect the authority of a State to 
                        provide or require workers' 
                        compensation.
                          (vi) Nonpreemption of state law.--The 
                        provisions of this subparagraph shall 
                        not be construed to preempt any 
                        provision of State law that affords 
                        greater protections to employees or to 
                        other participants engaged in work 
                        activities under a program funded under 
                        this part than is afforded by such 
                        provisions of this subparagraph.
                  (J) Information disclosure.--If a State to 
                which a grant is made under section 403 
                establishes safeguards against the use or 
                disclosure of information about applicants or 
                recipients of assistance under the State 
                program funded under this part, the safeguards 
                shall not prevent the State agency 
                administering the program from furnishing to a 
                private industry council the names, addresses, 
                telephone numbers, and identifying case number 
                information in the State program funded under 
                this part, of noncustodial parents residing in 
                the service delivery area of the private 
                industry council, for the purpose of 
                identifying and contacting noncustodial parents 
                regarding participation in the program under 
                this paragraph.
  (b) Contingency Fund.--
          (1) Establishment.--There is hereby established in 
        the Treasury of the United States a fund which shall be 
        known as the ``Contingency Fund for State Welfare 
        Programs'' (in this section referred to as the 
        ``Fund'').
          (2) Deposits into fund.--Out of any money in the 
        Treasury of the United States not otherwise 
        appropriated, there are appropriated for fiscal years 
        2013 and 2014 such sums as are necessary for payment to 
        the Fund in a total amount not to exceed $612,000,000 
        for each fiscal year, of which $2,000,000 shall be 
        reserved for carrying out the activities of the 
        commission established by the Protect our Kids Act of 
        2012 to reduce fatalities resulting from child abuse 
        and neglect.
          (3) Grants.--
                  (A) Provisional payments.--If an eligible 
                State submits to the Secretary a request for 
                funds under this paragraph during an eligible 
                month, the Secretary shall, subject to this 
                paragraph, pay to the State, from amounts 
                appropriated pursuant to paragraph (2), an 
                amount equal to the amount of funds so 
                requested.
                  (B) Payment priority.--The Secretary shall 
                make payments under subparagraph (A) in the 
                order in which the Secretary receives requests 
                for such payments.
                  (C) Limitations.--
                          (i) Monthly payment to a state.--The 
                        total amount paid to a single State 
                        under subparagraph (A) during a month 
                        shall not exceed \1/12\ of 20 percent 
                        of the State family assistance grant.
                          (ii) Payments to all states.--The 
                        total amount paid to all States under 
                        subparagraph (A) during fiscal year 
                        2011 and 2012, respectively, shall not 
                        exceed the total amount appropriated 
                        pursuant to paragraph (2) for each such 
                        fiscal year.
          (4) Eligible month.--As used in paragraph (3)(A), the 
        term ``eligible month'' means, with respect to a State, 
        a month in the 2-month period that begins with any 
        month for which the State is a needy State.
          (5) Needy state.--For purposes of paragraph (4), a 
        State is a needy State for a month if--
                  (A) the average rate of--
                          (i) total unemployment in such State 
                        (seasonally adjusted) for the period 
                        consisting of the most recent 3 months 
                        for which data for all States are 
                        published equals or exceeds 6.5 
                        percent; and
                          (ii) total unemployment in such State 
                        (seasonally adjusted) for the 3-month 
                        period equals or exceeds 110 percent of 
                        such average rate for either (or both) 
                        of the corresponding 3-month periods 
                        ending in the 2 preceding calendar 
                        years; or
                  (B) as determined by the Secretary of 
                Agriculture (in the discretion of the Secretary 
                of Agriculture), the monthly average number of 
                individuals (as of the last day of each month) 
                participating in the supplemental nutrition 
                assistance program in the State in the then 
                most recently concluded 3-month period for 
                which data are available exceeds by not less 
                than 10 percent the lesser of--
                          (i) the monthly average number of 
                        individuals (as of the last day of each 
                        month) in the State that would have 
                        participated in the supplemental 
                        nutrition assistance program in the 
                        corresponding 3-month period in fiscal 
                        year 1994 if the amendments made by 
                        titles IV and VIII of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996 had been in 
                        effect throughout fiscal year 1994; or
                          (ii) the monthly average number of 
                        individuals (as of the last day of each 
                        month) in the State that would have 
                        participated in the supplemental 
                        nutrition assistance program in the 
                        corresponding 3-month period in fiscal 
                        year 1995 if the amendments made by 
                        titles IV and VIII of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996 had been in 
                        effect throughout fiscal year 1995.
          (6) Annual reconciliation.--
                  (A) In general.--Notwithstanding paragraph 
                (3), if the Secretary makes a payment to a 
                State under this subsection in a fiscal year, 
                then the State shall remit to the Secretary, 
                within 1 year after the end of the first 
                subsequent period of 3 consecutive months for 
                which the State is not a needy State, an amount 
                equal to the amount (if any) by which--
                          (i) the total amount paid to the 
                        State under paragraph (3) of this 
                        subsection in the fiscal year; exceeds
                          (ii) the product of--
                                  (I) the Federal medical 
                                assistance percentage for the 
                                State (as defined in section 
                                1905(b), as such section was in 
                                effect on September 30, 1995);
                                  (II) the State's reimbursable 
                                expenditures for the fiscal 
                                year; and
                                  (III) \1/12\ times the number 
                                of months during the fiscal 
                                year for which the Secretary 
                                made a payment to the State 
                                under such paragraph (3).
                  (B) Definitions.--As used in subparagraph 
                (A):
                          (i) Reimbursable expenditures.--The 
                        term ``reimbursable expenditures'' 
                        means, with respect to a State and a 
                        fiscal year, the amount (if any) by 
                        which--
                                  (I) countable State 
                                expenditures for the fiscal 
                                year; exceeds
                                  (II) historic State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(iii)), 
                                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.
                          (ii) Countable state expenditures.--
                        The term ``countable expenditures'' 
                        means, with respect to a State and a 
                        fiscal year--
                                  (I) the qualified State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(i) (other 
                                than the expenditures described 
                                in subclause (I)(bb) of such 
                                section)) under the State 
                                program funded under this part 
                                for the fiscal year; plus
                                  (II) any amount paid to the 
                                State under paragraph (3) 
                                during the fiscal year that is 
                                expended by the State under the 
                                State program funded under this 
                                part.
                  (C) Adjustment of state remittances.--
                          (i) In general.--The amount otherwise 
                        required by subparagraph (A) to be 
                        remitted by a State for a fiscal year 
                        shall be increased by the lesser of--
                                  (I) the total adjustment for 
                                the fiscal year, multiplied by 
                                the adjustment percentage for 
                                the State for the fiscal year; 
                                or
                                  (II) the unadjusted net 
                                payment to the State for the 
                                fiscal year.
                          (ii) Total adjustment.--As used in 
                        clause (i), the term ``total 
                        adjustment'' means--
                                  (I) in the case of fiscal 
                                year 1998, $2,000,000;
                                  (II) in the case of fiscal 
                                year 1999, $9,000,000;
                                  (III) in the case of fiscal 
                                year 2000, $16,000,000; and
                                  (IV) in the case of fiscal 
                                year 2001, $13,000,000.
                          (iii) Adjustment percentage.--As used 
                        in clause (i), the term ``adjustment 
                        percentage'' means, with respect to a 
                        State and a fiscal year--
                                  (I) the unadjusted net 
                                payment to the State for the 
                                fiscal year; divided by
                                  (II) the sum of the 
                                unadjusted net payments to all 
                                States for the fiscal year.
                          (iv) Unadjusted net payment.--As used 
                        in this subparagraph, the term, 
                        ``unadjusted net payment'' means with 
                        respect to a State and a fiscal year--
                                  (I) the total amount paid to 
                                the State under paragraph (3) 
                                in the fiscal year; minus
                                  (II) the amount that, in the 
                                absence of this subparagraph, 
                                would be required by 
                                subparagraph (A) or by section 
                                409(a)(10) to be remitted by 
                                the State in respect of the 
                                payment.
          (7) State defined.--As used in this subsection, the 
        term ``State'' means each of the 50 States and the 
        District of Columbia.
          (8) Annual reports.--The Secretary shall annually 
        report to the Congress on the status of the Fund.

           *       *       *       *       *       *       *


      B. Changes in Existing Law Proposed by the Bill, as Reported

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italics, existing law in 
which no change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows (new 
matter is printed in italics and existing law in which no 
change is proposed is shown in roman):

SOCIAL SECURITY ACT

           *       *       *       *       *       *       *


TITLE IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH 
                CHILDREN AND FOR CHILD-WELFARE SERVICES

   PART A--BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY 
FAMILIES

           *       *       *       *       *       *       *


SEC. 403. GRANTS TO STATES.

  (a) Grants.--
          (1) Family assistance grant.--
                  (A) In general.--Each eligible State shall be 
                entitled to receive from the Secretary, for 
                fiscal year 2012, a grant in an amount equal to 
                the State family assistance grant.
                  (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 in 
                effect just before the enactment of the Welfare 
                Integrity and Data Improvement Act) as the 
                amount required to be paid to the State under 
                this paragraph (as so in effect) 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 fiscal 
                year 2012 $16,566,542,000 for grants under this 
                paragraph.
          (2) Healthy marriage promotion and responsible 
        fatherhood grants.--
                  (A) In general.--
                          (i) Use of funds.--Subject to 
                        subparagraphs (B), (C), and (E), the 
                        Secretary may use the funds made 
                        available under subparagraph (D) for 
                        the purpose of conducting and 
                        supporting research and demonstration 
                        projects by public or private entities, 
                        and providing technical assistance to 
                        States, Indian tribes and tribal 
                        organizations, and such other entities 
                        as the Secretary may specify that are 
                        receiving a grant under another 
                        provision of this part.
                          (ii) Limitations.--The Secretary may 
                        not award funds made available under 
                        this paragraph on a noncompetitive 
                        basis, and may not provide any such 
                        funds to an entity for the purpose of 
                        carrying out healthy marriage promotion 
                        activities or for the purpose of 
                        carrying out activities promoting 
                        responsible fatherhood unless the 
                        entity has submitted to the Secretary 
                        an application (or, in the case of an 
                        entity seeking funding to carry out 
                        healthy marriage promotion activities 
                        and activities promoting responsible 
                        fatherhood, a combined application that 
                        contains assurances that the entity 
                        will carry out such activities under 
                        separate programs and shall not combine 
                        any funds awarded to carry out either 
                        such activities) which--
                                  (I) describes--
                                          (aa) how the programs 
                                        or activities proposed 
                                        in the application will 
                                        address, as 
                                        appropriate, issues of 
                                        domestic violence; and
                                          (bb) what the 
                                        applicant will do, to 
                                        the extent relevant, to 
                                        ensure that 
                                        participation in the 
                                        programs or activities 
                                        is voluntary, and to 
                                        inform potential 
                                        participants that their 
                                        participation is 
                                        voluntary; and
                                  (II) contains a commitment by 
                                the entity--
                                          (aa) to not use the 
                                        funds for any other 
                                        purpose; and
                                          (bb) to consult with 
                                        experts in domestic 
                                        violence or relevant 
                                        community domestic 
                                        violence coalitions in 
                                        developing the programs 
                                        and activities.
                          (iii) Healthy marriage promotion 
                        activities.--In clause (ii), the term 
                        ``healthy marriage promotion 
                        activities'' means the following:
                                  (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.
                                  (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.
                  (B) Limitation on use of funds for 
                demonstration projects for coordination of 
                provision of child welfare and tanf services to 
                tribal families at risk of child abuse or 
                neglect.--
                          (i) In general.--Of the amounts made 
                        available under subparagraph (D) for a 
                        fiscal year, the Secretary may not 
                        award more than $2,000,000 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.
                          (ii) Limitation on use of funds.--A 
                        grant made pursuant to clause (i) to 
                        such a project shall not be used for 
                        any purpose other than--
                                  (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.
                          (iii) Reports.--The Secretary may 
                        require a recipient of funds awarded 
                        under this subparagraph 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 
                        subparagraph.
                  (C) Limitation on use of funds for activities 
                promoting responsible fatherhood.--
                          (i) In general.--Of the amounts made 
                        available under subparagraph (D) for a 
                        fiscal year, the Secretary may not 
                        award more than $75,000,000 on a 
                        competitive basis to States, 
                        territories, Indian tribes and tribal 
                        organizations, and public and nonprofit 
                        community entities, including religious 
                        organizations, for activities promoting 
                        responsible fatherhood.
                          (ii) Activities promoting responsible 
                        fatherhood.--In this paragraph, the 
                        term ``activities promoting responsible 
                        fatherhood'' means the following:
                                  (I) Activities 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.
                                  (II) Activities 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.
                                  (III) Activities 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.
                                  (IV) Activities to promote 
                                responsible fatherhood that are 
                                conducted through a contract 
                                with a nationally recognized, 
                                nonprofit fatherhood promotion 
                                organization, such as the 
                                development, promotion, and 
                                distribution of a media 
                                campaign to encourage the 
                                appropriate involvement of 
                                parents in the life of any 
                                child and specifically the 
                                issue of responsible 
                                fatherhood, and the development 
                                of a national clearinghouse to 
                                assist States and communities 
                                in efforts to promote and 
                                support marriage and 
                                responsible fatherhood.
                  (D) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                year 2012 for expenditure in accordance with 
                this paragraph--
                          (i) $75,000,000 for awarding funds 
                        for the purpose of carrying out healthy 
                        marriage promotion activities; and
                          (ii) $75,000,000 for awarding funds 
                        for the purpose of carrying out 
                        activities promoting responsible 
                        fatherhood.
                If the Secretary makes an award under 
                subparagraph (B)(i) for fiscal year 2012, the 
                funds for such award shall be taken in equal 
                portion from the amounts appropriated under 
                clauses (i) and (ii).
                  (E) Preference.--In awarding funds under this 
                paragraph for fiscal year 2011, the Secretary 
                shall give preference to entities that were 
                awarded funds under this paragraph for any 
                prior fiscal year and that have demonstrated 
                the ability to successfully carry out the 
                programs funded under this paragraph.
          (3) Supplemental grant for population increases in 
        certain states.--
                  (A) In general.--Each qualifying State shall, 
                subject to subparagraph (F), be entitled to 
                receive from the Secretary--
                          (i) for fiscal year 1998 a grant in 
                        an amount equal to 2.5 percent of the 
                        total amount required to be paid to the 
                        State under former section 403 (as in 
                        effect during fiscal year 1994) for 
                        fiscal year 1994; and
                          (ii) for each of fiscal years 1999, 
                        2000, and 2001, a grant in an amount 
                        equal to the sum of--
                                  (I) the amount (if any) 
                                required to be paid to the 
                                State under this paragraph for 
                                the immediately preceding 
                                fiscal year; and
                                  (II) 2.5 percent of the sum 
                                of--
                                          (aa) the total amount 
                                        required to be paid to 
                                        the State under former 
                                        section 403 (as in 
                                        effect during fiscal 
                                        year 1994) for fiscal 
                                        year 1994; and
                                          (bb) the amount (if 
                                        any) required to be 
                                        paid to the State under 
                                        this paragraph for the 
                                        fiscal year preceding 
                                        the fiscal year for 
                                        which the grant is to 
                                        be made.
                  (B) Preservation of grant without increases 
                for states failing to remain qualifying 
                states.--Each State that is not a qualifying 
                State for a fiscal year specified in 
                subparagraph (A)(ii) but was a qualifying State 
                for a prior fiscal year shall, subject to 
                subparagraph (F), be entitled to receive from 
                the Secretary for the specified fiscal year, a 
                grant in an amount equal to the amount required 
                to be paid to the State under this paragraph 
                for the most recent fiscal year for which the 
                State was a qualifying State.
                  (C) Qualifying state.--
                          (i) In general.--For purposes of this 
                        paragraph, a State is a qualifying 
                        State for a fiscal year if--
                                  (I) the level of welfare 
                                spending per poor person by the 
                                State for the immediately 
                                preceding fiscal year is less 
                                than the national average level 
                                of State welfare spending per 
                                poor person for such preceding 
                                fiscal year; and
                                  (II) the population growth 
                                rate of the State (as 
                                determined by the Bureau of the 
                                Census) for the most recent 
                                fiscal year for which 
                                information is available 
                                exceeds the average population 
                                growth rate for all States (as 
                                so determined) for such most 
                                recent fiscal year.
                          (ii) State must qualify in fiscal 
                        year 1998.--Notwithstanding clause (i), 
                        a State shall not be a qualifying State 
                        for any fiscal year after 1998 by 
                        reason of clause (i) if the State is 
                        not a qualifying State for fiscal year 
                        1998 by reason of clause (i).
                          (iii) Certain states deemed 
                        qualifying states.--For purposes of 
                        this paragraph, a State is deemed to be 
                        a qualifying State for fiscal years 
                        1998, 1999, 2000, and 2001 if--
                                  (I) the level of welfare 
                                spending per poor person by the 
                                State for fiscal year 1994 is 
                                less than 35 percent of the 
                                national average level of State 
                                welfare spending per poor 
                                person for fiscal year 1994; or
                                  (II) the population of the 
                                State increased by more than 10 
                                percent from April 1, 1990 to 
                                July 1, 1994, according to the 
                                population estimates in 
                                publication CB94-204 of the 
                                Bureau of the Census.
                  (D) Definitions.--As used in this paragraph:
                          (i) Level of welfare spending per 
                        poor person.--The term ``level of State 
                        welfare spending per poor person'' 
                        means, with respect to a State and a 
                        fiscal year--
                                  (I) the sum of--
                                          (aa) the total amount 
                                        required to be paid to 
                                        the State under former 
                                        section 403 (as in 
                                        effect during fiscal 
                                        year 1994) for fiscal 
                                        year 1994; and
                                          (bb) the amount (if 
                                        any) paid to the State 
                                        under this paragraph 
                                        for the immediately 
                                        preceding fiscal year; 
                                        divided by
                                  (II) the number of 
                                individuals, according to the 
                                1990 decennial census, who were 
                                residents of the State and 
                                whose income was below the 
                                poverty line.
                          (ii) National average level of state 
                        welfare spending per poor person.--The 
                        term ``national average level of State 
                        welfare spending per poor person'' 
                        means, with respect to a fiscal year, 
                        an amount equal to--
                                  (I) the total amount required 
                                to be paid to the States under 
                                former section 403 (as in 
                                effect during fiscal year 1994) 
                                for fiscal year 1994; divided 
                                by
                                  (II) the number of 
                                individuals, according to the 
                                1990 decennial census, who were 
                                residents of any State and 
                                whose income was below the 
                                poverty line.
                          (iii) State.--The term ``State'' 
                        means each of the 50 States of the 
                        United States and the District of 
                        Columbia.
                  (E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                years 1998, 1999, 2000, and 2001 such sums as 
                are necessary for grants under this paragraph, 
                in a total amount not to exceed $800,000,000.
                  (F) Grants reduced pro rata if insufficient 
                appropriations.--If the amount appropriated 
                pursuant to this paragraph for a fiscal year 
                (or portion of a fiscal year) is less than the 
                total amount of payments otherwise required to 
                be made under this paragraph for the fiscal 
                year (or portion of the fiscal year), then the 
                amount otherwise payable to any State for the 
                fiscal year (or portion of the fiscal year) 
                under this paragraph shall be reduced by a 
                percentage equal to the amount so appropriated 
                divided by such total amount.
                  (G) Budget scoring.--Notwithstanding section 
                257(b)(2) of the Balanced Budget and Emergency 
                Deficit Control Act of 1985, the baseline shall 
                assume that no grant shall be made under this 
                paragraph after fiscal year 2001.
                  (H) Reauthorization.--Notwithstanding any 
                other provision of this paragraph--
                          (i) any State that was a qualifying 
                        State under this paragraph for fiscal 
                        year 2001 or any prior fiscal year 
                        shall be entitled to receive from the 
                        Secretary for each of fiscal years 2002 
                        and 2003 a grant in an amount equal to 
                        the amount required to be paid to the 
                        State under this paragraph for the most 
                        recent fiscal year in which the State 
                        was a qualifying State;
                          (ii) subparagraph (G) shall be 
                        applied as if ``fiscal year 2011'' were 
                        substituted for ``fiscal year 2001'';
                          (iii) out of any money in the 
                        Treasury of the United States not 
                        otherwise appropriated, there are 
                        appropriated for each of fiscal years 
                        2002 and 2003 such sums as are 
                        necessary for grants under this 
                        subparagraph.
          (4) Bonus to reward high performance states.--
                  (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 a 
                high performing 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 a high performing State for a bonus 
                        year, which shall be based on the score 
                        assigned to the State 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.--Not later than 1 year after the 
                date of the enactment of the Personal 
                Responsibility and Work Opportunity 
                Reconciliation Act of 1996, the Secretary, in 
                consultation with the National Governors' 
                Association and the American Public Welfare 
                Association, shall develop a formula for 
                measuring State performance in operating the 
                State program funded under this part so as to 
                achieve the goals set forth in section 401(a).
                  (D) Scoring of state performance; setting of 
                performance thresholds.--For each bonus year, 
                the Secretary shall--
                          (i) use the formula developed under 
                        subparagraph (C) to assign a score to 
                        each eligible State for the fiscal year 
                        that immediately precedes the bonus 
                        year; and
                          (ii) prescribe a performance 
                        threshold 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 $200,000,000; 
                                and
                                  (II) the total amount of 
                                grants to be made under this 
                                paragraph for all bonus years 
                                equals $1,000,000,000.
                  (E) Definitions.--As used in this paragraph:
                          (i) Bonus year.--The term ``bonus 
                        year'' means fiscal years 1999, 2000, 
                        2001, 2002, and 2003.
                          (ii) High performing state.--The term 
                        ``high performing State'' means, with 
                        respect to a bonus year, an eligible 
                        State whose score assigned pursuant to 
                        subparagraph (D)(i) for the fiscal year 
                        immediately preceding the bonus year 
                        equals or exceeds the performance 
                        threshold 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 fiscal 
                years 1999 through 2003 $1,000,000,000 for 
                grants under this paragraph.
          (5) Welfare-to-work grants.--
                  (A) Formula grants.--
                          (i) Entitlement.--A State shall be 
                        entitled to receive from the Secretary 
                        of Labor a grant for each fiscal year 
                        specified in subparagraph (H) of this 
                        paragraph for which the State is a 
                        welfare-to-work State, in an amount 
                        that does not exceed the lesser of--
                                  (I) 2 times the total of the 
                                expenditures by the State 
                                (excluding qualified State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(i)) and 
                                any expenditure described in 
                                subclause (I), (II), or (IV) of 
                                section 409(a)(7)(B)(iv)) 
                                during the period permitted 
                                under subparagraph (C)(vii) of 
                                this paragraph for the 
                                expenditure of funds under the 
                                grant for activities described 
                                in subparagraph (C)(i) of this 
                                paragraph; or
                                  (II) the allotment of the 
                                State under clause (iii) of 
                                this subparagraph for the 
                                fiscal year.
                          (ii) Welfare-to-work state.--A State 
                        shall be considered a welfare-to-work 
                        State for a fiscal year for purposes of 
                        this paragraph if the Secretary of 
                        Labor determines that the State meets 
                        the following requirements:
                                  (I) The State has submitted 
                                to the Secretary of Labor and 
                                the Secretary of Health and 
                                Human Services (in the form of 
                                an addendum to the State plan 
                                submitted under section 402) a 
                                plan which--
                                          (aa) describes how, 
                                        consistent with this 
                                        subparagraph, the State 
                                        will use any funds 
                                        provided under this 
                                        subparagraph during the 
                                        fiscal year;
                                          (bb) specifies the 
                                        formula to be used 
                                        pursuant to clause (vi) 
                                        to distribute funds in 
                                        the State, and 
                                        describes the process 
                                        by which the formula 
                                        was developed;
                                          (cc) contains 
                                        evidence that the plan 
                                        was developed in 
                                        consultation and 
                                        coordination with 
                                        appropriate entitites 
                                        in sub-State areas;
                                          (dd) contains 
                                        assurances by the 
                                        Governor of the State 
                                        that the private 
                                        industry council (and 
                                        any alternate agency 
                                        designated by the 
                                        Governor under item 
                                        (ee)) for a service 
                                        delivery area in the 
                                        State will coordinate 
                                        the expenditure of any 
                                        funds provided under 
                                        this subparagraph for 
                                        the benefit of the 
                                        service delivery area 
                                        with the expenditure of 
                                        the funds provided to 
                                        the State under section 
                                        403(a)(1);
                                          (ee) if the Governor 
                                        of the State desires to 
                                        have an agency other 
                                        than a private industry 
                                        council administer the 
                                        funds provided under 
                                        this subparagraph for 
                                        the benefit of 1 or 
                                        more service delivery 
                                        areas in the State, 
                                        contains an application 
                                        to the Secretary of 
                                        Labor for a waiver of 
                                        clause (vii)(I) with 
                                        respect to the area or 
                                        areas in order to 
                                        permit an alternate 
                                        agency designated by 
                                        the Governor to so 
                                        administer the funds; 
                                        and
                                          (ff) describes how 
                                        the State will ensure 
                                        that a private industry 
                                        council to which 
                                        information is 
                                        disclosed pursuant to 
                                        section 403(a)(5)(K) or 
                                        454A(f)(5) has 
                                        procedures for 
                                        safeguarding the 
                                        information and for 
                                        ensuring that the 
                                        information is used 
                                        solely for the purpose 
                                        described in that 
                                        section.
                                  (II) The State has provided 
                                to the Secretary of Labor an 
                                estimate of the amount that the 
                                State intends to expend during 
                                the period permitted under 
                                subparagraph (C)(vii) of this 
                                paragraph for the expenditure 
                                of funds under the grant 
                                (excluding expenditures 
                                described in section 
                                409(a)(7)(B)(iv) (other than 
                                subclause (III) thereof)) 
                                pursuant to this paragraph.
                                  (III) The State has agreed to 
                                negotiate in good faith with 
                                the Secretary of Health and 
                                Human Services with respect to 
                                the substance and funding of 
                                any evaluation under section 
                                413(j), and to cooperate with 
                                the conduct of any such 
                                evaluation.
                                  (IV) The State is an eligible 
                                State for the fiscal year.
                                  (V) The State certifies that 
                                qualified State expenditures 
                                (within the meaning of section 
                                409(a)(7)) for the fiscal year 
                                will be not less than the 
                                applicable percentage of 
                                historic State expenditures 
                                (within the meaning of section 
                                409(a)(7)) with respect to the 
                                fiscal year.
                          (iii) Allotments to welfare-to-work 
                        states.--
                                  (I) In general.--Subject to 
                                this clause, the allotment of a 
                                welfare-to-work State for a 
                                fiscal year shall be the 
                                available amount for the fiscal 
                                year, multiplied by the State 
                                percentage for the fiscal year.
                                  (II) Minimum allotment.--The 
                                allotment of a welfare-to-work 
                                State (other than Guam, the 
                                Virgin Islands, or American 
                                Samoa) for a fiscal year shall 
                                not be less than 0.25 percent 
                                of the available amount for the 
                                fiscal year.
                                  (III) Pro rata reduction.--
                                Subject to subclause (II), the 
                                Secretary of Labor shall make 
                                pro rata reductions in the 
                                allotments to States under this 
                                clause for a fiscal year as 
                                necessary to ensure that the 
                                total of the allotments does 
                                not exceed the available amount 
                                for the fiscal year.
                          (iv) Available amount.--As used in 
                        this subparagraph, the term ``available 
                        amount'' means, for a fiscal year, the 
                        sum of--
                                  (I) 75 percent of the sum 
                                of--
                                          (aa) the amount 
                                        specified in 
                                        subparagraph (H) for 
                                        the fiscal year, minus 
                                        the total of the 
                                        amounts reserved 
                                        pursuant to 
                                        subparagraphs (E), (F), 
                                        and (G) for the fiscal 
                                        year; and
                                          (bb) any amount 
                                        reserved pursuant to 
                                        subparagraph (E) for 
                                        the immediately 
                                        preceding fiscal year 
                                        that has not been 
                                        obligated; and
                                  (II) any available amount for 
                                the immediately preceding 
                                fiscal year that has not been 
                                obligated by a State, other 
                                than funds reserved by the 
                                State for distribution under 
                                clause (vi)(III) and funds 
                                distributed pursuant to clause 
                                (vi)(I) in any State in which 
                                the service delivery area is 
                                the State.
                          (v) State percentage.--As used in 
                        clause (iii), the term ``State 
                        percentage'' means, with respect to a 
                        fiscal year, \1/2\ of the sum of--
                                  (I) the percentage 
                                represented by the number of 
                                individuals in the State whose 
                                income is less than the poverty 
                                line divided by the number of 
                                such individuals in the United 
                                States; and
                                  (II) the percentage 
                                represented by the number of 
                                adults who are recipients of 
                                assistance under the State 
                                program funded under this part 
                                divided by the number of adults 
                                in the United States who are 
                                recipients of assistance under 
                                any State program funded under 
                                this part.
                          (vi) Procedure for distribution of 
                        funds within states.--
                                  (I) Allocation formula.--A 
                                State to which a grant is made 
                                under this subparagraph shall 
                                devise a formula for allocating 
                                not less than 85 percent of the 
                                amount of the grant among the 
                                service delivery areas in the 
                                State, which--
                                          (aa) determines the 
                                        amount to be allocated 
                                        for the benefit of a 
                                        service delivery area 
                                        in proportion to the 
                                        number (if any) by 
                                        which the population of 
                                        the area with an income 
                                        that is less than the 
                                        poverty line exceeds 
                                        7.5 percent of the 
                                        total population of the 
                                        area, relative to such 
                                        number for all such 
                                        areas in the State with 
                                        such an excess, and 
                                        accords a weight of not 
                                        less than 50 percent to 
                                        this factor;
                                          (bb) may determine 
                                        the amount to be 
                                        allocated for the 
                                        benefit of such an area 
                                        in proportion to the 
                                        number of adults 
                                        residing in the area 
                                        who have been 
                                        recipients of 
                                        assistance under the 
                                        State program funded 
                                        under this part 
                                        (whether in effect 
                                        before or after the 
                                        amendments made by 
                                        section 103(a) of the 
                                        Personal Responsibility 
                                        and Work Opportunity 
                                        Reconciliation Act of 
                                        1996 first applied to 
                                        the State) for at least 
                                        30 months (whether or 
                                        not consecutive) 
                                        relative to the number 
                                        of such adults residing 
                                        in the State; and
                                          (cc) may determine 
                                        the amount to be 
                                        allocated for the 
                                        benefit of such an area 
                                        in proportion to the 
                                        number of unemployed 
                                        individuals residing in 
                                        the area relative to 
                                        the number of such 
                                        individuals residing in 
                                        the State.
                                  (II) Distribution of funds.--
                                          (aa) In general.--If 
                                        the amount allocated by 
                                        the formula to a 
                                        service delivery area 
                                        is at least $100,000, 
                                        the State shall 
                                        distribute the amount 
                                        to the entity 
                                        administering the grant 
                                        in the area.
                                          (bb) Special rule.--
                                        If the amount allocated 
                                        by the formula to a 
                                        service delivery area 
                                        is less than $100,000, 
                                        the sum shall be 
                                        available for 
                                        distribution in the 
                                        State under subclause 
                                        (III) during the fiscal 
                                        year.
                                  (III) Projects to help long-
                                term recipients of assistance 
                                enter unsubsidized jobs.--The 
                                Governor of a State to which a 
                                grant is made under this 
                                subparagraph may distribute not 
                                more than 15 percent of the 
                                grant funds (plus any amount 
                                required to be distributed 
                                under this subclause by reason 
                                of subclause (II)(bb)) to 
                                projects that appear likely to 
                                help long-term recipients of 
                                assistance under the State 
                                program funded under this part 
                                (whether in effect before or 
                                after the amendments made by 
                                section 103(a) of the Personal 
                                Responsibility and Work 
                                Opportunity Reconciliation Act 
                                of 1996 first applied to the 
                                State) enter unsubsidized 
                                employment.
                          (vii) Administration.--
                                  (I) Private industry 
                                councils.--The private industry 
                                council for a service delivery 
                                area in a State shall have sole 
                                authority, in coordination with 
                                the chief elected official (as 
                                defined in section 3 of the 
                                Workforce Innovation and 
                                Opportunity Act) of the area, 
                                to expend the amounts 
                                distributed under clause 
                                (vi)(II)(aa) for the benefit of 
                                the service delivery area, in 
                                accordance with the assurances 
                                described in clause (ii)(I)(dd) 
                                provided by the Governor of the 
                                State.
                                  (II) Enforcement of 
                                coordination of expenditures 
                                with other expenditures under 
                                this part.--Notwithstanding 
                                subclause (I) of this clause, 
                                on a determination by the 
                                Governor of a State that a 
                                private industry council (or an 
                                alternate agency described in 
                                clause (ii)(I)(dd)) has used 
                                funds provided under this 
                                subparagraph in a manner 
                                inconsistent with the 
                                assurances described in clause 
                                (ii)(I)(dd)--
                                          (aa) the private 
                                        industry council (or 
                                        such alternate agency) 
                                        shall remit the funds 
                                        to the Governor; and
                                          (bb) the Governor 
                                        shall apply to the 
                                        Secretary of Labor for 
                                        a waiver of subclause 
                                        (I) of this clause with 
                                        respect to the service 
                                        delivery area or areas 
                                        involved in order to 
                                        permit an alternate 
                                        agency designated by 
                                        the Governor to 
                                        administer the funds in 
                                        accordance with the 
                                        assurances.
                                  (III) Authority to permit use 
                                of alternate administering 
                                agency.--The Secretary of Labor 
                                shall approve an application 
                                submitted under clause 
                                (ii)(I)(ee) or subclause 
                                (II)(bb) of this clause to 
                                waive subclause (I) of this 
                                clause with respect to 1 or 
                                more service delivery areas if 
                                the Secretary determines that 
                                the alternate agency designated 
                                in the application would 
                                improve the effectiveness or 
                                efficiency of the 
                                administration of amounts 
                                distributed under clause 
                                (vi)(II)(aa) for the benefit of 
                                the area or areas.
                          (viii) Data to be used in determining 
                        the number of adult tanf recipients.--
                        For purposes of this subparagraph, the 
                        number of adult recipients of 
                        assistance under a State program funded 
                        under this part for a fiscal year shall 
                        be determined using data for the most 
                        recent 12-month period for which such 
                        data is available before the beginning 
                        of the fiscal year.
                          (ix) Reversion of unallotted formula 
                        funds.--If at the end of any fiscal 
                        year any funds available under this 
                        subparagraph have not been allotted due 
                        to a determination by the Secretary 
                        that any State has not met the 
                        requirements of clause (ii), such funds 
                        shall be transferred to the General 
                        Fund of the Treasury of the United 
                        States.
                  (B) Competitive grants.--
                          (i) In general.--The Secretary of 
                        Labor shall award grants in accordance 
                        with this subparagraph, in fiscal years 
                        1998 and 1999, for projects proposed by 
                        eligible applicants, based on the 
                        following:
                                  (I) The effectiveness of the 
                                proposal in--
                                          (aa) expanding the 
                                        base of knowledge about 
                                        programs aimed at 
                                        moving recipients of 
                                        assistance under State 
                                        programs funded under 
                                        this part who are least 
                                        job ready into 
                                        unsubsidized 
                                        employment.
                                          (bb) moving 
                                        recipients of 
                                        assistance under State 
                                        programs funded under 
                                        this part who are least 
                                        job ready into 
                                        unsubsidized 
                                        employment; and
                                          (cc) moving 
                                        recipients of 
                                        assistance under State 
                                        programs funded under 
                                        this part who are least 
                                        job ready into 
                                        unsubsidized 
                                        employment, even in 
                                        labor markets that have 
                                        a shortage of low-skill 
                                        jobs.
                                  (II) At the discretion of the 
                                Secretary of Labor, any of the 
                                following:
                                          (aa) The history of 
                                        success of the 
                                        applicant in moving 
                                        individuals with 
                                        multiple barriers into 
                                        work.
                                          (bb) Evidence of the 
                                        applicant's ability to 
                                        leverage private, 
                                        State, and local 
                                        resources.
                                          (cc) Use by the 
                                        applicant of State and 
                                        local resources beyond 
                                        those required by 
                                        subparagraph (A).
                                          (dd) Plans of the 
                                        applicant to coordinate 
                                        with other 
                                        organizations at the 
                                        local and State level.
                                          (ee) Use by the 
                                        applicant of current or 
                                        former recipients of 
                                        assistance under a 
                                        State program funded 
                                        under this part as 
                                        mentors, case managers, 
                                        or service providers.
                          (ii) Eligible applicants.--As used in 
                        clause (i), the term ``eligible 
                        applicant'' means a private industry 
                        council for a service delivery area in 
                        a State, a political subdivision of a 
                        State, or a private entity applying in 
                        conjunction with the private industry 
                        council for such a service delivery 
                        area or with such a political 
                        subdivision, that submits a proposal 
                        developed in consultation with the 
                        Governor of the State.
                          (iii) Determination of grant 
                        amount.--In determining the amount of a 
                        grant to be made under this 
                        subparagraph for a project proposed by 
                        an applicant, the Secretary of Labor 
                        shall provide the applicant with an 
                        amount sufficient to ensure that the 
                        project has a reasonable opportunity to 
                        be successful, taking into account the 
                        number of long-term recipients of 
                        assistance under a State program funded 
                        under this part, the level of 
                        unemployment, the job opportunities and 
                        job growth, the poverty rate, and such 
                        other factors as the Secretary of Labor 
                        deems appropriate, in the area to be 
                        served by the project.
                          (iv) Consideration of needs of rural 
                        areas and cities with large 
                        concentrations of poverty.--In making 
                        grants under this subparagraph, the 
                        Secretary of Labor shall consider the 
                        needs of rural areas and cities with 
                        large concentrations of residents with 
                        an income that is less than the poverty 
                        line.
                          (v) Funding.--For grants under this 
                        subparagraph for each fiscal year 
                        specified in subparagraph (H), there 
                        shall be available to the Secretary of 
                        Labor an amount equal to the sum of--
                                  (I) 25 percent of the sum 
                                of--
                                          (aa) the amount 
                                        specified in 
                                        subparagraph (H) for 
                                        the fiscal year, minus 
                                        the total of the 
                                        amounts reserved 
                                        pursuant to 
                                        subparagraphs (E), (F), 
                                        and (G) for the fiscal 
                                        year; and
                                          (bb) any amount 
                                        reserved pursuant to 
                                        subparagraph (E) for 
                                        the immediately 
                                        preceding fiscal year 
                                        that has not been 
                                        obligated; and
                                  (II) any amount available for 
                                grants under this subparagraph 
                                for the immediately preceding 
                                fiscal year that has not been 
                                obligated.
                  (C) Limitations on use of funds.--
                          (i) Allowable activities.--An entity 
                        to which funds are provided under this 
                        paragraph shall use the funds to move 
                        individuals into and keep individuals 
                        in lasting unsubsidized employment by 
                        means of any of the following:
                                  (I) The conduct and 
                                administration of community 
                                service or work experience 
                                programs.
                                  (II) Job creation through 
                                public or private sector 
                                employment wage subsidies.
                                  (III) On-the-job training.
                                  (IV) Contracts with public or 
                                private providers of readiness, 
                                placement, and post-employment 
                                services, or if the entity is 
                                not a private industry council 
                                or workforce investment board, 
                                the direct provision of such 
                                services.
                                  (V) Job vouchers for 
                                placement, readiness, and 
                                postemployment services.
                                  (VI) Job retention or support 
                                services if such services are 
                                not otherwise available.
                                  (VII) Not more than 6 months 
                                of vocational educational or 
                                job training.
                        Contracts or vouchers for job placement 
                        services supported by such funds must 
                        require that at least \1/2\ of the 
                        payment occur after an eligible 
                        individual placed into the workforce 
                        has been in the workforce for 6 months.
                          (ii) General eligibility.--An entity 
                        that operates a project with funds 
                        provided under this paragraph may 
                        expend funds provided to the project 
                        for the benefit of recipients of 
                        assistance under the program funded 
                        under this part of the State in which 
                        the entity is located who--
                                  (I) has received assistance 
                                under the State program funded 
                                under this part (whether in 
                                effect before or after the 
                                amendments made by section 103 
                                of the Personal Responsibility 
                                and Work Opportunity 
                                Reconciliation Act of 1996 
                                first apply to the State) for 
                                at least 30 months (whether or 
                                not consecutive); or
                                  (II) within 12 months, will 
                                become ineligible for 
                                assistance under the State 
                                program funded under this part 
                                by reason of a durational limit 
                                on such assistance, without 
                                regard to any exemption 
                                provided pursuant to section 
                                408(a)(7)(C) that may apply to 
                                the individual.
                          (iii) Noncustodial parents.--An 
                        entity that operates a project with 
                        funds provided under this paragraph may 
                        use the funds to provide services in a 
                        form described in clause (i) to 
                        noncustodial parents with respect to 
                        whom the requirements of the following 
                        subclauses are met:
                                  (I) The noncustodial parent 
                                is unemployed, underemployed, 
                                or having difficulty in paying 
                                child support obligations.
                                  (II) At least 1 of the 
                                following applies to a minor 
                                child of the noncustodial 
                                parent (with preference in the 
                                determination of the 
                                noncustodial parents to be 
                                provided services under this 
                                paragraph to be provided by the 
                                entity to those noncustodial 
                                parents with minor children who 
                                meet, or who have custodial 
                                parents who meet, the 
                                requirements of item (aa)):
                                          (aa) The minor child 
                                        or the custodial parent 
                                        of the minor child 
                                        meets the requirements 
                                        of subclause (I) or 
                                        (II) of clause (ii).
                                          (bb) The minor child 
                                        is eligible for, or is 
                                        receiving, benefits 
                                        under the program 
                                        funded under this part.
                                          (cc) The minor child 
                                        received benefits under 
                                        the program funded 
                                        under this part in the 
                                        12-month period 
                                        preceding the date of 
                                        the determination but 
                                        no longer receives such 
                                        benefits.
                                          (dd) The minor child 
                                        is eligible for, or is 
                                        receiving, assistance 
                                        under the Food and 
                                        Nutrition Act of 2008, 
                                        benefits under the 
                                        supplemental security 
                                        income program under 
                                        title XVI of this Act, 
                                        medical assistance 
                                        under title XIX of this 
                                        Act, or child health 
                                        assistance under title 
                                        XXI of this Act.
                                  (III) In the case of a 
                                noncustodial parent who becomes 
                                enrolled in the project on or 
                                after the date of the enactment 
                                of this clause, the 
                                noncustodial parent is in 
                                compliance with the terms of an 
                                oral or written personal 
                                responsibility contract entered 
                                into among the noncustodial 
                                parent, the entity, and (unless 
                                the entity demonstrates to the 
                                Secretary that the entity is 
                                not capable of coordinating 
                                with such agency) the agency 
                                responsible for administering 
                                the State plan under part D, 
                                which was developed taking into 
                                account the employment and 
                                child support status of the 
                                noncustodial parent, which was 
                                entered into not later than 30 
                                (or, at the option of the 
                                entity, not later than 90) days 
                                after the noncustodial parent 
                                was enrolled in the project, 
                                and which, at a minimum, 
                                includes the following:
                                          (aa) A commitment by 
                                        the noncustodial parent 
                                        to cooperate, at the 
                                        earliest opportunity, 
                                        in the establishment of 
                                        the paternity of the 
                                        minor child, through 
                                        voluntary 
                                        acknowledgement or 
                                        other procedures, and 
                                        in the establishment of 
                                        a child support order.
                                          (bb) A commitment by 
                                        the noncustodial parent 
                                        to cooperate in the 
                                        payment of child 
                                        support for the minor 
                                        child, which may 
                                        include a modification 
                                        of an existing support 
                                        order to take into 
                                        account the ability of 
                                        the noncustodial parent 
                                        to pay such support and 
                                        the participation of 
                                        such parent in the 
                                        project.
                                          (cc) A commitment by 
                                        the noncustodial parent 
                                        to participate in 
                                        employment or related 
                                        activities that will 
                                        enable the noncustodial 
                                        parent to make regular 
                                        child support payments, 
                                        and if the noncustodial 
                                        parent has not attained 
                                        20 years of age, such 
                                        related activities may 
                                        include completion of 
                                        high school, a general 
                                        equivalency degree, or 
                                        other education 
                                        directly related to 
                                        employment.
                                          (dd) A description of 
                                        the services to be 
                                        provided under this 
                                        paragraph, and a 
                                        commitment by the 
                                        noncustodial parent to 
                                        participate in such 
                                        services, that are 
                                        designed to assist the 
                                        noncustodial parent 
                                        obtain and retain 
                                        employment, increase 
                                        earnings, and enhance 
                                        the financial and 
                                        emotional contributions 
                                        to the well-being of 
                                        the minor child.
                                In order to protect custodial 
                                parents and children who may be 
                                at risk of domestic violence, 
                                the preceding provisions of 
                                this subclause shall not be 
                                construed to affect any other 
                                provision of law requiring a 
                                custodial parent to cooperate 
                                in establishing the paternity 
                                of a child or establishing or 
                                enforcing a support order with 
                                respect to a child, or 
                                entitling a custodial parent to 
                                refuse, for good cause, to 
                                provide such cooperation as a 
                                condition of assistance or 
                                benefit under any program, 
                                shall not be construed to 
                                require such cooperation by the 
                                custodial parent as a condition 
                                of participation of either 
                                parent in the program 
                                authorized under this 
                                paragraph, and shall not be 
                                construed to require a 
                                custodial parent to cooperate 
                                with or participate in any 
                                activity under this clause. The 
                                entity operating a project 
                                under this clause with funds 
                                provided under this paragraph 
                                shall consult with domestic 
                                violence prevention and 
                                intervention organizations in 
                                the development of the project.
                          (iv) Targeting of hard to employ 
                        individuals with characteristics 
                        associated with long-term welfare 
                        dependence.--An entity that operates a 
                        project with funds provided under this 
                        paragraph may expend not more than 30 
                        percent of all funds provided to the 
                        project for programs that provide 
                        assistance in a form described in 
                        clause (i)--
                                  (I) to recipients of 
                                assistance under the program 
                                funded under this part of the 
                                State in which the entity is 
                                located who have 
                                characteristics associated with 
                                long-term welfare dependence 
                                (such as school dropout, teen 
                                pregnancy, or poor work 
                                history), including, at the 
                                option of the State, by 
                                providing assistance in such 
                                form as a condition of 
                                receiving assistance under the 
                                State program funded under this 
                                part;
                                  (II) to children--
                                          (aa) who have 
                                        attained 18 years of 
                                        age but not 25 years of 
                                        age; and
                                          (bb) who, before 
                                        attaining 18 years of 
                                        age, were recipients of 
                                        foster care maintenance 
                                        payments (as defined in 
                                        section 475(4)) under 
                                        part E or were in 
                                        foster care under the 
                                        responsibility of a 
                                        State;
                                  (III) to recipients of 
                                assistance under the State 
                                program funded under this part, 
                                determined to have significant 
                                barriers to self-sufficiency, 
                                pursuant to criteria 
                                established by the local 
                                private industry council; or
                                  (IV) to custodial parents 
                                with incomes below 100 percent 
                                of the poverty line (as defined 
                                in section 673(2) of the 
                                Omnibus Budget Reconciliation 
                                Act of 1981, including any 
                                revision required by such 
                                section, applicable to a family 
                                of the size involved).
                        To the extent that the entity does not 
                        expend such funds in accordance with 
                        the preceding sentence, the entity 
                        shall expend such funds in accordance 
                        with clauses (ii) and (iii) and, as 
                        appropriate, clause (v).
                          (v) Authority to provide work-related 
                        services to individuals who have 
                        reached the 5 year limit.--An entity 
                        that operates a project with funds 
                        provided under this paragraph may use 
                        the funds to provide assistance in a 
                        form described in clause (i) of this 
                        subparagraph to, or for the benefit of, 
                        individuals who (but for section 
                        408(a)(7)) would be eligible for 
                        assistance under the program funded 
                        under this part of the State in which 
                        the entity is located.
                          (vi) Relationship to other provisions 
                        of this part.--
                                  (I) Rules governing use of 
                                funds.--The rules of section 
                                404, other than subsections 
                                (b), (f), and (h) of section 
                                404, shall not apply to a grant 
                                made under this paragraph.
                                  (II) Rules governing payments 
                                to states.--The Secretary of 
                                Labor shall carry out the 
                                functions otherwise assigned by 
                                section 405 to the Secretary of 
                                Health and Human Services with 
                                respect to the grants payable 
                                under this paragraph.
                                  (III) Administration.--
                                Section 416 shall not apply to 
                                the programs under this 
                                paragraph.
                          (vii) Prohibition against use of 
                        grant funds for any other fund matching 
                        requirement.--An entity to which funds 
                        are provided under this paragraph shall 
                        not use any part of the funds, nor any 
                        part of State expenditures made to 
                        match the funds, to fulfill any 
                        obligation of any State, political 
                        subdivision, or private industry 
                        council to contribute funds under 
                        section 403(b) or 418 or any other 
                        provision of this Act or other Federal 
                        law.
                          (viii) Deadline for expenditure.--An 
                        entity to which funds are provided 
                        under this paragraph shall remit to the 
                        Secretary of Labor any part of the 
                        funds that are not expended within 5 
                        years after the date the funds are so 
                        provided.
                          (ix) Regulations.--Within 90 days 
                        after the date of the enactment of this 
                        paragraph, the Secretary of Labor, 
                        after consultation with the Secretary 
                        of Health and Human Services and the 
                        Secretary of Housing and Urban 
                        Development, shall prescribe such 
                        regulations as may be necessary to 
                        implement this paragraph.
                          (x) Reporting requirements.--The 
                        Secretary of Labor, in consultation 
                        with the Secretary of Health and Human 
                        Services, States, and organizations 
                        that represent State or local 
                        governments, shall establish 
                        requirements for the collection and 
                        maintenance of financial and 
                        participant information and the 
                        reporting of such information by 
                        entities carrying out activities under 
                        this paragraph.
                  (D) Definitions.--
                          (i) Individuals with income less than 
                        the poverty line.--For purposes of this 
                        paragraph, the number of individuals 
                        with an income that is less than the 
                        poverty line shall be determined for a 
                        fiscal year--
                                  (I) based on the methodology 
                                used by the Bureau of the 
                                Census to produce and publish 
                                intercensal poverty data for 
                                States and counties (or, in the 
                                case of Puerto Rico, the Virgin 
                                Islands, Guam, and American 
                                Samoa, other poverty data 
                                selected by the Secretary of 
                                Labor); and
                                  (II) using data for the most 
                                recent year for which such data 
                                is available before the 
                                beginning of the fiscal year.
                          (ii) Private industry council.--As 
                        used in this paragraph, the term 
                        ``private industry council'' means, 
                        with respect to a service delivery 
                        area, the private industry council or 
                        local workforce development board 
                        established for the local workforce 
                        development area pursuant to title I of 
                        the Workforce Innovation and 
                        Opportunity Act, as appropriate.
                          (iii) Service delivery area.--As used 
                        in this paragraph, the term ``service 
                        delivery area'' shall have the meaning 
                        given such term for purposes of the Job 
                        Training Partnership Act or.
                  (E) Funding for indian tribes.--1 percent of 
                the amount specified in subparagraph (H) for 
                fiscal year 1998 and $15,000,000 of the amount 
                so specified for fiscal year 1999 shall be 
                reserved for grants to Indian tribes under 
                section 412(a)(3).
                  (F) Funding for evaluations of welfare-to-
                work programs.--0.6 percent of the amount 
                specified in subparagraph (H) for fiscal year 
                1998 and $9,000,000 of the amount so specified 
                for fiscal year 1999 shall be reserved for use 
                by the Secretary to carry out section 413(j).
                  (G) Funding for evaluation of abstinence 
                education programs.--
                          (i) In general.--0.2 percent of the 
                        amount specified in subparagraph (H) 
                        for fiscal year 1998 and $3,000,000 of 
                        the amount so specified for fiscal year 
                        1999 shall be reserved for use by the 
                        Secretary to evaluate programs under 
                        section 510, directly or through 
                        grants, contracts, or interagency 
                        agreements.
                          (ii) Authority to use funds for 
                        evaluations of welfare-to-work 
                        programs.--Any such amount not required 
                        for such evaluations shall be available 
                        for use by the Secretary to carry out 
                        section 413(j).
                          (iii) Deadline for outlays.--Outlays 
                        from funds used pursuant to clause (i) 
                        for evaluation of programs under 
                        section 510 shall not be made after 
                        fiscal year 2005.
                          (iv) Interim report.--Not later than 
                        January 1, 2002, the Secretary shall 
                        submit to the Congress an interim 
                        report on the evaluations referred to 
                        in clause (i).
                  (H) Appropriations.--
                          (i) In general.--Out of any money in 
                        the Treasury of the United States not 
                        otherwise appropriated, there are 
                        appropriated for grants under this 
                        paragraph--
                                  (I) $1,500,000,000 for fiscal 
                                year 1998; and
                                  (II) $1,400,000,000 for 
                                fiscal year 1999.
                          (ii) Availability.--The amounts made 
                        available pursuant to clause (i) shall 
                        remain available for such period as is 
                        necessary to make the grants provided 
                        for in this paragraph.
                  (I) Worker protections.--
                          (i) Nondisplacement in work 
                        activities.--
                                  (I) General prohibition.--
                                Subject to this clause, an 
                                adult in a family receiving 
                                assistance attributable to 
                                funds provided under this 
                                paragraph may fill a vacant 
                                employment position in order to 
                                engage in a work activity.
                                  (II) Prohibition against 
                                violation of contracts.--A work 
                                activity engaged in under a 
                                program operated with funds 
                                provided under this paragraph 
                                shall not violate an existing 
                                contract for services or a 
                                collective bargaining 
                                agreement, and such a work 
                                activity that would violate a 
                                collective bargaining agreement 
                                shall not be undertaken without 
                                the written concurrence of the 
                                labor organization and employer 
                                concerned.
                                  (III) Other prohibitions.--An 
                                adult participant in a work 
                                activity engaged in under a 
                                program operated with funds 
                                provided under this paragraph 
                                shall not be employed or 
                                assigned--
                                          (aa) when any other 
                                        individual is on layoff 
                                        from the same or any 
                                        substantially 
                                        equivalent job;
                                          (bb) if the employer 
                                        has terminated the 
                                        employment of any 
                                        regular employee or 
                                        otherwise caused an 
                                        involuntary reduction 
                                        in its workforce with 
                                        the intention of 
                                        filling the vacancy so 
                                        created with the 
                                        participant; or
                                          (cc) if the employer 
                                        has caused an 
                                        involuntary reduction 
                                        to less than full time 
                                        in hours of any 
                                        employee in the same or 
                                        a substantially 
                                        equivalent job.
                          (ii) Health and safety.--Health and 
                        safety standards established under 
                        Federal and State law otherwise 
                        applicable to working conditions of 
                        employees shall be equally applicable 
                        to working conditions of other 
                        participants engaged in a work activity 
                        under a program operated with funds 
                        provided under this paragraph.
                          (iii) Nondiscrimination.--In addition 
                        to the protections provided under the 
                        provisions of law specified in section 
                        408(c), an individual may not be 
                        discriminated against by reason of 
                        gender with respect to participation in 
                        work activities engaged in under a 
                        program operated with funds provided 
                        under this paragraph.
                          (iv) Grievance procedure.--
                                  (I) In general.--Each State 
                                to which a grant is made under 
                                this paragraph shall establish 
                                and maintain a procedure for 
                                grievances or complaints from 
                                employees alleging violations 
                                of clause (i) and participants 
                                in work activities alleging 
                                violations of clause (i), (ii), 
                                or (iii).
                                  (II) Hearing.--The procedure 
                                shall include an opportunity 
                                for a hearing.
                                  (III) Remedies.--The 
                                procedure shall include 
                                remedies for violation of 
                                clause (i), (ii), or (iii), 
                                which may continue during the 
                                pendency of the procedure, and 
                                which may include--
                                          (aa) suspension or 
                                        termination of payments 
                                        from funds provided 
                                        under this paragraph;
                                          (bb) prohibition of 
                                        placement of a 
                                        participant with an 
                                        employer that has 
                                        violated clause (i), 
                                        (ii), or (iii);
                                          (cc) where 
                                        applicable, 
                                        reinstatement of an 
                                        employee, payment of 
                                        lost wages and 
                                        benefits, and 
                                        reestablishment of 
                                        other relevant terms, 
                                        conditions and 
                                        privileges of 
                                        employment; and
                                          (dd) where 
                                        appropriate, other 
                                        equitable relief.
                                  (IV) Appeals.--
                                          (aa) Filing.--Not 
                                        later than 30 days 
                                        after a grievant or 
                                        complainant receives an 
                                        adverse decision under 
                                        the procedure 
                                        established pursuant to 
                                        subclause (I), the 
                                        grievant or complainant 
                                        may appeal the decision 
                                        to a State agency 
                                        designated by the State 
                                        which shall be 
                                        independent of the 
                                        State or local agency 
                                        that is administering 
                                        the programs operated 
                                        with funds provided 
                                        under this paragraph 
                                        and the State agency 
                                        administering, or 
                                        supervising the 
                                        administration of, the 
                                        State program funded 
                                        under this part.
                                          (bb) Final 
                                        determination.--Not 
                                        later than 120 days 
                                        after the State agency 
                                        designated under item 
                                        (aa) receives a 
                                        grievance or complaint 
                                        made under the 
                                        procedure established 
                                        by a State pursuant to 
                                        subclause (I), the 
                                        State agency shall make 
                                        a final determination 
                                        on the appeal.
                          (v) Rule of interpretation.--This 
                        subparagraph shall not be construed to 
                        affect the authority of a State to 
                        provide or require workers' 
                        compensation.
                          (vi) Nonpreemption of state law.--The 
                        provisions of this subparagraph shall 
                        not be construed to preempt any 
                        provision of State law that affords 
                        greater protections to employees or to 
                        other participants engaged in work 
                        activities under a program funded under 
                        this part than is afforded by such 
                        provisions of this subparagraph.
                  (J) Information disclosure.--If a State to 
                which a grant is made under section 403 
                establishes safeguards against the use or 
                disclosure of information about applicants or 
                recipients of assistance under the State 
                program funded under this part, the safeguards 
                shall not prevent the State agency 
                administering the program from furnishing to a 
                private industry council the names, addresses, 
                telephone numbers, and identifying case number 
                information in the State program funded under 
                this part, of noncustodial parents residing in 
                the service delivery area of the private 
                industry council, for the purpose of 
                identifying and contacting noncustodial parents 
                regarding participation in the program under 
                this paragraph.
  (b) Contingency Fund.--
          (1) Establishment.--There is hereby established in 
        the Treasury of the United States a fund which shall be 
        known as the ``Contingency Fund for State Welfare 
        Programs'' (in this section referred to as the 
        ``Fund'').
          (2) Deposits into fund.--Out of any money in the 
        Treasury of the United States not otherwise 
        appropriated, there are appropriated for fiscal years 
        2013 and 2014 such sums as are necessary for payment to 
        the Fund in a total amount not to exceed $612,000,000 
        for each fiscal year, of which $2,000,000 shall be 
        reserved for carrying out the activities of the 
        commission established by the Protect our Kids Act of 
        2012 to reduce fatalities resulting from child abuse 
        and neglect.
          (3) Grants.--
                  (A) Provisional payments.--If an eligible 
                State submits to the Secretary a request for 
                funds under this paragraph during an eligible 
                month, the Secretary shall, subject to this 
                paragraph, pay to the State, from amounts 
                appropriated pursuant to paragraph (2), an 
                amount equal to the amount of funds so 
                requested.
                  (B) Payment priority.--The Secretary shall 
                make payments under subparagraph (A) in the 
                order in which the Secretary receives requests 
                for such payments.
                  (C) Limitations.--
                          (i) Monthly payment to a state.--The 
                        total amount paid to a single State 
                        under subparagraph (A) during a month 
                        shall not exceed \1/12\ of 20 percent 
                        of the State family assistance grant.
                          (ii) Payments to all states.--The 
                        total amount paid to all States under 
                        subparagraph (A) during fiscal year 
                        2011 and 2012, respectively, shall not 
                        exceed the total amount appropriated 
                        pursuant to paragraph (2) for each such 
                        fiscal year.
          (4) Eligible month.--As used in paragraph (3)(A), the 
        term ``eligible month'' means, with respect to a State, 
        a month in the 2-month period that begins with any 
        month for which the State is a needy State.
          (5) Needy state.--For purposes of paragraph (4), a 
        State is a needy State for a month if--
                  (A) the average rate of--
                          (i) total unemployment in such State 
                        (seasonally adjusted) for the period 
                        consisting of the most recent 3 months 
                        for which data for all States are 
                        published equals or exceeds 6.5 
                        percent; and
                          (ii) total unemployment in such State 
                        (seasonally adjusted) for the 3-month 
                        period equals or exceeds 110 percent of 
                        such average rate for either (or both) 
                        of the corresponding 3-month periods 
                        ending in the 2 preceding calendar 
                        years; or
                  (B) as determined by the Secretary of 
                Agriculture (in the discretion of the Secretary 
                of Agriculture), the monthly average number of 
                individuals (as of the last day of each month) 
                participating in the supplemental nutrition 
                assistance program in the State in the then 
                most recently concluded 3-month period for 
                which data are available exceeds by not less 
                than 10 percent the lesser of--
                          (i) the monthly average number of 
                        individuals (as of the last day of each 
                        month) in the State that would have 
                        participated in the supplemental 
                        nutrition assistance program in the 
                        corresponding 3-month period in fiscal 
                        year 1994 if the amendments made by 
                        titles IV and VIII of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996 had been in 
                        effect throughout fiscal year 1994; or
                          (ii) the monthly average number of 
                        individuals (as of the last day of each 
                        month) in the State that would have 
                        participated in the supplemental 
                        nutrition assistance program in the 
                        corresponding 3-month period in fiscal 
                        year 1995 if the amendments made by 
                        titles IV and VIII of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996 had been in 
                        effect throughout fiscal year 1995.
          (6) Annual reconciliation.--
                  (A) In general.--Notwithstanding paragraph 
                (3), if the Secretary makes a payment to a 
                State under this subsection in a fiscal year, 
                then the State shall remit to the Secretary, 
                within 1 year after the end of the first 
                subsequent period of 3 consecutive months for 
                which the State is not a needy State, an amount 
                equal to the amount (if any) by which--
                          (i) the total amount paid to the 
                        State under paragraph (3) of this 
                        subsection in the fiscal year; exceeds
                          (ii) the product of--
                                  (I) the Federal medical 
                                assistance percentage for the 
                                State (as defined in section 
                                1905(b), as such section was in 
                                effect on September 30, 1995);
                                  (II) the State's reimbursable 
                                expenditures for the fiscal 
                                year; and
                                  (III) \1/12\ times the number 
                                of months during the fiscal 
                                year for which the Secretary 
                                made a payment to the State 
                                under such paragraph (3).
                  (B) Definitions.--As used in subparagraph 
                (A):
                          (i) Reimbursable expenditures.--The 
                        term ``reimbursable expenditures'' 
                        means, with respect to a State and a 
                        fiscal year, the amount (if any) by 
                        which--
                                  (I) countable State 
                                expenditures for the fiscal 
                                year; exceeds
                                  (II) historic State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(iii)), 
                                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.
                          (ii) Countable state expenditures.--
                        The term ``countable expenditures'' 
                        means, with respect to a State and a 
                        fiscal year--
                                  (I) the qualified State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(i) (other 
                                than the expenditures described 
                                in subclause (I)(bb) of such 
                                section)) under the State 
                                program funded under this part 
                                for the fiscal year; plus
                                  (II) any amount paid to the 
                                State under paragraph (3) 
                                during the fiscal year that is 
                                expended by the State under the 
                                State program funded under this 
                                part.
                  (C) Adjustment of state remittances.--
                          (i) In general.--The amount otherwise 
                        required by subparagraph (A) to be 
                        remitted by a State for a fiscal year 
                        shall be increased by the lesser of--
                                  (I) the total adjustment for 
                                the fiscal year, multiplied by 
                                the adjustment percentage for 
                                the State for the fiscal year; 
                                or
                                  (II) the unadjusted net 
                                payment to the State for the 
                                fiscal year.
                          (ii) Total adjustment.--As used in 
                        clause (i), the term ``total 
                        adjustment'' means--
                                  (I) in the case of fiscal 
                                year 1998, $2,000,000;
                                  (II) in the case of fiscal 
                                year 1999, $9,000,000;
                                  (III) in the case of fiscal 
                                year 2000, $16,000,000; and
                                  (IV) in the case of fiscal 
                                year 2001, $13,000,000.
                          (iii) Adjustment percentage.--As used 
                        in clause (i), the term ``adjustment 
                        percentage'' means, with respect to a 
                        State and a fiscal year--
                                  (I) the unadjusted net 
                                payment to the State for the 
                                fiscal year; divided by
                                  (II) the sum of the 
                                unadjusted net payments to all 
                                States for the fiscal year.
                          (iv) Unadjusted net payment.--As used 
                        in this subparagraph, the term, 
                        ``unadjusted net payment'' means with 
                        respect to a State and a fiscal year--
                                  (I) the total amount paid to 
                                the State under paragraph (3) 
                                in the fiscal year; minus
                                  (II) the amount that, in the 
                                absence of this subparagraph, 
                                would be required by 
                                subparagraph (A) or by section 
                                409(a)(10) to be remitted by 
                                the State in respect of the 
                                payment.
          (7) State defined.--As used in this subsection, the 
        term ``State'' means each of the 50 States and the 
        District of Columbia.
          (8) Annual reports.--The Secretary shall annually 
        report to the Congress on the status of the Fund.
  (c) Social Impact Demonstration Projects.--
          (1) Purposes.--The purposes of this subsection are 
        the following:
                  (A) To improve the lives of families and 
                individuals in need in the United States by 
                funding social programs that achieve real 
                results.
                  (B) To redirect funds away from programs 
                that, based on objective data, are ineffective, 
                and into programs that achieve demonstrable, 
                measurable results.
                  (C) To ensure Federal funds are used 
                effectively on social services to produce 
                positive outcomes for both service recipients 
                and taxpayers.
                  (D) To establish the use of social impact 
                partnerships to address some of our Nation's 
                most pressing problems.
                  (E) To facilitate the creation of public-
                private partnerships that bundle philanthropic 
                or other private resources with existing public 
                spending to scale up effective social 
                interventions already being implemented by 
                private organizations, non-profits, charitable 
                organizations, and State and local governments 
                across the country.
                  (F) To bring pay-for-performance to the 
                social sector, allowing the United States to 
                improve the impact and effectiveness of vital 
                social services programs while redirecting 
                inefficient or duplicative spending.
                  (G) To incorporate outcomes measurement and 
                randomized controlled trials or other rigorous 
                methodologies for assessing program impact.
          (2) Social impact partnership application.--
                  (A) Notice.--Not later than 1 year after the 
                date of the enactment of this subsection, the 
                Secretary of the Treasury, in consultation with 
                the Federal Interagency Council on Social 
                Impact Partnerships, shall publish in the 
                Federal Register a request for proposals from 
                States or local government for social impact 
                partnership projects in accordance with this 
                paragraph.
                  (B) Required outcomes for social impact 
                partnership project.--To qualify as a social 
                impact partnership project under this 
                subsection, a project must produce 1 or more 
                measurable, clearly defined outcomes that 
                result in social benefit and Federal savings 
                through any of the following:
                          (i) Increasing work and earnings by 
                        individuals who have been unemployed in 
                        the United States for more than 6 
                        consecutive months.
                          (ii) Increasing employment and 
                        earnings of individuals who have 
                        attained 16 years of age but not 25 
                        years of age.
                          (iii) Increasing employment among 
                        individuals receiving Federal 
                        disability benefits.
                          (iv) Reducing the dependence of low-
                        income families on Federal means-tested 
                        benefits.
                          (v) Improving rates of high school 
                        graduation.
                          (vi) Reducing teen and unplanned 
                        pregnancies.
                          (vii) Improving birth outcomes and 
                        early childhood health and development 
                        among low-income families and 
                        individuals.
                          (viii) Reducing rates of asthma, 
                        diabetes, or other preventable diseases 
                        among low-income families and 
                        individuals to reduce the utilization 
                        of emergency and other high-cost care.
                          (ix) Increasing the proportion of 
                        children living in 2-parent families.
                          (x) Reducing incidences and adverse 
                        consequences of child abuse and 
                        neglect.
                          (xi) Reducing the number of youth in 
                        foster care by increasing adoptions, 
                        permanent guardianship arrangements, 
                        reunification, or placement with a fit 
                        and willing relative, or by avoiding 
                        placing children in foster care by 
                        ensuring they can be cared for safely 
                        in their own homes.
                          (xii) Reducing the number of children 
                        and youth in foster care residing in 
                        group homes, child care institutions, 
                        agency-operated foster homes, or other 
                        non-family foster homes, unless it is 
                        determined that it is in the interest 
                        of the child's long-term health, 
                        safety, or psychological well-being to 
                        not be placed in a family foster home.
                          (xiii) Reducing the number of 
                        children returning to foster care.
                          (xiv) Reducing recidivism among 
                        juveniles, individuals released from 
                        prison, or other high-risk populations.
                          (xv) Reducing the rate of 
                        homelessness among our most vulnerable 
                        populations.
                          (xvi) Improving the health and well-
                        being of those with mental, emotional, 
                        and behavioral health needs.
                          (xvii) Improving the educational 
                        outcomes of special-needs or low-income 
                        children.
                          (xviii) Improving the employment and 
                        well-being of returning United States 
                        military members.
                          (xix) Increasing the financial 
                        stability of low-income families.
                          (xx) Increasing the independence and 
                        employability of individuals who are 
                        physically or mentally disabled.
                          (xxi) Other measurable outcomes 
                        defined by the State or local 
                        government that result in positive 
                        social outcomes and Federal savings.
                  (C) Application required.--The notice 
                described in subparagraph (A) shall require a 
                State or local government to submit an 
                application for the social impact partnership 
                project that addresses the following:
                          (i) The outcome goals of the project.
                          (ii) A description of each 
                        intervention in the project and 
                        anticipated outcomes of the 
                        intervention.
                          (iii) Rigorous evidence demonstrating 
                        that the intervention can be expected 
                        to produce the desired outcomes.
                          (iv) The target population that will 
                        be served by the project.
                          (v) The expected social benefits to 
                        participants who receive the 
                        intervention and others who may be 
                        impacted.
                          (vi) Projected Federal, State, and 
                        local government costs and other costs 
                        to conduct the project.
                          (vii) Projected Federal, State, and 
                        local government savings and other 
                        savings, including an estimate of the 
                        savings to the Federal Government, on a 
                        program-by-program basis and in the 
                        aggregate, if the project is 
                        implemented and the outcomes are 
                        achieved.
                          (viii) If savings resulting from the 
                        successful completion of the project 
                        are estimated to accrue to the State or 
                        local government, the likelihood of the 
                        State or local government to realize 
                        those savings.
                          (ix) A plan for delivering the 
                        intervention through a social impact 
                        partnership model.
                          (x) A description of the expertise of 
                        each service provider that will 
                        administer the intervention, including 
                        a summary of the experience of the 
                        service provider in delivering the 
                        proposed intervention or a similar 
                        intervention, or demonstrating that the 
                        service provider has the expertise 
                        necessary to deliver the proposed 
                        intervention.
                          (xi) An explanation of the experience 
                        of the State or local government, the 
                        intermediary, or the service provider 
                        in raising private and philanthropic 
                        capital to fund social service 
                        investments.
                          (xii) The detailed roles and 
                        responsibilities of each entity 
                        involved in the project, including any 
                        State or local government entity, 
                        intermediary, service provider, 
                        independent evaluator, investor, or 
                        other stakeholder.
                          (xiii) A summary of the experience of 
                        the service provider delivering the 
                        proposed intervention or a similar 
                        intervention, or a summary 
                        demonstrating the service provider has 
                        the expertise necessary to deliver the 
                        proposed intervention.
                          (xiv) A summary of the unmet need in 
                        the area where the intervention will be 
                        delivered or among the target 
                        population who will receive the 
                        intervention.
                          (xv) The proposed payment terms, the 
                        methodology used to calculate outcome 
                        payments, the payment schedule, and 
                        performance thresholds.
                          (xvi) The project budget.
                          (xvii) The project timeline.
                          (xviii) The criteria used to 
                        determine the eligibility of an 
                        individual for the project, including 
                        how selected populations will be 
                        identified, how they will be referred 
                        to the project, and how they will be 
                        enrolled in the project.
                          (xix) The evaluation design.
                          (xx) The metrics that will be used to 
                        determine whether the outcomes have 
                        been achieved and how the metrics will 
                        be measured.
                          (xxi) An explanation of how the 
                        metrics used to determine whether the 
                        outcomes have been achieved are 
                        independent, objective indicators of 
                        impact and are not subject to 
                        manipulation by the service provider, 
                        intermediary, or investor.
                          (xxii) A summary explaining the 
                        independence of the evaluator from the 
                        other entities involved in the project 
                        and the evaluator's experience in 
                        conducting rigorous evaluations of 
                        program effectiveness including, where 
                        available, well-implemented randomized 
                        controlled trials on the intervention 
                        or similar interventions.
                          (xxiii) The capacity of the service 
                        provider to deliver the intervention to 
                        the number of participants the State or 
                        local government proposes to serve in 
                        the project.
                  (D) Project intermediary information 
                required.--The application described in 
                subparagraph (C) shall also contain the 
                following information about any intermediary 
                for the social impact partnership project 
                (whether an intermediary is a service provider 
                or other entity):
                          (i) Experience and capacity for 
                        providing or facilitating the provision 
                        of the type of intervention proposed.
                          (ii) The mission and goals.
                          (iii) Information on whether the 
                        intermediary is already working with 
                        service providers that provide this 
                        intervention or an explanation of the 
                        capacity of the intermediary to begin 
                        working with service providers to 
                        provide the intervention.
                          (iv) Experience working in a 
                        collaborative environment across 
                        government and nongovernmental 
                        entities.
                          (v) Previous experience collaborating 
                        with public or private entities to 
                        implement evidence-based programs.
                          (vi) Ability to raise or provide 
                        funding to cover operating costs (if 
                        applicable to the project).
                          (vii) Capacity and infrastructure to 
                        track outcomes and measure results, 
                        including--
                                  (I) capacity to track and 
                                analyze program performance and 
                                assess program impact; and
                                  (II) experience with 
                                performance-based awards or 
                                performance-based contracting 
                                and achieving project 
                                milestones and targets.
                          (viii) Role in delivering the 
                        intervention.
                          (ix) How the intermediary would 
                        monitor program success, including a 
                        description of the interim benchmarks 
                        and outcome measures.
                  (E) Feasibility studies funded through other 
                sources.--The notice described in subparagraph 
                (A) shall permit a State or local government to 
                submit an application for social impact 
                partnership funding that contains information 
                from a feasibility study developed for purposes 
                other than applying for funding under this 
                subsection.
          (3) Awarding social impact partnership agreements.--
                  (A) Timeline in awarding agreement.--Not 
                later than 6 months after receiving an 
                application in accordance with paragraph (2), 
                the Secretary, in consultation with the Federal 
                Interagency Council on Social Impact 
                Partnerships, shall determine whether to enter 
                into an agreement for a social impact 
                partnership project with a State or local 
                government.
                  (B) Considerations in awarding agreement.--In 
                determining whether to enter into an agreement 
                for a social impact partnership project (the 
                application for which was submitted under 
                paragraph (2)) the Secretary, in consultation 
                with the Federal Interagency Council on Social 
                Impact Partnerships (established by paragraph 
                (6)) and the head of any Federal agency 
                administering a similar intervention or serving 
                a population similar to that served by the 
                project, shall consider each of the following:
                          (i) The recommendations made by the 
                        Commission on Social Impact 
                        Partnerships.
                          (ii) The value to the Federal 
                        Government of the outcomes expected to 
                        be achieved if the outcomes specified 
                        in the agreement are achieved.
                          (iii) The likelihood, based on 
                        evidence provided in the application 
                        and other evidence, that the State or 
                        local government in collaboration with 
                        the intermediary and the service 
                        providers will achieve the outcomes.
                          (iv) The savings to the Federal 
                        Government if the outcomes specified in 
                        the agreement are achieved.
                          (v) The savings to the State and 
                        local governments if the outcomes 
                        specified in the agreement are 
                        achieved.
                          (vi) The expected quality of the 
                        evaluation that would be conducted with 
                        respect to the agreement.
                  (C) Agreement authority.--
                          (i) Agreement requirements.--In 
                        accordance with this paragraph, the 
                        Secretary, in consultation with the 
                        Federal Interagency Council on Social 
                        Impact Partnerships and the head of any 
                        Federal agency administering a similar 
                        intervention or serving a population 
                        similar to that served by the project, 
                        may enter into an agreement for a 
                        social impact partnership project with 
                        a State or local government if the 
                        Secretary, in consultation with the 
                        Federal Interagency Council on Social 
                        Impact Partnerships, determines that 
                        each of the following requirements are 
                        met:
                                  (I) The State or local 
                                government agrees to achieve 1 
                                or more outcomes specified in 
                                the agreement in order to 
                                receive payment.
                                  (II) The Federal payment to 
                                the State or local government 
                                for each outcome specified is 
                                less than or equal to the value 
                                of the outcome to the Federal 
                                Government over a period not to 
                                exceed 10 years, as determined 
                                by the Secretary, in 
                                consultation with the State or 
                                local government.
                                  (III) The duration of the 
                                project does not exceed 10 
                                years.
                                  (IV) The State or local 
                                government has demonstrated, 
                                through the application 
                                submitted under paragraph (2), 
                                that, based on prior rigorous 
                                experimental evaluations or 
                                rigorous quasi-experimental 
                                studies, the intervention can 
                                be expected to achieve each 
                                outcome specified in the 
                                agreement.
                                  (V) The State, local 
                                government, intermediary, or 
                                service provider has experience 
                                raising private or 
                                philanthropic capital to fund 
                                social service investments (if 
                                applicable to the project).
                                  (VI) The State or local 
                                government has shown that each 
                                service provider has experience 
                                delivering the intervention, a 
                                similar intervention, or has 
                                otherwise demonstrated the 
                                expertise necessary to deliver 
                                the intervention.
                          (ii) Payment.--The Secretary shall 
                        pay the State or local government only 
                        if the independent evaluator described 
                        in paragraph (5) determines that the 
                        social impact partnership project has 
                        met the requirements specified in the 
                        agreement and achieved an outcome 
                        specified in the agreement.
                  (D) Notice of agreement award.--Not later 
                than 30 days after entering into an agreement 
                under this paragraph, the Secretary shall 
                publish a notice in the Federal Register that 
                includes, with regard to the agreement, the 
                following:
                          (i) The outcome goals of the social 
                        impact partnership project.
                          (ii) A description of each 
                        intervention in the project.
                          (iii) The target population that will 
                        be served by the project.
                          (iv) The expected social benefits to 
                        participants who receive the 
                        intervention and others who may be 
                        impacted.
                          (v) The detailed roles, 
                        responsibilities, and purposes of each 
                        Federal, State, or local government 
                        entity, intermediary, service provider, 
                        independent evaluator, investor, or 
                        other stakeholder.
                          (vi) The payment terms, the 
                        methodology used to calculate outcome 
                        payments, the payment schedule, and 
                        performance thresholds.
                          (vii) The project budget.
                          (viii) The project timeline.
                          (ix) The project eligibility 
                        criteria.
                          (x) The evaluation design.
                          (xi) The metrics that will be used to 
                        determine whether the outcomes have 
                        been achieved and how these metrics 
                        will be measured.
                          (xii) The estimate of the savings to 
                        the Federal, State, and local 
                        government, on a program-by-program 
                        basis and in the aggregate, if the 
                        agreement is entered into and 
                        implemented and the outcomes are 
                        achieved.
                  (E) Authority to transfer administration of 
                agreement.--The Secretary may transfer to the 
                head of another Federal agency the authority to 
                administer (including making payments under) an 
                agreement entered into under subparagraph (C), 
                and any funds necessary to do so.
          (4) Feasibility study funding.--
                  (A) Requests for funding for feasibility 
                studies.--The Secretary shall reserve a portion 
                of the amount reserved to carry out this 
                subsection to assist States or local 
                governments in developing feasibility studies 
                to apply for social impact partnership funding 
                under paragraph (2). To be eligible to receive 
                funding to assist with completing a feasibility 
                study, a State or local government shall submit 
                an application for feasibility study funding 
                addressing the following:
                          (i) A description of the outcome 
                        goals of the social impact partnership 
                        project.
                          (ii) A description of the 
                        intervention, including anticipated 
                        program design, target population, an 
                        estimate regarding the number of 
                        individuals to be served, and setting 
                        for the intervention.
                          (iii) Evidence to support the 
                        likelihood that the intervention will 
                        produce the desired outcomes.
                          (iv) A description of the potential 
                        metrics to be used.
                          (v) The expected social benefits to 
                        participants who receive the 
                        intervention and others who may be 
                        impacted.
                          (vi) Estimated costs to conduct the 
                        project.
                          (vii) Estimates of Federal, State, 
                        and local government savings and other 
                        savings if the project is implemented 
                        and the outcomes are achieved.
                          (viii) An estimated timeline for 
                        implementation and completion of the 
                        project, which shall not exceed 10 
                        years.
                          (ix) With respect to a project for 
                        which the State or local government 
                        selects an intermediary to operate the 
                        project, any partnerships needed to 
                        successfully execute the project and 
                        the ability of the intermediary to 
                        foster the partnerships.
                          (x) The expected resources needed to 
                        complete the feasibility study for the 
                        State or local government to apply for 
                        social impact partnership funding under 
                        paragraph (2).
                  (B) Federal selection of applications for 
                feasibility study.--Not later than 6 months 
                after receiving an application for feasibility 
                study funding under subparagraph (A), the 
                Secretary, in consultation with the Federal 
                Interagency Council on Social Impact 
                Partnerships and the head of any Federal agency 
                administering a similar intervention or serving 
                a population similar to that served by the 
                project, shall select State or local government 
                feasibility study proposals for funding based 
                on the following:
                          (i) The recommendations made by the 
                        Commission on Social Impact 
                        Partnerships.
                          (ii) The likelihood that the proposal 
                        will achieve the desired outcomes.
                          (iii) The value of the outcomes 
                        expected to be achieved.
                          (iv) The potential savings to the 
                        Federal Government if the social impact 
                        partnership project is successful.
                          (v) The potential savings to the 
                        State and local governments if the 
                        project is successful.
                  (C) Public disclosure.--Not later than 30 
                days after selecting a State or local 
                government for feasibility study funding under 
                this paragraph, the Secretary shall cause to be 
                published on the website of the Federal 
                Interagency Council on Social Impact 
                Partnerships information explaining why a State 
                or local government was granted feasibility 
                study funding.
                  (D) Funding restriction.--
                          (i) Feasibility study restriction.--
                        The Secretary may not provide 
                        feasibility study funding under this 
                        paragraph for more than 50 percent of 
                        the estimated total cost of the 
                        feasibility study reported in the State 
                        or local government application 
                        submitted under subparagraph (A).
                          (ii) Aggregate restriction.--Of the 
                        total amount reserved to carry out this 
                        subsection, the Secretary may not use 
                        more than $10,000,000 to provide 
                        feasibility study funding to States or 
                        local governments under this paragraph.
                          (iii) No guarantee of funding.--The 
                        Secretary shall have the option to 
                        award no funding under this paragraph.
                  (E) Submission of feasibility study 
                required.--Not later than 9 months after the 
                receipt of feasibility study funding under this 
                paragraph, a State or local government 
                receiving the funding shall complete the 
                feasibility study and submit the study to the 
                Federal Interagency Council on Social Impact 
                Partnerships.
                  (F) Delegation of authority.--The Secretary 
                may transfer to the head of another Federal 
                agency the authorities provided in this 
                paragraph and any funds necessary to exercise 
                the authorities.
          (5) Evaluations.--
                  (A) Authority to enter into agreements.--For 
                each State or local government awarded a social 
                impact partnership project approved by the 
                Secretary under this subsection, the head of 
                the relevant agency, as determined by the 
                Federal Interagency Council on Social Impact 
                Partnerships, shall enter into an agreement 
                with the State or local government to pay for 
                all or part of the independent evaluation to 
                determine whether the State or local government 
                project has met an outcome specified in the 
                agreement in order for the State or local 
                government to receive outcome payments under 
                this subsection.
                  (B) Evaluator qualifications.--The head of 
                the relevant agency may not enter into an 
                agreement with a State or local government 
                unless the head determines that the evaluator 
                is independent of the other parties to the 
                agreement and has demonstrated substantial 
                experience in conducting rigorous evaluations 
                of program effectiveness including, where 
                available and appropriate, well-implemented 
                randomized controlled trials on the 
                intervention or similar interventions.
                  (C) Methodologies to be used.--The evaluation 
                used to determine whether a State or local 
                government will receive outcome payments under 
                this subsection shall use experimental designs 
                using random assignment or other reliable, 
                evidence-based research methodologies, as 
                certified by the Federal Interagency Council on 
                Social Impact Partnerships, that allow for the 
                strongest possible causal inferences when 
                random assignment is not feasible.
                  (D) Progress report.--
                          (i) Submission of report.--The 
                        independent evaluator shall--
                                  (I) not later than 2 years 
                                after a project has been 
                                approved by the Secretary and 
                                biannually thereafter until the 
                                project is concluded, submit to 
                                the head of the relevant agency 
                                and the Federal Interagency 
                                Council on Social Impact 
                                Partnerships a written report 
                                summarizing the progress that 
                                has been made in achieving each 
                                outcome specified in the 
                                agreement; and
                                  (II) before the scheduled 
                                time of the first outcome 
                                payment and before the 
                                scheduled time of each 
                                subsequent payment, submit to 
                                the head of the relevant agency 
                                and the Federal Interagency 
                                Council on Social Impact 
                                Partnerships a written report 
                                that includes the results of 
                                the evaluation conducted to 
                                determine whether an outcome 
                                payment should be made along 
                                with information on the unique 
                                factors that contributed to 
                                achieving or failing to achieve 
                                the outcome, the challenges 
                                faced in attempting to achieve 
                                the outcome, and information on 
                                the improved future delivery of 
                                this or similar interventions.
                          (ii) Submission to congress.--Not 
                        later than 30 days after receipt of the 
                        written report pursuant to clause 
                        (i)(II), the Federal Interagency 
                        Council on Social Impact Partnerships 
                        shall submit the report to each 
                        committee of jurisdiction in the House 
                        of Representatives and the Senate.
                  (E) Final report.--
                          (i) Submission of report.--Within 6 
                        months after the social impact 
                        partnership project is completed, the 
                        independent evaluator shall--
                                  (I) evaluate the effects of 
                                the activities undertaken 
                                pursuant to the agreement with 
                                regard to each outcome 
                                specified in the agreement; and
                                  (II) submit to the head of 
                                the relevant agency and the 
                                Federal Interagency Council on 
                                Social Impact Partnerships a 
                                written report that includes 
                                the results of the evaluation 
                                and the conclusion of the 
                                evaluator as to whether the 
                                State or local government has 
                                fulfilled each obligation of 
                                the agreement, along with 
                                information on the unique 
                                factors that contributed to the 
                                success or failure of the 
                                project, the challenges faced 
                                in attempting to achieve the 
                                outcome, and information on the 
                                improved future delivery of 
                                this or similar interventions.
                          (ii) Submission to congress.--Not 
                        later than 30 days after receipt of the 
                        written report pursuant to clause 
                        (i)(II), the Federal Interagency 
                        Council on Social Impact Partnerships 
                        shall submit the report to each 
                        committee of jurisdiction in the House 
                        of Representatives and the Senate.
                  (F) Limitation on cost of evaluations.--Of 
                the amount reserved under this subsection for 
                social impact partnership projects, the 
                Secretary may not obligate more than 15 percent 
                to evaluate the implementation and outcomes of 
                the projects.
                  (G) Delegation of authority.--The Secretary 
                may transfer to the head of another Federal 
                agency the authorities provided in this 
                paragraph and any funds necessary to exercise 
                the authorities.
          (6) Federal interagency council on social impact 
        partnerships.--
                  (A) Establishment.--There is established the 
                Federal Interagency Council on Social Impact 
                Partnerships (in this paragraph referred to as 
                the ``Council'') to--
                          (i) coordinate the efforts of social 
                        impact partnership projects funded 
                        under this subsection;
                          (ii) advise and assist the Secretary 
                        in the development and implementation 
                        of the projects;
                          (iii) advise the Secretary on 
                        specific programmatic and policy matter 
                        related to the projects;
                          (iv) provide subject-matter expertise 
                        to the Secretary with regard to the 
                        projects;
                          (v) ensure that each State or local 
                        government that has entered into an 
                        agreement with the Secretary for a 
                        social impact partnership project under 
                        this subsection and each evaluator 
                        selected by the head of the relevant 
                        agency under paragraph (5) has access 
                        to Federal administrative data to 
                        assist the State or local government 
                        and the evaluator in evaluating the 
                        performance and outcomes of the 
                        project;
                          (vi) address issues that will 
                        influence the future of social impact 
                        partnership projects in the United 
                        States;
                          (vii) provide guidance to the 
                        executive branch on the future of 
                        social impact partnership projects in 
                        the United States;
                          (viii) review State and local 
                        government applications for social 
                        impact partnerships to ensure that 
                        agreements will only be awarded under 
                        this subsection when rigorous, 
                        independent data and reliable, 
                        evidence-based research methodologies 
                        support the conclusion that an 
                        agreement will yield savings to the 
                        Federal Government if the project 
                        outcomes are achieved before the 
                        applications are approved by the 
                        Secretary;
                          (ix) certify, in the case of each 
                        approved social impact partnership, 
                        that the project will yield a projected 
                        savings to the Federal Government if 
                        the project outcomes are achieved, and 
                        coordinate with the relevant Federal 
                        agency to produce an after-action 
                        accounting once the project is complete 
                        to determine the actual Federal savings 
                        realized, and the extent to which 
                        actual savings aligned with projected 
                        savings; and
                          (x) provide oversight of the actions 
                        of the Secretary and other Federal 
                        officials under this subsection and 
                        report periodically to Congress and the 
                        public on the implementation of this 
                        subsection.
                  (B) Composition of council.--The Council 
                shall have 11 members, as follows:
                          (i) Chair.--The Chair of the Council 
                        shall be the Director of the Office of 
                        Management and Budget.
                          (ii) Other members.--The head of each 
                        of the following entities shall 
                        designate 1 officer or employee of the 
                        entity to be a Council member:
                                  (I) The Department of Labor.
                                  (II) The Department of Health 
                                and Human Services.
                                  (III) The Social Security 
                                Administration.
                                  (IV) The Department of 
                                Agriculture.
                                  (V) The Department of 
                                Justice.
                                  (VI) The Department of 
                                Housing and Urban Development.
                                  (VII) The Department of 
                                Education.
                                  (VIII) The Department of 
                                Veterans Affairs.
                                  (IX) The Department of the 
                                Treasury.
                                  (X) The Corporation for 
                                National and Community Service.
          (7) Commission on social impact partnerships.--
                  (A) Establishment.--There is established the 
                Commission on Social Impact Partnerships (in 
                this paragraph referred to as the 
                ``Commission'').
                  (B) Duties.--The duties of the Commission 
                shall be to--
                          (i) assist the Secretary and the 
                        Federal Interagency Council on Social 
                        Impact Partnerships in reviewing 
                        applications for funding under this 
                        subsection;
                          (ii) make recommendations to the 
                        Secretary and the Federal Interagency 
                        Council on Social Impact Partnerships 
                        regarding the funding of social impact 
                        partnership agreements and feasibility 
                        studies; and
                          (iii) provide other assistance and 
                        information as requested by the 
                        Secretary or the Federal Interagency 
                        Council on Social Impact Partnerships.
                  (C) Composition.--The Commission shall be 
                composed of 9 members, of whom--
                          (i) 1 shall be appointed by the 
                        President, who will serve as the Chair 
                        of the Commission;
                          (ii) 1 shall be appointed by the 
                        Majority Leader of the Senate;
                          (iii) 1 shall be appointed by the 
                        Minority Leader of the Senate;
                          (iv) 1 shall be appointed by the 
                        Speaker of the House of 
                        Representatives;
                          (v) 1 shall be appointed by the 
                        Minority Leader of the House of 
                        Representatives;
                          (vi) 1 shall be appointed by the 
                        Chairman of the Committee on Finance of 
                        the Senate;
                          (vii) 1 shall be appointed by the 
                        ranking member of the Committee on 
                        Finance of the Senate;
                          (viii) 1 member shall be appointed by 
                        the Chairman of the Committee on Ways 
                        and Means of the House of 
                        Representatives; and
                          (ix) 1 shall be appointed by the 
                        ranking member of the Committee on Ways 
                        and Means of the House of 
                        Representatives.
                  (D) Qualifications of commission members.--
                The members of the Commission shall--
                          (i) be experienced in finance, 
                        economics, pay for performance, or 
                        program evaluation;
                          (ii) have relevant professional or 
                        personal experience in a field related 
                        to 1 or more of the outcomes listed in 
                        this subsection; or
                          (iii) be qualified to review 
                        applications for social impact 
                        partnership projects to determine 
                        whether the proposed metrics and 
                        evaluation methodologies are 
                        appropriately rigorous and reliant upon 
                        independent data and evidence-based 
                        research.
                  (E) Timing of appointments.--The appointments 
                of the members of the Commission shall be made 
                not later than 120 days after the date of the 
                enactment of this subsection, or, in the event 
                of a vacancy, not later than 90 days after the 
                date the vacancy arises. If a member of 
                Congress fails to appoint a member by that 
                date, the President may select a member of the 
                President's choice on behalf of the member of 
                Congress. Notwithstanding the preceding 
                sentence, if not all appointments have been 
                made to the Commission as of that date, the 
                Commission may operate with no fewer than 5 
                members until all appointments have been made.
                  (F) Term of appointments.--
                          (i) In general.--The members 
                        appointed under subparagraph (C) shall 
                        serve as follows:
                                  (I) 3 members shall serve for 
                                2 years.
                                  (II) 3 members shall serve 
                                for 3 years.
                                  (III) 3 members (1 of which 
                                shall be Chair of the 
                                Commission appointed by the 
                                President) shall serve for 4 
                                years.
                          (ii) Assignment of terms.--The 
                        Commission shall designate the term 
                        length that each member appointed under 
                        subparagraph (C) shall serve by 
                        unanimous agreement. In the event that 
                        unanimous agreement cannot be reached, 
                        term lengths shall be assigned to the 
                        members by a random process.
                  (G) Vacancies.--Subject to subparagraph (E), 
                in the event of a vacancy in the Commission, 
                whether due to the resignation of a member, the 
                expiration of a member's term, or any other 
                reason, the vacancy shall be filled in the 
                manner in which the original appointment was 
                made and shall not affect the powers of the 
                Commission.
                  (H) Appointment power.--Members of the 
                Commission appointed under subparagraph (C) 
                shall not be subject to confirmation by the 
                Senate.
          (8) Limitation on use of funds.--Of the amounts 
        reserved to carry out this subsection, the Secretary 
        may not use more than $2,000,000 in any fiscal year to 
        support the review, approval, and oversight of social 
        impact partnership projects, including activities 
        conducted by--
                  (A) the Federal Interagency Council on Social 
                Impact Partnerships; and
                  (B) any other agency consulted by the 
                Secretary before approving a social impact 
                partnership project or a feasibility study 
                under paragraph (4).
          (9) No federal funding for credit enhancements.--No 
        amount reserved to carry out this subsection may be 
        used to provide any insurance, guarantee, or other 
        credit enhancement to a State or local government under 
        which a Federal payment would be made to a State or 
        local government as the result of a State or local 
        government failing to achieve an outcome specified in a 
        contract.
          (10) Availability of funds.--Amounts reserved to 
        carry out this subsection shall remain available until 
        10 years after the date of the enactment of this 
        subsection.
          (11) Website.--The Federal Interagency Council on 
        Social Impact Partnerships shall establish and maintain 
        a public website that shall display the following:
                  (A) A copy of, or method of accessing, each 
                notice published regarding a social impact 
                partnership project pursuant to this 
                subsection.
                  (B) A copy of each feasibility study funded 
                under this subsection.
                  (C) For each State or local government that 
                has entered into an agreement with the 
                Secretary for a social impact partnership 
                project, the website shall contain the 
                following information:
                          (i) The outcome goals of the project.
                          (ii) A description of each 
                        intervention in the project.
                          (iii) The target population that will 
                        be served by the project.
                          (iv) The expected social benefits to 
                        participants who receive the 
                        intervention and others who may be 
                        impacted.
                          (v) The detailed roles, 
                        responsibilities, and purposes of each 
                        Federal, State, or local government 
                        entity, intermediary, service provider, 
                        independent evaluator, investor, or 
                        other stakeholder.
                          (vi) The payment terms, methodology 
                        used to calculate outcome payments, the 
                        payment schedule, and performance 
                        thresholds.
                          (vii) The project budget.
                          (viii) The project timeline.
                          (ix) The project eligibility 
                        criteria.
                          (x) The evaluation design.
                          (xi) The metrics used to determine 
                        whether the proposed outcomes have been 
                        achieved and how these metrics are 
                        measured.
                  (D) A copy of the progress reports and the 
                final reports relating to each social impact 
                partnership project.
                  (E) An estimate of the savings to the 
                Federal, State, and local government, on a 
                program-by-program basis and in the aggregate, 
                resulting from the successful completion of the 
                social impact partnership project.
          (12) Regulations.--The Secretary, in consultation 
        with the Federal Interagency Council on Social Impact 
        Partnerships, may issue regulations as necessary to 
        carry out this subsection.
          (13) Definitions.--In this subsection:
                  (A) Agency.--The term ``agency'' has the 
                meaning given that term in section 551 of title 
                5, United States Code.
                  (B) Intervention.--The term ``intervention'' 
                means a specific service delivered to achieve 
                an impact through a social impact partnership 
                project.
                  (C) Secretary.--The term ``Secretary'' means 
                the Secretary of the Treasury.
                  (D) Social impact partnership project.--The 
                term ``social impact partnership project'' 
                means a project that finances social services 
                using a social impact partnership model.
                  (E) Social impact partnership model.--The 
                term ``social impact partnership model'' means 
                a method of financing social services in 
                which--
                          (i) Federal funds are awarded to a 
                        State or local government only if a 
                        State or local government achieves 
                        certain outcomes agreed on by the State 
                        or local government and the Secretary; 
                        and
                          (ii) the State or local government 
                        coordinates with service providers, 
                        investors (if applicable to the 
                        project), and (if necessary) an 
                        intermediary to identify--
                                  (I) an intervention expected 
                                to produce the outcome;
                                  (II) a service provider to 
                                deliver the intervention to the 
                                target population; and
                                  (III) investors to fund the 
                                delivery of the intervention.
                  (F) State.--The term ``State'' means each 
                State of the United States, the District of 
                Columbia, each commonwealth, territory or 
                possession of the United States, and each 
                federally recognized Indian tribe.
          (14) Funding.--Of the amounts made available to carry 
        out subsection (b) for fiscal year 2017, the Secretary 
        shall reserve $100,000,000 to carry out this 
        subsection.

           *       *       *       *       *       *       *


                 VIII. ADDITIONAL AND DISSENTING VIEWS

                              ----------                              


                     ADDITIONAL VIEWS FOR H.R. 5170

    This legislation represents a missed opportunity to 
seriously address the ongoing challenge of poverty in America.
    Over the past 50 years, Congress has enacted laws that 
lifted tens of millions of Americans out of poverty, making our 
anti-poverty programs ten times more effective than they were 
when the War on Poverty began.
    But nearly 47 million Americans are still living in 
poverty, including one in five children. These families, and 
the millions of families at risk of falling into poverty, face 
impossible choices every day: transportation to work, child 
care, school supplies, food for dinner, and a place to live. 
They worry about what they will do if they or their children 
get sick and they have no paid leave at work, or how they will 
get to work if the car breaks down. And they have nothing left 
at the end of the month to save for college or retirement.
    A serious attempt to fight poverty would include action on 
the basic supports needed to support work and sustain 
employment--paid leave, access to quality child care, equal pay 
for women and a decent minimum wage, and an Earned Income Tax 
Credit that reaches all workers who need it.
    A serious attempt to fight poverty would include action on 
affordable housing, access to early childhood education, and an 
effort to make college more affordable to help struggling 
families raise their children and help them toward a better 
life.
    A serious attempt to fight poverty would build on 
successful programs like the Supplemental Nutrition Assistance 
Program (SNAP), which lifts nearly 10 million Americans out of 
poverty, and the Social Services Block Grant (SSBG), which 
provides critical help to nearly 30 million Americans. And it 
would build on the Affordable Health Care, which has given 
families long-awaited peace of mind about high medical bills.
    The millions of families that are struggling deserve more 
than this legislation.
                                           Sander M. Levin,
                                                    Ranking Member.

                     DISSENTING VIEWS FOR H.R. 5170

    Social impact financing offers the potential of greater 
private involvement and resources to tackle some serious social 
problems. Though still in an experimental stage, states and 
localities are involved with feasibility studies to determine 
its usefulness. Without our approving any new legislation, any 
state can already use Temporary Assistance for Needy Families 
funds for social impact financing so long as the initiative is 
designed to achieve the statutory purposes of TANF. If the 
laboratories of democracy think this approach to engage the 
private sector is cost efficient, they can do it now.
    What this bill does is authorize the use of TANF funds for 
non-TANF purposes. It removes $100 million from a contingency 
fund for needy families, transfers it away from the supervision 
of the Department of Health and Human Services, and authorizes 
its expenditure for what may well be worthy purposes but 
purposes that are not related to TANF. Now is not the time to 
reduce funding for needy children.
    The TANF contingency fund should be focused on effective 
ways to assist impoverished families moving into long-term jobs 
through which they earn enough to support their families and to 
offer direct assistance to those children in families who 
cannot secure such jobs. It should not be treated as a slush 
fund to fund an as yet unproven social experiment.
    In Texas, only one of every 20 children living below the 
poverty line receives direct TANF assistance. That's not 
temporary assistance for needy families--it's no assistance at 
all for most. Too often TANF has meant less and less for fewer 
and fewer.
    The sponsors of this legislation refuse any change to this 
bill. Even my modest amendment offering a compromise to require 
that at least half of the monies be used for programs that 
directly benefit children was rejected on a recorded vote.
    A number of young entrepreneurs with a social conscience, 
with a desire to give back to our communities, these 
entrepreneurs are applying their talents regarding how they can 
make a difference to resolve some of the pressing social 
problems that we face. In Austin, Texas, for example, I am 
impressed with a number of feasibility studies already underway 
to engage more private resources in offering answers to 
pressing public concerns.
    But not everyone who applies for these funds is certain to 
bring this outlook. Many of our nonprofits in Texas and across 
America are trying to grapple with serious local problems like 
child abuse that have been substantially aggravated by State 
neglect. As the need for services has soared and public 
resources have dwindled, these good people in many cases are 
truly desperate for help--willing to try almost anything that 
might help them to help others. In designing a new program with 
$100 million in taxpayer funds, we need to ensure that those 
dollars are put to effective use. We have to consider the 
possibility of the unscrupulous offering false hope to a 
desperate local community. This bill lacks adequate safeguards.
                                                     Lloyd Doggett.

                                  [all]