|
|
|
|
|
Gregory Meeks (D-NY) |
Melvin Watt (D-NC) |
Chaka Fattah (D-PA) |
|
|
 |
|
| Emanuel Cleaver, II (D-MO) | Donna L. Christensen (D-VI) |
Artur Davis (D-AL) |
|
|
 |
|
| Barbara Lee (D-CA) | Sheila Jackson-Lee (D-TX) | Corrine Brown (D-FL) |
 |
 |
|
| Laura Richardson (D-CA) | Eddie Bernice Johnson (D-TX) | Carolyn C. Kilpatrick (D-MI) |
 |
 |
 |
| Elijah Cummings (D-MD) | Maxine Walters (D-CA) | Charlie Rangel (D-NY) |
|
|
|
 |
| Donald Payne (D-NJ) | Hank Johnson (D-GA) | William Lacy Clay (D-MO) |
|
|
|
|
| Al Green (D-TX) | Edolphus Towns (D-NY) | Robert C. Scott (D-VA) |
|
|
|
 |
| Bobby L. Rush (D-IL) | G. K Butterfield (D-NC) | Sanford D. Bishop, Jr. (D-GA) |
|
|
|
 |
|
Gwen Moore (D-WI) |
André Carson (D-IN) |
Bennie G. Thompson (D-MS) |
Mr. DAVIS of Illinois (for himself, Mr. MEEKS of New York, Mr. WATT, Mr. FATTAH, Mr. CLEAVER, Mrs. CHRISTENSEN, Mr. DAVIS of Alabama, Ms. LEE of California, Ms. JACKSON-LEE of Texas, Ms. CORRINE BROWN of Florida, Ms. RICHARDSON, Ms. EDDIE BERNICE JOHNSON of Texas, Ms. KILPATRICK of Michigan, Mr. CUMMINGS, Ms. WATERS, Mr. RANGEL, Mr. PAYNE, Mr. JOHNSON of Georgia, Mr. CLAY, Mr. AL GREEN of Texas, Mr. TOWNS, Mr. SCOTT of Virginia, Mr. RUSH, Mr. BUTTERFIELD, Mr. BISHOP of Georgia, Ms. MOORE of Wisconsin, Mr. CARSON of Indiana, and Mr. THOMPSON of Mississippi) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Education and Labor, Energy and Commerce, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
-
Be it enacted by the Senate and House of
Representatives of the United States of America in Congress
assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
-
(a) Short Title- This Act may be cited as the
`Julia Carson Responsible Fatherhood and Healthy Families Act of
2009'.
-
(b) Table of Contents- The table of contents
of this Act is as follows:
-
Sec. 1. Short title; table of contents.
-
Sec. 2. Findings.
TITLE I--PROMOTING RESPONSIBLE FATHERHOOD AND STRENGTHENING LOW-INCOME FAMILIES
-
Sec. 101. State assessments of barriers
to employment and financial support of children.
-
Sec. 102. Grants to States to conduct
demonstration projects to promote economic opportunity for
low-income parents.
-
Sec. 103. Healthy marriage promotion and
responsible fatherhood programs.
-
Sec. 104. Elimination of separate TANF
work participation rate for 2-parent families.
-
Sec. 105. Ban on recovery of Medicaid
costs for births.
-
Sec. 106. Improved collection and
distribution of child support.
-
Sec. 107. Collection of child support
under the supplemental nutrition assistance program.
-
Sec. 108. Grants supporting healthy
family partnerships for domestic violence intervention and
preventions.
-
Sec. 109. Procedures to address domestic
violence.
TITLE II--REVENUE PROVISIONS
-
Sec. 201. Increase in credit percentage
under earned income tax credit for eligible individuals with
no qualifying children.
-
Sec. 202. Broker reporting of customer's
basis in securities transactions.
-
Sec. 203. Modification of effective date
of leasing provisions of the American Jobs Creation Act of
2004.
-
Sec. 204. Clarification of economic
substance doctrine.
SEC. 2. FINDINGS.
-
Congress makes the following findings:
-
(1) The most important factor in a
child's upbringing is whether the child is brought up in a
loving, healthy, supportive environment.
-
(2) Children who grow up with two parents
are, on average, more likely than their peers in
single-parent homes to finish high school and be
economically self-sufficient.
-
(3) Father-child interaction, like
mother-child interaction, has been shown to promote the
positive physical, social, emotional, and mental development
of children.
-
(4) Children typically live without both
parents when their parents are divorced or did not marry.
More than 1/3 of all first marriages end in divorce, and 60
percent of divorcing couples have children. More than 1/3 of
all births are to unmarried women.
-
(5) More than 1 in 4 families with
children have only 1 parent present, and more than 1 in 3
children live absent their biological father.
-
(6) Recent studies demonstrate that most
unwed fathers in urban areas are highly involved with the
mother of their child before and after the child's birth,
with 80 percent involved during the mother's pregnancy, and
50 percent living with the child's mother at the time of the
child's birth. However, the relationship between the parents
often does not last, and many fathers do not maintain
contact with their children as the children grow up.
-
(7) An estimated 25 percent of the
children who live in households without their father have
not seen their fathers in at least 1 year.
-
(8) The inability of parents to sustain a
healthy relationship with their child's other parent and
remain involved in their child's life can have severe
negative consequences for the parents, the child, their
community, and taxpayers.
-
(9) Single-parent families are 5 times as
likely to be poor as married-couple families.
-
(10) Children raised in single-parent
families are more likely than children raised in 2-parent
families to do poorly in school, have emotional and
behavioral problems, become teenage parents, commit crimes,
smoke cigarettes, abuse drugs and alcohol, and have
poverty-level incomes as adults.
-
(11) High rates of unemployment and low
wages are primary reasons why parents do not marry and why
2-parent families break up.
-
(12) Domestic violence is also a
significant problem leading to the nonformation or breakup
of 2-parent families.
-
(13) A history of incarceration is a
major barrier to employment. Sixty percent of young
African-American men who dropped out of high school have
served time. When these men leave prison, they often have
difficulty finding a job and supporting their children.
-
(14) Over 1/2 of State prison inmates are
parents. When noncustodial parents go to prison, most of
them are required to pay their child support obligation,
even though they have little ability to pay the support.
When these parents leave prison, they typically owe more
than $20,000 in child support debt. Noncustodial parents
leaving prison often re-enter the underground economy
because of financial pressures or to avoid the child support
system, making it less likely that they will successfully
rejoin society and reunite with their families.
-
(15) Children should receive the child
support paid by their parents, and the government should not
keep the money to recover welfare costs. Regular child
support income appears to have a greater positive impact on
children dollar for dollar than other types of income.
Researchers in Wisconsin found that when monthly child
support was passed through to families receiving assistance
under the Temporary Assistance for Needy Families program
established under part A of title IV of the Social Security
Act (TANF) and disregarded 100 percent in determining
assistance for the families, fathers paid more child
support, established their legal relationship with their
children more quickly, and worked less in the underground
economy. Moreover, the State costs of a full pass-through
and disregard of child support were fully offset by
increased payments by fathers and decreased public
assistance use by families.
-
(16) The Department of Health and Human
Services National Child Support Enforcement Strategic Plan
for fiscal years 2005 through 2009 states that `child
support is no longer a welfare reimbursement,
revenue-producing device for the Federal and State
governments; it is a family-first program, intended to
ensure families' self-sufficiency by making child support a
more reliable source of income'.
-
(17) Current law permits States to apply
the cost of passing through child support to families
receiving assistance under the TANF program toward their
maintenance of effort (MOE) requirements, but only to the
extent that the State disregards the child support payments
in determining the amount and type of TANF assistance.
-
(18) Programs that increase employment
opportunity and reduce barriers by increasing employment
opportunity and reducing recidivism will benefit children
and families.
-
(19) Transitional jobs programs have
shown promise in reducing unemployment among chronically
unemployed or underemployed population groups, including
formerly incarcerated individuals, the homeless, and young
African-American men.
-
(20) To strengthen families it is
important to improve the upward economic mobility of the
custodial and noncustodial parent wage-earners, as well as
youth at risk of early parenthood or incarceration, by
providing the skills and experience necessary to access jobs
with family sustaining wages and benefits. In families in
which all the members do not live together, this is
important to enable the prompt and consistent payment of
adequate child support.
-
(21) It is important and useful to foster
local and regional economic development and job advancement
for workers, especially young custodial and noncustodial
parents, by funding local collaborations among business,
education, and the community in the development of pathways
for preparing disadvantaged citizens to meet the workforce
needs of the local and regional economy.
-
(22) Employers benefit from working with
and being supported by the local education, postsecondary,
and workforce systems in identifying the academic and
occupational skill sets needed to fill the skilled jobs in
the changing economy. Local economic and community
development is enhanced when residents have access to higher
wage employment, thus increasing the tax base, fueling the
economy, and contributing to greater family economic
security.
-
(23) Public-private career pathways
partnerships are an important tool for linking employers and
workers with the workforce education services they need and
for integrating community economic development and workforce
education services. Transitional jobs programs can serve as
the first step in a career pathway by giving unemployed
individuals with multiple barriers to employment, valuable
work experience and related services.
-
(24) The purpose of child support is to
provide necessary income support for and increase the
well-being of children living apart from a parent. To
improve the ability of low-income noncustodial parents to
provide long-term support and care for their children
throughout their entire childhood, it is important that
child support polices support parental efforts to pursue
education and employment and to stay involved with their
children.
-
(25) Responsible parenthood includes
active participation in financial support and child-rearing,
as well as the formation and maintenance of a positive,
healthy, and nonviolent relationship between parent and
child and a cooperative, healthy, and nonviolent
relationship between parents.
-
(26) States should be encouraged to
implement voluntary programs that provide support for
responsible parenting, including by increasing the
employment and financial security of parents, and the
parental involvement of noncustodial parents.
-
(27) Promoting responsible parenthood
saves the government money by reducing the need for public
assistance, increasing the educational attainment of
children, reducing juvenile delinquency and crime, reducing
substance abuse, and lowering rates of unemployment.
-
(28) Programs to encourage responsible
fatherhood or responsible motherhood should promote and
provide support services for--
-
(A) fostering loving and healthy
relationships between parents and children;
-
(B) increasing responsibility of
noncustodial parents for the long-term care and
financial well-being of their children;
-
(C) increasing employment of
low-income, noncustodial parents and improving
compliance with child support obligations; and
-
(D) reducing barriers to active
2-parent involvement and cooperative parenting.
-
(29) The promotion of marriage and
responsible parenthood should not denigrate the standing or
parenting efforts of single parents or other caregivers,
lessen the protection of children from abusive parents, or
compromise the safety or health of the custodial or
noncustodial parent, but should increase the chance that
children will have 2 caring parents to help them grow up
healthy and secure.
SEC. 101. STATE ASSESSMENTS OF BARRIERS TO EMPLOYMENT AND FINANCIAL SUPPORT OF CHILDREN.
-
(a) State Assessments and Reports- As a
condition of the continued approval of a State plan under part D
of title IV of the Social Security Act (42 U.S.C. 651 et seq.),
each State with an approved such plan, acting through the
appropriate State agencies, shall assess the State policies with
respect to the issues described in subsection (b) and submit a
report to the Secretary of Health and Human Services on the
results of such assessment not later than October 1, 2012.
-
(b) Issues Described- For purposes of
subsection (a), the issues described in this subsection are the
following:
-
(1) The process of setting and modifying
child support obligations, particularly with respect to
low-income parents, including--
-
(A) the role and criteria for using
imputed income in determining child support obligations;
-
(B) the process of modifying
obligations;
-
(C) the consideration of income and
employment status, including efforts to identify
unreported income;
-
(D) the consideration of
incarceration;
-
(E) the consideration of disability;
-
(F) the treatment of arrearages,
including interest charged, and laws or procedures that
interfere with forgiveness, adjustment, waiver, or
compromise of arrears owed to the State by low-income
noncustodial parents who lack sufficient ability to pay
such arrearages;
-
(G) the procedures related to
retroactive support; and
-
(H) State pass-through and disregard
policies for recipients of means-tested public benefits.
-
(2) The impact of State criminal laws and
law enforcement practices on the employment acquisition,
retention, and advancement prospects of individuals
following arrest, conviction, or incarceration, including--
-
(A) any efforts, including counseling
or employment support, to assist ex-prisoners with
reentry to a community and successful reunification with
their families; and
-
(B) an assessment of any efforts to
seal or expunge arrest and conviction records and any
efforts to grant certificates or other acknowledgments
of rehabilitation to ex-prisoners, and to examine State
occupational licensing and certification procedures.
-
(3) An assessment of the impact of debt
on employment retention, including child support and
non-child support debts imposed to recover costs related to
welfare and criminal justice.
-
(4) An assessment of State practices
related to providing prisoners and ex-prisoners with valid
identification documents upon release from prison.
-
(5) Identification of any other barriers
to healthy family formation or sustainable economic
opportunity for custodial and noncustodial parents that are
created or exacerbated by Federal or State laws, policies,
or procedures, including an examination of the rules of
Federal and State means-tested programs, the operation of
the State workforce system, the availability of financial
education services, and the availability of domestic
violence services and child support procedures to help
victims of domestic violence stay safe and obtain the child
support they are owed.
-
(c) Grants to States for Commissions on State
Law Improvements in the Best Interest of Children and Families-
The Secretary of Health and Human Services shall award grants to
States to establish or support commissions to review the State
assessment conducted in accordance with subsection (a) and to
make recommendations on ways to improve State law in the best
interest of children and families.
-
(d) Appropriations- Out of any money in the
Treasury of the United States not otherwise appropriated, there
are appropriated to the Secretary of Health and Human Services
for each of fiscal years 2011 through 2015, $3,000,000, to
remain available until expended, for the purpose of making--
-
(1) payments to States to offset all or a
portion of the costs of conducting the State assessments and
reports required under subsection (a); and
-
(2) grants to States under subsection
(c).
SEC. 102. GRANTS TO STATES TO CONDUCT DEMONSTRATION PROJECTS TO PROMOTE ECONOMIC OPPORTUNITY FOR LOW-INCOME PARENTS.
-
(a) Court-Supervised or IV-D
Agency-Supervised Employment Programs for Noncustodial Parents-
-
(1) IN GENERAL- To assist States in
implementing section 466(a)(15) of the Social Security Act,
the Secretary of Health and Human Services shall award
grants to States to conduct demonstration projects to
establish, in coordination with counties and other local or
tribal governments, court-supervised or IV-D agency
supervised-employment programs for noncustodial parents who
have barriers to employment and a history of nonpayment of
child support obligations, as determined by a court or the
IV-D agency, and who are determined by the court or agency
to be in need of employment services or placement in order
to pay such child support obligations. A noncustodial parent
described in the preceding sentence who is an ex-offender
shall be eligible to participate in a program established
under this subsection.
-
(2) REQUIREMENTS-
-
(A) OPTION TO PARTICIPATE PRIOR TO
CONTEMPT FINDING- A State shall not be eligible to
receive a grant under this subsection unless any program
established with funds made available under the grant
provides noncustodial parents described in paragraph (1)
with an option to participate in the program prior to
the court or agency entering a finding that the
noncustodial parent is in contempt for failure to pay a
child support obligation and, potentially subject to
criminal penalties.
-
(B) PROGRAM GOALS- An employment
program established with funds made available under a
grant awarded under this subsection shall be designed to
do the following:
-
(i) To assist noncustodial
parents described in paragraph (1) obtain and
maintain unsubsidized employment.
-
(ii) To increase the amount of
financial support received by children.
-
(iii) To help noncustodial
parents described in paragraph (1) improve
relationships with their children and their
children's custodial parent.
-
(C) 6 MONTHS OF CONTINUOUS, TIMELY
PAYMENTS- An employment program established with funds
made available under this subsection shall not permit a
noncustodial parent placed in the program to graduate
from the program and avoid penalties for failure to pay
a child support obligation until the noncustodial parent
completes at least 6 months of continuous, timely
payment of the parent's child support obligations.
-
(D) USE OF FUNDS-
-
(i) Services provided under an
employment program established with funds made
available under a grant made under this subsection
must include the following:
-
(I) Job placement, including
job development and supervised job search as
necessary.
-
(II) Case management,
including educational assessment and advising,
vocational assessment and career exploration
services, and court liaison services.
-
(III) Counseling on
responsible parenthood.
-
(IV) Referral for support and
educational services.
-
(V) Employment retention
services.
-
(ii) Services provided under an
employment program established with funds made
available under a grant made under this subsection
may include the following:
-
(I) Remedial education
services or educational referral.
-
(II) Support funds for
services such as transportation, child care, or
short-term training.
-
(III) Transitional jobs
programs.
-
(IV) Public-private career
pathway partnerships established in accordance
with subsection (b)(2).
-
(V) Occupational skill
training, including college credit programs.
-
(VI) Curricula development.
-
(E) ADMINISTRATION- A State that
receives a grant under this subsection may contract with
a public or private nonprofit organization, including a
faith-based or community-based organization, to
administer (in conjunction with the court of
jurisdiction or the IV-D agency) the court-supervised or
IV-D agency-supervised employment program.
-
(b) Transitional Jobs and Public-Private
Partnership Grants- The Secretary of Labor shall award grants to
States to conduct demonstration projects to carry out one or
more of the projects described in paragraphs (1) and (2).
-
(1) TRANSITIONAL JOBS GRANTS-
-
(A) IN GENERAL- To establish and
expand transitional jobs programs for eligible
individuals, including such programs conducted by local
governments, State employment agencies, nonprofit
organizations, and faith-based or community-based
organizations or intermediaries, that--
-
(i) combine time-limited
employment in transitional jobs that may be
subsidized with public funds, with activities that
promote skill development and remove barriers to
employment, such as case management services and
education, training, child support-related services,
and other activities, pursuant to individual plans;
and
-
(ii) provide such individuals
with--
-
(I) transitional jobs
placements and job placement assistance, to help
the individuals make the transition from
subsidized employment in transitional jobs to
stable unsubsidized employment; and
-
(II) retention services after
the transition to unsubsidized employment.
-
(B) ELIGIBLE INDIVIDUALS- For
purposes of this paragraph, the term `eligible
individuals' means individuals within any of the
following categories of disproportionately chronically
unemployed individuals:
-
(i) Individuals who have attained
age 16, but not attained age 36, and who have
documented barriers to employment such as lack of a
high school diploma, limited English proficiency,
aging out of foster care, or offender status,
particularly such individuals who are parents or
expectant parents.
-
(ii) Formerly incarcerated
individuals.
-
(iii) Homeless or formerly
homeless individuals.
-
(iv) Individuals with
disabilities.
-
(v) Individuals designated by a
court or the IV-D agency to participate in
transitional jobs programs.
-
(C) LIMITATIONS ON USE OF FUNDS-
-
(i) ALLOWABLE ACTIVITIES- A State
that receives a grant under this paragraph (or a
subgrantee of such State) (referred to in this
paragraph as the `program operator') shall use the
funds made available under the grant to operate a
transitional jobs program for eligible individuals
consistent with the following requirements:
-
(I) JOBS- The program
operator shall place eligible individuals in
temporary jobs, the incomes from which may be
subsidized in whole or in part with public
funds. An eligible individual placed in such a
job (referred to in this paragraph as `a
participant') shall perform work directly for
the program operator or another public,
nonprofit, or private sector organization (which
operator or organization may be referred to in
this paragraph as a `worksite employer') within
the community involved.
-
(II) HOURS-
-
(III) JOB PREPARATION AND
SERVICES- The program operator shall--
-
(IV) JOB PLACEMENT ASSISTANCE
AND RETENTION SERVICES- The program operator
shall provide job placement assistance to help
participants obtain unsubsidized employment and
shall provide retention services to the
participants for a minimum of 6 months after
entry into the unsubsidized employment.
-
(V) EDUCATION OR TRAINING- In
any workweek in which a participant is scheduled
to work at least 30 hours in the program, not
less than 20 percent of the scheduled hours and
not more than 50 percent of the scheduled hours
shall involve participation in--
-
(VI) DURATION-
-
(VII) SUPERVISION- The
worksite employer or program operator shall
supervise program participants, consistent with
the goal of addressing the limited work
experience and skills of the participants.
-
(D) REPORTS- Not later than 120 days
after the end of the grant period, the State shall
submit a report to the Secretary of Labor that contains
information on the number of participants in the program
who have entered unsubsidized employment, the percentage
of program participants who are employed during the
second quarter after exit, the percentage of program
participants who are employed during the fourth quarter
after exit, the median earnings of program participants
during the second quarter after exit, the percentage of
program participants who obtain an education or training
credential during participation or within one year of
exit, and demographic information regarding the
participants.
-
(E) TECHNICAL ASSISTANCE- The
Secretary of Labor shall enter into contracts with
entities with demonstrated experience in the provision
of transitional jobs to provide technical assistance to
the program operators and worksite employers for the
programs assisted under this paragraph.
-
(2) PUBLIC-PRIVATE CAREER PATHWAYS
PARTNERSHIPS-
-
(A) IN GENERAL- To allow workforce
education providers representing career pathway
partnerships--
-
(i) to create or expand career
pathways, with groups of employers in specific
industry or occupational sectors, for disadvantaged
workers, which may include any mix of such
employers' existing lower wage employees, new hires
or potential hires; or
-
(ii) to fill in gaps in career
pathways in particular localities or regions as
needed to ensure that career pathways are accessible
to unemployed disadvantaged workers and at risk
youth who have lower skills or limited English
proficiency, including through the creation of
workforce education services, such as `bridge'
programs that contextualize basic skills, English
language, or college remedial education services to
specific career pathways, and efforts to create
opportunities for gaining work experience in a
career pathway.
-
(B) USE OF FUNDS- Funds made
available under a grant under this paragraph may be used
by career pathways partnerships for any expense
reasonably related to the accomplishment of the specific
objectives of the partnership and the purpose described
in this paragraph, including any of the activities
described in subsection (a)(2)(D).
-
(C) LIMITATIONS-
-
(i) IN GENERAL- Of the funds made
available to a career pathway partnership to carry
out the purpose described in this paragraph--
-
(I) not more than 30 percent
of such funds may be used to pay or subsidize
wages during a period of work experience or
internship, not to exceed 90 days; and
-
(II) not more than 10 percent
of such funds may be used for administrative
purposes, but this limitation shall not apply to
activities related to building and maintaining
partnerships, including such activities as
conducting workforce needs assessments,
brokering public-private and interagency
agreements, creating customized curricula, and
developing work experience opportunities.
-
(ii) PROHIBITION ON SUBSIDIZING
WAGES OF CURRENT EMPLOYEES- No funds made available
to carry out this paragraph shall be used to
subsidize the wages of any individual who, as of the
date of the establishment of the career pathway
partnership, is an employee of any employer
participating in the partnership.
-
(D) REQUIREMENTS FOR AWARDING OF
SUBGRANTS-
-
(i) IN GENERAL- Funds shall be
made available to career pathway partnerships to
carry out the purpose described in this paragraph
based on a performance-based accountability system
that includes the following measures of performance:
-
(I) The number of individuals
to be trained.
-
(II) The percentage of such
individuals who complete the program.
-
(III) The percentage of such
individuals who enter or advance in employment.
-
(IV) The wage and benefit
gains of individuals who complete the program
before and within 6 months after their program
completion, including the extent to which the
individuals achieved economic self-sufficiency.
-
(V) The percentage of
individuals who complete the program and enter
employment who retain employment for at least 6
months.
-
(VI) Where applicable, the
percentage of individuals who owe child support
and complete the program who improve in their
payment of child support within 6 months after
their program completion.
-
In establishing goals for such
measures, due consideration shall be given to the
education, work experience, and job readiness of the
individuals expected to participate in the program,
the barriers of such individuals to employment, and
the local job market.
-
(ii) CONSIDERATIONS FOR FUNDING
RENEWALS- A subgrantee's level of success in
achieving employment, advancement, wage, and
employment retention goals shall be a primary
consideration for determining whether to renew a
grant made to such entity and the funding level for
such grant.
-
(iii) PRIORITIES FOR AWARDS OF
SUBGRANTS- In awarding subgrants under this
paragraph, a State shall give priority to
applications that--
-
(I) propose to serve areas of
high poverty, high youth unemployment, high
dropout rates, or high rates of low-income
single-parent families;
-
(II) include a substantial
cash or in-kind match by all employers,
including joint labor-management programs where
applicable, in the partnerships, such as paid
release time for employed workforce education
participants;
-
(III) use instructional
materials and instructors directly used in the
specific business or industry sectors of the
partnership employers;
-
(IV) link successful
completion of workforce education services to
wage increases, promotions or job hires;
-
(V) will result in attainment
of employer-recognized occupational and
educational credentials;
-
(VI) address career guidance
and adult basic education and English language
needs as well as job-specific skills;
-
(VII) demonstrate a blending
of resources from partner agencies in the
workforce system and other sectors and Federal
programs, including superior procedures for
coordinating responsible fatherhood promotion
activities, where appropriate, to support the
development of high quality pathways;
-
(VIII) identify how the
subgrantee will maximize services to unemployed
disadvantaged workers who also face other
barriers in the labor market, such as high
school dropout, offender status, aging out of
foster care, low basic skill level, including
limited English proficiency, learning
disabilities, physical, emotional or behavior
disabilities, or substance abuse recovery, which
may be through direct relationships with local
providers of transitional jobs programs under
which in appropriate circumstances transitional
jobs participants may access career pathways
programs upon completion of the transitional
jobs program; and
-
(IX) support collaboration,
as appropriate, between employers and labor
organizations and other workforce development
professionals, including joint labor management
training and education programs where
appropriate.
-
(E) DEFINITIONS- In this paragraph:
-
(i) ADULT EDUCATION- The term
`adult education' has the meaning given that term in
section 203 of the Workforce Investment Act of 1998
(20 U.S.C. 9202).
-
(ii) CAREER PATHWAY- The term
`career pathway' means a linked set of workforce
education and job opportunities within a specific
industry sector, or for an occupational sector that
cuts across multiple business and industry sectors,
which begins at the lowest skill and English
language levels, and extends through for-credit
college opportunities such as earning relevant
associate or bachelor's degrees, and prepares
individuals for advancement in jobs in demand in the
local or regional labor market.
-
(iii) COMMUNITY-BASED PROVIDER-
The term `community-based provider' means a
not-for-profit organization, with local boards of
directors, that directly provides workforce
education services.
-
(iv) INSTITUTION OF HIGHER
EDUCATION- The term `institution of higher
education' has the meaning given that term in
section 101 of the Higher Education Act of 1965 (20
U.S.C. 1001).
-
(v) CHARTER SCHOOL- The term
`charter school' has the meaning given that term in
section 5210 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7221i).
-
(vi) AREA VOCATIONAL EDUCATION
SCHOOL- The term `area vocational and technical
education school' has the meaning given that term in
section 3 of the Carl D. Perkins Vocational and
Technical Education Act of 1998 (20 U.S.C. 2302).
-
(vii) DISADVANTAGED WORKERS- The
term `disadvantaged workers' means unemployed
individuals in low-income households or employed
individuals in low-income households with wages at
or below 2/3 of the median wage for the State or
region applying for the grant.
-
(viii) CAREER PATHWAY
PARTNERSHIP- The term `career pathway partnership'
means collaborations of 1 or more workforce
education providers, 1 or more employers, 1 or more
labor organizations, where applicable, as a result
of such organization's representation of employees
at the worksite who have skills in which the
training or employment programs are proposed, and
may include optional additional entities as needed
to provide a comprehensive range of workforce
education and ancillary support services.
-
(ix) WORKFORCE EDUCATION- The
term `workforce education' means a set of career
guidance and exploration services, adult education
and English language services, job training,
registered apprenticeship programs, and credit and
noncredit postsecondary education services aimed at
preparing individuals to enter and sustain
employment in specific occupations and to have the
sufficient skills to respond to shifting employment
opportunities.
-
(x) WORKFORCE EDUCATION PROVIDER-
The term `workforce education provider' means
community-based providers, institutions of higher
education, area vocational and technical education
schools, charter schools, and other public nonprofit
entities that have a demonstrated capacity to
provide quality workforce education services.
-
(c) Matching Requirement-
-
(1) IN GENERAL - The Secretary of Health
and Human Services and the Secretary of Labor may not award
a grant to a State under this section unless the State
agrees that, with respect to the costs to be incurred by the
State in conducting a demonstration project with funds
provided under the grant, the State will make available
non-Federal contributions in an amount equal to 10 percent
of the amount of Federal funds paid to the State under such
grant.
-
(2) NON-FEDERAL CONTRIBUTIONS- In this
subsection, the term `non-Federal contributions' includes
contributions by the State and by public and private
entities that may be in cash or in kind, but does not
include any amounts provided by the Federal Government, or
services assisted or subsidized to any significant extent by
the Federal Government, or any amount expended by a State
before October 1, 2007.
-
(d) Worker Protections and Labor Standards-
-
(1) RATE OF PAY; BENEFITS AND WORKING
CONDITIONS-
-
(A) IN GENERAL- A worksite employer
of a participant in a program or activity funded under
this section shall pay the participant at the rate paid
to employees of the worksite employer who are not
participants in such program or activity and who perform
comparable work at the worksite, including periodic
increases where appropriate. If no other employees of
the worksite employer perform comparable work at the
worksite, the worksite employer shall pay the
participant not less than the applicable Federal or
State minimum wage, whichever is higher.
-
(B) BENEFITS AND CONDITIONS- An
individual employed through participation in a program
or activity funded under this section shall be provided
with benefits and working conditions at the same level
and to the same extent as such benefits and conditions
are provided to other employees of the employer of the
individual who have worked a similar length of time and
perform the same work.
-
(2) NONDUPLICATION-
-
(A) IN GENERAL- Funds provided
through a grant made under this paragraph shall be used
only for a program or activity that does not duplicate,
and is in addition to, a program or activity otherwise
available in the locality of the program or activity
funded under this section.
-
(B) PRIVATE, NONPROFIT ENTITY- Funds
provided through a grant made under this section shall
not be provided to a private nonprofit entity to conduct
programs or activities that are the same as or
substantially equivalent to activities provided by a
State or local government agency in the area in which
such entity is located, unless the requirements of
paragraph (3) are met.
-
(3) NONDISPLACEMENT-
-
(A) IN GENERAL- A worksite employer
shall not displace an employee or position (including
partial displacement such as reduction in hours, wages,
or employment benefits) or impair contracts for services
or collective bargaining agreements, as a result of the
use by such employer of a participant in a program or
activity funded under this section, and no participant
in the program or activity shall be assigned to fill any
established unfilled position vacancy.
-
(B) JOB OPPORTUNITIES- A job
opportunity shall not be created under this paragraph
that will infringe in any manner on the promotional
opportunity of an employed individual.
-
(C) LIMITATION ON SERVICES-
-
(i) SUPPLANTATION OF HIRING- A
participant in any program or activity funded under
this section shall not perform any services or
duties, or engage in activities, that will supplant
the hiring of employees that are not participants in
the program or activity.
-
(ii) DUTIES FORMERLY PERFORMED BY
ANOTHER EMPLOYEE- A participant in any program or
activity funded under this section shall not perform
services or duties, or engage in activities, that
are services, duties, or activities that had been
performed by or were assigned to any employee who
recently resigned or was discharged, who is subject
to a reduction in force, who has recall rights
pursuant to a collective bargaining agreement or
applicable personnel procedures, who is on leave
(such as terminal, temporary, vacation, emergency,
or sick leave), who is on strike, or who is being
locked out.
-
(D) CONCURRENCE OF LOCAL LABOR
ORGANIZATION- No placement shall be made under a program
or activity funded under this section until the entity
conducting the program or activity has obtained the
written concurrence of any local labor organization
representing employees who are engaged in the same or
substantially similar work as that proposed to be
carried out for the worksite employer with whom a
participant is to be placed under the program or
activity.
-
(4) NO IMPACT ON UNION ORGANIZING- A
State conducting a demonstration project funded under this
section and any entity conducting a program or activity
funded under this section shall provide the Secretary with a
certified assurance that none of such funds shall be used to
assist or deter union organizing.
-
(5) ACCOUNTABILITY-
-
(A) IN GENERAL- Funds provided under
this section shall not be used to subsidize training or
employment with an employer that has a demonstrable
record of noncompliance with Federal labor, civil
rights, workplace safety, or related laws.
-
(B) CERTIFIED SATISFACTORY RECORD-
Employers who receive training or wage subsidies under
programs or activities funded under this section shall
have a satisfactory record in labor relations and
employment practices, as certified by the Secretary of
Labor.
-
(C) APPLICATION OF WORKER PROTECTION
LAWS- A participant in a program or activity funded
under this section shall be considered to be an employee
of any employer that the participant is placed with for
all purposes under Federal and State law, including laws
relating to health and safety, civil rights, and
worker's compensation.
-
(D) OTHER JOB QUALITY STANDARDS-
Employers who receive training or wage subsidies under
programs or activities funded under this section shall
meet all applicable State or local job or employer
quality standards regarding such issues as wages,
benefits, advancement opportunities, and turnover rates
established for programs funded under the Workforce
Investment Act of 1998 (29 U.S.C. 2801 et seq.).
-
(6) GRIEVANCE PROCEDURE- An entity
conducting a program or activity funded under this section
shall establish and maintain a procedure for the filing and
adjudication of grievances by employees of worksite
employers who are not participants in the program, or such
employees' representatives, or by participants in such a
program or activity alleging a violation of a provision of
this subsection that is similar to the grievance procedure
established by a State for purposes of section 407(f)(3) of
the Social Security Act (42 U.S.C. 607(f)(3)).
-
(7) NONPREEMPTION OF STATE LAW- The
provisions of this subsection shall not be construed to
preempt any provision of State law that affords greater
protections to employees or participants than are afforded
by this subsection.
-
(8) TREATMENT OF AMOUNTS PAID TO
PARTICIPANTS- Amounts paid to a participant in a program or
activity funded under this section shall be--
-
(A) considered earned income for
purpose of determining the participant's eligibility for
the child tax credit established under section 24 of the
Internal Revenue Code of 1986, the earned income tax
credit established under section 32 of such Code, and
any other tax benefit established under such Code the
eligibility for which is based on earned income; and
-
(B) disregarded for purposes of
determining the participant's, the participant's
family's, or the participant's household's eligibility
for, or amount of, assistance or benefits provided under
any means-tested program funded in whole or in part with
Federal funds.
-
(e) Application-
-
(1) REQUIREMENTS FOR ALL APPLICATIONS-
-
(A) IN GENERAL- A State desiring to
receive a grant to conduct a demonstration project under
this section shall submit an application--
-
(i) to the Secretary of Health
and Human Services, in the case of a grant under
subsection (a); or
-
(ii) to the Secretary of Labor,
in the case of a grant under subsection (b);
-
at such time, in such manner, and
containing such information or assurances as the
Secretary of Health and Human Services or the Secretary
of Labor, as appropriate, may require.
-
(B) COMPLIANCE WITH WORKER
PROTECTIONS AND LABOR STANDARDS- The application shall
include an assurance that the State and any entity
conducting a program or activity under the project shall
comply with the worker protections and labor standards
established in accordance with such protections under
subsection (d).
-
(C) NONDISCRIMINATION- The
application shall include an assurance that the State
and any entity conducting a program or activity under
the demonstration project shall comply with section
188(a)(2) of the Workforce Investment Act of 1998 (29
U.S.C. 2938(a)(2)) to the same extent that such section
would apply to the entity if the program or activity
conducted under the demonstration project was considered
to be funded or otherwise financially assisted under
that Act.
-
(D) ASSURANCE GRANT WILL SUPPLEMENT,
NOT SUPPLANT, OTHER STATE FUNDING- The application shall
include an assurance from the chief executive officer of
the State that funds made available under the grant will
supplement, and not supplant, other funds used by the
State to establish or support employment placements for
low-income parents.
-
(2) SPECIFIC DEMONSTRATION PROJECT
REQUIREMENTS-
-
(A) COURT-SUPERVISED OR IV-D
AGENCY-SUPERVISED EMPLOYMENT PROGRAMS FOR NONCUSTODIAL
PARENTS- In order to conduct a demonstration project
described in subsection (a), a State shall include in
the application submitted to the Secretary of Health and
Human Services the following:
-
(i) Evidence of an agreement
between the State and 1 or more counties to
establish an employment program that meets the
requirements of subsection (a).
-
(ii) The number of potential
noncustodial parents to be served by the program.
-
(iii) The purposes specific to
that State's program.
-
(iv) The median income of the
target population.
-
(B) PUBLIC-PRIVATE CAREER PATHWAYS
PARTNERSHIPS- In order to conduct a demonstration
project described in paragraph (2) of subsection (b), a
State shall include in the application submitted to the
Secretary of Labor a description of--
-
(i) the number, characteristics,
and employment and earnings status of disadvantaged
individuals in the State or applicable region where
the program is to be conducted;
-
(ii) which business and industry
sectors, or occupational clusters that cut across
sectors, will be targeted by the career pathways
partnership, based on overall economic benefit to
the community, the current and future demand for
workers, the advancement opportunities for workers,
the wages at each step of the career pathway, and
availability of worker benefits;
-
(iii) the interventions that will
be put in place to address any educational deficits,
limited English proficiency, or learning
disabilities of individuals who participate in the
program and to ensure that such individuals have the
academic, technical, communications, and other job
skills to function in the jobs targeted by the
partnership;
-
(iv) how the members of the
partnership will collaborate on the development of
curriculum and delivery of training that will
provide the necessary occupational, academic and
other work-related skills and credentialing needed
for the specific labor market areas;
-
(v) the supports that will be
used to provide counseling, mentoring or other
support to individuals while in training or to
assist them in navigating in complicated work
environments;
-
(vi) the set of career exposure
activities that will be put in place to provide
hands-on experience such as work experience, on the
job training, internships, or work-study;
-
(vii) the agreements that are in
place with employers, industry groups, and labor
organizations, where applicable, to ensure access to
jobs and advancement opportunities in the targeted
businesses, industry, or occupations;
-
(viii) how the workforce
education providers in the partnership will assess
the employment barriers and needs of local
disadvantaged individuals who participate in the
program and will identify resources for meeting
those needs;
-
(ix) how the workforce education
providers will work with partnership employers,
business and industry groups, labor organizations,
where applicable, and local economic development
organizations to identify the priority workforce
needs of the local industry;
-
(x) how the partnerships will
ensure that the appropriate program delivery models
and formal agreements are in place to ensure maximum
benefits to the individuals receiving career pathway
partnership services and to the employers and labor
organizations, where applicable, in the partnership
and the industries or businesses they represent;
-
(xi) how partnership employers
and labor organizations, where applicable, will be
actively involved in identifying specific workforce
education needs, planning the curriculum, assisting
in training activities, providing job opportunities,
and coordinating job retention for individuals hired
after training through the program and followup
support; and
-
(xii) how the partnership will
build on existing career pathways programs, where
applicable, to serve the targeted population.
-
(3) APPLICATIONS BY INDIAN TRIBES OR
TRIBAL ORGANIZATIONS- The Secretary of Health and Human
Services and the Secretary of Labor may exempt an Indian
tribe or tribal organization from any requirement of this
section that the Secretary of Health and Human Services or
the Secretary of Labor determines would be inappropriate to
apply to the Indian tribe or tribal organization, taking
into account the resources, needs, and other circumstances
of the Indian tribe or tribal organization.
-
(f) Priorities and Requirements for Awarding
Grants-
-
(1) IN GENERAL- Subject to paragraphs (2)
and (3), the Secretary of Health and Human Services (in the
case of a grant under subsection (a)) and the Secretary of
Labor (in the case of a grant under subsection (b)) shall
give priority to making grants under this section to
entities that--
-
(A) demonstrate success with respect
to meeting the goals of quality job placement, long-term
unsubsidized job retention, and, where applicable,
increasing child support payments, decreasing unpaid
child support arrearages, and increasing the involvement
of low-income noncustodial parents with their children
through their participation in responsible fatherhood
activities, including participation in programs that
provide culturally relevant curricula in core subjects
including--
-
(i) conducting activities with
children;
-
(ii) improving communication
skills;
-
(iii) child support management;
-
(iv) providing financially for
the family's security and well-being;
-
(v) managing stress and anger;
-
(vi) maintaining physical and
mental health;
-
(vii) parenting and relationship
skills;
-
(viii) child development; and
-
(ix) barriers to responsible
parenthood, including substance abuse, unemployment,
criminal justice system involvement, and inadequate
housing; and
-
(B) coordinate with, and link
individuals as applicable to, other public and private
benefits and employment services for low-income adults
among the different systems or programs in which such
adults are involved, including the criminal justice
system, the State programs funded under each part of
title IV of the Social Security Act (42 U.S.C. 601 et
seq.) (including programs and activities funded under
section 403(a)(2) of the Social Security Act (42 U.S.C.
603(a)(2)), educational assistance and student aid
programs, and job training or employment programs,
including State employment agencies.
-
(2) PERFORMANCE MEASURES- In making
grants under this section, the Secretary of Health and Human
Services (in the case of a grant under subsection (a)) and
the Secretary of Labor (in the case of a grant under
subsection (b)) shall ensure that grantees demonstrate a
plan for implementing measures to track their performance
with respect to meeting the goals of quality job placement,
long-term unsubsidized job retention, and, where applicable,
increasing child support payments, decreasing child support
arrearages, and increasing the involvement of low-income
noncustodial parents with their children.
-
(3) REFLECTIVE OF TARGET POPULATIONS- In
making grants under this section, the Secretary of Health
and Human Services (in the case of a grant under subsection
(a)) and the Secretary of Labor (in the case of a grant
under subsection (b)) shall give priority to States with
proposed demonstration projects that are designed to target
low-income adults, including custodial and noncustodial
parents, and low-income married couples.
-
(4) SUBSTANTIAL FUNDING FOR EACH OF THE
PURPOSES- In making grants under subsection (b), the
Secretary of Labor shall ensure that a substantial share of
the amount appropriated under subsection (j) for a fiscal
year is used for carrying out each of the projects described
in paragraphs (1) and (2) of subsection (b).
-
(g) Regulatory and Policy Flexibility- The
Secretary of Labor and the Secretary of Health and Human
Services, in coordination with the Secretary of Education and
the Attorney General, shall work with grantees under this
section to resolve policy barriers that may impede blending of
Federal resources to support these demonstration projects.
-
(h) Evaluation- The Secretary of Health and
Human Services (in the case of a grant under subsection (a)) and
the Secretary of Labor (in the case of a grant under subsection
(b)) shall provide for an independent and rigorous evaluation of
the demonstration projects conducted under this section that
includes, to the maximum extent feasible, random assignment or
other appropriate statistical techniques, in order to assess the
effectiveness of the projects.
-
(i) General Definitions- In this section:
-
(1) STATE- The term `State' means each of
the 50 States, the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam,
American Samoa, and includes an Indian tribe or tribal
organization.
-
(2) IV-D AGENCY- The term `IV-D agency'
means the State or local agency responsible for
administering the State program established under part D of
title IV of the Social Security Act (42 U.S.C. 651 et seq.).
-
(3) INDIAN TRIBE; TRIBAL ORGANIZATION-
The terms `Indian tribe' and `tribal organization' have the
meaning given such terms in section 4 of the Indian
Self-Determination and Education Assistance Act (25 U.S.C.
450b).
-
(j) Appropriation- Out of any money in the
Treasury of the United States not otherwise appropriated, there
are appropriated to carry out this section--
-
(1) for programs administered by the
Secretary of Health and Human Services under subsection (a),
$15,000,000 for each of fiscal years 2011 through 2015; and
-
(2) for programs administered by the
Secretary of Labor under subsection (b), $35,000,000 for
each of fiscal years 2011 through 2015.
SEC. 103. HEALTHY MARRIAGE PROMOTION AND RESPONSIBLE FATHERHOOD PROGRAMS.
-
(a) Ensuring Funding for Responsible
Fatherhood Programs- Section 403(a)(2)(C) of the Social Security
Act (42 U.S.C. 603(a)(2)(C)) is amended--
-
(1) in the subparagraph heading, by
striking `LIMITATION ON USE OF' and inserting `REQUIREMENT
TO USE CERTAIN'; and
-
(2) in clause (i), by striking `may not
award more than $50,000,000' and inserting `shall award at
least 1/2 of the amounts'.
-
(b) Voluntary Participation-
-
(1) ASSURANCE- Section 403(a)(2)(A)(ii)(II)
of the Social Security Act (42 U.S.C. 603(a)(2)(A)(ii)(II))
is amended--
-
(A) in item (aa), by striking `and'
at the end;
-
(B) in item (bb), by striking the
period at the end and inserting a semicolon; and
-
(C) by adding at the end the
following new items:
-
(2) PROHIBITION- Section 408(a) of such
Act (42 U.S.C. 608(a)) is amended by adding at the end the
following:
-
`(12) BAN ON CONDITIONING RECEIPT OF TANF
OR CERTAIN OTHER BENEFITS ON PARTICIPATION IN A HEALTHY
MARRIAGE OR RESPONSIBLE FATHERHOOD PROGRAM- A State to which
a grant is made under section 403 shall not condition the
receipt of assistance under the State program funded under
this part, under a program funded with qualified State
expenditures (as defined in section 409(a)(7)(B)(i)), or
under any other program funded under this title, on
participation in a healthy marriage promotion activity (as
defined in section 403(a)(2)(A)(iii)) or in an activity
promoting responsible fatherhood (as defined in section
403(a)(2)(C)(ii)).'.
-
(3) PENALTY- Section 409(a) of such Act
(42 U.S.C. 609(a)) is amended by adding at the end the
following:
-
`(16) PENALTY FOR CONDITIONING RECEIPT OF
TANF OR CERTAIN OTHER BENEFITS ON PARTICIPATION IN A HEALTHY
MARRIAGE OR RESPONSIBLE FATHERHOOD PROGRAM- If the Secretary
determines that a State has violated section 408(a)(12)
during a fiscal year, the Secretary shall reduce the grant
payable to the State under section 403(a)(1) for the
immediately succeeding fiscal year by an amount equal to 5
percent of the State family assistance grant.'.
-
(c) Activities Promoting Responsible
Fatherhood- Section 403(a)(2)(C)(ii) of the Social Security Act
(42 U.S.C. 603(a)(2)(C)(ii)) is amended--
-
(1) in subclause (I), by striking
`marriage or sustain marriage' and insert `healthy
relationships and marriages or to sustain healthy
relationships or marriages';
-
(2) in subclause (II), by inserting
`educating youth who are not yet parents about the economic,
social, and family consequences of early parenting, helping
participants in fatherhood programs work with their own
children to break the cycle of early parenthood,' after
`child support payments,'; and
-
(3) in subclause (III), by striking
`fathers' and inserting `low-income fathers and other
low-income noncustodial parents who are not eligible for
assistance under the State program funded under this part'.
-
(d) Reauthorization- Section 403(a)(2)(D) of
such Act (42 U.S.C. 603(a)(2)(D)) is amended by striking `2006
through 2010' and inserting `2011 through 2015'.
-
(e) Effective Date- The amendments made by
this section shall take effect on October 1, 2010.
SEC. 104. ELIMINATION OF SEPARATE TANF WORK PARTICIPATION RATE FOR 2-PARENT FAMILIES.
-
(a) In General- Section 407 of the Social
Security Act (42 U.S.C. 607) is amended--
-
(1) in subsection (a)--
-
(A) beginning in the heading, by
striking `Participation Rate Requirements' and all that
follows through `A State' in paragraph (1) and inserting
`Participation Rate Requirements- A State'; and
-
(B) by striking paragraph (2);
-
(2) in subsection (b)--
-
(A) in paragraph (1)(A), by striking
`subsection (a)(1)' and inserting `subsection (a)';
-
(B) in paragraph (2), by striking the
paragraph heading and all that follows through `A
family' and inserting `SPECIAL RULE- A family';
-
(C) in paragraph (4), by striking
`paragraphs (1)(B) and (2)(B)' and inserting
`determining monthly participation rates under paragraph
(1)(B)'; and
-
(D) in paragraph (5), by striking
`rates' and inserting `rate'; and
-
(3) in subsection (c)--
-
(A) in paragraph (1)(B), in the
matter preceding clause (i), by striking `subsection
(b)(2)(B)' and inserting `subsection (b)(1)(B)(i)'; and
-
(B) in paragraph (2)(D)--
-
(i) by striking `paragraphs (1)(B)(i)
and (2)(B) of subsection (b)' and inserting
`subsection (b)(1)(B)(i)'; and
-
(ii) by striking `and in 2-parent
families, respectively,'.
-
(b) Effective Date-
-
(1) IN GENERAL- The amendments made by
subsection (a) shall take effect on the date of enactment of
this Act and shall apply to the determination of minimum
participation rates for months beginning on or after that
date.
-
(2) LIMITATION ON PENALTY IMPOSITION-
Notwithstanding section 409(a)(3) of the Social Security
Act, the Secretary of Health and Human Services shall not
impose a penalty against a State under that section on the
basis of the State's failure to satisfy the participation
rate required for any of fiscal years 2006 through 2009 if
the State demonstrates that the State would have met such
requirement if, with respect to those months of any of such
fiscal years that began prior to or on the date of enactment
of this Act, the State were permitted to count 2-parent
families that met the requirements of section 407(c)(1)(A)
of the Social Security Act (42 U.S.C. 607(c)(1)(A)) in the
determination of monthly participation rates under section
407(b)(1)(B)(i) of such Act (42 U.S.C. 607(b)(1)(B)(i)).
SEC. 105. BAN ON RECOVERY OF MEDICAID COSTS FOR BIRTHS.
-
(a) Ban on Recovery-
-
(1) IN GENERAL- Section 454 of the Social
Security Act (42 U.S.C. 654), is amended--
-
(A) by striking `and' at the end of
paragraph (32);
-
(B) by striking the period at the end
of paragraph (33) and inserting a semicolon; and
-
(C) by inserting after paragraph (33)
the following:
-
`(34) provide that, except as provided in
section 1902(a)(25)(F)(ii), the State shall not use the
State program operated under this part to collect any amount
owed to the State by reason of costs incurred under the
State plan approved under title XIX for the birth of a child
for whom support rights have been assigned pursuant to
section 471(a)(17) or 1912; and'.
-
(2) RULE OF CONSTRUCTION- Nothing in
section 454(34) of the Social Security Act (42 U.S.C.
654(34)), as added by paragraph (1), shall be construed as
affecting the application of section 1902(a)(25) of such Act
(42 U.S.C. 1396a(a)(25)) with respect to a State (relating
to the State Medicaid plan requirement for the State to take
all reasonable measures to ascertain the legal liability of
third parties to pay for care and services available under
the plan).
-
(3) REPEAL OF CERTAIN DRA AMENDMENTS- For
provisions repealing amendments to section 454 of the Social
Security Act made by section 7301(b)(1)(C) of the Deficit
Reduction Act of 2005, see section 106(a)(3) of this Act.
-
(b) Clarification That Ban on Recovery Does
Not Apply With Respect to Insurance of a Parent With an
Obligation To Pay Child Support- Clause (ii) of section
1902(a)(25)(F) of the Social Security Act (42 U.S.C.
1396a(a)(25)(F)) is amended by inserting `only if such
third-party liability is derived through insurance,' before
`seek'.
-
(c) Effective Date-
-
(1) IN GENERAL- Except as provided in
paragraph (2), the amendments made by this section take
effect on October 1, 2009.
-
(2) EXTENSION OF EFFECTIVE DATE FOR STATE
LAW AMENDMENT- In the case of a State plan under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.) which
the Secretary of Health and Human Services determines
requires State legislation in order for the plan to meet the
additional requirements imposed by the amendments made by
this section, the State plan shall not be regarded as
failing to comply with the requirements of such title solely
on the basis of its failure to meet these additional
requirements before the first day of the first calendar
quarter beginning after the close of the first regular
session of the State legislature that begins after the date
of enactment of this Act. For purposes of the previous
sentence, in the case of a State that has a 2-year
legislative session, each year of the session is considered
to be a separate regular session of the State legislature.
SEC. 106. IMPROVED COLLECTION AND DISTRIBUTION OF CHILD SUPPORT.
-
(a) Distribution of Child Support-
-
(1) FULL DISTRIBUTION OF CHILD SUPPORT
COLLECTED; REFORM OF RULES FOR DISTRIBUTION OF CHILD SUPPORT
COLLECTED ON BEHALF OF CHILDREN IN FOSTER CARE-
-
(A) IN GENERAL- Section 457 of the
Social Security Act (42 U.S.C. 657) is amended--
-
(i) by striking subsection (a)
and inserting the following:
-
`(a) Full Distribution of Amounts Collected
on Behalf of Any Family- Subject to subsection (c), the entire
amount collected on behalf of any family as support by a State
pursuant to a plan approved under this part shall be paid by the
State to the family.'; and
-
(ii) by striking subsections (c)
through (e) and inserting the following:
-
`(c) Amounts Collected for Child for Whom
Foster Care Maintenance Payments Are Made- Notwithstanding the
preceding provisions of this section, amounts collected by a
State as child support for months in any period on behalf of a
child for whom a public agency is making foster care maintenance
payments under part E shall be paid to the public agency
responsible for supervising the placement of the child, which
may use the payments in the manner it determines will serve the
best interests of the child, including setting such payments
aside for the child's future needs or use.'.
-
(B) FOSTER CARE STATE PLAN AMENDMENT-
Section 471(a)(17) of the Social Security Act (42 U.S.C.
671(a)(17)) is amended--
-
(i) by inserting `and consistent
with the child's case plan' after `where
appropriate'; and
-
(ii) by striking `secure an
assignment to the State of any rights to support'
and inserting `establish paternity and establish,
modify, and enforce child support obligations'.
-
(C) SOCIAL SECURITY ACT AMENDMENTS-
-
(i) CHILD SUPPORT STATE PLAN
AMENDMENT- Section 454 of the Social Security Act
(42 U.S.C. 654), as amended by section 104(a)(1) of
this Act, is amended by inserting after paragraph
(34) the following:
-
`(35) provide that a State shall pay all
collected child support to the payee, except as provided in
section 457(c).'.
-
(ii) DISBURSEMENT OF SUPPORT
PAYMENTS- Section 454B(c) of the Social Security Act
(42 U.S.C. 654b(c)) is amended by adding at the end
the following new paragraph:
-
`(3) DISBURSEMENT TO FAMILIES- The State
disbursement unit shall pay all collected child support to
the payee, except as otherwise provided in section 457.'.
-
(2) CONFORMING AMENDMENTS-
-
(A) Section 409(a)(7)(B)(i)(I)(aa) of
such Act (42 U.S.C. 609(a)(7)(B)(i)(I)(aa)) is amended
by striking `457(a)(1)(B)' and inserting `457(a)'.
-
(B) Section 454(5) of such Act (42
U.S.C. 654(5)) is amended by striking `(A) in any case'
and all that follows through `(B)'.
-
(C) Section 466(a)(3)(B) of such Act
(42 U.S.C. 666(a)(3)(B)) is amended--
-
(i) by striking `shall be
distributed in accordance with section 457 in the
case of overdue support assigned to a State pursuant
to section 408(a)(3) or 471(a)(17), or, in any other
case,'; and
-
(ii) and inserting `or to the
public agency responsible for supervising the
placement of the child, which may use the payments
in the manner the public agency determines will
serve the best interest of the child' before the
semicolon.
-
(3) REPEAL OF CERTAIN DRA AMENDMENTS-
Effective on the date of enactment of this Act, subsections
(a) and (b) of section 7301 of the Deficit Reduction Act of
2005 (Public Law 109-171; 120 Stat. 141) are repealed and
parts A and D of title IV of the Social Security Act shall
be applied as if the amendments made by such subsections had
not been enacted.
-
(b) Prohibition on Conditioning Receipt of
TANF on Assignment of Support- Section 408(a)(3) of the Social
Security Act (42 U.S.C. 608(a)(3)) is amended--
-
(1) in the paragraph heading, by striking
`NO ASSISTANCE FOR FAMILIES NOT' and inserting `PROHIBITION
ON CONDITIONING ASSISTANCE FOR FAMILIES ON';
-
(2) by inserting `not' after `shall';
-
(3) by inserting `or under a program
funded with qualified State expenditures (as defined in
section 409(a)(7)(B)(i))' after `this part'; and
-
(4) by striking `, not exceeding the
total amount of assistance so paid to the family,'.
-
(c) Requirement To Disregard Percentage of
Child Support Collected in Determining Amount and Type of TANF
Assistance- Section 408(a) of the Social Security Act (42 U.S.C.
608(a)) is amended by adding at the end the following new
paragraph:
-
`(12) REQUIREMENT TO DISREGARD PERCENTAGE
OF CHILD SUPPORT COLLECTED IN DETERMINING AMOUNT AND TYPE OF
TANF ASSISTANCE- A State to which a grant is made under
section 403 shall disregard at least the same percentage of
amounts collected as support on behalf of a family as the
percentage of earned income that the State disregards, in
determining the amount or type of assistance provided to the
family under the State program funded under this part or
under a program funded with qualified State expenditures (as
defined in section 409(a)(7)(B)(i)).'.
-
(d) Restoration of Federal Funding- Effective
on the date of enactment of this Act, section 7309 of the
Deficit Reduction Act of 2005 (Public Law 109-171; 120 Stat.
147) is repealed and part D of title IV of the Social Security
Act shall be applied as if the amendment made by subsection (a)
of that section had not been enacted.
-
(e) Repeal of Mandatory Fee for Child Support
Collection- Effective on the date of enactment of this Act,
section 7310 of the Deficit Reduction Act of 2005 (Public Law
109-171; 120 Stat. 147) is repealed and part D of title IV of
the Social Security Act shall be applied as if the amendments
made by that section had not been enacted.
-
(f) Prohibition on Considering a Period of
Incarceration Voluntary Unemployment- Section 466(a) of the
Social Security Act (42 U.S.C. 666(a)) is amended by inserting
after paragraph (19) the following:
-
`(20) PROCEDURES RELATING TO PERIODS OF
INCARCERATION OF NONCUSTODIAL PARENTS-
-
`(A) IN GENERAL- Procedures which
require that, in determining or modifying the amount of,
or terms and conditions of, any support obligation of a
noncustodial parent, the State--
-
`(i) shall not consider any
period of incarceration of such parent as a period
of voluntary unemployment that disqualifies the
parent from obtaining a modification of the support
obligation consistent with the parent's ability to
pay child support; and
-
`(ii) subject to subparagraph (B)
in the case of an incarcerated parent, may--
-
`(I) temporarily suspend any
support obligation on the parent and the
enforcement of any support obligation of the
parent existing prior to the period of
incarceration; and
-
`(II) temporarily prohibit
the accrual of any interest on any support
obligation of the parent existing prior to the
period of incarceration during any such period.
-
`(B) NOTICE AND OPPORTUNITY TO
CHALLENGE SUSPENSION- Such procedures shall require the
State to provide a custodial parent with--
-
`(i) notice of any suspension of
review, adjustment, or enforcement of a support
obligation and of any prohibition on interest
accrual on such obligation that is imposed in
accordance with subparagraph (A)(ii); and
-
`(ii) an opportunity to request
that the suspension or prohibition be terminated or
modified on the basis that the noncustodial parent
has sufficient income or resources to continue
payment of the support obligation during the
noncustodial parent's period of incarceration.'.
-
(g) Review and Adjustment of Child Support
Arrearages Upon Request- Section 466(a)(10) of the Social
Security Act (42 U.S.C. 666(a)(10)) is amended by adding at the
end the following:
-
`(D) REVIEW AND ADJUSTMENT OF
ARREARAGES- Procedures which require the State to
review, and if appropriate, reduce the balance of
arrearages permanently assigned to the State under part
A or E of this title, or under title XIX, pursuant to
standards and procedures established by the State, in
cases where the obligor lacks sufficient ability to pay
the arrears, adjustment will promote timely payment of
current support, or barriers, such as incarceration, may
have limited the ability of the obligor to timely seek a
modification of the order, and it is in the best
interests of the child to make such reduction. Nothing
in the preceding sentence shall be construed as
affecting arrearages that have not been permanently
assigned to the State under any such part or title.'.
-
(h) Study and Report- Not later than October
1, 2012, the Secretary of Health and Human Services shall study
and submit a report to Congress regarding the following:
-
(1) The effect of age eligibility
restrictions for the earned income tax credit established
under section 32 of the Internal Revenue Code of 1986 for
individuals without qualifying children on--
-
(A) the ability of young parents to
pay child support;
-
(B) compliance with child support
orders; and
-
(C) the relationship between young
noncustodial parents and their children.
-
(2) The impact of State earned income tax
credit programs, especially such programs with targeted
benefits for noncustodial parents, on--
-
(A) the ability of noncustodial
parents to pay child support;
-
(B) compliance with child support
orders; and
-
(C) the relationship between
noncustodial parents and their children.
-
(3) The challenges faced by legal
immigrants and individuals for whom English is not their
primary language in fulfilling child support and other
noncustodial parenting obligations.
-
(i) Effective Date-
-
(1) IN GENERAL- Except as otherwise
provided in this section, the amendments made by this
section shall take effect on October 1, 2009, and shall
apply to payments under parts A and D of title IV of the
Social Security Act for calendar quarters beginning on or
after that date, and without regard to whether regulations
to implement the amendments are promulgated by such date.
-
(2) STATE OPTION TO ACCELERATE EFFECTIVE
DATE- Notwithstanding paragraph (1), a State may elect to
have the amendments made by the preceding provisions of this
section apply to the State and to amounts collected by the
State (and to payments under parts A and D of title IV of
such Act), on and after such date as the State may select
that is not later than September 30, 2009.
SEC. 107. COLLECTION OF CHILD SUPPORT UNDER THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM.
-
(a) Encouragement of Collection of Child
Support- Section 5 of the Food and Nutrition Act of 2008 (7
U.S.C. 2014) is amended--
-
(1) in subsection (e)--
-
(A) by redesignating paragraphs (5)
and (6) as paragraphs (6) and (7), respectively;
-
(B) in paragraph (4)(B), by striking
`paragraph (6)' and inserting `paragraph (7)'; and
-
(C) by inserting after paragraph (4)
the following:
-
`(5) DEDUCTION FOR CHILD SUPPORT
RECEIVED-
-
`(A) IN GENERAL- A household shall be
allowed a deduction of 20 percent of all legally
obligated child support payments received from an
identified or putative parent of a child in the
household if that parent is not a household member.
-
`(B) ORDER OF DETERMINING DEDUCTIONS-
A deduction under this paragraph shall be determined
before the computation of the excess shelter deduction
under paragraph (7).'; and
-
(2) in subsection (k)(4)(B), by striking
`subsection (e)(6)' and inserting `subsection (e)(7)';
-
(b) Simplified Verification of Child Support
Payments- Section 5(n) of the Food and Nutrition Act of 2008 (7
U.S.C. 2014(n)) is amended--
-
(1) in the subsection heading, by
striking `State Options to Simplify', and inserting
`Simplified'; and
-
(2) by striking `Regardless of whether'
and inserting the following:
-
`(1) IN GENERAL- A household that is
paying legally obligated child support through the program
under part D of title IV of the Social Security Act (42
U.S.C. 651 et seq.) shall receive--
-
`(A) a deduction under subsection
(e)(4); or
-
`(B) an exclusion for paid child
support under subsection (d)(3).
-
`(2) STATE OPTIONS- Regardless of
whether'.
-
(c) Inclusion of Economic Opportunities
Programs in Definition of Work Program- Section 6(o)(2) of the
Food and Nutrition Act of 2008 (7 U.S.C. 2015(o)(2)) is
amended--
-
(1) in subparagraph (C), by striking `or'
at the end;
-
(2) in subparagraph (D), by striking the
period at the end and inserting `; or'; and
-
(3) by adding at the end the following:
-
`(E) participate in and comply with
the requirements of a demonstration project under
section 106 of the Julia Carson Responsible Fatherhood
and Healthy Families Act of 2009;'.
-
(d) Effective Date-
-
(1) IN GENERAL- This section and the
amendments made by this section take effect on October 1,
2009.
-
(2) STATE OPTION- A State may implement
the amendments made by subsections (a) and (b) for
participating households at the first recertification of the
households that occurs on or after October 1, 2009.
SEC. 108. GRANTS SUPPORTING HEALTHY FAMILY PARTNERSHIPS FOR DOMESTIC VIOLENCE INTERVENTION AND PREVENTIONS.
-
Section 403(a) of the Social Security Act (42
U.S.C. 603(a)) is amended by adding at the end the following new
paragraph:
-
`(6) GRANTS SUPPORTING HEALTHY FAMILY
PARTNERSHIPS FOR DOMESTIC VIOLENCE INTERVENTION AND
PREVENTION-
-
`(A) IN GENERAL- The Secretary shall
award grants on a competitive basis to healthy family
partnerships to develop and implement promising
practices for--
-
`(i) assessing and providing
services to individuals and families affected by
domestic violence, including through caseworker
training, the provision of technical assistance to
community partners, and the implementation of safe
visitation and exchange programs; or
-
`(ii) preventing domestic
violence, particularly as a barrier to economic
security, and fostering healthy relationships.
-
`(B) EDUCATION SERVICES- In awarding
grants under subparagraph (A), the Secretary shall
ensure that 10 percent of the funds made available under
such grants are used for high schools and other
secondary educational institutions and institutions of
higher education to provide education services on the
value of healthy relationships, responsible parenting,
and healthy marriages characterized by mutual respect
and nonviolence, and the importance of building
relationships skills such as communication, conflict
resolution, and budgeting.
-
`(C) APPLICATION- The respective
entity and organization of a healthy family partnership
entered into for purposes of receiving a grant under
this paragraph shall submit a joint application to the
Secretary, at such time and in such manner as the
Secretary shall specify, containing--
-
`(i) a description of how the
partnership intends to carry out the activities
described in subparagraph (A);
-
`(ii) an assurance that funds
made available under the grant shall be used to
supplement, and not supplant, other funds used by
the entity or organization to carry out programs,
activities, or services described in subparagraph
(A) or (B); and
-
`(iii) such other information as
the Secretary may require.
-
`(D) GENERAL RULES GOVERNING USE OF
FUNDS- The rules of section 404, other than subsection
(b) of that section, shall not apply to a grant made
under this paragraph.
-
`(E) DEFINITIONS- In this paragraph:
-
`(i) DOMESTIC VIOLENCE- The term
`domestic violence' has the meaning given that term
in section 402(a)(7)(B).
-
`(ii) HEALTHY FAMILY PARTNERSHIP-
The term `healthy family partnership' means a
partnership between--
-
`(I) an entity receiving
funds under a grant made under paragraph (2) to
promote healthy marriage or responsible
fatherhood; and
-
`(II) an organization with
demonstrated expertise working with survivors of
domestic violence.
-
`(F) APPROPRIATION- Out of any money
in the Treasury of the United States not otherwise
appropriated, there are appropriated for each of fiscal
years 2011 through 2015, $25,000,000 for purposes of
awarding grants to healthy family partnerships under
this paragraph.'.
SEC. 109. PROCEDURES TO ADDRESS DOMESTIC VIOLENCE.
-
(a) In General- Section 403(a)(2) of the
Social Security Act (42 U.S.C. 603(a)(2)) is amended--
-
(1) by redesignating subparagraph (D) as
subparagraph (F); and
-
(2) by inserting after subparagraph (C)
the following:
-
`(D) REQUIREMENTS FOR RECEIPT OF
FUNDS- An entity may not be awarded a grant under this
paragraph unless the entity, as a condition of receiving
funds under such a grant--
-
`(i) identifies in its
application for the grant the domestic violence
experts at the local, State, or national level with
whom the entity will consult in the development and
implementation of the programs and activities of the
entity;
-
`(ii) on award of the grant, and
in consultation with such domestic violence experts,
develops a written protocol which describes--
-
`(I) how the entity will
identify instances or risks of domestic
violence;
-
`(II) the procedures for
responding to such instances or risk, including
making service referrals and providing
protections and appropriate assistance for
identified individuals and families;
-
`(III) how confidentiality
issues will be addressed; and
-
`(IV) the domestic violence
training that will be provided to ensure
effective and consistent implementation of the
protocol; and
-
`(iii) in an annual report to the
Secretary, includes a description of the domestic
violence protocols, and a description of any
implementation issues identified with respect to
domestic violence and how the issues were addressed.
-
`(E) DOMESTIC VIOLENCE DEFINED- In
this paragraph, the term `domestic violence' has the
meaning given that term in section 402(a)(7)(B).'.
-
(b) Conforming Amendments- Section 403(a)(2)
of such Act (42 U.S.C. 603(a)(2)), as amended by section 103(d)
of this Act and subsection (a)(1) of this section, is amended--
-
(1) in subparagraph (A)(i)--
-
(A) by striking `(B) and (C)' and
inserting `(B), (C), and (D)'; and
-
(B) by striking `subparagraph (D)'
and inserting `subparagraph (F)';
-
(2) in subparagraphs (B)(i) and (C)(i),
by striking `(D)' each place it appears and inserting `(F)';
and
-
(3) in subparagraph (F) (as so
redesignated by subsection (a)(1) of this section), by
striking `$150,000,000 for each of fiscal years 2011 through
2015' and inserting `$150,000,000 for each of fiscal years
2011 and 2012 and $200,000,000 for each of fiscal years 2013
through 2015'.
SEC. 201. INCREASE IN CREDIT PERCENTAGE UNDER EARNED INCOME TAX CREDIT FOR ELIGIBLE INDIVIDUALS WITH NO QUALIFYING CHILDREN.
-
(a) In General- The row in the table in
subparagraph (A) of section 32(b)(1) of the Internal Revenue
Code of 1986 relating to no qualifying children is amended to
read as follows:
----------------------------------
----------------------------------
`No qualifying children 20 7.65'.
----------------------------------
-
(b) Effective Date- The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 2009.
SEC. 202. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES TRANSACTIONS.
-
(a) In General- Section 6045 of the Internal
Revenue Code of 1986 (relating to returns of brokers) is amended
to read as follows:
-
`(g) Additional Information Required in the
Case of Securities Transactions-
-
`(1) IN GENERAL- If a broker is otherwise
required to make a return under subsection (a) with respect
to any applicable security, the broker shall include in such
return the information described in paragraph (2).
-
`(2) ADDITIONAL INFORMATION REQUIRED-
-
`(A) IN GENERAL- The information
required under paragraph (1) to be shown on a return
with respect to an applicable security of a customer
shall include for each reported applicable security the
customer's adjusted basis in such security.
-
`(B) EXEMPTION FROM REQUIREMENT- The
Secretary shall issue such regulations or guidance as
necessary concerning the application of the requirement
under subparagraph (A) in cases in which a broker in
making a return does not have sufficient information to
meet such requirement with respect to the reported
applicable security. Such regulations or guidance may--
-
`(i) require such other
information related to such adjusted basis as the
Secretary may prescribe, and
-
`(ii) exempt classes of cases in
which the broker does not have sufficient
information to meet either the requirement under
subparagraph (A) or the requirement under clause (i).
-
`(3) INFORMATION TRANSFERS- To the extent
provided in regulations, there shall be such exchanges of
information between brokers as such regulations may require
for purposes of enabling such brokers to meet the
requirements of this subsection.
-
`(4) DEFINITIONS- For purposes of this
subsection, the term `applicable security' means any--
-
`(A) security described in
subparagraph (A) or (C) of section 475(c)(2),
-
`(B) interest in a regulated
investment company (as defined in section 851), or
-
`(C) other financial instrument
designated in regulations prescribed by the Secretary.'.
-
(b) Conforming Amendment- Section 6045(h)(4)
of such Code is amended by inserting `(as in effect on the date
of the enactment of the Julia Carson Responsible Fatherhood and
Healthy Families Act of 2009)' after `subsection (g)(3)'.
-
(c) Effective Date- The amendment made by
this section shall apply to returns the due date for which
(determined without regard to extensions) is after December 31,
2009, with respect to securities acquired after December 31,
2008.
SEC. 203. MODIFICATION OF EFFECTIVE DATE OF LEASING PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF 2004.
-
(a) Leases to Foreign Entities- Section
849(b) of the American Jobs Creation Act of 2004 is amended by
adding at the end the following new paragraph:
-
`(5) LEASES TO FOREIGN ENTITIES- In the
case of tax-exempt use property leased to a tax-exempt
entity which is a foreign person or entity, the amendments
made by this part shall apply to taxable years beginning
after December 31, 2006, with respect to leases entered into
on or before March 12, 2004.'.
-
(b) Effective Date- The amendment made by
this section shall take effect as if included in the enactment
of the American Jobs Creation Act of 2004.
SEC. 204. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.
-
(a) In General- Section 7701 of the Internal
Revenue Code of 1986 is amended by redesignating subsection (o)
as subsection (p) and by inserting after subsection (n) the
following new subsection:
-
`(o) Clarification of Economic Substance
Doctrine; etc-
-
`(1) GENERAL RULES-
-
`(A) IN GENERAL- In any case in which
a court determines that the economic substance doctrine
is relevant for purposes of this title to a transaction
(or series of transactions), such transaction (or series
of transactions) shall have economic substance only if
the requirements of this paragraph are met.
-
`(B) DEFINITION OF ECONOMIC
SUBSTANCE- For purposes of subparagraph (A)--
-
`(i) IN GENERAL- A transaction
has economic substance only if--
-
`(I) the transaction changes
in a meaningful way (apart from Federal tax
effects) the taxpayer's economic position, and
-
`(II) the taxpayer has a
substantial nontax purpose for entering into
such transaction and the transaction is a
reasonable means of accomplishing such purpose.
-
In applying subclause (II), a
purpose of achieving a financial accounting benefit
shall not be taken into account in determining
whether a transaction has a substantial nontax
purpose if the origin of such financial accounting
benefit is a reduction of income tax.
-
`(ii) SPECIAL RULE WHERE TAXPAYER
RELIES ON PROFIT POTENTIAL- A transaction shall not
be treated as having economic substance by reason of
having a potential for profit unless--
-
`(I) the present value of the
reasonably expected pre-tax profit from the
transaction is substantial in relation to the
present value of the expected net tax benefits
that would be allowed if the transaction were
respected, and
-
`(II) the reasonably expected
pre-tax profit from the transaction exceeds a
risk-free rate of return.
-
`(C) TREATMENT OF FEES AND FOREIGN
TAXES- Fees and other transaction expenses and foreign
taxes shall be taken into account as expenses in
determining pre-tax profit under subparagraph (B)(ii).
-
`(2) SPECIAL RULES FOR TRANSACTIONS WITH
TAX-INDIFFERENT PARTIES-
-
`(A) SPECIAL RULES FOR FINANCING
TRANSACTIONS- The form of a transaction which is in
substance the borrowing of money or the acquisition of
financial capital directly or indirectly from a
tax-indifferent party shall not be respected if the
present value of the deductions to be claimed with
respect to the transaction is substantially in excess of
the present value of the anticipated economic returns of
the person lending the money or providing the financial
capital. A public offering shall be treated as a
borrowing, or an acquisition of financial capital, from
a tax-indifferent party if it is reasonably expected
that at least 50 percent of the offering will be placed
with tax-indifferent parties.
-
`(B) ARTIFICIAL INCOME SHIFTING AND
BASIS ADJUSTMENTS- The form of a transaction with a
tax-indifferent party shall not be respected if--
-
`(i) it results in an allocation
of income or gain to the tax-indifferent party in
excess of such party's economic income or gain, or
-
`(ii) it results in a basis
adjustment or shifting of basis on account of
overstating the income or gain of the
tax-indifferent party.
-
`(3) DEFINITIONS AND SPECIAL RULES- For
purposes of this subsection--
-
`(A) ECONOMIC SUBSTANCE DOCTRINE- The
term `economic substance doctrine' means the common law
doctrine under which tax benefits under subtitle A with
respect to a transaction are not allowable if the
transaction does not have economic substance or lacks a
business purpose.
-
`(B) TAX-INDIFFERENT PARTY- The term
`tax-indifferent party' means any person or entity not
subject to tax imposed by subtitle A. A person shall be
treated as a tax-indifferent party with respect to a
transaction if the items taken into account with respect
to the transaction have no substantial impact on such
person's liability under subtitle A.
-
`(C) EXCEPTION FOR PERSONAL
TRANSACTIONS OF INDIVIDUALS- In the case of an
individual, this subsection shall apply only to
transactions entered into in connection with a trade or
business or an activity engaged in for the production of
income.
-
`(D) TREATMENT OF LESSORS- In
applying paragraph (1)(B)(ii) to the lessor of tangible
property subject to a lease--
-
`(i) the expected net tax
benefits with respect to the leased property shall
not include the benefits of--
-
`(I) depreciation,
-
`(II) any tax credit, or
-
`(III) any other deduction as
provided in guidance by the Secretary, and
-
`(ii) subclause (II) of paragraph
(1)(B)(ii) shall be disregarded in determining
whether any of such benefits are allowable.
-
`(4) OTHER COMMON LAW DOCTRINES NOT
AFFECTED- Except as specifically provided in this
subsection, the provisions of this subsection shall not be
construed as altering or supplanting any other rule of law,
and the requirements of this subsection shall be construed
as being in addition to any such other rule of law.
-
`(5) REGULATIONS- The Secretary shall
prescribe such regulations as may be necessary or
appropriate to carry out the purposes of this subsection.
Such regulations may include exemptions from the application
of this subsection.'.
-
(b) Effective Date- The amendments made by
this section shall apply to transactions entered into after the
date of the enactment of this Act.
END