• Mission & Governance
• Services Overview
• How to Get Involved
• Standing Committees
• NCSL Foundation

• Issue Areas: A-Z
• State-Federal Relations
• NCSL Standing Committees
• News from D.C. and the States

• About State Legislatures
• Elections, Campaigns & Redistricting
• NCSL's StateConnect Directory
• Web Sites

• Online Guide to NCSL Services
• Staff Sections and Networks
• Meetings & Professional Development
• Staff Directories

• Meetings Calendar
• Online Registration
• Meetings Home Page
• Legislative Summit

• Bookstore
• State Legislatures Magazine
• NCSL's StateConnect Directory

Welfare Reform Reauthorization: NCSL bill summary of the " The Next Step in Reforming Welfare Act", H.R. 3625, as introduced by Representative Ben Cardin (D-MD) (Adobe Acrobat Required to access pdf version of bill summary)

Human Services Committee Bill Summary H.R. 3625

H.R. 3625
The Next Step in Reforming Welfare Act
Sponsors: Representative Cardin (D-MD)
Cosponsors: Representatives Stark (D-CA), Levin (D-MI), McDermott (D-WA), & Doggett (D-TX)

H.R. 3625, a welfare reform reauthorization proposal introduced in the House on January 24, 2002, by Representative Ben Cardin, is the proposal of Democrats on the Human Resources Subcommittee of the House Committee on Ways on Means. It reauthorizes the Temporary Assistance to Needy Families program from FY 2003-2007.

Section 101: The bill continues the TANF grants (states' Family Assistance Grants) through 2007. The bill adds an inflationary increase to the block grant to match the increase of Consumer Price Index.

Section 102: The High Performance Bonus fund is continued with funding of $200 million a year 2007.

Section 103: TANF supplemental grants are also continued through 2007 at the level of $319 million a year. These grants were part of the original TANF program, but expired at the end of FY 2001. They were continued for FY 2002 as part of the economic stimulus package.

Section 104: The bill provides additional grants for states with low federal funding per poor child. States would be given these grants when their total TANF allocation divided by the number of poor children below the poverty level is less than 75% of the national average of TANF funding per poor child. The grants for FY 2003 would be based on a state's TANF grant for FY 2002. The funding a state received in any of the FYs 2004 through 2007 would be based on any prior year after FY 02. Grants would be used to meet any purpose of the TANF program. A total of $1 billion over five years would be available for this purpose.

Section 105: The bill continues the $2 billion contingency fund that was part of the original TANF program, expired in FY 2001, and was continued in FY 2002 as part of the economic stimulus package. It does make changes to the Maintenance of Effort (MOE) requirements for states accessing the fund and the "triggers" which make states eligible to access it. Rather than having a 100% MOE requirement, the Cardin bill calls for MOE in the amount of a state's requirement for its TANF grant.

Congressman Cardin's bill also calls for changes in the Contingency Fund's "triggers," or conditions under which a state could access it. One change would be to the unemployment trigger. If the seasonally adjusted rate of total unemployment in the state increased by 1.5% over the most recent three years for which data is available, or there was a 50% increase over the corresponding three-month period in the preceding fiscal year, a state could access the fund. Another change concerns the Food Stamp test. State would be eligible to access the fund if the monthly average number of households participating in the program for the recent three-month period exceeded the monthly average number of households that participated in the program in the corresponding three- month period in the previous year.

Any monthly payment during a fiscal year could not exceed 20% of the state family assistance grant.

Section 201: The Cardin bill would add a fifth purpose to the existing four purposes of the TANF program, "reduce the extent and severity of poverty and promote self-sufficiency among families with children."

Section 202: Congressman Cardin would provide child poverty reduction bonuses to reward states that reduce child poverty. A state would demonstrate that it had reduced child poverty and that the average depth of child poverty did not increase. $150,000,000 would be available for these grants. Awards would be calculated based on the state's share of children under 18.

Section 203: The bill requires a review and conciliation process requirement. It prohibits a state from imposing a sanction on a recipient unless the states has attempted at least twice, using two different methods, to notify the recipients about the sanction and the steps required to come into compliance, and has afforded the recipient an opportunity to meet with a caseworker or other person in authority to explain the lack of compliance. The caseworker is specifically required to consider whether conditions including physical or mental disabilities, domestic violence or limited proficiency in English contributed to the noncompliance and to used screening tools to see if those conditions exist. There is a penalty of 5% of the TANF grant for a state found to violate this process.

Section 204: The caseload reduction credit in existing law is replaced by an employment credit. The bill would reduce the minimum work participation rate by the number of percentage points in the employment credit. The credit would equal twice the number of families that ceased to receive cash TANF payments and had earnings divided by the average monthly number of families receiving TANF grants. The period in which the earnings would occur is the third quarter of the preceding fiscal year and the baseline period is the first quarter of the preceding fiscal year. A family earning more than 33% of the state's average wage, the family would be counted as 1.5 families. If a state's previous minimum work participation rate was less than 50% before the law, the applicable rate would be the lesser of 10 % points greater than the rate calculated using the employment credit or 50%.

Section 505: H.R. 3625 restores funding for the Social Services Block Grant to $2.8 billion for fiscal year 2003 and each succeeding fiscal year.

Section 301: The bill clarifies that wage subsidies are not assistance and do not count toward the 5 year time limit.

Section 302: Congressman Cardin proposes to increase the entitlement funding of the Child Care and Development Block Grant (CCDF), which is now $2.7 billion. His bill authorizes the following amounts:

• FY 03-- $3,967,000,000
• FY 04-- $4,467,000,000
• FY 05-- $4,967,000,000
• FY 06-- $5,467,000,000
• FY 07-- $5,967,000,000

The bill also increases the child care quality set aside from 4% to 12% and makes a state or local health and safety standards that apply to CCDF-funded child care apply to TANF-funded child care. In addition, the bill would extend protection for individuals who cannot comply with work requirements due to lack of childcare to those with children up to age 13, not under 6 as in present law.

Section 303: The bill would provide competitive grants to improve access to human services programs including TANF, Food Stamps, Medicaid, SCHIP, CCDF, child support, the federal EITC, LIHEAP, EITC, and WIA. The Secretary of Health and Human Services would award grants to states and counties to pay the federal share of the cost of improving program administration of programs supporting low income families with children. These grants would require a 20% match. The funds would be used for such activities as simplifying applications and creating uniformity in program applications. Grants to non-profits and localities would be used for activities such as promoting participation in programs supporting low income families with children and distributing information about and developing service centers for such programs. The legislation authorizes $500,000,000 for these grants for FYs 2003-2007.

A final provision in this section of the bill requires state agencies administering the TANF program to make an initial assessment of the skills, prior work experience and circumstances related to the employability of the each head of household receiving assistance including physical or mental impairments, proficiency in English, child care needs and whether the recipient is a victim violence.

Section 401: The bill would require states as part of their state plan to establish goals and take action to improve initial earnings, job advancement, and employment retention for individuals in and individuals leaving the program and submit information about these employment advancement goals and actions.

Section 402: The bill establishes an employment advancement fund. The bill establishes a program of grants to states that would focus in improving wages for low-income workers (through training and other services) and enhancing employment prospects for welfare recipients with certain barriers (such as a disability or limited proficiency in English). The authorization for this program would be $150,000,000 for FYs 2003-2007.

Section 403: The bill removes the present limit on the number of TANF recipients (currently 30%) enrolled in vocation education or high school who may be counted towards the work participation requirement.

Section 404: The bill would allow states to count up to two years of vocational and educational training as work activity. Presently, only one year can count.

Section 405: The bill would allow states to count in the state's work participation rate rehabilitation services designed to improve future employment activities such as substance abuse treatment, rehabilitation services, or domestic violence counseling for up to six months.

Section 406: The bill would allow states to use TANF funds carried over from previous years to fund non-assistance benefits and services.

Section 501: The bill would establish a Family Formation Fund by reallocating the $100,000,000 out-of-wedlock reduction bonus fund. The funding would be for fiscal years 2003 and 2007. Grants would go to states and localities for research, technical assistance and demonstration projects to promote and fund best practices to promote two-parent families, to reduce teen pregnancies and to increase the ability of non-custodial parents to financially support and be involved with their children. The bill provides that not less than 30 percent of the funds go to each of the three areas in a fiscal year.

Section 502: This provision of the bill modifies the rule requiring assignment of support rights as a condition of receiving assistance to cover just that amount of support that accrues during the period in which the family is on assistance, not to exceed the amount paid out to the family in assistance.

The bill would provide federal cost-sharing if a state chooses to pass through child support to a family on TANF for less than 5 years. The bill requires that states pay families formerly on assistance the amounts collected to cover current and past due support, and provides federal cost sharing if the state passes through the entire amount of assistance to families not on assistance.

The bill would prohibit states from using the child support program to recover the Medicaid costs of the birth of a child.

The bill also gives states the option to discontinue assignments of child support in effect upon the passage of PRWORA.

Section 503: The bill eliminates the separate work participation requirement for two-parent families. It would be conformed to existing two-parent requirement of 50%.

Section 504: The bill would prohibit states from imposing stricter eligibility requirements for a two-parent family than a single-parent family. A state could pass a law to allow it to "opt out" from this provision. Violating this provision would result in a penalty of 5% of a state's TANF grant.

Section 601: The bill removes the ban on states serving legal immigrants with TANF funds during their first five years in this country. The sponsor's income would be deemed available to the non-citizen for the first three years. Participation in an English-as-a-second-language program would count toward the federal work participation requirement for 10 of the 30 hours required, just as education leading to employment counts under present law.

Section 602: The bill would restore eligibility to legal immigrants for the Supplemental Security Income (SSI) program with a requirement that their sponsor's income be deemed for their first three years in the United States.

Section 603: The provisions regarding legal immigrants would take effect on October 1, 2002.

Section 701: The bill adjusts states' Maintenance of Effort (MOE) requirement by inflation

Section 702: States would be prohibited from using federal TANF funds to replace state funding in programs not counted toward state MOE. A penalty of 5% of the TANF grant would be imposed for violating this prohibition.

Section 801: The bill would continue the funding provided to HHS for TANF-related evaluation and research at $15 million per year.

Section 802: HHS would be required to conduct longitudinal studies to track the employment and earnings status of TANF leavers over three years.

Section 803: States would be required to include information about the physical or mental disability status of the head of a TANF household in their state report.

Section 804: The bill would require that the Annual Report to Congress on the TANF program include information about separate state programs, including the number of individuals served by the program and whether the individuals are served by TANF or MOE funds, and the eligibility criteria for participation in the program.

Section 805: The bill requires that the Secretary of Human Services, in consultation with the states and policy experts, draw up a list of reasons why recipients leave the TANF program. The reason a recipient leaves the program would become part of the data included in the quarterly state reports.

Section 806: Within six months of the passage of this bill, HHS would have to establish a standardized format that states would be required to use to submit their state plans.

The bill's effective date would be October 1, 2002. A delay in implementing the bill's provisions would be permitted if HHS determines that a state plan requires state legislation, other than appropriating funds, until after the close of a state's legislative session.