29-010
1st Session
108-162
--PERSONAL RESPONSIBILITY AND INDIVIDUAL DEVELOPMENT FOR EVERYONE ACT (PRIDE)
[To accompany H.R. 4]
[Including cost estimate of the Congressional Budget Office]
The Committee on Finance, to which was referred the bill (H.R. 4) to reauthorize and improve the program of block grants to States for temporary assistance for needy families, improve access to quality child care, and for other purposes, reports favorably thereon with an amendment and recommends that the bill, as amended, do pass.
The 1996 welfare reform law supplanted the main existing welfare program for families, Aid to Families with Dependent Children (AFDC) and its work/training component (JOBS), and greatly changed most other federally supported aid to the poor. It was enacted after debate stretching over 3 years and two presidential vetoes.
The move to reform this system was prompted by soaring AFDC rolls and higher costs, extant federal waivers for more than half the states to undertake their own welfare reforms, frustration with the long AFDC tenure and youth of many recipient parents, concerns over the extent of unwed parenthood among recipients, reaction to AFDC's unrestricted entitlement nature, and disillusion with the most recent attempt at reform (the 1988 Family Support Act).
The welfare portion of the House Republicans' Contract with America agenda was introduced as the Personal Responsibility Act in January 1995. The House and Senate both passed versions of the legislation.
A preliminary House-Senate agreement on H.R. 4 was added to the 1995 Balanced Budget Act (H.R. 2491) in late November 1995. Excepting some small but controversial items, it contained the gist of the final accord on H.R. 4. President Clinton vetoed it on December 6, 1995--objecting to Medicaid provisions in the larger measure. Then, on December 21-22, 1995, Congress approved the final House-Senate H.R. 4 agreement (the Personal Responsibility and Work Opportunity Act). The President vetoed this H.R. 4 accord on January 9, 1996, citing insufficient child care and work support provisions.
By the end of June 1996, House and Senate Republicans had essentially incorporated the vetoed H.R. 4, with added money for child care and contingencies, in H.R. 3734 (the FY1997 budget reconciliation bill). On August 22, 1996, the President signed the welfare reform law.
Programs authorized under PRWORA were scheduled to expire on September 30, 2002. In February, 2002 President Bush released his reauthorization proposal. The House of Representatives passed a welfare bill very similar to the President's proposal.
In the 107th Congress, the Senate Finance Committee reported legislation based on a proposal crafted by a bipartisan group of Senators on the Senate Finance Committee which included a number of provisions adopted from the President's proposal for
welfare reform. The full Senate did not pass a reauthorization of Temporary Assistance for Needy Families (TANF).
The Finance Committee continued the work done in the 107th Congress relative to welfare reform. In the 108th Congress, the Finance Committee held a number of bipartisan briefings on: fatherhood initiatives, data collection, state plans, workforce attachment and advancement, work readiness, and family formation policies. The committee made a sustained effort to hear from stakeholders on the issue of welfare reform, including policy experts, advocates, family groups, organizations representing the states, and officials from the Department of Health and Human Services.
The full committee held one field hearing and one committee hearing.
The field hearing was held on February 20, 2003 in Des Moines, Iowa, and was titled: `Welfare Reform: Past Successes, New Challenges.' The purpose of the hearing was to review the provisions of the 1996 welfare reform bill which are working in Iowa and to identify areas in need of strengthening and improvement.
The committee heard testimony from: Ms. Donna Littrel, an Insurance Policy Specialist at Aegon Insurance, an Iowan who has successfully made the transition from welfare to work; Ms. Deb Bingaman, Administrator, Division of Financial, Health and Work Supports at the Iowa Department of Human Services; Ms. Linda Anderson, a Human Resources Recruiter from Mercy Hospital, representing the business community to discuss successful strategies in Iowa to assist those receiving welfare make the transition from welfare to work.
The committee heard additional testimony from Representative Dave Heaton from the Iowa State Legislature to discuss ways to build upon the success of the 1996 Act; Ms. Sonja Marquez from Boost 4 Families to discuss Iowa's rural child care challenges and Ron Haskins, former White House policy lead on welfare reform to discuss ways to strengthen the family formation policies envisioned by the 1996 Act.
The final full committee hearing on welfare reform was on March 12, 2003 titled, `Welfare Reform: Building on Success.'
The committee heard testimony from: The Honorable Tommy Thompson, Secretary, Department of Health and Human Services, on the Administration's proposal for the reauthorization of the Temporary Assistance for Needy Families (TANF) program.
The committee also heard testimony from Mr. Howard Hendrick, Oklahoma Secretary of Human Services on family formation policies; Ms. Marilyn Ray Smith, Deputy Commissioner and IV--D Director, Massachusetts Department of Revenue on child support; Mr. Larry Temple, Deputy Executive Director of the Texas Workforce Commission on a practitioner's perspective on running a welfare to work program and Ms. Margy Waller, Fellow at the Brookings Institution on analysis of various welfare reform proposals.
The committee began its deliberations by agreeing to continue many of the reforms from the 1996 Act but working to improve it with priorities from members and the Administration. The committee bill reflects the analysis of Representative Dave Heaton, `The work of welfare reform is not done. While caseloads have declined dramatically, many families struggle with barriers to self-sufficiency.' (Testimony before the Senate Finance Committee)
Additionally, the committee considered the recommendations of Ron Haskins: `Given that the 1996 reforms have been so successful, we should leave intact the major features of the reforms. Thus, the block grant and state flexibility has proven its value and should be maintained.' (Testimony before the Senate Finance Committee)
The following provisions in the committee bill are maintained from current law:
A number of changes to current law in the committee bill are similar to provisions both in the bill reported out of the Senate Finance Committee in the 107th Congress and the President's proposal.
Highlights include: raising the participation rate; raising the standard hour for core activities; policies designed to address the needs of every family on assistance, otherwise known as `universal engagement'; policies designed to address the needs of families who require additional time in barrier removal activities, otherwise known as the `3+3' provisions; child support improvements; and healthy family formations policies.
Major themes of the changes to current law center on the following three principles and were informed by testimony presented to the committee as well as current research and analysis:
From Donna Littrel a welfare to work success story: `Becoming an Aegon employee was a turning point for my family and me. Our family still received assistance for our medical bills and some food stamps, but we no longer had to rely on FIP (case assistance) to provide us an income. I never imagined I would be working for such a wonderful company. It was a very liberating feeling.' (Testimony before the Senate Finance Committee)
From Larry Temple: `What have we learned? Well, that work works. When you strengthen the work requirements, more people leave the rolls due to employment.' (Testimony before the Senate Finance Committee)
From Secretary Tommy Thompson: `The most humane social program is a healthy and independent family that has the capacity and the ability to have a good, paying job. Federal and State welfare programs should recognize this fact by helping and encouraging Americans to build and maintain healthy and independent families. We can do better. The first step was excellent. The next step can be even better.' (Testimony before the Senate Finance Committee)
The Committee bill:
Increases the work participation rate for States 5% each year, from 50% in 2004 to 70% in 2008.
Eliminates the caseload reduction credit, which has erased most states' obligation to ensure that any TANF recipient is engaged in work, and replaces it with an employment credit which emphasizes good jobs.
Caps the credit so that states have a real participation rate. The value of the credit is phased down so that in fiscal year 2008, all states must have a real work participation rate of 50%.
Increases the minimum threshold for participation in core work activities from 20 to 24 hours.
Increases the standard weekly average number of hours from 30 for a parent with a child six and over. Adopts a tiered approach assigning partial and extra credit for hours below and above the standard hour of 34.
Increases the standard weekly average of hours from 20 for a parent with a child under six. Adopts a tiered approach, assigning partial credit for hours below the standard hour of 24 and extra credit for hours above 34.
Ensures that every family has a plan for achieving self-sufficiency. States must prepare a plan for every family receiving assistance and in most cases that plan should involve some amount of work or work readiness activities.
From Deb Bingaman: `* * * policies must include the maximum possible flexibility so that each family's uniqueness can be respected.' (Testimony before the Senate Finance Committee)
From Howard Hendrick: `We are all for flexibility.' (Testimony before the Senate Finance Committee)
The Committee bill:
Allows states to claim partial and extra credit for work hours below and above the standard hour. Currently, a recipient only counts toward the work participation requirement if the recipient meets the standard hour.
Allows states to engage individuals in a broader range of activities, including job search, substance abuse treatment, post-secondary education and training and other barrier removal activities after the 24 hour threshold of core work activities is met.
Allows states to engage adult recipients in a broad range of activities, including substance abuse treatment, post-secondary education and other barrier removal activities for a three-month period in each 24 month period.
Allows states to engage adult recipients in education and rehabilitative activities combined with work or work readiness activities for an additional three months out of 24 months for a total of 6 months.
Includes a provision allowing adult recipients to attend longer duration vocational or post-secondary education.
Allows states to determine, on a case-by-case basis, whether or not to count families toward their participation rate in the first month of assistance.
Makes the contingency fund more accessible to States.
Allows states to use unobligated balances, which currently can only be used for cash assistance, for any purpose under TANF, including funding for childcare.
From Marilyn Smith: `There is no longer any debate that responsible father involvement is good for children. The only question is how to achieve it.' (Testimony before the Senate Finance Committee)
From Ron Haskins: `The President has called for $300 million per year in spending on programs that attempt to increase marriage rates among low-income families. There is little question that increased marriage rates among the poor would greatly reduce poverty and lead to improved school performance, improved social behavior and improved health among children.' (Testimony before the Senate Finance Committee)
From Wade Horn and Isabel V. Sawhill, `The empirical literature clearly demonstrates that children do best when they grow up in a household with two parents who are married to each other.' (`Father, Marriage and Welfare Reform' Chapter 16, The New World of Welfare)
The Committee bill:
Provides $100 million a year in matching grants for marriage promotion and $100 million a year for research, demonstration and technical assistance primarily related to marriage.
Adopts the Domenici/Bayh/Santorum bill to promote Responsible Fatherhood.
Includes a special rule relating to a single parent caring for a child or dependant with a physical or mental impairment.
Improves child support collection, assignment and distribution.
Increases child care spending for the current unmet need.
Increased funding for child care is a critical issue for members on the Senate Finance Committee.
On the issue of child care, the committee bill increases mandatory child care spending $1 billion over five years. The committee bill recognizes that since 1996, federal funding specifically appropriated for child care has increased more than five-fold from $935 million in 1996 to $4.8 billion in 2002. In fiscal year 2001, an estimated 2.51 million children were receiving Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF) or Social Services Block Grant (SSBG) funded child care services in an average month, compared to 1.2 million in 1996.
Further, states can transfer up to 30% of their TANF funds to CCDF, or spend TANF directly on child care, without limit. To support spending on child care, the committee bill maintains TANF's original funding level, even though the caseload is 54% of what it was prior to the 1996 act.
In 2003, states transferred $1.9 billion from TANF to CCDF and spent $1.6 billion in TANF on direct child care.
Additionally, the committee bill would allow states to use their unobligated TANF balances on services other than assistance, such as child care.
Finally, the committee bill recognizes that all committee members share the common goal of implementing policies that will help move families from dependence to increasing independence.
The committee bill reflects the view that enhancing work supports and providing additional assistance should be the focus of the next phase of welfare reform. The committee bill would enhance work supports by providing states with the option to serve families through barrier removal activities as well as substance abuse activities, post-secondary education and other activities.
The committee bill reflects the view that the fact that 57% of adults receiving assistance who report zero hours of activity is an indication that states can do more to engage clients in meaningful activities.
Additionally, the committee bill reflects the view that the fact that many states have an effective participation rate threshold of zero as a result of the caseload reduction credit represents a fundamental flaw in the 1996 act which should be corrected in this reauthorization.
The committee bill adopts a blended approach, combining work supports and flexibility with increased work requirements on individuals and states in advancement of the common goal of moving families out of deep and persistent poverty into self-sufficiency.
Section 101--State Plans
To receive block grant funds, a state must have submitted a TANF plan within the 27-month period that ends with the close of the 1st quarter of the fiscal year. This plan must include a description of the programs that the state will run to provide assistance to needy families and provide job preparation, work and support services to enable them to leave the program and describe how the state will ensure that parents and caretakers receiving assistance engage in work activities (within 24 months of receiving assistance, or earlier at state option). The plan must indicate whether the state intends to treat families migrating from another state differently from others (and, if so, how) and whether it intends to provide assistance to non-citizens (and, if so, to provide an overview of aid). It also must establish goals to reduce the rate of out-of-wedlock pregnancies, with special emphasis on teenage pregnancies, and establish numerical goals for reducing the illegitimacy ratio of the state. The plan must describe how the state will provide education and training on statutory rape to the law enforcement and educational systems, and it must include a number of certifications (for example, equitable access to Indians and establishment and enforcement of standards against program fraud and abuse). States have the option of including a certification regarding the treatment of individuals with a history of domestic violence.
The Committee bill requires the state plan to establish specific measurable performance objectives for pursuing TANF purposes, and to describe the methodology the state will use to measure performance in relation to each objective. The Committee bill states that the performance objectives, as determined by the state, are to be consistent with criteria used by the Secretary in establishing performance measures for the employment achievement bonus (workforce attachment and advancement) and with such other criteria related to other (non-work) purposes of the program as the Secretary may establish, in consultation with the National Governors Association and the American Public Human Services Association. The performance measures determined by the states could include both process measures and outcome measures. The Committee bill specifies that the plan must describe any strategies and programs that the state plans to use concerning employment retention and advancement; reduction of teen pregnancy; services for struggling and noncompliant families, and for clients with special problems; program integration, including provision of services through the One-Stop delivery system under WIA; and engagement of faith-based organizations in provision of services funded by TANF if the state is undertaking any strategies or programs to engage these organizations. It requires state plans to describe how the state intends to encourage equitable treatment of healthy, married, two-parent families under TANF. It deletes the requirement to indicate whether the state intends to treat incoming families differently from residents (found unconstitutional) and drops the rule that community service be required from adults who fail to work after two months of aid, unless the governor opts out. It requires the plan to include a report detailing progress toward full engagement. It adds a requirement that tribal governments be consulted about the TANF plan and its service design. It requires governors of states that provide transportation aid under TANF to certify that state and local transportation agencies and planning bodies have been consulted in the development of the plan, The Committee bill directs the Secretary to develop a proposed Standard State Plan Form for use by states nine months from enactment and requires states, by October 1, 2004, to submit their fiscal year 2005 plans on the standard form. It requires states to make available to the public through an appropriate State-maintained Internet website and through other means the state deems appropriate several documents: the proposed state plan (with at least 45 days for comment), comments received concerning the plan (or, at the state's discretion, a summary of the comments), and proposed amendments to the plan. It also requires that state plans in effect for any fiscal year be available to the public by the means listed above. The Committee bill requires the Secretary, in consultation with states, to develop uniform performance measures designed to evaluate TANF state programs. The bill amends current law provisions requiring the Secretary to annually rank states by adding new ranking factors, namely: success of recipients in retaining employment, the ability of recipients to increase wages, and the degree to which recipients have workplace attachment and advancement. It also changes the job placement ranking factor by deleting the qualifier `long-term' from private sector job placement.
Sections 107, 109 and 110 of the Committee bill contain other state TANF plan provisions. Section 107 requires a state that takes the option to establish an undergraduate postsecondary or vocational educational program to describe, in an addendum to its TANF plan, eligibility criteria that will restrict enrollment to persons whose past earnings indicate that they cannot qualify for employment that will make them self-sufficient and who, by enrollment in the program, will be prepared for higher-paying occupations in demand in the state. Section 109 requires plans to include criteria for deeming a single parent who provides care for a disabled child or dependent to be meeting all or part of the family's work requirements. Section 109 permits a State, if it includes in its TANF plan a description of policies for areas of Indian country or an Alaskan native village with high joblessness, to define countable work activities for persons complying with individual responsibility plans and living in these areas. Section 110 requires state plans to outline how the State intends to require parent or caretaker recipients to engage in work or alternative self-sufficiency activities, as defined by the State, and to require recipient families to engage in activities in accordance with family self-sufficiency plans.
The Committee bill includes provisions to clarify what states are doing to move welfare clients into self sufficiency and to make the plans more meaningful. The Committee bill would require states to establish performance objectives and encourage an ongoing review of these objectives while maintaining state flexibility.
Section 102--Family Assistance Grants
The law appropriated $16.5 billion annually for family assistance grants to the states and the District of Columbia (D.C.) for FYs1997-2002. It also appropriated $77.9 million annually for family assistance grants to the territories (and, within overall ceilings, such sums as needed for matching grants to the territories). Family assistance grants have been continued at FY2002 funding levels through March 31, 2004 through a series of temporary extensions. Basic state grants are based on federal expenditures for TANF's predecessor programs during FY1992 through FY1995.
The Committee bill appropriates family assistance grants, at current levels, for the states, the District of Columbia, and the territories for fiscal years 2004 through 2008. The Committee bill also appropriates matching grants for the territories for fiscal years 2004 through 2008.
(No Change).
Section 103--Promotion of family formation and healthy marriage
The purposes of TANF include encouraging the formation and maintenance of two-parent families, ending the dependence of needy parents on government benefits by promoting. . .marriage, and reducing the incidence of out-of-wedlock pregnancies. The law established a bonus (up to $100 million yearly for four years) for 5 jurisdictions with the greatest percentage decease in nonmarital birth ratios and a decline from 1995 levels in abortion rates.
The Committee bill repeals the bonus for reduction of the illegitimacy ratio. It appropriates $100 million a year for five years (FYs 2004-2008) for competitive grants (50 percent matching rate) to states, territories, Indian tribes and tribal organizations to develop and implement innovative programs to promote and support healthy, married, two-parent families and to encourage responsible fatherhood. Grant funds must to used to support any of the following: public advertising campaigns on the value of marriage and the skills needed to increase marital stability and health; education in high schools on the value of marriage, relationship skills, and budgeting; marriage education, marriage skills, and relationship skills programs, which may include parenting skills, financial management, conflict resolution, and job and career advancement, for non-married expectant and recent mothers and fathers; pre-marital education and marriage skills training for engaged couples and for couples or persons interested in marriage; marriage enhancement and marriage skills training programs for married couples; divorce reduction programs that teach relationship skills; marriage mentoring programs which use married couples as role models and mentors; and programs to reduce the marriage disincentive in means-tested aid programs, if offered in conjunction with any activity described above. The Committee bill exempts marriage promotion grants from the general rules governing use of TANF funds (Section 404), but not from the percentage cap on administrative costs. To be eligible for a grant, applicants must consult with experts in domestic violence or with relevant community domestic violence coalitions and must describe in their applications how their proposed programs or activities will deal with issues of domestic violence and what they will do, to the extent relevant, to ensure that participation in the programs is voluntary and to inform potential participants that participation is voluntary. The Committee bill provides that marriage promotion funds appropriated for each of fiscal years 2004 through 2008 shall remain available to the Secretary until spent and that grantees may use marriage promotion funds without fiscal year limitation. The Committee bill provides that other TANF funds may be used by a state or Indian tribe with an approved tribal family assistance plan as all or part of the required state match for marriage promotion grants, but that these funds cannot count towards a state's `Maintenance of Effort' or MOE. The Committee bill also includes conforming language relative to the fourth purpose of TANF, specifying that it is to encourage the formation and maintenance of healthy, two-parent married families and to encourage responsible fatherhood. The bill provides that all state spending (including funds spent on families ineligible for TANF) for the purpose of preventing and reducing the incidence of out-of-wedlock births, encouraging the formation and maintenance of healthy two-parent married families, or encouraging responsible fatherhood shall count toward required maintenance-of-effort spending.
Two of the four original purposes of TANF are directly related to ending out-of-wedlock births and encouraging the formation and maintenance of two-parent families. The bonus to reduce out of wedlock births was initially developed to enhance these purposes. This bonus has not proven to be an effective mechanism for motivating state action. A correlation between state action and a reduction in out of wedlock births and family formation has not been established.
The Committee bill would redirect the funding to address the underlying purposes of TANF. The Committee bill would provide optional grants to states to explore innovative and creative approaches to promote healthy family formation activities. The Committee bill stipulates that participation in these programs is voluntary and that program development must be coordinated with domestic violence experts.
The Committee bill also includes a provision (in Section 114) which would direct a portion of the funds for research and demonstration programs and technical assistance related to healthy family formation activities. These funds would be in addition to grants to states for healthy family formation activities. Currently there is a 25 year body of research related to work activities and welfare. The Committee bill would encourage a focus on research centered on marriage and family assistance so that states can learn from rigorous evaluations of activities to promote marriage and family formation.
Section 104--Supplemental grant for population increases in certain states
The law provides supplemental grants for (17) states with exceptionally high population growth during the early 1990s, benefits lower than 35% of the national average, or a
combination of above-average growth and below-average AFDC benefits. Grants were authorized for a total of $800 million over FYs 1998 through 2001, and annual grants grew from $79 million to $319.5 million over this period. Congress froze grants at the fiscal year 2001 level in making fiscal year 2002 and 2003 appropriations.
The Committee bill extends supplemental grants, at their FY 2001 level, for FYs 2004 through 2007.
The Committee bill extends the supplemental grant program for certain states.
Section 105--Bonus to reward employment achievement
The Secretary of HHS, in consultation with the National Governors Association (NGA) and the American Public Human Services Association (APHSA) was required to develop a formula for measuring state performance relative to block grant goals. Awards for performance years 1998-2000 were based on work-related measures (and were paid to 38 jurisdictions). For later years, non-work measures--including food stamp and medicaid coverage of low-income families--were added. States can receive a bonus based on their absolute score in the current (performance) year and/or their improvement from the previous year, but the bonus cannot exceed 5% of the family assistance grant. $200 million per year was available for performance bonuses, for a total of $1 billion between FYs 1999 and 2003.
The Committee bill appropriates $600 million (for FYs 2004 through 2009) for bonuses to states that qualify as `employment achievement' states by meeting standards to be developed by the Secretary in consultation with the states. Bonuses are to average $100 million per year. The Committee bill specifies that the employment achievement formula is to measure absolute and relative progress toward the goals of job entry, job retention, and increased earnings as well as attachment to the workforce. It caps a state's bonus at 5% of its family assistance grant. For FY 2004 and FY 2005, the employment achievement bonus may be based on three components of the repealed high performance bonus--job entry rate, job retention rate, and earnings gain rate. The Committee bill makes tribal organizations eligible for the bonus and directs the Secretary to consult with tribal organizations in determining criteria for awards to them.
The Committee bill provides for states to continue their successful efforts to move welfare recipients into good jobs. States have directed considerable resources into moving welfare recipients into meaningful employment. The Committee bill would continue to provide incentives for states to focus on employment attachment and achievement and would continue the policy of rewarding states for doing so. The Committee bill would preserve the concept of the High Performance Bonus focused on employment attachment and achievement.
Section 106--Contingency fund
The TANF law established a $2 billion contingency fund for matching grants at the Medicaid matching rate (which ranges from 50% to 76.6% in 2003) to `needy' states that expect during the fiscal year to spend under the TANF program (not counting child care) 100% of their FY1994 level of spending on TANF-predecessor programs (not counting child care). States can access the contingency fund by meeting one of two `needy' state triggers: (1) an unemployment rate for a 3-month period that is at least 6.5% and 110% of the rate for the corresponding period in either of the two preceding calendar years; or (2) a food stamp caseload increase of 10% over the FY 1994-1995 level (adjusted for the impact of immigrant and food stamp constraints in the 1996 welfare law). Contingency fund payments for any fiscal year are limited to 20% of the state's base grant, and a state can draw down no more than 1/12 of its maximum annual contingency fund amount in a given month. Under a final reconciliation process, a state's federal match rate (for drawing down contingency funds) is reduced if it received funds for fewer than 12 months in any year.
The Committee bill appropriates such sums as are needed for contingency fund grants, up to $2 billion over 5 years, FYs 2004-2008. It eliminates the requirement that states spent 100% of their historic level to qualify for contingency funds (instead applying the TANF MOE, 75%-80%). It entitles states to a contingency fund grant reflecting costs of TANF caseloads when they are `needy' under a revised definition. To trigger on as needy: (a) a state must have an increase of 5 percent in the monthly average unduplicated number of families receiving assistance under its TANF program in the most recently concluded 3-month period with data, compared with the corresponding period in either of the two most recent preceding fiscal years; (b) the TANF caseload increase must be due, in large measure, to economic conditions rather than state policy changes, and (c) for the most recent three-month period with data, the average rate of seasonally adjusted total unemployment must be at least 1.5 percentage points or 50 percent higher than in the corresponding period in either of the two most recent preceding fiscal years; or, for the most recent 13 weeks with data, the average rate of insured unemployment must be at least 1 percentage point higher than in the corresponding period in either of the two most recent fiscal years; or, for the most recently concluded 3-months with national data, the monthly average number of food stamp recipient households, as of the last day of each month, exceeds by at least 15 percent the corresponding caseload number in the comparable period in either of the two most recent preceding fiscal years, provided the HHS Secretary and the Secretary of Agriculture agree that the increased caseload was due, in large measure, to economic conditions rather than to policy change. The Committee bill provides that a state that initially qualifies as needy because of its TANF caseload plus its food stamp caseload shall continue to be considered needy as long as the state meets the original qualifying conditions. A state that initially qualifies as needy because of its TANF caseload plus its total or insured unemployment rate shall not trigger off until its rate falls below the original qualifying level
The contingency fund grant is based on the maximum cash benefit level for a family of 3 persons ( if the state has more than one maximum cash benefit level, the grant is based on the maximum benefit for the largest number of 3-person families) and is payable for TANF caseload increases above 5 percent. The grant equals the state's federal Medicaid matching rate times the benefit cost of an increase in the TANF family caseload above 5 percent in the most recently concluded 3-month period with data, compared with the corresponding period in either of the two most recent preceding fiscal years. A state's total contingency grant cannot exceed 10 percent of its family assistance grant. To receive a contingency fund grant, a state must have spent 70 percent of its TANF grants (excluding welfare-to-work funds from the Department of Labor). Unexpended balances are the total amount of TANF grants not yet spent by the state as of the end of the preceding fiscal year minus current year expenditures through the end of the most recent quarter that exceed the pro rata share of the current fiscal year TANF grant. The Committee bill repeals the fiscal penalty for failure of a state that receives contingency funds to maintain 100% of its historic spending level (MOE), but provides that a state shall not be eligible for a contingency fund grant unless its MOE spending equals 75% (80%, if it fails work participation rates).
Because state spending had to exceed 100% of the FY 1994 level in order for a state to access the contingency fund, states were unable to receive contingency funds during the recent economic downturn. The Committee bill would liberalize the contingency fund so that states are better able to draw down those dollars.
Section 107--Use of funds
The law permits states or tribes to use TANF funds received for any fiscal year for `assistance' in any later year, without fiscal year limitation. Regulations define assistance as ongoing aid for basic needs, plus supportive services such as child care and transportation for families who are not employed. Federally funded assistance to a given family is time-limited (60 months, with some hardship extensions allowed).
The Committee bill permits carryover of TANF funds granted to the state or tribe for any fiscal year to provide any benefit or service under the state or tribal TANF program without fiscal year limitation. The Committee bill also allows a state or tribe to designate a portion of the TANF grant as a contingency reserve, which may be used without fiscal year limitation, to provide any benefit or service. If the state or tribe designates reserve funds, it must include the amount in its annual report. The Committee bill deletes authority (Section 404(c)) for differential treatment of families moving into a state (which was invalidated by the U.S. Supreme Court in 1999). The Committee bill exempts marriage promotion grant funds from general rules (but not the administrative percentage cap) on use of TANF funds. The Committee bill restores transferability of TANF funds to SSBG to 10%.
The bill permits states to use TANF funds to establish an undergraduate 2- or 4-year degree postsecondary program or a vocational educational program for up to 10% of TANF families, under which the following services could be provided: child care, transportation, payment for books and supplies, other services provided under policies determined by the state to ensure coordination and lack of duplication. No TANF funds could be used for tuition under this program. Hours of participation in these programs would be countable toward meeting state work requirements. Students could also receive credit for hours spent in one of the nine `direct' work activities of current law or in work study, practicums, internships, clinical placements, laboratory or field work, or other activities that would enhance their employability, as determined by the state, or in study time (at the rate of not less than 1 hour for every hour of class time and not more than 2 hours for every hour of class time. Students' total time in education, core work, work study, laboratory or field work, study time, etc. would be countable against hours requirements. Also, students could be credited as one working family if, in addition to complying with the full-time educational participation requirements of their educational program, they engaged in one of the countable work activities above for at least the following number of hours: 6 hours weekly in the first year, 8 hours in the second year, 10 hours in the third year, and 12 hours in the fourth and any later year. For good cause, states could modify these hour requirements. To be eligible for these programs, recipients would be required to maintain satisfactory academic progress (as defined by the institution operating the program). With good cause exceptions, participants would be required to complete requirements of a degree or vocational educational training program within the normal time frame for full time students.
Currently, carry over funds can be spent only on cash assistance for basic ongoing needs (and some services for the unemployed). The Committee bill would allow carry over funds to be spent on any activity authorized under TANF, including child care. This provides additional flexibility for the states.
Additionally, the Committee bill would permit states to designate an amount of unused dollars in a contingency reserve fund. This clarifies that, while unspent, these funds have been earmarked for purposes associated with the legislation.
In addition, under an amendment offered by Senator Snowe, the bill allows states to create postsecondary education programs for TANF recipients, but caps the number of participants at 10 percent of the TANF caseload. The bill permits states to allow a subset of recipients to benefit from a postsecondary strategy while maintaining an overall work orientation. In doing so, the committee is using a Maine program (`Parents as Scholars') as a model.
Section 108--Repeal of federal loan for state welfare programs
The law provides a $1.7 billion revolving and interest-bearing federal loan fund for state TANF programs.
The Committee bill repeals the loan fund.
The fund did not function effectively.
Section 109--Work participation requirements
Participation standards
States must have a specified percentage of their adult recipients engaged in creditable work activities. Since FY 2002 the participation standard has been 50% for all families (and since FY 1999 it has been 90% for the two-parent component of the caseload). Participation standards are reduced by a caseload reduction credit (below). In tribal family assistance programs, work participation standards are set by the HHS Secretary, with the tribe's participation.
The Committee bill increases the all-family standard from the current 50% level to the following levels: FY 2005, 55%; FY 2006, 60%; FY 2007, 65%; and FY 2008 and thereafter, 70%. The Committee bill eliminates the separate rate for two parent families.
Currently, many states have an effective participation rate requirement of 0%. The Committee bill increases work participation requirements to move towards universal engagement policies under which States actively engage all welfare recipients in moving towards self sufficiency.
Calculation of participation rates
A state's monthly participation rate, expressed as a percentage, equals (a) the number of all recipient families in which an individual is engaged in work activities for the month, divided by (b) the number of recipient families with an adult recipient, but excluding families subject that month to a penalty for work refusal (provided they have not been penalized for more than 3 months), single-parent families with children under 1, if the state exempts them from work, and, at state option, families in tribal family assistance programs.
The Committee bill permits a state to exclude all families from work participation calculations during their first month of TANF assistance on a case by case basis and to exclude families with a child under age 1 (subject to a 12 month in a lifetime limit) from work requirements and calculations of work participation rates on a case-by-case basis.
This language recognizes that the initial assessment and development of a family self sufficiency plan takes some time, during which the family may not be participating in countable activities. In addition, it ensures that states receive credit for families with young children who are engaged in countable activities.
Caseload reduction credit
For each percent decline in the caseload from the FY 1995 level (not attributable to policy changes), the work participation standard is lowered by l percentage point). (In FY 2001, caseload reduction credits cut required work rates of 28 states to zero.)
The Committee bill replaces the current caseload reduction credit with an employment credit but permits states to phase in the replacement. In a separate provision, it places the same limits on the extent to which any employment, caseload reduction, or other credit could reduce a state's required participation rate. Under these limitations, credits could not exceed 40 percentage points for fiscal year 2004; 35 percentage points for fiscal year 2005; 30 percentage points for fiscal year 2006; 25 percentage points for fiscal year 2007; and 20 percentage points for fiscal year 2008 or thereafter.
PRWORA included a credit states could take for purposes of establishing their work participation rate based on a state's caseload reduction. Because caseloads have fallen so dramatically, many states now have an effective participation threshold of 0. The cap on the employment credit ensures that while policy priorities relative to encouraging states to work to move clients into good paying jobs are achieved, participation rates are not undermined by the credit.
Employment credit
No provision.
The Committee bill establishes a percentage point credit against the work participation standard (subject to the limits described immediately below). Essentially, the credit equals the percentage of TANF families in a fiscal year who leave ongoing cash assistance with a job. It is calculated by dividing (a) twice the quarterly average unduplicated number of families (excluding child-only families) that received TANF assistance during the preceding fiscal year but who ceased to receive TANF--and did not receive cash assistance from a separate state-funded program--for at least two consecutive months following case closure during the applicable period (most recent 4 quarters with data) and were employed during the calendar quarter immediately after leaving TANF by (b) the average monthly number of families (again excluding child-only families) who received cash payments under TANF during the preceding fiscal year. At state option, calculations could include in the numerator: (1) twice the quarterly average number of families that received non-recurring short term benefits rather than ongoing cash and who earned at least $1,000 in the quarter after receiving the benefit, and (2) twice the quarterly average number of families that included an adult who received substantial child care or transportation assistance. If both these options were taken, the denominator would be increased by twice the quarterly number of families that received non-recurring short-term benefits during the year and by twice the quarterly average number of families with an adult who received substantial child care or transportation assistance. In consultation with directors of state TANF programs, the Secretary is to define substantial child care or transportation assistance, specifying a threshold for each type of aid--a dollar value or a time duration. The definition is to take account of large one-time transition payments.
Extra credit--as 1.5 families--would be given to families whose earnings during the quarter after leaving the benefit rolls during the preceding fiscal year equaled at least 33 percent of the State's average wage.
Employment credits or caseload reduction credits or a combination of the two could not exceed 40 percentage points for fiscal year 2004; 35 percentage points for fiscal year 2005; 30 percentage points for fiscal year 2006; 25 percentage points for fiscal year 2007; and 20 percentage points for fiscal year 2008 or thereafter. (As a result, credits could not cut effective work participation rates below these floors: 10 percent for fiscal year 2004, 20 percent for fiscal year 2005; 30 percent for fiscal year 2006; 40 percent for fiscal year 2007, and 50 percent for fiscal year 2008 and thereafter.)
The Committee bill authorizes and requires the HHS Secretary to use information in the National Directory of New Hires to calculate State employment credits. If the TANF leaver's employer is not required to report new hires, the Secretary must use quarterly wage information submitted by the state. To calculate employment credits for families who received non-recurring short term benefits and for those who received substantial child care and transportation assistance, the Secretary is to use other required data. The Committee bill requires the Secretary by August 30 each year to determine--and to notify each state of--the amount of the employment credit that will be used in calculating participation rates for the immediately succeeding fiscal year.
The Committee bill sets October 1, 2005 as the effective date for replacement of the caseload reduction credit by the employment credit, but permits states to elect to have a one-year delay. If a state makes this choice, its adjusted work participation standard for fiscal year 2006 shall be determined by using both the caseload reduction credit and the employment credit (one-half credit for each).
The current caseload reduction credit contains a flawed incentive under which a State may receive credit toward the work participation requirements for families who leave assistance but do not become employed. The Committee bill substitutes an employment credit for families that leave assistance for gainful employment.
Work activities
The law lists 12 activities that can be credited toward meeting participation standards. Nine activities have priority status: unsubsidized jobs, subsidized private jobs, subsidized public jobs, work experience, on-the-job training; job search (6 weeks usual maximum, with no more than 4 consecutive weeks), community service, vocational educational training (12 month limit), and providing child care for TANF recipients in community service). Three non-priority activities are countable: job skills training directly related to employment; and (for high-school dropouts only) education directly related to work and completion of secondary school. The 6-week time limit on countable job search is doubled during high unemployment. No more than 30% of persons credited with work may consist of persons engaged in vocational educational training and teen parents without high school diplomas who are deemed to be engaged in work through education. In tribal family assistance programs, work activities are set by the HHS Secretary, with the tribe's participation.
The Committee bill lists 17 activities that can be credited toward meeting participation standards. It continues the current law list of 12 work activities (treating the 9 priority activities above as direct work activities) and lists five `qualified activities' that may be counted under certain conditions (see below). The qualified activities are postsecondary education, adult literacy programs or activities, substance abuse counseling or treatment, programs or activities designed to remove work barriers, as defined by the state, and work activities authorized under any waiver for any State that was continued under Section 415 before the date of enactment of PRIDE. The Committee bill deletes the requirement that only four consecutive weeks of job search can be counted within the normal 6 week limit. It doubles the permissible length of job search if the state meets the unemployment rate or increased food stamp caseload criteria for a `needy state' under the contingency fund definition. The Committee bill permits a state to define countable work activities for persons complying with a family self sufficiency plan and living in areas of Indian country or an Alaskan native village with high `joblessness.' To qualify for this option, the state must include in its TANF plan a description of its policies for these areas.
The Committee bill includes activities proposed to maintain all the flexibility of current law and adds new flexibility in countable activities. Expanding the list of allowable activities would permit states to provide up-front job preparedness for families who need specialized services. It would allow states to engage recipients in short-term `barrier removal' activities. Many states have such programs and some have done these under `waivers.' Hours in such activities would now count toward the federal participation standards.
Required work hours
Generally, to count toward the all-family rate, participation of 30 hours (20 hours in priority work activities) is required. For two-parent families the standard is 35 hours (30 in priority work activities), but increases to 55 hours (50 in priority activities) if the family receives federally-subsidized child care. For a single parent caring for a child under age 6, 20 hours of participation satisfies the standard. States may exempt single parents of children under age 1 from work and exclude them from the calculation of work participation rates. Teen parents are deemed to meet the weekly hour participation standard by maintaining satisfactory attendance in secondary school (or the equivalent in the month) or by participating in education directly related to employment for an average of 20 hours weekly. On one occasion per person, participation in job search for 3 or 4 days during a week must be treated as a week of participation.) In tribal family assistance programs, required work hours are set by the HHS Secretary, with the tribe's participation. [Note: except for teen parents, single parents with a child under 6, and participants in a tribal program with different hour requirements, families must work an average of at least 30 hours weekly to be counted as working.]
The Committee bill adopts a standard work week of 24 hours for a single parent with a child under age 6; 34 hours for a single parent with a child over 6; 39 hours for a two-parent family (but 55 hours for a two-parent family that receives federally funded child care). The calculation of weekly hour hours is made by dividing monthly hours of work by 4. Families meeting the standard are counted as 1.0 family in calculating the state's work participation rate. Extra credit is given for work by a single parent family (with or without a preschooler) above 34 hours and by two-parent families above their 39- and 55-hour standards. All schedules provide partial credit--provided sufficient hours are spent on direct work--for hours below the standard, as follows:
-------------------------------------------------------------------------------------------------------
Partial/full/extra work credit Single-parent family Two-parent family
Child under 6 No child under 6 With child care
-------------------------------------------------------------------------------------------------------
.675 of a family 20-23 hours 20-13 hours 26-29 hours 40-44 hours.
.75 of a family 24-29 hours 30-34 hours 45-50 hours.
.875 of a family 30-33 hours 35-38 hours 51-54 hours.
1.0 family 24-34 hours 34 hours 39 hours 55 hours.
1.05 family 35-37 hours 35-37 hours 40-42 hours 56-58 hours.
1.08 family 38+ hours 38+ hours 43+ hours 59+ hours.
-------------------------------------------------------------------------------------------------------
Generally, to receive any credit for hours at or below 24, a single-parent family must engage for all of these hours in one of the nine direct work activities--unsubsidized job, subsidized private job, subsidized public job, work experience, on-the-job training; job search and job readiness assistance, community service, vocational educational training, and providing child care for TANF recipients in community service. For work credit, a two-parent family generally must spend all hours at or below 34 weekly in a direct work activity (50 hours if the family receives federally funded child care and has no disabled member). However, for three months in any 24-month period, a state may give work credit for any hours spent in one of the five `qualified activities'--postsecondary education, adult literacy programs or activities, substance abuse counseling or treatment, programs or activities designed to remove work barriers, as defined by the state, and work activities authorized under any waiver for any state that was continued under section 415 before the date of enactment of PRIDE. In some cases a state may give work credit for a second three-month period (within the 24 month limit). Eligible for this period of extended time are persons whose family self-sufficiency plan requires engagement in one of three qualified rehabilitative services, namely, adult literacy programs or activities, participation in a program designed to increase proficiency in the English language, and substance abuse or mental health treatment. Total hours of their activity, including any core activities, must average 24 hours weekly. Once a family has reached the direct work hours threshold, it may receive credit for unlimited job search or vocational educational training or any of the five `qualified activities.'
Teen parents who maintain satisfactory secondary school attendance or participate in education directly related to work for an average of 20 hours weekly are deemed to count as 1 family. A single recipient caregiver who provides substantial ongoing care for a child or adult dependent with a physical or mental impairment may receive credit as engaged in work under certain conditions. Qualifying conditions include that the state must have determined that the child or adult dependent requires substantial ongoing care because of a verified impairment, that the parent or other caregiver is the most appropriate provider of the care, and that, in the month for which caregiving hours count as work, the recipient is in compliance with her self-sufficiency
plan. Further, the state TANF plan must set forth criteria for deeming the single parent providing care for a disabled child or dependent to be meeting all or part of that family's work requirements. The Committee bill retains the (30 percent) limitation on persons who may be credited with work by virtue of vocational educational training (for no more than 12 months) or (if teen parents) by high school attendance or work directly related to education. Excluded from the 30% cap are participants in the optional, limited 2- or 4-year post-secondary education program (Parents as Scholars), participants supplementing hours spent in core activities (e.g. for single parents, meeting the 24 hour per week in core activity requirement) with vocational education training and participation during the 3-month (or 6-month) period when states have the option to count expanded work activities under the bill.
The Committee bill recognizes that the success achieved by TANF and Work First programs are a result of a sustained emphasis on adult attachment to the workforce. The Committee bill attempts to build on the success of the past by increasing work and reducing the welfare rolls. Successes thus far come primarily from experiments and initiatives undertaken at the state level under waivers or TANF to move recipients from welfare-to-work. The Committee bill establishes clearly defined goals and benchmarks for hours of participation.
Under the Committee bill, states would have flexibility to engage single moms with pre-schoolers at fewer hours than the overall `standard' and to offset this by engaging others full time.
The Committee bill would expand the list of activities that count after a recipient has engaged in core work activities for 24 hours--allowing states to count `supplemental' hours spent in post-secondary education, vocational education beyond 1 year; and other education and barrier removal activities.
It would encourage states to provide post-employment activities, particularly education or additional job search, for working recipients to help recipients enhance their job skills and training to advance and leave welfare.
The Committee bill would provide a `Tiered Approach' to calculating hours of work activity counted towards meeting the participation rate.
`Partial credit' recognizes that some recipients might not meet the full-time standard; for example, persons in unsubsidized employment might be employed part-time or part of the month.
The Committee bill recognizes that parents who must engage in substantial, continuous care of a disabled child or family member are engaged in meaningful activity. States should work with these families to monitor their progress and development.
Section 110--Universal engagement and family self sufficiency plan requirements; other prohibitions and requirements
Universal engagement
State plan must require that a parent or caretaker engage in work (as defined by the state) after, at most, 24 months of assistance. (This requirement is not enforced by a specific penalty.)
The Committee bill deletes the 24-month work trigger provision. It requires that state plans outline how they intend to require parents or minor child head of household to engage in work or alternative sufficiency activities, as defined by the state--while observing the prohibition against penalizing work refusal by a single parent of a preschool child if the parent has a demonstrated inability to obtain needed child care for specified reasons. States may not exempt partially sanctioned families from the requirements of this section.
By requiring states to outline how they intend to engage in self-sufficiency efforts all TANF families--not just those included in the work participation rate--the Committee bill would promote movement of all families from dependence to self-sufficiency.
Family self-sufficiency plan requirements
Within 30 days, states must make an initial assessment of the skills, work experience, and employability of each recipient 18 or older or those who have not completed high school. States may, but need not, establish an individual responsibility plan for each family.
The Committee bill requires states to initiate screening and assessment, in a manner they deem appropriate, of the skills, work experience, education, work readiness, work barriers and employability of each adult or minor child head of household recipient who has attained age 18 or who has not completed high school and to assess, in a manner they deem appropriate, the work support and other assistance and family support services for which families are eligible and the well-being of the family's children and, where appropriate, activities or resources to improve their well being. The use of job search can be used as a form of assessment. Assessments and plans should be constantly updated and revised. States should use the experiences of participation to inform what future assessments and plan should include. The Committee bill requires states, in a manner they deem appropriate, to establish a self-sufficiency plan for each family. The Committee bill requires states to continually review and update a family's self sufficiency plan. Required plan contents: activities designed to assist the family achieve their maximum degree of self-sufficiency, requirement that the recipient participate in activities in accordance with the
plan, supportive services that the state intends to provide, steps to promote child well-being and, when appropriate, adolescent well-being, information about work support assistance for which the family may be eligible (such as food stamps, medicaid, SCHIP, federal or state funded child care, EITC, low-income home energy assistance, WIC, WIA program, and housing assistance). The state must monitor the participation of adults and minor child household heads in the self-sufficiency plans and regularly review the family's progress, using methods it deems appropriate, and revise the plan when appropriate. Before imposing a sanction against a recipient for failure to comply with a TANF rule or a requirement of the self-sufficiency plan, the state must, to the extent deemed appropriate by the state, review the plan and make a good faith effort (defined by the state) to consult with the family. States must comply with self-sufficiency plan requirements within 1 year after enactment (for families then receiving TANF). For families not enrolled on the date of enactment, the deadline for self-sufficiency plans is the later of: 60 days after the family first receives assistance on the basis of its most recent application, or 1 year after enactment. The Committee bill provides that nothing in the self-sufficiency plan subsection or amendments made by it shall be construed to establish a private right or cause of action against a state for failure to comply with the provisions or to limit claims that might be available under other federal or state laws. The General Accounting Office is required to submit a report to the Ways and Means and Finance Committees evaluating the implementation of the universal engagement provisions of the bill. See Section 111 (Penalties) below for penalty on failure to comply with self-sufficiency plan requirements.
States should provide a plan for every family on assistance and work with those families, even if the families are not able to participate fully in the work requirements. Additionally, the self sufficiency plan for each family should be a continually updated document as States monitor the progress of families receiving assistance. The Committee bill would require States to make families on assistance aware of additional work supports and assistance for which they are eligible.
Prohibitions and requirements
Transitional compliance for teen parents
The law makes an unmarried teenage parent (under age 18) ineligible for federally funded TANF assistance if she has a minor child at least 12 weeks old and no high school diploma unless she participates in a high school diploma program (or equivalent) or in an alternative educational or training program approved by the state. To receive TANF, she also must live with her child in an adult-supervised setting (a residence maintained by her parent, legal guardian, or other adult relative). If the teen parent has no available relative or guardian with whom to live, or if the state determines that the relative's home might be harmful, the state must provide, or assist the teen mother in locating, a second chance home, maternity home, or other appropriate adult-supervised living arrangement. TANF funds may be used to help operate second-chance homes.
The Committee bill would allow 60 days for a teen parent to comply with these requirements--permitting states to give federally funded TANF for up to 60 days to a teen parent not yet participating in education or training or not yet living in an adult-supervised arrangement. It also would add to allowable living arrangements transitional living youth projects funded under section 321 of the Runaway and Homeless Youth Act.
The Committee bill includes a `transitional compliance' period for minor parents, so that income-eligible minor parents who at the time of application are having trouble meeting the rules and eligibility conditions related to education and living arrangements (such as school dropouts and homeless youth) are brought into the program where they can get the case management they need to meet the requirements.
Section 111--Penalties against states
Failure to meet the fiscal maintenance of effort requirement
To receive a full TANF grant, state spending under all state programs in the previous year on behalf of TANF-eligible families (defined to include those ineligible because of the 5-year time limit or the federal ban on benefits to new immigrants) must equal at least 75% of the state's historic level (sum spent in FY1994 on AFDC and related programs). If a state fails work participation requirements, the required spending level rises to 80%. State expenditures that qualify for maintenance-of-effort credit are cash aid, child care, educational activities designed to increase self-sufficiency, job training, and work (but not generally available to non-TANF families) administrative costs (15% limit), child support collection passed through to the family without benefit reduction, and any other use of funds reasonably calculated to accomplish a TANF purpose.
The Committee bill extends the requirement that states maintain their own funding at 75 percent of its historic level (80% in case of failure to satisfy work standards) to cover FYs 2003 through 2009. It also specifies that a state's required MOE percentage for a given year is to be based on its meeting or failing the work requirement for the preceding fiscal year.
By basing the MOE requirement on the state's work performance in the preceding year, the Committee bill ensures that states know the MOE requirement they will need to meet at the start of the year.
Penalties for failure to comply with self-sufficiency plan requirements
No provision.
The Committee bill (in section 110) adds failure to comply with family self-sufficiency plan requirements to the penalty paragraph regarding failure to comply with minimum participation standards (see above for penalty schedule). For fiscal year 2005 and later, it provides that the penalty shall be based on the degree of substantial noncompliance. The Secretary must take into account factors such as the number or percentage of families for whom a plan is not established in a timely fashion, the duration of delays, whether the failure are isolated and nonrecurring, and the existence of systems to ensure establishment and monitoring of plans. The Secretary may reduce the penalty if the noncompliance is due to circumstances that made the state needy under the contingency fund definition or due to extraordinary circumstances such as a natural disaster or regional recession.
The Committee bill adds a penalty provision to enforce the new requirement that states develop family self-sufficiency plans for recipients, while stipulating that states will not be subject to penalty unless they are in substantial noncompliance with the law.
Section 112--Data collection and reporting
The law requires states to collect monthly, and report quarterly, disaggregated case record information (sample case record information may be used) about families who receive assistance under the state TANF program (except for information relating to activities carried out with welfare-to-work grants from the Department of Labor [DOL]). Required information includes ages of family members, size of family, employment status and earnings of the employed adult, marital status of adults, race and educational level of each adult and child, whether the family received subsidized housing, Medicaid, food stamps, or subsidized child care (and if the latter two, the amount). Also required are the number of hours per week that an adult participated in specified activities, information needed to calculate participation rates, type and amount of assistance received under TANF, unearned income received, and citizenship of family members.
Quarterly reports also must include the percentage of funds used for administrative costs or overhead, the total amount spent on programs for needy families, the number of noncustodial parents who participated in work activities, and the total amount spent on transitional services (with separate accounting for welfare-to-work grants). Quarterly reports also must provide the number of families and persons who received assistance each month and the total value of this assistance (with a breakdown for welfare-to-work grants). From a sample of closed cases, the report must provide the number of case closures attributed to employment, marriage, time limit sanction or state policy. The law requires the Secretary to submit annual reports to Congress that include state progress in meeting TANF objectives, demographic and financial characteristics of applicants, recipients, and ex-recipients, characteristics of each TANF-funded program, and trends in employment and earnings of needy families with children.
The Committee bill extends quarterly reporting requirements to cover families in MOE-funded separate state programs. It requires monthly reports from states on the TANF and separate state program caseload and annual reports from states on the characteristics of their state TANF program and their MOE separate state programs. Annual state reports must include names of programs, their activities and purpose, eligibility criteria, funding sources, number of beneficiaries, sanction policies, and work requirements, if any. The Committee bill qualifies the use of samples to provide disaggregated case record information, permitting the Secretary to designate core data elements that must be reported for all families. The Committee bill also changes some of the data elements required in the quarterly reports. For instance, it adds the race and educational level of each minor parent, deletes the educational level of each child, and adds the reason for receipt of assistance for a total of more than 60 months. It specifies that reported work experience be supervised. It also requires information needed to calculate progress toward universal engagement of each family, the date the family first received TANF, whether a self-sufficiency plan is established for the family; the marital status of the parents at the birth of each child in the family, and whether paternity has been established for those who were unwed. Quarterly reports must include information on families that became ineligible for assistance during the month, broken down by reason (earnings, changes in family composition that result in increased earnings, sanctions, time limits, or other specified reasons). The Committee bill requires the Secretary to prescribe regulations needed to collect data and to consult with the NGA, APHSA, and the National Conference of State Legislatures (as well as the Secretary of Labor) in defining data elements for required reports. The Committee bill changes the requirements for the Secretary's annual TANF reports to Congress by setting July 1 as the deadline, deleting the requirement for information about applicants and requiring that the report include information about separate state MOE programs. It requires states to report to the Secretary annually, beginning with FY2005, on achievement and improvement during the past fiscal year under the state's performance goals and measures.
The Committee bill extends quarterly reporting requirements to ensure consistent data reporting and monitoring of all qualified State programs. Annual reports on all TANF and MOE programs are needed to provide information (e.g., number of beneficiaries) that is not otherwise available on non-cash assistance programs. Designation of a few core data elements for universal reporting would facilitate performance measurement and accountability. These elements are already submitted by states as part of the High Performance Bonus data collection. Data elements that have been difficult for the TANF agency to collect and report, or are not used to any significant extent, would be dropped to reduce burden on state agencies. A few data elements would be added to monitor compliance with universal engagement requirements.
Section 113--Direct funding and administration by Indian tribes
The law earmarks some TANF funds--an amount equal to federal pre-TANF payments received by the state attributable to Indians--for administration by tribes with approved tribal
family assistance plans. It deducts these sums ($115 million in FY2003) from state TANF grants. It also appropriates $7.6 million annually for work and training activities (now known as Native Employment Works [NEW]) to tribes that operated a pre-TANF work and training program.
For FYs 2004-2008, the Committee bill reauthorizes tribal family assistance grants and grants for NEW programs. It establishes a tribal TANF improvement fund ($100 million authorized for each of 5 years) for the purpose of providing technical assistance to tribes and awarding competitive grants directly to tribes carrying out a tribal family assistance plan.
The 1996 welfare law permitted Indian tribes to receive direct Federal funding to operate cash welfare programs. The Committee bill continues that authority and creates a tribal TANF improvement fund. The fund is intended to encourage more tribes to exercise their option to operate TANF programs and to improve administration of programs already operating. The bill also continues funding for the Indian job training program known as NEW.
Section 114--Research, evaluations, and national studies
The 1996 welfare law required the HHS Secretary to conduct research on effects, costs, and benefits of state programs. It provides that the Secretary might help states develop innovative approaches to employing TANF recipients and increasing the well-being of their children and directed the Secretary to evaluate these innovative projects. For 6 years (FYs 1997 through 2002) it appropriated $15 million yearly, half for TANF research and novel approaches cited above and half for the federal share of state-initiated TANF studies and the completion and evaluation of pre-TANF waiver projects. (However, in subsequent appropriation acts, Congress has rescinded these provisions and appropriated research funds on a less prescriptive basis under Section 1110 of the Social Security Act--which deals with cooperative research and demonstration projects.) Section 413 of the Social Security Act also requires the Secretary to rank annually the states to which family assistance grants are paid, in the order of their placing recipients into long-term private sector jobs, reducing the overall welfare caseload, and (when a practicable calculation method becomes available) diverting persons from formally applying for TANF assistance.
The Committee bill appropriates $100 million yearly for FYs 2004 through 2008, of which 80% must be spent on marriage promotion activities (described in the section establishing marriage grants). It makes these funds available to the HHS Secretary for the purpose of conducting and supporting research and demonstration projects by public or private entities, and providing technical assistance to states, Indian tribal organization, and such other TANF grantees as the Secretary may specify. It authorizes the Secretary to conduct these studies and demonstrations directly or through grants, contracts, or interagency agreements. In addition, for 5 years (FYs 2004 through 2008) it extends the current law annual appropriation of $15 million and its designated 50-50 allocation).
The committee bill also would establish a demonstration program for up to 10 states to enhance or to provide for improved program integration coordination and delivery across various workforce and public assistance programs. Programs covered in the bill (`qualified programs') are TANF, Title XX social services block grant, and mandatory child care under Title IV of the Social Security Act. The head of a state entity or of a sub-state entity administering 2 or more qualified programs could apply to operate a demonstration. Provisions that could not be waived include any provision of law relating to civil rights or the prohibition of discrimination, purposes or goals of any program, maintenance of effort funding rules, health or safety, labor standards under the Fair Labor Standards Act, and environmental protection. A waiver could not be granted if it would waive any funding restriction or limitation in an appropriations Act, or if it would have the effect of transferring appropriated funds from one account to another. Child care funding can only be spent on child care. Applicants would be required to include a plan for evaluation to demonstrate the improved effectiveness of programs included. Approval would be required from the Secretary or Secretaries overseeing programs proposed under the demonstration.
Healthy marriages are critically important to the well-being of children, a point recognized in the purposes of the original TANF law. The TANF program works with families to help them overcome great difficulties and barriers, so they can become stronger and self-sufficient. One important way we can help many families is to help them build the skills and knowledge that will enable them to form and sustain healthy marriages.
There is much, however, that we do not yet know about how states and communities can effectively promote healthy marriages. The Secretary's Fund for Research Demonstrations and Technical Assistance serves several purposes. Just as current welfare to work programs are built on the foundation of considerable research and experience, the ability of states and communities to provide effective assistance to families in the future will depend on a strong base of research and examined experience.
This section would fund research on the operation and impact of various promising healthy marriage promotion services and strategies. Funds would also be used to support demonstration projects intended to examine how various comprehensive community based strategies and programs can help to promote the development and strength of healthy marriages.
Funds would be available for HHS to make technical assistance available to program operators, in particular, by helping states, tribes and local administrators learn from each other.
Effective service delivery is often inhibited by poor coordination and inefficiencies inherent to providing complementary services through different programs. Through these demonstrations, limited to the following three programs under the jurisdiction of the Senate Finance Committee: the Social Services Block Grant, The Temporary Assistance for Needy Families program and the mandatory child care funding, states could begin to explore ways to improve the quality of services for families.
Section 115--Study by the Census Bureau
The 1996 welfare law appropriated $10 million annually for 7 years (FYs 1996 through 2002) to expand the Survey of Income and Program Participation (SIPP) so as to obtain data with which to evaluate TANF's impact on a random national sample of recipients and, as appropriate, other low-income working families.
The Committee bill appropriates $10 million annually for FYs 2004 through 2008 for continued and enhanced study by the Census Bureau of TANF and other low-income families with children. The bill requires the Bureau to implement or enhance a longitudinal survey of program participation. It also requires the Commerce Secretary, using data from the survey, to submit two reports to congressional committees (House Ways and Means and Senate Finance Committees) on the well-being of children and families. The first report is due not later than 24 months, and the second one, not later than 60 months, after enactment of PRIDE. The bill specifies that where comparable measures of well-being exist in previous Census Bureau surveys, the reports must make appropriate comparisons and assess changes in the measures.
Reauthorization of TANF provides an opportunity to strengthen the SIPP and build upon the Census Bureau's federal-state partnership, linking state cross-program administrative data and survey data to meet the requirements in the enhanced SIPP to understand how low-income families are faring under TANF.
Section 116--Funding for child care
The 1996 welfare law created a mandatory child care block grant and appropriated $13.9 billion for it over 6 years ($2.7 billion for FY2002, the final year) and authorized $1 billion annually through FY2002 in discretionary funding under an expanded Child Care and Development Block Grant (CCDBG). FY2003 appropriations totaled $4.8 billion--$2.7 billion in mandatory funds and $2.1 billion in discretionary funds. (In addition, the welfare law permits states to transfer some TANF funds to the CCDBG.)
The Committee bill increases mandatory child care funding by $1 billion over five years, providing $2.9 billion annually. It also sets aside $10 million in mandatory child care funds for the Commonwealth of Puerto Rico.
The need for additional childcare resources to assist families.
Section 117--Definitions
The law does not define the term `assistance,' but regulations define it as cash, payments, vouchers, and other forms of benefits designed to meet a family's ongoing basic needs (food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses) plus supportive services such as transportation and child care provided to families who are not employed. It does not include nonrecurrent, short-term benefits that are not intended to meet recurrent or ongoing needs and will not extend beyond four months.
The Committee bill defines assistance to mean payment, by cash, voucher, or other means, to or for a person or family for the purpose of meeting a subsistence need (including food, clothing, shelter, and related items, but not including costs of transportation or child care) and not including a payment for a subsistence need made on a short-term, nonrecurring basis, as defined by the state in accordance with regulations prescribed by the HHS Secretary.
The Committee bill affirms the flexibility of states to provide assistance and services to low-income families, including temporarily unemployed families, and clarifies that rules tied to state spending on `assistance' will not apply to child care and other non-cash work support services provided to the unemployed.
Section 118--Responsible Fatherhood Program
No provision.
The Responsible Fatherhood Program would be added to the Social Security Act as a new Part C to Title IV. The Committee bill amends Title 1 of P.L. 104-193 which would make the responsible fatherhood program subject to the charitable choice provisions. The Committee bill also includes a list of findings with respect to the impact of fathers being absent from the home and the purposes of a responsible fatherhood program.
The Committee bill establishes four components for the responsible fatherhood program. It authorizes (1) a $20 million grant program for up to 10 eligible states to conduct demonstration programs; (2) a $30 million grant for eligible entities to conduct demonstration programs; (3) $5 million for a nationally recognized nonprofit fatherhood promotion organization to develop and promote a responsible fatherhood media campaign; and (4) a $20 million block grant to states for states to conduct responsible fatherhood media campaigns.
Grants to states to conduct demonstration programs
The Committee bill authorizes a $20 million appropriation that gives the HHS Secretary the authority to award grants to up to 10 eligible states to conduct demonstration programs that carry out the purposes described below. An eligible state is a state that submits to the Secretary an application for a grant, at such time, in such manner, and containing the information required by the Secretary. An eligible state must give the Secretary a state plan that describes the types of programs or activities that the state will fund under the grant, including a good faith estimate of the number and characteristics of clients to be served under the projects and how the state intends to achieve at least two of the purposes described below. The state plan also must include a description of how the state will coordinate and cooperate with state and local entities responsible for carrying out other programs that relate to the purposes intended to be achieved under the demonstration program, including as appropriate, entities responsible for carrying out jobs programs and programs serving children and families. In addition, the state plan must include an agreement to maintain such records, submit such reports, and cooperate with such reviews and audits as the Secretary finds necessary to provide oversight of the demonstration program.
The Committee bill requires the chief executive officer of the state to certify to the HHS Secretary that the state will use the demonstration funds to promote at least two of the purposes described below; the state will return any unused funds to the Secretary; and that the funds provided under the grant will be used for programs and activities that target low-income participants and that at least 50 percent of the participants in each program or activity funded must be parents of a child who is, or within the past 24 months has been, a recipient of assistance or services under a state program funded under Title IV-D or Title IV-A, foster care (Title IV-E), Medicaid (Title XIX), or food stamps; or parents, including an expectant parent or a married parent, whose income (after adjustment for court-ordered child support paid or received) does not exceed 150% of the poverty line. In addition, the chief executive officer of the state must certify to the Secretary that programs or activities funded under the demonstration grant will be provided with information about the prevention of domestic violence and that the state will consult with representatives of state and local domestic violence centers. The state must also certify that funds provided to the state for demonstration grants must not be used to supplement or supplant other federal, state, or local funds that are used to support programs or activities that are related to the purposes of the demonstration grants.
In determining which states to award responsible fatherhood demonstration grants, the HHS Secretary must attempt to achieve a balance among the eligible states with respect to the size, urban or rural location, and use of differing or unique methods of the entities that states intend to use to conduct the programs and activities funded by the demonstration grants. The Secretary must give priority to eligible states that have demonstrated progress in achieving at least one of the stated purposes through previous state initiatives or that have demonstrated need with respect to reducing the incidence of out-of-wedlock births or absent fathers in the state.
The Committee bill stipulates the purposes of the demonstration grants are to promote responsible fatherhood through (1) marriage promotion (through counseling, mentoring, disseminating information about the advantages of marriage and two-parent involvement for children, enhancing relationship skills, teaching how to control aggressive behavior, disseminating information on the causes of domestic violence and child abuse, marriage preparation programs, premarital counseling, skills-based marriage education, financial planning seminars, and divorce education and reduction programs, including mediation and counseling); (2) parenting activities (through counseling, mentoring, mediation, disseminating information about good parenting practices, skills-based parenting education, encouraging child support payments, and other methods); and (3) fostering economic stability of fathers (through work first services, job search, job training, subsidized employment, education, including career-advancing education, job retention, job enhancement, dissemination of employment materials, coordination with existing employment services such as welfare-to-work programs, referrals to local employment training initiatives, and other methods).
The Committee bill prohibits the use of responsible fatherhood demonstration grants for court proceedings on matters of child visitation or child custody, or legislative advocacy.
The Committee bill prohibits a state from being awarded a grant unless the state consults with experts of domestic violence or with relevant community domestic violence coalitions in developing programs or activities funded by the grant. The state also must describe in the grant application how the proposed programs or activities will address, as appropriate, issues of domestic violence and what the state will do, to the extent relevant, to ensure that participation in such programs or activities is voluntary and to inform potential participants that their involvement is voluntary.
The Committee bill requires that each eligible state that receives a grant must return any unused portion of the grant for a fiscal year back to the HHS Secretary not later than the last day of the second succeeding fiscal year, together with any earnings from interest on the unused portion. The Secretary is required to establish an appropriate procedure for redistributing to eligible states that have expended the entire amount of their grant for a fiscal year any amount that is returned to the Secretary by eligible states.
The Committee bill authorizes a $20 million appropriation for each of the fiscal years 2004 through 2008 for responsible fatherhood demonstration grants. The Committee bill stipulates that the amount of each responsible fatherhood demonstration grant awarded must be an amount sufficient to implement the state plan submitted by the state, subject to a minimum amount of $1 million per fiscal year in the case of the 50 states and the District of Columbia, and $500,000 in the case of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.
Grants to eligible entities to conduct demonstration programs
The Committee bill authorizes a $30 million appropriation that gives the HHS Secretary the authority to award grants to eligible entities to conduct demonstration programs that carry out the purposes described above. An eligible entity is a local government, local private agency, community-based or nonprofit organization, or private entity, including any charitable or faith-based organization that submits to the Secretary an application for a grant, at such time, in such manner, and containing the information required by the Secretary. An eligible entity must give the Secretary a description of the programs and activities that the entity will fund under the grant, including a good faith estimate of the number and characteristics of clients to be served under the projects and how the entity intends to achieve at least two of the purposes described above. The project description also must include a description of how the entity will coordinate and cooperate
with state and local entities responsible for carrying out other programs that relate to the purposes intended to be achieved under the demonstration program, including as appropriate, entities responsible for carrying out jobs programs and programs serving children and families. In addition, the project description must include an agreement to maintain such records, submit such reports, and cooperate with such reviews and audits as the Secretary finds necessary to provide oversight of the demonstration program.
The Committee bill requires a certification that the entity will use the demonstration funds to promote at least two of the purposes described above; the entity will return any unused funds to the Secretary; and that the funds provided under the grant will be used for programs and activities that target low-income participants and that at least 50 percent of the participants in each program or activity funded must be parents of a child who is, or within the past 24 months has been, a recipient of assistance or services under a state program funded under Title IV-D or Title IV-A, foster care (Title IV-E), Medicaid (Title XIX), or food stamps; or parents, including an expectant parent or a married parent, whose income (after adjustment for court-ordered child support paid or received) does not exceed 150% of the poverty line. In addition, the Committee bill requires a certification that the entity will consult with representatives of state and local domestic violence centers. The entity must also certify that funds provided to the state for demonstration grants must not be used to supplement or supplant other federal, state, or local funds provided to the entity that are used to support programs or activities that are related to the purposes of the demonstration grants.
In determining which entities to which to award responsible fatherhood demonstration grants, the HHS Secretary must attempt to achieve a balance among the eligible entities with respect to the size, urban or rural location, and use of differing or unique methods of the entities.
The Committee bill prohibits the use of responsible fatherhood demonstration grants awarded to entities for court proceedings on matters of child visitation or child custody, or legislative advocacy.
The Committee bill stipulates that the HHS Secretary may not award a grant to an eligible entity unless the entity, as a condition of receiving the grant, consults with experts in domestic violence or with relevant community domestic violence coalitions in developing the programs or activities funded by the grant; and describes in the grant application how the programs or activities will address issues of domestic violence and what the entity will do to ensure that participation in the programs or activities funded is voluntary and to inform potential participants that their involvement is voluntary.
The Committee bill requires that each eligible entity that receives a grant must return any unused portion of the grant for a fiscal year back to the HHS Secretary not later than the last day of the second succeeding fiscal year, together with any earnings from interest on the unused portion. The Secretary is required to establish an appropriate procedure for redistributing to eligible entities that have expended the entire amount of their grant for a fiscal year any amount that is returned to the Secretary by eligible entities.
The Committee bill authorizes a $30 million appropriation for each of the fiscal years 2004 through 2008 for responsible fatherhood demonstration grants to eligible entities.
National clearinghouse for responsible fatherhood programs
The Committee bill authorizes an appropriation of $5 million for the HHS Secretary to contract with a nationally recognized, nonprofit fatherhood promotion organization to (1) develop, promote and distribute to interested states, local governments, public agencies, and private entities a media campaign that encourages appropriate involvement of both parents in the life of their children (with an emphasis on responsible fatherhood); and (2) develop a national clearinghouse to assist states and communities in efforts to promote and support marriage and responsible fatherhood by collecting, evaluating, and making available (through the Internet and by other means) to other states information on state-sponsored media campaigns.
The Committee bill requires the HHS Secretary to ensure that the selected nationally recognized nonprofit fatherhood promotion organization coordinate the media campaign and national clearinghouse that are developed with grant funds with a national, state, or local domestic violence program.
The nationally recognized nonprofit fatherhood promotion organization must have at least four years of experience in designing and disseminating a national public education campaign, and in providing consultation and training to community-based organizations interested in implementing fatherhood programs.
The Committee bill authorizes a $5 million appropriation for each of the fiscal years 2004 through 2008 to establish a national clearinghouse for responsible fatherhood programs.
Block grants to states to encourage media campaigns
The Committee bill authorizes the HHS Secretary to provide a $20 million block grant to states for media campaigns for each of the fiscal years 2004 through 2008.
Not later than October 1 of each of the fiscal years for which a state wants to receive an allotment of block grant funds, the Committee bill requires the chief executive officer of the state to certify to the HHS Secretary that the state will use grant funds to promote the formation and maintenance of married two-parent families, strengthen fragile families, and promote responsible fatherhood through media campaigns. The executive officer also must certify that the state will return any unused funds to the Secretary and comply with the stipulated reporting requirements.
States have the option of establishing media campaigns via radio or television, air-time challenge programs (under which the state may purchase air time only if it obtains non-federal contributions to purchase additional similar air time), or through the distribution of printed or other advertisements. A state may administer media campaigns directly or through grants, contracts, or cooperative agreements with public agencies, local governments, or private entities (including charitable and faith-based organizations). In developing broadcast and printed advertisements for media campaigns, the state or other entity administering the campaign must consult with representative of state and local domestic violence centers. The Committee bill defines broadcast advertisement, child at risk, poverty line, printed or other advertisement, state, and young child.
Each state's allotment is based on its proportion of poor children in the nation, and its portion of children under age 5 in the nation. Each state and the District of Columbia would receive no less than the minimum allotment of $200,000; Guam, Puerto Rico, the Virgin Islands, American Samoa, and the Northern Mariana Islands would receive no less than $100,000 per year for FY2004-2008.
The Committee bill requires that each eligible entity that receives a grant must return any unused portion of the grant for a fiscal year back to the HHS Secretary not later than the last day of the second succeeding fiscal year, together with any earnings from interest on the unused portion. The Secretary is required to establish an appropriate procedure for redistributing to states that have expended the entire amount of their grant for a fiscal year any amount that is returned to the Secretary by states, or not allotted to states because the state did not submit a certification by October 1 of a fiscal year.
The Committee bill requires each state that receives an allotment to monitor and evaluate the media campaigns conducted using the allotted grant funds and submit an annual report to the Secretary at such time, in such manner, and containing such information as the Secretary may require.
The Committee bill authorizes the HHS Secretary to provide a $20 million block grant to states for media campaigns for each of the fiscal years 2004 through 2008. The Secretary must conduct an evaluation of the impact of the media campaigns and report to Congress the results of the evaluation no later than December 31, 2006. The Committee bill authorizes a $1 million appropriation for FY2004 to conduct the evaluation (the evaluation funding is to remain available until expended).
Children do better academically, emotionally and socially when raised by their married biological parents. This provision in the bill provides states and faith based and community organizations and local governments with resources to find innovative ways to promote responsible fatherhood through marriage promotion and divorce reduction, parenting skill building, and where appropriate, expanded opportunities for strengthening the employment opportunities of low-income fathers. The provision is targeted on families, many of whom are unmarried at the time of the birth of their child, who have received TANF, Food Stamps or Medicaid Services or who have incomes below 150% of poverty. The provision requires all grantees to ensure that program participation is voluntary and that domestic violence experts and coalitions are consulted.
Section 119--Additional grants
No provision in TANF law.
The Committee bill authorizes appropriation of $40 million for each of FYs 2004-2008 for grants to be made by the HHS Secretary to entities for the purpose of capitalizing and developing the role of sustainable social services that are critical to the success of moving TANF recipients to work. Applicants would be required to describe the capitalization strategy they intend to follow to develop a program that generates its own source of on-going revenue while assisting TANF recipients. Administrative costs could not exceed 15 percent (except for computerization and information technology needed for tracking or monitoring required by TANF), but none of the other statutory rules regarding use of TANF funds would apply. The Committee bill requires the Secretary to conduct an evaluation of the programs developed by these grants.
The bill also authorizes appropriation of $25 million for each of FYs 2004-2009 for grants for low-income car ownership. The purposes are to improve employment opportunities of low-income families and provide incentives to states, Indian tribes, localities, and nonprofit groups to develop and administer programs that promote car ownership by low-income families. No more than 5% of the funds could be used for administrative costs of the Secretary in carrying out this program.
These provisions would support efforts to develop the role of self-sustainable social services and would help families have reliable means of getting to and from employment.
Section 120--Technical corrections
Section 201--Extension of Abstinence Education Program
The law appropriated $50 million annually for FYs 1998-2002 for matching grants to states to provide abstinence education and, at state option, mentoring, counseling, and adult supervision to promote abstinence from sexual activity, with a focus on groups that are most likely to bear children out-of-wedlock. Funding was extended through March 31, 2004 by continuing appropriations. Funds must be requested by states when they apply for Maternal and Child Health (MUCH) block grant funds and must be used exclusively for the teaching of abstinence. States must match every $4 in federal funds with $3 in state funds.
The Committee bill appropriates $50 million annually for the program through fiscal year 2008. Moreover, the Committee bill allows unrequested abstinence education funds to be reallocated among the states with abstinence education programs instead of being returned to the U.S. Treasury.
The Committee bill continues the program with no change, but allows unrequested funds to be reallocated among the states with abstinence education programs. This will allow states that want to provide abstinence education with more access to funding.
Section 301--Distribution of child support collected by states on behalf of children receiving certain welfare benefits
Assignment of child support rights
In order to receive benefits TANF recipients must assign their child support rights to the state. The assignment covers any unpaid child support that accrues while the family receives TANF and any support that accrued before the family began receiving TANF.
Any assignment of rights to unpaid child support that was in effect on Sept. 30, 1997 must remain in effect. This means that any child support collected as a result of the assignment must go the state and the federal government.
The Committee bill stipulates that the assignment covers only child support that accrues during the period that the family receives TANF. (In other words, pre-assistance arrearages would be eliminated). In addition, the Committee bill gives states the option to discontinue assignments in effect on Sept. 30, 1997. If a state chooses to discontinue the child support assignment, the state may distribute collections from such assignment to the family. States also would have the option to discontinue pre-assistance arrearage assignments in effect after September 30, 1997 and before the implementation date of this provision. If a state chooses to discontinue the child support assignment, the state may distribute collections from such assignment to the family.
The Committee bill would support family self-sufficiency by allowing families to keep more of the child support collected on their behalf. It would also prevent TANF families from losing access to lump sum collections of past-due pre-assistance support that may help them exit TANF.
Distribution of child support to TANF families
While the family receives TANF benefits, the state is permitted to retain any current child support payments and any assigned arrearages it collects up to the cumulative amount of TANF benefits which has been paid to the family. In other words, the state can decide how much, if any, of the state share (some, all, none) of the child support payment collected on behalf of TANF families to send to the family. The state is required to pay the federal government the federal share of the child support collected.
Child support payments collected on behalf of TANF families that are passed through to the family and disregarded by the state count toward the TANF MOE (maintenance of effort) expenditure requirement.
For families who receive assistance from the State (which would include TANF or foster care) the Committee bill requires the federal government to waive its share of child support collections passed through to TANF families by the state and disregarded by the State up to an amount equal to $400 per month in the case of a family with one child, and up to $600 per month in the case of a family with two or more children. Like current law, disregarded pass through amounts count as TANF MOE expenditures.
The Committee bill includes a provision that allows states with section 1115 demonstration waivers (on or before October 1, 1997) related to the child support pass-through provisions to continue to pass through payments to families in accordance with the terms of the waiver.
The Committee bill promotes family self-sufficiency by providing an incentive for States to allow families to keep more of the child support collected on their behalf. No such incentive currently exists. This option would also allow noncustodial parents who pay child support to know that their support payments are being received by their children.
Distribution of child support to former TANF families
With respect to former TANF families: Current child support payments must be paid to the family. Since October 1, 1997, child support arrearages that accrue after the family leaves TANF also are required to be paid to the family before any monies may be retained by the State. Further since October 1, 2000, child support arrearages that accrued before the family began receiving TANF also are required to be distributed to the family first.
However, if child support arrearages are collected through the federal income tax refund offset program, the family does not have first claim on the arrearage payments. Such arrearage payments are retained by the state and the federal government.
As mentioned above, the Committee bill eliminates the assignment of pre-assistance arrearages. The Committee bill also eliminates the special treatment of child support arrearages collected through the federal income tax refund offset program. Such collections also would go the family first.
To the extent that the arrearage amount payable to a former TANF family in any given month under the Committee bill exceeds the amount that would have been payable to the family under current law, the state can elect to have the amount paid to the family considered an expenditure for Maintenance-of-Effort (MOE) purposes. In addition, the Committee bill amends the Child Support Enforcement State Plan to include an election by the state to include whether it is using the new option to pass through all arrearage payments to former TANF families without paying the federal government its share of such collections or whether it chooses to maintain the current law distribution method. Further, the Committee bill stipulates that no later than 6 months after the date of enactment of this legislation, the HHS Secretary, in consultation with the states, must establish the procedures to be used to make estimates of excess costs associated with the new funding option.
The Committee bill supports self-sufficiency by providing former TANF families with more of the child support collected on their behalf, regardless of how it is collected. It allows states to use the federal tax refund offset remedy to get more collections to families. Providing MOE for additional money to families provides further incentive for states to exercise this option and is consistent with MOE policy on the pass through of child support collections to current TANF families.
Distribution of child support to families that never received assistance
The entire amount of the child support collection is distributed to families that never received TANF assistance.
Same as current law.
No change
Distribution of child support to families under certain agreements
In the case of a family receiving TANF assistance from an Indian tribe or tribal organization, the child support collection is to be distributed according to the cooperative agreement specified in the Child Support Enforcement State Plan.
Same as current law.
No change.
Effective date
Not applicable.
The amendments made by this section of the bill would take effect on October 1, 2007, and would apply to payments under parts A and D of Title IV of the Social Security Act for calendar quarters beginning on or after such date. States could elect to have the amendments take effect earlier--at any date that is after enactment of the bill and before October 1, 2007.
This effective date will allow states sufficient time to implement required and optional changes in child support distribution and assignment, while also allowing states to choose to proceed more quickly.
Section 302--Mandatory review and adjustment of child support orders for families receiving TANF
Federal law requires that the state have procedures under which every 3 years the state review and adjust (if appropriate) child support orders at the request of either parent, and that in the case of TANF families, the State review and update (if appropriate) child support orders at the request of the state Child Support Enforcement (CSE) agency or of either parent.
The Committee bill requires states to review and, if appropriate, adjust child support orders in TANF cases every 3 years. The provision would take effect on October 1, 2005.
The mandatory review and, if necessary, modification of child support orders will make award amounts more appropriate. In some cases this will increase the amount of payment required, which will in turn increase collections, and in other cases it will reduce the amount of payment required, therefore limiting the accumulation of uncollectible arrears.
Section 303--Report on undistributed child support payments
No provision.
The Committee bill requires that within 6 months of enactment, the HHS Secretary must submit to the House Ways and Means Committee and the Senate Finance Committee a report on the procedures states use to locate custodial parents for whom child support has been collected but not yet distributed. The report must include an estimate of the total amount of undistributed child support and the average length of time it takes undistributed child support to be distributed. To the extent that the HHS Secretary deems appropriate, the report would be required to include recommendations as to whether additional procedures should be established at the state or federal level to expedite the payment of undistributed child support.
Undistributed collections are a significant new issue that merits further analysis and may require further state or federal action in order to ensure that families are receiving the support paid on their behalf, as appropriate.
Section 304--Use of new hire information to assist in administration of unemployment compensation programs
Federal law requires all employers in the nation to report basic information on every newly-hired employee to the state. States are then required to collect all this information in the State Directory of New Hires, to use this information to locate noncustodial parents who owe child support and to send a wage withholding order to their employer, and to (within 3 business days) report all information in their State Directory of New Hires to the National Directory of New Hires. Information in the State Directory of New Hires is used by State Employment Security Agencies (the agency that operates the State Unemployment Compensation program) to match against unemployment compensation records to determine whether people drawing unemployment compensation benefits are actually working. (Note that states currently have access to the new hire information only in their own state.)
The Committee bill authorizes State Employment Security Agencies (which are responsible for administering the Unemployment Compensation program) to request and receive information from the National Directory of New Hires (which includes information from all of the state directories as well as federal employers) via the HHS Secretary in order to help detect fraud in the unemployment compensation system.
The Committee bill requires state agencies to have in effect data security and control policies that the HHS Secretary finds adequate to ensure the security of the information and to ensure that access to such information is restricted to authorized persons for purposes of authorized uses and disclosures. An officer or employee of a state agency who fails to comply with security requirements would be subject to current law penalties related to misuse of information. The Committee bill requires the Secretary to establish uniform procedures that govern information requests and data matching. The Committee bill requires the state agency to reimburse the HHS Secretary for cost incurred by the Secretary in furnishing requested information.
The provision would take effect on October 1, 2004.
The Committee bill will improve the Unemployment Compensation Program by allowing State Employment Security Agencies to determine whether people drawing unemployment compensation benefits are actually working in another state or for the federal government. Current data matches do not allow SESAs to identify this kind of employment.
Section 305--Decrease in amount of child support arrearage triggering passport denial
Federal law stipulates that the HHS Secretary is required to submit to the Secretary of State the names of noncustodial parents who have been certified by the state CSE agency as owing more than $5,000 in past-due child support. The Secretary of State has authority to deny, revoke, restrict, or limit passports to noncustodial parents whose child support arrearages exceed $5,000.
The Committee bill authorizes the denial, revocation, or restriction of passports to noncustodial parents whose child support arrearages exceed $2,500, rather than $5,000 as under current law. The provision would take effect on October 1, 2004.
This provision will increase the success of the passport denial program and provide more collections to families. Fewer arrears will have to build up before this effective enforcement tool can be utilized.
Section 306--Use of tax refund intercept program to collect past-due child support on behalf of children who are not minors
Federal law prohibits the use of the federal income tax offset program to recover past-due child support on behalf of non-welfare cases in which the child is not a minor, unless the child was determined disabled while he or she was a minor and for whom the child support order is still in effect. (Since its enactment in 1981 (P.L. 97-35), the federal income tax offset program has been used to collect child support arrearages on behalf of welfare families regardless of whether the children were still minors--as long as the child support order was in effect.)
The Committee bill permits the federal income tax refund offset program to be used to collect arrearages on behalf of non-welfare children who are no longer minors. The provision would take effect on October 1, 2005.
This will increase support to families by removing a barrier to collecting past due child support on behalf of children who are no longer minors.
Section 307--Garnishment of compensation paid to veterans for service-connected disabilities in order to enforce child support obligations
The disability compensation benefits of veterans are treated differently than most forms of government payment for purposes of paying child support. Whereas most government payments are subject to being automatically withheld to pay child support, veterans disability compensation is not subject to intercept. The only exception occurs when veterans have elected to forego some of their retirement pay in order to collect additional disability payments. The advantage of veterans replacing retirement pay with disability pay is that the disability pay is not subject to taxation. With this exception, which occurs rarely, the only way to obtain child support payments from veterans' disability compensation is to request that the Secretary of the Veterans Administration intercept the disability compensation and make the child support payments.
The Committee bill allows veterans' disability compensation benefits to be intercepted (withheld) and paid on a routine basis to the custodial parent if the veteran is in arrears on child support payments. This provision prohibits the garnishment of any veteran's disability compensation in order to collect alimony, unless that disability compensation is being paid because retirement benefits are being waived. The provision would take effect on October 1, 2005.
This proposal will provide more child support collections to families of veterans and make the child support intercept of veterans's disability payments more consistent with other forms of government payment.
Section 308--Improving federal debt collection practices
Federal law stipulates that any federal agency that is owed a nontax debt (that is more than 180 days past-due) may notify the Secretary