This Act may be cited as the “Pathways Out of Poverty Act of 2017”.

The table of contents for this Act is as follows:

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

The purposes of this subtitle are to—

(1) establish a Federal-State partnership to provide access to high-quality public prekindergarten programs for all children from low-income and moderate-income families to ensure that they enter kindergarten prepared for success;

(2) broaden participation in such programs to include children from additional middle-class families; and

(3) promote access to high-quality kindergarten, and high-quality early childhood education programs and settings for children.

In this subtitle:

(1) CHILD WITH A DISABILITY.—The term “child with a disability” has the meaning given the term in section 602 of the Individuals with Disabilities Education Act (20 U.S.C. 1401).

(2) COMPREHENSIVE EARLY LEARNING ASSESSMENT SYSTEM.—The term “comprehensive early learning assessment system”—

(A) means a coordinated and comprehensive system of multiple assessments, each of which is valid and reliable for its specified purpose and for the population with which it will be used, that—

(i) organizes information about the process and context of young children’s learning and development to help early childhood educators make informed instructional and programmatic decisions; and

(ii) conforms to the recommendations of the National Research Council reports on early childhood; and

(B) includes, at a minimum—

(i) child screening measures;

(ii) child formative assessments;

(iii) measures of environmental quality; and

(iv) measures of the quality of adult-child interactions.

(3) DUAL LANGUAGE LEARNER.—The term “dual language learner” means an individual who is limited English proficient.

(4) EARLY CHILDHOOD EDUCATION PROGRAM.—The term “early childhood education program” has the meaning given the term under section 103 of the Higher Education Act of 1965 (20 U.S.C. 1003).

(5) ELEMENTARY SCHOOL.—The term “elementary school” has the meaning given the term in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

(6) ELIGIBILITY DETERMINATION DATE.—The term “eligibility determination date” means the date used to determine eligibility for public elementary school in the community in which the eligible local entity involved is located.

(7) ELIGIBLE LOCAL ENTITY.—The term “eligible local entity” means—

(A) a local educational agency, including—

(i) a charter school or a charter management organization that acts as a local educational agency; or

(ii) an educational service agency in partnership with a local educational agency;

(B) an entity that carries out an early childhood education program; or

(C) a consortium of entities described in subparagraph (A) or (B).

(8) FULL-DAY.—The term “full-day” means a day that is—

(A) equivalent to a full school day at the public elementary schools in a State; and

(B) not less than 5 hours a day.

(9) HIGH-QUALITY PREKINDERGARTEN PROGRAM.—The term “high-quality prekindergarten program” means a prekindergarten program supported by an eligible local entity that includes, at a minimum, the following elements based on nationally recognized standards:

(A) Serves children who—

(i) are age 4 or children who are age 3 or 4, by the eligibility determination date (including children who turn age 5 while attending the program); or

(ii) have attained the legal age for State-funded prekindergarten.

(B) Requires high qualifications for staff, including that teachers meet the requirements of one of the following clauses:

(i) The teacher has a bachelor’s degree in early childhood education or a related field with coursework that demonstrates competence in early childhood education.

(ii) The teacher—

(I) has a bachelor’s degree in any field;

(II) has demonstrated knowledge of early childhood education by passing a State-approved assessment in early childhood education;

(III) while employed as a teacher in the prekindergarten program, is engaged in ongoing professional development in early childhood education for not less than 2 years; and

(IV) not more than 3 years after starting employment as a teacher in the prekindergarten program, enrolls in and completes a State-approved educator preparation program in which the teacher receives training and support in early childhood education.

(iii) The teacher has a bachelor’s degree with a credential, license, or endorsement that demonstrates competence in early childhood education.

(C) Maintains an evidence-based maximum class size.

(D) Maintains an evidence-based child to instructional staff ratio.

(E) Offers a full-day program.

(F) Provides developmentally appropriate, evidence-based curricula and learning environments that are aligned with the State’s early learning and development standards described in section 115(1).

(G) Offers instructional staff salaries comparable to kindergarten through grade 12 teaching staff.

(H) Provides for ongoing monitoring and program evaluation to ensure continuous improvement.

(I) Offers accessible comprehensive services for children that include, at a minimum—

(i) screenings for vision, dental, health (including mental health), and development and referrals, and assistance obtaining services, when appropriate;

(ii) family engagement opportunities that take into account home language, such as parent conferences (including parent input about their child’s development) and support services, such as parent education;

(iii) nutrition services, including nutritious meals and snack options aligned with requirements set by the most recent Child and Adult Care Food Program guidelines promulgated by the Department of Agriculture as well as regular, age-appropriate, nutrition education for children and their families;

(iv) programs coordinated with local educational agencies and entities providing programs authorized under section 619 and part C of the Individuals with Disabilities Education Act (20 U.S.C. 1419 and 1431 et seq.);

(v) physical activity programs aligned with evidence-based guidelines, such as those recommended by the Institute of Medicine, and which take into account and accommodate children with disabilities;

(vi) additional support services, as appropriate, based on the findings of the needs analysis as described in section 120; and

(vii) on-site coordination, to the maximum extent feasible.

(J) Provides high-quality professional development for all staff, including regular in-classroom observation for teachers and teacher assistants by individuals trained in such observation.

(K) Meets the education performance standards in effect under section 641A(a)(1)(B) of the Head Start Act (42 U.S.C. 9836a(a)(1)(B)).

(L) Maintains evidence-based health and safety standards.

(10) GOVERNOR.—The term “Governor” means the chief executive officer of a State.

(11) HOMELESS CHILD.—The term “homeless child” means a child or youth described in section 725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)).

(12) INSTITUTION OF HIGHER EDUCATION.—The term “institution of higher education” has the meaning given the term in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002).

(13) INDIAN TRIBE; TRIBAL ORGANIZATION.—The terms “Indian tribe” and “tribal organization” have the meanings given the terms in 658P of the Child Care and Development Block Grant of 1990 (42 U.S.C. 9858n).

(14) LIMITED ENGLISH PROFICIENT.—The term “limited English proficient” has the meaning given the term in section 637 of the Head Start Act (42 U.S.C. 9832).

(15) LOCAL EDUCATIONAL AGENCY; STATE EDUCATIONAL AGENCY; EDUCATIONAL SERVICE AGENCY.—The terms “local educational agency”, “State educational agency”, and “educational service agency” have the meanings given the terms in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

(16) MIGRATORY CHILD.—The term “migratory child” has the meaning given the term in section 1309 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6399).

(17) OUTLYING AREA.—The term “outlying area” means each of the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Republic of Palau.

(18) POVERTY LINE.—The term “poverty line” means the official poverty line (as defined by the Office of Management and Budget)—

(A) adjusted to reflect the percentage change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor for the most recent 12-month period or other interval for which the data are available; and

(B) applicable to a family of the size involved.

(19) SECONDARY SCHOOL.—The term “secondary school” has the meaning given the term in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

(20) SECRETARY.—The term “Secretary” means the Secretary of Education.

(21) STATE.—Except as otherwise provided in this subtitle, the term “State” means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and each of the outlying areas.

(22) STATE ADVISORY COUNCIL ON EARLY CHILDHOOD EDUCATION AND CARE.—The term “State Advisory Council on Early Childhood Education and Care” means the State Advisory Council on Early Childhood Education and Care established under section 642B(b) of the Head Start Act (42 U.S.C. 9837b(b)).

From amounts made available to carry out this subtitle, the Secretary, in consultation with the Secretary of Health and Human Services, shall award grants to States to implement high-quality prekindergarten programs, consistent with the purposes of this subtitle described in section 111. For each fiscal year, the funds provided under a grant by a State shall equal the allotment determined for the State under section 114.

(a) Reservation.—From the amount made available each fiscal year to carry out this subtitle, the Secretary shall—

(1) reserve not less than 1 percent and not more than 2 percent for payments to Indian tribes and tribal organizations;

(2) reserve ½ of 1 percent for the outlying areas to be distributed among the outlying areas on the basis of their relative need, as determined by the Secretary in accordance with the purposes of this subtitle;

(3) reserve ½ of 1 percent for eligible local entities that serve children in families who are engaged in migrant or seasonal agricultural labor; and

(4) reserve not more than 1 percent or $30,000,000, whichever amount is less, for national activities, including administration, technical assistance, and evaluation.

(b) Allotments.—

(1) IN GENERAL.—From the amount made available each fiscal year to carry out this subtitle and not reserved under subsection (a), the Secretary shall make allotments to States in accordance with paragraph (2) that have submitted an approved application.

(2) ALLOTMENT AMOUNT.—

(A) IN GENERAL.—Subject to subparagraph (B), the Secretary shall allot the amount made available under paragraph (1) for a fiscal year among the States in proportion to the number of children who are age 4 who reside within the State and are from families with incomes at or below 200 percent of the poverty line for the most recent year for which satisfactory data are available, compared to the number of such children who reside in all such States for that fiscal year.

(B) MINIMUM ALLOTMENT AMOUNT.—No State receiving an allotment under subparagraph (A) may receive less than ½ of 1 percent of the total amount allotted under such subparagraph.

(3) REALLOTMENT AND CARRY OVER.—

(A) IN GENERAL.—If one or more States do not receive an allotment under this subsection for any fiscal year, the Secretary may use the amount of the allotment for that State or States, in such amounts as the Secretary determines appropriate, for either or both of the following:

(i) To increase the allotments of States with approved applications for the fiscal year, consistent with subparagraph (B).

(ii) To carry over the funds to the next fiscal year.

(B) REALLOTMENT.—In increasing allotments under subparagraph (A)(i), the Secretary shall allot to each State with an approved application an amount that bears the same relationship to the total amount to be allotted under subparagraph (A)(i), as the amount the State received under paragraph (2) for that fiscal year bears to the amount that all States received under paragraph (2) for that fiscal year.

(4) STATE.—For purposes of this subsection, the term “State” means each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.

(c) Flexibility.—The Secretary may make minimal adjustments to allotments under this subsection, which shall neither lead to a significant increase or decrease in a State’s allotment determined under subsection (b), based on a set of factors, such as the level of program participation and the estimated cost of the activities specified in the State plan under section 116(a)(2).

A State is eligible to receive a grant under this subtitle if the State demonstrates to the Secretary that the State—

(1) has established or will establish early learning and development standards that describe what children from birth to kindergarten entry should know and be able to do, are universally designed and developmentally, culturally, and linguistically appropriate, are aligned with the State’s challenging academic content standards and challenging student academic achievement standards, as adopted under section 1111(b)(1) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311(b)(1)), and cover the essential domains of school readiness, which address—

(A) physical well-being and motor development;

(B) social and emotional development;

(C) approaches to learning, including creative arts expression;

(D) developmentally appropriate oral and written language and literacy development; and

(E) cognition and general knowledge, including early mathematics and early scientific development;

(2) has the ability or will develop the ability to link prekindergarten data with its elementary school and secondary school data for the purpose of collecting longitudinal information for all children participating in the State’s high-quality prekindergarten program and any other federally funded early childhood program that will remain with the child through the child’s public education through grade 12;

(3) offers State-funded kindergarten for children who are eligible children for that service in the State; and

(4) has established a State Advisory Council on Early Childhood Education and Care.

(a) In general.—To receive a grant under this subtitle, the Governor of a State, in consultation with the Indian tribes and tribal organizations in the State, if any, shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require. At a minimum, each such application shall include—

(1) an assurance that the State—

(A) will coordinate with and continue to participate in the programs authorized under section 619 and part C of the Individuals with Disabilities Education Act (20 U.S.C. 1419 and 1431 et seq.), the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), and the maternal, infant, and early childhood home visiting programs funded under section 511 of the Social Security Act (42 U.S.C. 711) for the duration of the grant;

(B) will designate a State-level entity (such as an agency or joint interagency office), selected by the Governor, for the administration of the grant, which shall coordinate and consult with the State educational agency if the entity is not the State educational agency; and

(C) will establish, or certify the existence of, program standards for all State prekindergarten programs consistent with the definition of a high-quality prekindergarten program under section 112;

(2) a description of the State’s plan to—

(A) use funds received under this subtitle and the State’s matching funds to provide high-quality prekindergarten programs, in accordance with section 117(d), with open enrollment for all children in the State who—

(i) are described in section 112(9)(A); and

(ii) are from families with incomes at or below 200 percent of the poverty line;

(B) develop or enhance a system for monitoring eligible local entities that are receiving funds under this subtitle for compliance with quality standards developed by the State and to provide program improvement support, which may be accomplished through the use of a State-developed system for quality rating and improvement;

(C) if applicable, expand participation in the State’s high-quality prekindergarten programs to children from families with incomes above 200 percent of the poverty line;

(D) carry out the State’s comprehensive early learning assessment system, or how the State plans to develop such a system, ensuring that any assessments are culturally, developmentally, and age-appropriate and consistent with the recommendations from the study on Developmental Outcomes and Assessments for Young Children by the National Academy of Sciences, consistent with section 649(j) of the Head Start Act (42 U.S.C. 9844);

(E) develop, implement, and make publicly available the performance measures and targets described in section 119;

(F) increase the number of teachers with bachelor’s degrees in early childhood education, or with bachelor’s degrees in another closely related field and specialized training in early childhood education, including how institutions of higher education will support increasing the number of teachers with such degrees and training, including through the use of assessments of prior learning, knowledge, and skills to facilitate and expedite attainment of such degrees;

(G) coordinate and integrate the activities funded under this subtitle with Federal, State, and local services and programs that support early childhood education and care, including programs supported under this subtitle, the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.), the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), the Head Start Act (42 U.S.C. 9831 et seq.), the Community Services Block Grant Act (42 U.S.C. 9901 et seq.), the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), the temporary assistance for needy families program under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), the State incentive grant program under section 14006 of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5), federally funded early literacy programs, the maternal, infant, and early childhood home visiting programs funded under section 511 of the Social Security Act (42 U.S.C. 711), health improvements to child care funded under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), the program under subtitle B of title VII of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11431 et seq.), the Investing In Innovation program under section 14007 of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5), programs authorized under part E of title IV of the Social Security Act (42 U.S.C. 670 et seq.), the Fostering Connections to Success and Increasing Adoptions Act of 2008 (Public Law 110–351), and any other Federal, State, or local early childhood education programs used in the State;

(H) award subgrants to eligible local entities, and in awarding such subgrants, facilitate a delivery system of high-quality prekindergarten programs that includes diverse providers, such as providers in community-based, public school, and private settings, and consider the system’s impact on options for families;

(I) in the case of a State that does not have a funding mechanism for subgranting funds to implement high-quality prekindergarten, use objective criteria in awarding subgrants to eligible local entities that will implement high-quality prekindergarten programs, including actions the State will take to ensure that eligible local entities will coordinate with local educational agencies or other early learning providers, as appropriate, to carry out activities to provide children served under this subtitle with a successful transition from preschool into kindergarten, which activities shall include—

(i) aligning curricular objectives and instruction;

(ii) providing staff professional development, including opportunities for joint-professional development on early learning and kindergarten through grade 3 standards, assessments, and curricula;

(iii) coordinating family engagement and support services; and

(iv) encouraging the shared use of facilities and transportation, as appropriate;

(J) use the State early learning and development standards described in section 115(1) to address the needs of dual language learners, including by incorporating benchmarks related to English language development;

(K) identify barriers, and propose solutions to overcome such barriers, which may include seeking assistance under section 126, in the State to effectively use and integrate Federal, State, and local public funds and private funds for early childhood education that are available to the State on the date on which the application is submitted;

(L) support articulation agreements (as defined in section 486A of the Higher Education Act of 1965 (20 U.S.C. 1093a)) between public 2-year and public 4-year institutions of higher education in the State for early childhood teacher preparation programs and related fields;

(M) ensure that the higher education programs in the State have the capacity to prepare a workforce to provide high-quality prekindergarten programs;

(N) support workforce development, including State and local policies that support prekindergarten instructional staff’s ability to earn a degree, certification, or other specializations or qualifications, including policies on leave, substitutes, and child care services, including non-traditional hour child care;

(O) hold eligible local entities accountable for use of funds;

(P) ensure that the State’s early learning and development standards are integrated into the instructional and programmatic practices of high-quality prekindergarten programs and related programs and services, such as those provided to children under section 619 and part C of the Individuals with Disabilities Education Act (20 U.S.C. 1419 and 1431 et seq.);

(Q) increase the number of children in the State who are enrolled in high-quality kindergarten programs and carry out a strategy to implement such a plan;

(R) coordinate the State’s activities supported by grants under this subtitle with activities in State plans required under the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.), the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), the Head Start Act (42 U.S.C. 9831 et seq.), the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), and the Adult Education and Family Literacy Act (20 U.S.C. 9201 et seq.);

(S) encourage eligible local entities to coordinate with community-based learning resources, such as libraries, arts and arts education programs, appropriate media programs, family literacy programs, public parks and recreation programs, museums, nutrition education programs, and programs supported by the Corporation for National and Community Service;

(T) work with eligible local entities, in consultation with elementary school principals, to ensure that high-quality prekindergarten programs have sufficient facilities to meet the needs of children eligible for prekindergarten;

(U) support local early childhood coordinating entities, such as local early childhood councils, if applicable, and help such entities to coordinate early childhood education programs with high-quality prekindergarten programs to ensure effective and efficient delivery of early childhood education program services;

(V) ensure that the provision of high-quality prekindergarten programs will not lead to a diminution of services for infants and toddlers or disrupt the care of infants and toddlers in the geographic area served by the eligible local entity, which may include demonstrating that the State will direct funds to provide high-quality early childhood education and care to infants and toddlers in accordance with section 117(d); and

(W) ensure that all high-quality prekindergarten programs the State supports under this Act will conduct criminal history background checks that meet the requirements of subsection (b) on employees and applicants for employment with direct access to children; and

(3) an inventory of the State’s higher education programs that prepare individuals for work in a high-quality prekindergarten program, including—

(A) certification programs;

(B) associate degree programs;

(C) baccalaureate degree programs;

(D) master’s degree programs; and

(E) other programs that lead to a specialization in early childhood education, or a related field.

(b) Criminal history background checks.—

(1) IN GENERAL.—The criminal history background checks required under subsection (a)(2)(W) shall include—

(A) a search of the State criminal registry or repository in the State in which the employee resides and previously resided;

(B) a search of the State-based child abuse and neglect registries and databases in the State in which the employee resides and previously resided;

(C) a Federal Bureau of Investigation fingerprint check using the Integrated Automated Fingerprint Identification System; and

(D) a search of the National Sex Offender Registry established under section 119 of the Adam Walsh Child Protection and Safety Act of 2006 (42 U.S.C. 16919).

(2) PROHIBITION OF EMPLOYMENT.—To be eligible to receive a grant under this subtitle, a State shall prohibit an individual with direct access to children from employment with a program supported with grant funds under this subtitle if the individual has been convicted of a violent felony or any violent or sexual crime against a minor, as defined by the State.

(3) UPDATED CHECKS.—To be eligible to receive a grant under this subtitle, each criminal history background check conducted on an employee as required under subsection (a)(2)(W) shall be periodically repeated or updated in accordance with State law.

(4) APPEAL PROCESS.—To be eligible to receive a grant under this subtitle, a State shall provide an individual with a timely process by which to—

(A) appeal the results of a criminal history background check conducted under this section to challenge the accuracy or completeness of the information produced by such background check; and

(B) seek appropriate relief for any final employment decision based on materially inaccurate or incomplete information produced by such background check.

(c) Development of application.—In developing an application for a grant under this subtitle, a State shall consult with the State Advisory Council on Early Childhood Education and Care and incorporate such Council’s recommendations, where applicable.

(d) Construction.—Nothing in this section shall be construed to alter or otherwise affect the rights, remedies, and procedures afforded school employees, local educational agency employees, and the employees of early childhood education programs under Federal, State, or local laws (including applicable regulations or court orders) or under the terms of collective bargaining agreements, memoranda of understanding, or other agreements between such employees and their employers.

(a) Reservation for quality improvement activities.—

(1) IN GENERAL.—A State that receives a grant under this subtitle may reserve for, not more than the first 4 years such State receives such a grant, not more than 20 percent of the grant funds for quality improvement activities if such activities support the elements of high-quality prekindergarten programs. Such quality improvement activities may include supporting teachers and principals in a State’s high-quality prekindergarten program, licensed or regulated child care, or Head Start programs to enable such teachers to earn a baccalaureate degree in early childhood education, or closely related field, through activities which may include—

(A) expanding or establishing scholarships, counseling, and compensation initiatives to cover the cost of tuition, fees, materials, transportation, and release time for such teachers; and

(B) providing ongoing professional development opportunities, including regular in-classroom observation by individuals trained in such observation, for such teachers, principals, and teachers assistants to enable such teachers, principals, and teachers assistants to carry out the elements of high-quality prekindergarten programs, which may include activities that address—

(i) promoting children’s development across the essential domains of early learning and development;

(ii) developmentally appropriate teacher-child interaction;

(iii) effective family engagement;

(iv) providing culturally competent instruction;

(v) working with a diversity of children and families, including children with special needs and dual language learners;

(vi) childhood nutrition and physical education programs; and

(vii) supporting the implementation of evidence-based curricula.

(2) NOT SUBJECT TO MATCHING.—The amount reserved under paragraph (1) shall not be subject to the matching requirements under section 120.

(3) COORDINATION.—A State that reserves an amount under paragraph (1) shall coordinate the use of such amount with activities funded under section 658G of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858e) and the Head Start Act (42 U.S.C. 9831 et seq.).

(4) CONSTRUCTION.—A State may not use funds reserved under this subsection to meet the requirement described in section 112(9)(G).

(b) Subgrants for high-Quality prekindergarten programs.—A State that receives a grant under this subtitle shall award subgrants of sufficient size to eligible local entities to enable such eligible local entities to implement high-quality prekindergarten programs for children who—

(1) are described in section 112(9)(A);

(2) reside within the State; and

(3) are from families with incomes at or below 200 percent of the poverty line.

(c) Administration.—A State that receives a grant under this subtitle may reserve not more than 1 percent of the grant funds for administration of the grant, and may use part of that reservation for the maintenance of the State Advisory Council on Early Childhood Education and Care.

(d) Early childhood education and care programs for infants and toddlers.—

(1) USE OF ALLOTMENT FOR INFANTS AND TODDLERS.—An eligible State may apply to use, and the appropriate Secretary may grant permission for the State to use, not more than 15 percent of the funds made available through a grant received under this subtitle to award subgrants to early childhood education programs to provide, consistent with the State’s early learning and development guidelines for infants and toddlers, high-quality early childhood education and care to infants and toddlers who reside within the State and are from families with incomes at or below 200 percent of the poverty line.

(2) APPLICATION.—To be eligible to use the grant funds as described in paragraph (1), the State shall submit an application to the appropriate Secretary at such time, in such manner, and containing such information as the Secretary may require. Such application shall, at a minimum, include a description of how the State will—

(A) designate a lead agency which shall administer such funds;

(B) ensure that such lead agency, in coordination with the State’s Advisory Council on Early Childhood Education and Care, will collaborate with other agencies in administering programs supported under this subsection for infants and toddlers in order to obtain input about the appropriate use of such funds and ensure coordination with programs for infants and toddlers funded under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), the Head Start Act (42 U.S.C. 9831 et seq.) (including any Early Learning Quality Partnerships established in the State under section 645B of the Head Start Act, as added by section 202), the Race to the Top and Early Learning Challenge program under section 14006 of Public Law 111–5 (123 Stat. 283), the maternal, infant, and early childhood home visiting programs funded under section 511 of the Social Security Act (42 U.S.C. 711), and part C of the Individuals with Disabilities Education Act (20 U.S.C. 1431 et seq.);

(C) ensure that infants and toddlers who benefit from amounts made available under this subsection will transition to and have the opportunity to participate in a high-quality prekindergarten program supported under this subtitle;

(D) in awarding subgrants, give preference to early childhood education programs that have a plan to increase services to children with special needs, including children with developmental delays or disabilities, children who are dual language learners, homeless children, children who are in foster care, children of migrant families, children eligible for free or reduced-price lunch under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.), or children in the child welfare system; and

(E) give priority to activities carried out under this subsection that will increase access to high-quality early childhood education programs for infants and toddlers in local areas with significant concentrations of low-income families that do not currently benefit from such programs.

(3) ELIGIBLE PROVIDERS.—A State may use the grant funds as described in paragraph (1) to serve infants and toddlers only by working with early childhood education program providers that—

(A) offer full-day, full-year care, or otherwise meet the needs of working families; and

(B) meet high-quality standards, such as—

(i) Early Head Start program performance standards under the Head Start Act (42 U.S.C. 9831 et seq.); or

(ii) high-quality, demonstrated, valid, and reliable program standards that have been established through a national entity that accredits early childhood education programs.

(4) FEDERAL ADMINISTRATION.—

(A) IN GENERAL.—The Secretary of Education shall bear responsibility for obligating and disbursing funds to support activities under this subsection and ensuring compliance with applicable laws and administrative requirements, subject to paragraph (3).

(B) INTERAGENCY AGREEMENT.—The Secretary of Education and the Secretary of Health and Human Services shall jointly administer activities supported under this subsection on such terms as such Secretaries shall set forth in an interagency agreement. The Secretary of Health and Human Services shall be responsible for any final approval of a State’s application under this subsection that addresses the use of funds designated for services to infants and toddlers.

(C) APPROPRIATE SECRETARY.—In this subsection, the term “appropriate Secretary” used with respect to a function, means the Secretary designated for that function under the interagency agreement.

(a) Prekindergarten for 3-Year-Olds.—Each State that certifies to the Secretary that the State provides universally available, voluntary, high-quality prekindergarten programs for 4-year-old children who reside within the State and are from families with incomes at or below 200 percent of the poverty line may use the State’s allocation under section 114(b) to provide high-quality prekindergarten programs for 3-year-old children who reside within the State and are from families with incomes at or below 200 percent of the poverty line.

(b) Subgrants.—In each State that has a city, county, or local educational agency that provides universally available high-quality prekindergarten programs for 4-year-old children who reside within the State and are from families with incomes at or below 200 percent of the poverty line the State may use amounts from the State’s allocation under section 114(b) to award subgrants to eligible local entities to enable such eligible local entities to provide high-quality prekindergarten programs for 3-year-old children who are from families with incomes at or below 200 percent of the poverty line and who reside in such city, county or local educational agency.

(a) In general.—A State that receives a grant under this subtitle shall develop, implement, and make publicly available the performance measures and targets for the activities carried out with grant funds. Such measures shall, at a minimum, track the State’s progress in—

(1) increasing school readiness across all domains for all categories of children, as described in section 123(b)(7), including children with disabilities and dual language learners;

(2) narrowing school readiness gaps between minority and nonminority children, and low-income children and more advantaged children, in preparation for kindergarten entry;

(3) decreasing placement for children in elementary school in special education programs and services as described in part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.);

(4) increasing the number of programs meeting the criteria for high-quality prekindergarten programs, as defined by the State and in accordance with section 112;

(5) decreasing the need for grade-to-grade retention in elementary school;

(6) if applicable, ensuring that high-quality prekindergarten programs do not experience instances of chronic absence among the children who participate in such programs;

(7) increasing the number and percentage of low-income children in high-quality early childhood education programs that receive financial support through funds provided under this subtitle; and

(8) providing high-quality nutrition services, nutrition education, physical activity, and obesity prevention programs.

(b) Prohibition of misdiagnosis practices.—A State shall not, in order to meet the performance measures and targets described in subsection (a), engage in practices or policies that will lead to the misdiagnosis or under-diagnosis of disabilities or developmental delays among children who are served through programs supported under this subtitle.

(a) Matching funds.—

(1) IN GENERAL.—Except as provided in paragraph (2), a State that receives a grant under this subtitle shall provide matching funds from non-Federal sources, as described in subsection (c), in an amount equal to—

(A) 10 percent of the Federal funds provided under the grant in the first year of grant administration;

(B) 10 percent of the Federal funds provided under the grant in the second year of grant administration;

(C) 20 percent of the Federal funds provided under the grant in the third year of grant administration;

(D) 30 percent of the Federal funds provided under the grant in the fourth year of grant administration;

(E) 40 percent of the Federal funds provided under the grant in the fifth year of grant administration;

(F) 50 percent of the Federal funds provided under the grant in the sixth year of grant administration;

(G) 75 percent of the Federal funds provided under the grant in the seventh year of grant administration; and

(H) 100 percent of the Federal funds provided under the grant in the eighth and following years of grant administration.

(2) REDUCED MATCH RATE.—A State that meets the requirements under subsection (b) may provide matching funds from non-Federal sources at a reduced rate. The full reduced matching funds rate shall be in an amount equal to—

(A) 5 percent of the Federal funds provided under the grant in the first year of grant administration;

(B) 5 percent of the Federal funds provided under the grant in the second year of grant administration;

(C) 10 percent of the Federal funds provided under the grant in the third year of grant administration;

(D) 20 percent of the Federal funds provided under the grant in the fourth year of grant administration;

(E) 30 percent of the Federal funds provided under the grant in the fifth year of grant administration;

(F) 40 percent of the Federal funds provided under the grant in the sixth year of grant administration;

(G) 50 percent of the Federal funds provided under the grant in the seventh year of grant administration;

(H) 75 percent of the Federal funds provided under the grant in the eighth year of grant administration; and

(I) 100 percent of the Federal funds provided under the grant in the ninth and following years of the grant administration.

(b) Reduced match rate eligibility.—A State that receives a grant under this subtitle may provide matching funds from non-Federal sources at the full reduced rate under subsection (a)(2) if the State—

(1) (A) offers enrollment in high-quality prekindergarten programs to not less than half of children in the State who are—

(i) age 4 on the eligibility determination date; and

(ii) from families with incomes at or below 200 percent of the poverty line; and

(B) has a plan for continuing to expand access to high-quality prekindergarten programs for such children in the State; and

(2) has a plan to expand access to high-quality prekindergarten programs to children from moderate income families whose income exceeds 200 percent of the poverty line.

(c) Non-Federal resources.—

(1) IN CASH.—A State shall provide the matching funds under this section in cash.

(2) FUNDS TO BE CONSIDERED AS MATCHING FUNDS.—A State may include, as part of the State’s matching funds under this section, not more than 10 percent of the amount of State funds designated for State prekindergarten programs or to supplement Head Start programs under the Head Start Act (42 U.S.C. 9831 et seq.) as of the date of enactment of this Act, but may not include any funds that are attributed as matching funds, as part of a non-Federal share, or as a maintenance of effort requirement, for any other Federal program.

(d) Maintenance of effort.—

(1) IN GENERAL.—If a State reduces its combined fiscal effort per student or the aggregate expenditures within the State to support early childhood education programs for any fiscal year that a State receives a grant authorized under this subtitle relative to the previous fiscal year, the Secretary shall reduce support for such State under this subtitle by the same amount as the decline in State and local effort for such fiscal year.

(2) WAIVER.—The Secretary may waive the requirements of paragraph (1) if—

(A) the Secretary determines that a waiver would be appropriate due to a precipitous decline in the financial resources of a State as a result of unforeseen economic hardship or a natural disaster that has necessitated across-the-board reductions in State services, including early childhood education programs; or

(B) due to the circumstances of a State requiring reductions in specific programs, including early childhood education, if the State presents to the Secretary a justification and demonstration why other programs could not be reduced and how early childhood programs in the State will not be disproportionately harmed by such State action.

(e) Supplement not supplant.—Grant funds received under this title shall be used to supplement and not supplant other Federal, State, and local public funds expended on public prekindergarten programs in the State.

(a) In general.—An eligible local entity desiring to receive a subgrant under section 117(b) shall submit an application to the State, at such time, in such manner, and containing such information as the State may reasonably require.

(b) Contents.—Each application submitted under subsection (a) shall include the following:

(1) PARENT AND FAMILY ENGAGEMENT.—A description of how the eligible local entity plans to engage the parents and families of the children such entity serves and ensure that parents and families of eligible children are aware of the services provided by the eligible local entity, which shall include a plan to—

(A) carry out meaningful parent and family engagement, through the implementation and replication of evidence-based or promising practices and strategies, which shall be coordinated with parent and family engagement strategies supported under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.) and part A of title I and title V of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq. and 7201 et seq.), if applicable, to—

(i) provide parents and family members with the skills and opportunities necessary to become full partners in their children’s education, particularly the families of dual language learners and children with disabilities;

(ii) improve child development; and

(iii) strengthen relationships among prekindergarten staff and parents and family members; and

(B) perform community outreach to encourage families with eligible children to participate in the eligible local entity’s high-quality prekindergarten program, including—

(i) homeless children;

(ii) dual language learners;

(iii) children in foster care;

(iv) children with disabilities; and

(v) migrant children.

(2) COORDINATION AND ALIGNMENT.—A description of how the eligible local entity will—

(A) coordinate, if applicable, the eligible local entity’s activities with—

(i) Head Start agencies (consistent with section 642(e)(5) of the Head Start Act (42 U.S.C. 9837(e)(5))), if the local entity is not a Head Start agency;

(ii) local educational agencies, if the eligible local entity is not a local educational agency;

(iii) providers of services under part C of the Individuals with Disabilities Education Act (20 U.S.C. 1431 et seq.);

(iv) programs carried out under section 619 of the Individuals with Disabilities Education Act (20 U.S.C. 1419); and

(v) if feasible, other entities carrying out early childhood education programs and services within the area served by the local educational agency;

(B) if applicable, develop and implement a systematic procedure for transferring, with parental consent, early childhood education program records for each participating child to the school in which such child will enroll in kindergarten;

(C) develop a plan to promote continuity of developmentally appropriate instructional programs and shared expectations with local elementary schools for children’s learning and development as children transition to kindergarten;

(D) organize, if feasible, and participate in joint training, when available, including transition-related training for school staff and early childhood education program staff;

(E) establish comprehensive transition policies and procedures, with applicable elementary schools and principals, for the children served by the eligible local entity that support the school readiness of children transitioning to kindergarten;

(F) conduct outreach to parents, families, and elementary school teachers and principals to discuss the educational, developmental, and other needs of children entering kindergarten;

(G) help parents, including parents of children who are dual language learners, understand and engage with the instructional and other services provided by the kindergarten in which such child will enroll after participation in a high-quality prekindergarten program; and

(H) develop and implement a system to increase program participation of underserved populations of eligible children, especially homeless children, children eligible for a free or reduced-price lunch under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.), parents of children who are dual language learners, and parents of children with disabilities.

(3) PROTECTIONS FOR SPECIAL POPULATIONS.—A description of how the eligible local entity will meet the diverse needs of children in the community to be served, including children with disabilities, children whose native language is not English, children with other special needs, children in the State foster care system, and homeless children. Such description shall demonstrate, at a minimum, how the entity plans to—

(A) ensure the eligible local entity’s high-quality prekindergarten program is accessible and appropriate for children with disabilities and dual language learners;

(B) establish effective procedures for providing necessary early intervening services to children with disabilities prior to an eligibility determination by the State or local agency responsible for providing services under section 619 or part C of the Individuals with Disabilities Education Act (20 U.S.C. 1419 and 1431 et seq.);

(C) establish effective procedures for timely referral of children with disabilities to the State or local agency described in subparagraph (B);

(D) ensure that the eligible local entity’s high-quality prekindergarten program works with appropriate entities to address the elimination of barriers to immediate and continuous enrollment for homeless children; and

(E) ensure access to and continuity of enrollment in high-quality prekindergarten programs for migratory children, if applicable, and homeless children, including through policies and procedures that require—

(i) outreach to identify migratory children and homeless children;

(ii) immediate enrollment, including enrollment during the period of time when documents typically required for enrollment, including health and immunization records, proof of eligibility, and other documents, are obtained;

(iii) continuous enrollment and participation in the same high-quality prekindergarten program for a child, even if the child moves out of the program’s service area, if that enrollment and participation are in the child’s best interest, including by providing transportation when necessary;

(iv) professional development for high-quality prekindergarten program staff regarding migratory children and homelessness among families with young children; and

(v) in serving homeless children, collaboration with local educational agency liaisons designated under section 722(g)(1)(J)(ii) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11432(g)(1)(J)(ii)), and local homeless service providers.

(4) ACCESSIBLE COMPREHENSIVE SERVICES.—A description of how the eligible local entity plans to provide accessible comprehensive services, described in section 112(9)(I), to the children the eligible local entity serves. Such description shall provide information on how the entity will—

(A) conduct a data-driven community assessment in coordination with members of the community, including parents and community organizations, or use a recently conducted data-driven assessment, which—

(i) may involve an external partner with expertise in conducting such needs analysis, to determine the most appropriate social or other support services to offer through the eligible local entity’s on-site comprehensive services to children who participate in high-quality prekindergarten programs; and

(ii) shall consider the resources available at the school, local educational agency, and community levels to address the needs of the community and improve child outcomes; and

(B) have a coordinated system to facilitate the screening, referral, and provision of services related to health, nutrition, mental health, disability, and family support for children served by the eligible local entity.

(5) WORKFORCE.—A description of how the eligible local entity plans to support the instructional staff of such entity’s high-quality prekindergarten program, which shall, at a minimum, include a plan to provide high-quality professional development, or facilitate the provision of high-quality professional development through an external partner with expertise and a demonstrated track record of success, based on scientifically valid research, that will improve the knowledge and skills of high-quality prekindergarten teachers and staff through activities, which may include—

(A) acquiring content knowledge and learning teaching strategies needed to provide effective instruction that addresses the State’s early learning and development standards described under section 115(1);

(B) enabling high-quality prekindergarten teachers and staff to pursue specialized training in early childhood development;

(C) enabling high-quality prekindergarten teachers and staff to acquire the knowledge and skills to provide instruction and appropriate language and support services to increase the English language skills of dual language learners;

(D) enabling high-quality prekindergarten teachers and staff to acquire the knowledge and skills to provide developmentally appropriate instruction for children with disabilities;

(E) promoting classroom management;

(F) providing high-quality induction and support for incoming high-quality prekindergarten teachers and staff in high-quality prekindergarten programs, including through the use of mentoring programs that have a demonstrated track record of success;

(G) promoting the acquisition of relevant credentials, including in ways that support career advancement through career ladders; and

(H) enabling high-quality prekindergarten teachers and staff to acquire the knowledge and skills to provide culturally competent instruction for children from diverse backgrounds.

(a) In general.—An eligible local entity that receives a subgrant under section 117(b) shall use subgrant funds to implement the elements of a high-quality prekindergarten program for the children described in section 117(b).

(b) Coordination.—

(1) LOCAL EDUCATIONAL AGENCY PARTNERSHIPS WITH LOCAL EARLY CHILDHOOD EDUCATION PROGRAMS.—A local educational agency that receives a subgrant under this subtitle shall provide an assurance that the local educational agency will enter into strong partnerships with local early childhood education programs, including programs supported through the Head Start Act (42 U.S.C. 9831 et seq.).

(2) ELIGIBLE LOCAL ENTITIES THAT ARE NOT LOCAL EDUCATIONAL AGENCIES.—An eligible local entity that is not a local educational agency that receives a subgrant under this subtitle shall provide an assurance that such entity will enter into strong partnerships with local educational agencies.

(a) In general.—Each State that receives a grant under this subtitle shall prepare an annual report, in such manner and containing such information as the Secretary may reasonably require.

(b) Contents.—A report prepared under subsection (a) shall contain, at a minimum—

(1) a description of the manner in which the State has used the funds made available through the grant and a report of the expenditures made with the funds;

(2) a summary of the State’s progress toward providing access to high-quality prekindergarten programs for children eligible for such services, as determined by the State, from families with incomes at or below 200 percent of the poverty line, including the percentage of funds spent on children from families with incomes—

(A) at or below 100 percent of the poverty line;

(B) at or below between 101 and 150 percent of the poverty line; and

(C) at or below between 151 and 200 percent of the poverty line;

(3) an evaluation of the State’s progress toward achieving the State’s performance targets, described in section 119;

(4) data on the number of high-quality prekindergarten program teachers and staff in the State (including teacher turnover rates and teacher compensation levels compared to teachers in elementary schools and secondary schools), according to the setting in which such teachers and staff work (which settings shall include, at a minimum, Head Start programs, public prekindergarten, and child care programs) who received training or education during the period of the grant and remained in the early childhood education program field;

(5) data on the kindergarten readiness of children in the State;

(6) a description of the State’s progress in overcoming barriers to the effective use of Federal, State, and local public funds and private funds, for early childhood education;

(7) the number and percentage of children in the State participating in high-quality prekindergarten programs, disaggregated by race, ethnicity, family income, child age, disability, whether the children are homeless children, and whether the children are dual language learners;

(8) data on the availability, affordability, and quality of infant and toddler care in the State;

(9) the number of operational minutes per week and per year for each eligible local entity that receives a subgrant;

(10) the local educational agency and ZIP code in which each eligible local entity that receives a subgrant operates;

(11) information, for each of the local educational agencies described in paragraph (10), on the percentage of the costs of the public early childhood education programs that is funded from Federal, from State, and from local sources, including the percentages from specific funding programs;

(12) data on the number and percentage of children in the State participating in public kindergarten programs, disaggregated by race, family income, child age, disability, whether the children are homeless children, and whether the children are dual language learners, with information on whether such programs are offered—

(A) for a full-day; and

(B) at no cost to families; and

(13) data on the number of individuals in the State who are supported with scholarships, if applicable, to meet the baccalaureate degree requirement for high-quality prekindergarten programs, as defined in section 112.

(c) Submission.—A State shall submit the annual report prepared under subsection (a), at the end of each fiscal year, to the Secretary, the Secretary of Health and Human Services, and the State Advisory Council on Early Childhood Education and Care.

(d) Cooperation.—An eligible local entity that receives a subgrant under this subtitle shall cooperate with all Federal and State efforts to evaluate the effectiveness of the program the entity implements with subgrant funds.

(e) National report.—The Secretary shall compile and summarize the annual State reports described under subsection (c) and shall prepare and submit an annual report to Congress that includes a summary of such State reports.

(a) Prohibition on required participation.—A State receiving a grant under this subtitle shall not require any child to participate in any Federal, State, local, or private early childhood education program, including a high-quality prekindergarten program.

(b) Prohibition on use of funds for assessment.—A State receiving a grant under this subtitle and an eligible local entity receiving a subgrant under this subtitle shall not use any grant or subgrant funds to carry out any of the following activities:

(1) An assessment that provides rewards or sanctions for individual children, teachers, or principals.

(2) An assessment that is used as the primary or sole method for assessing program effectiveness.

(3) Evaluating children, other than for the purposes of—

(A) improving instruction or the classroom environment;

(B) targeting professional development;

(C) determining the need for health, mental health, disability, or family support services;

(D) program evaluation for the purposes of program improvement and parent information; and

(E) improving parent and family engagement.

(a) Increased access for younger children.—Not later than 1 year after the date of enactment of this Act, the Secretary and the Secretary of Health and Human Services shall develop a process—

(1) for use in the event that Head Start programs funded under the Head Start Act (42 U.S.C. 9831 et seq.) operate in States or regions that have achieved sustained universal, voluntary access to 4-year-old children who reside within the State and who are from families with incomes at or below 200 percent of the poverty line to high-quality prekindergarten programs; and

(2) for how such Head Start programs will begin converting slots for children who are age 4 on the eligibility determination date to children who are age 3 on the eligibility determination date, or, when appropriate, converting Head Start programs into Early Head Start programs to serve infants and toddlers.

(b) Community need and resources.—The process described in subsection (a) shall—

(1) be carried out on a case-by-case basis and shall ensure that sufficient resources and time are allocated for the development of such a process so that no child or cohort is excluded from currently available services; and

(2) ensure that any conversion shall be based on community need and not on the aggregate number of children served in a State or region that has achieved sustained, universal, voluntary access to high-quality prekindergarten programs.

(c) Public comment and notice.—Not fewer than 90 days after the development of the proposed process described in subsection (a), the Secretary and the Secretary of Health and Human Services shall publish a notice describing such proposed process for conversion in the Federal Register providing at least 90 days for public comment. The Secretaries shall review and consider public comments prior to finalizing the process for conversion of Head Start slots and programs.

(d) Reports to congress.—Concurrently with publishing a notice in the Federal Register as described in subsection (c), the Secretaries shall provide a report to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate that provides a detailed description of the proposed process described in subsection (a), including a description of the degree to which Head Start programs are providing State-funded high-quality prekindergarten programs as a result of the grant opportunity provided under this subtitle in States where Head Start programs are eligible for conversion described in subsection (a).

In providing technical assistance to carry out activities under this title, the Secretary shall coordinate that technical assistance, in appropriate cases, with technical assistance provided by the Secretary of Health and Human Services to carry out the programs authorized under the Head Start Act (42 U.S.C. 9831 et seq.), the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), and the maternal, infant and early childhood home visiting programs assisted under section 511 of the Social Security Act (42 U.S.C. 711).

There are authorized to be appropriated to carry out this subtitle—

(1) $1,300,000,000 for fiscal year 2018;

(2) $3,250,000,000 for fiscal year 2019;

(3) $5,780,000,000 for fiscal year 2020;

(4) $7,580,000,000 for fiscal year 2021;

(5) $8,960,000,000 for fiscal year 2022; and

(6) such sums as may be necessary for each of fiscal years 2023 through 2027.

(a) In general.—From the amounts appropriated under subsection (f), the Secretary of Education, in consultation with the Secretary of Health and Human Services, shall award competitive grants to States that wish to increase the capacity and build the infrastructure within the State to offer high-quality prekindergarten programs.

(b) Eligibility.—A State that is not receiving funds under section 115 may compete for grant funds under this subtitle if the State provides an assurance that the State will, through the support of grant funds awarded under this subtitle, meet the eligibility requirements of section 115 not later than 3 years after the date the State first receives grant funds under this subtitle.

(c) Grants.—

(1) DURATION.—The Secretary shall award grants to States under this subtitle for a period of not more than 3 years and such grants shall not be renewed.

(2) AUTHORITY TO SUBGRANT.—

(A) IN GENERAL.—A State receiving a grant under this subtitle may use the grant funds to make subgrants to eligible local entities (defined in section 112(7)) to carry out activities under the grant.

(B) ELIGIBLE LOCAL ENTITIES.—An eligible local entity receiving a subgrant under subparagraph (A) shall comply with the requirements for States receiving a grant under this subtitle, as appropriate.

(d) Application.—

(1) IN GENERAL.—A Governor of a State that desires to receive a grant under this subtitle shall submit an application to the Secretary of Education at such time, in such manner, and accompanied by such information as the Secretary may reasonably require, including a description of how the State plans to become eligible for grants under section 115 by not later than 3 years after the date the State first receives grant funds under this subtitle.

(2) DEVELOPMENT OF APPLICATION.—In developing an application for a grant under this subtitle, a Governor of a State shall consult with the State Advisory Council on Early Childhood Education and Care, and incorporate their recommendations, where applicable.

(e) Matching requirement.—

(1) IN GENERAL.—To be eligible to receive a grant under this subtitle, a State shall contribute for the activities for which the grant was awarded non-Federal matching funds in an amount equal to not less than 20 percent of the amount of the grant.

(2) NON-FEDERAL FUNDS.—To satisfy the requirement of paragraph (1), a State may use—

(A) cash; or

(B) an in-kind contribution.

(3) FINANCIAL HARDSHIP WAIVER.—The Secretary may waive paragraph (1) or reduce the amount of matching funds required under that paragraph for a State that has submitted an application for a grant under this subtitle if the State demonstrates, in the application, a need for such a waiver or reduction due to extreme financial hardship, as determined by the Secretary of Education.

(f) Authorization of Appropriations.—There are authorized to be appropriated to carry out this subtitle—

(1) $750,000,000 for fiscal year 2018; and

(2) such sums as may be necessary for each of fiscal years 2019 through 2027.

(a) Organization of State Advisory Group Member Representatives.—Section 223(f) of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5633(f)) is amended—

(1) in paragraph (1), by striking “an eligible organization composed of member representatives of the State advisory groups appointed under subsection (a)(3)” and inserting “a nonpartisan, nonprofit organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986,”; and

(2) by amending paragraph (2) to read as follows:

“(2) ASSISTANCE.—To be eligible to receive such assistance, such organization shall—

“(A) be governed by individuals who—

“(i) have been appointed by a chief executive of a State to serve as a State advisory group member under subsection (a)(3); and

“(ii) are elected to serve as a governing officer of such organization by a majority of the Chairs (or Chair-designees) of all such State advisory groups;

“(B) include member representatives from a majority of such State advisory groups, who shall be representative of regionally and demographically diverse States and jurisdictions;

“(C) annually seek appointments by the chief executive of each State of one State advisory group member and one alternate State advisory group member from each such State to implement the advisory functions specified in clauses (iv) and (v) of subparagraph (D), including serving on the PROMISE Advisory Panel, and make a record of any such appointments available to the public; and

“(D) agree to carry out activities that include—

“(i) conducting an annual conference of such member representatives for purposes relating to the activities of such State advisory groups;

“(ii) disseminating information, data, standards, advanced techniques, and program models;

“(iii) reviewing Federal policies regarding juvenile justice and delinquency prevention;

“(iv) advising the Administrator with respect to particular functions or aspects of the work of the Office, and appointing a representative, diverse group of members of such organization under subparagraph (C) to serve as an advisory panel of State juvenile justice advisors (referred to as the ‘PROMISE Advisory Panel’) to carry out the functions specified in subsection (g); and

“(v) advising the President and Congress with regard to State perspectives on the operation of the Office and Federal legislation pertaining to juvenile justice and delinquency prevention.”.

(b) PROMISE Advisory Panel.—Section 223 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5633) is further amended by adding at the end the following new subsection:

“(g) PROMISE Advisory Panel.—

“(1) FUNCTIONS.—The PROMISE Advisory Panel required under subsection (f)(2)(D) shall—

“(A) assess successful evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention carried out by PROMISE Coordinating Councils under section 511 of title V of division A of the Pathways Out of Poverty Act of 2017;

“(B) provide the Administrator with a list of individuals and organizations with experience in administering or evaluating practices that serve youth involved in, or at risk of involvement in, juvenile delinquency and criminal street gang activity, from which the Administrator shall select individuals who shall—

“(i) provide to the Administrator peer reviews of applications submitted by units of local government and Indian tribes pursuant to title V of division A of the Pathways Out of Poverty Act of 2017, to ensure that such applications demonstrate a clear plan to—

“(I) serve youth as part of an entire family unit; and

“(II) coordinate the delivery of service to youth among agencies; and

“(ii) advise the Administrator with respect to the award and allocation of PROMISE Planning grants to local and tribal governments that develop PROMISE Coordinating Councils, and of PROMISE Implementation grants to such PROMISE Coordinating Councils, pursuant to title V of division A of the Pathways Out of Poverty Act of 2017; and

“(C) develop performance standards to be used to evaluate programs and activities carried out with grants under title V of division A of the Pathways Out of Poverty Act of 2017, including the evaluation of changes achieved as a result of such programs and activities related to decreases in juvenile delinquency and criminal street gang activity, including—

“(i) prevention of involvement by at-risk youth in juvenile delinquency or criminal street gang activity;

“(ii) diversion of youth with a high risk of continuing involvement in juvenile delinquency or criminal street gang activity; and

“(iii) financial savings from deferred or eliminated costs, or other benefits, as a result of such programs and activities, and the reinvestment by the unit or tribe of any such savings.

“(2) ANNUAL REPORT.—Not later than 18 months after the date of the effective date of this subsection, and annually thereafter, the PROMISE Advisory Panel shall prepare a report containing the findings and determinations under paragraph (1)(A) and shall submit such report to Congress, the President, the Attorney General, and the chief executive and chief law enforcement officer of each State, unit of local government, and Indian tribe.”.

(c) Authorization of appropriations.—Section 299(a)(1) of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5671(a)(1)) is amended to read as follows:

“(1) There are authorized to be appropriated such sums as may be necessary to carry out this title for each of the fiscal years 2015 through 2017.”.

(a) Grant for collection of data To determine need.—Subject to the availability of appropriations, the Administrator of the Office of Juvenile Justice and Delinquency Prevention shall award a grant, on a competitive basis, to an organization to—

(1) collect and analyze data related to the existing juvenile delinquency and criminal street gang activity prevention and intervention needs and resources in each designated geographic area;

(2) use the data collected and analyzed under paragraph (1) to compile a list of designated geographic areas that have the most need of resources, based on such data, to carry out juvenile delinquency and criminal street gang activity prevention and intervention;

(3) use the data collected and analyzed under paragraph (1) to rank the areas listed under paragraph (2) in descending order by the amount of need for resources to carry out juvenile delinquency and criminal street gang activity prevention and intervention, ranking the area with the greatest need for such resources highest; and

(4) periodically update the list and rankings under paragraph (3) as the Administrator determines to be appropriate.

(b) Data sources.—In compiling such list and determining such rankings, the organization shall collect and analyze data relating to juvenile delinquency and criminal street gang activity prevention and intervention—

(1) using the geographic information system and Web-based mapping application known as the Socioeconomic Mapping and Resource Topography (SMART) system;

(2) from the Department of Health and Human Services, the Department of Labor, the Department of Housing and Urban Development, and the Department of Education; and

(3) from the annual KIDS Count Data Book and other data made available by the KIDS Count initiative of the Annie E. Casey Foundation.

(c) Use of data by the administrator.—The list and rankings required by this section shall be provided to the Administrator to be used to provide funds under this section in the most strategic and effective manner to ensure that resources and services are provided to youth in the communities with the greatest need for such resources and services.

(d) Limitation on use of collected data.—The information collected and analyzed under this section may not be used for any purpose other than to carry out the purposes of this section. Such information may not be used for any purpose related to the investigation or prosecution of any person, or for profiling of individuals based on race, ethnicity, socio-economic status, or any other characteristic.

(e) Authorization and limitation of appropriations.—Of the amount appropriated for fiscal year 2018 to carry out this section and subtitle A of title V of this Act, not more than 1 percent of such amount, or $1,000,000, whichever is less, shall be available to carry out this section.

The purposes of the grant programs established under this title are to—

(1) enable local and tribal communities to assess the unmet needs of youth who are involved in, or are at risk of involvement in, juvenile delinquency or criminal street gangs;

(2) develop plans appropriate for a community to address those unmet needs with juvenile delinquency and gang prevention and intervention practices; and

(3) implement and evaluate such plans in a manner consistent with this title.

In this title:

(1) ADMINISTRATOR.—The term “Administrator” means the Administrator of the Office of Juvenile Justice and Delinquency Prevention.

(2) COMMUNITY.—The term “community” means a unit of local government or an Indian tribe, or part of such a unit or tribe, as determined by such a unit or tribe for the purpose of applying for a grant under this title.

(3) DESIGNATED GEOGRAPHIC AREA.—The term “designated geographic area” means a 5-digit postal ZIP Code assigned to a geographic area by the United States Postal Service.

(4) EVIDENCE-BASED.—

(A) IN GENERAL.—The term “evidence-based”, when used with respect to a practice relating to juvenile delinquency and criminal street gang activity prevention and intervention, means a practice (including a service, program, activity, intervention, technology, or strategy) for which the Administrator has determined—

(i) causal evidence documents a relationship between the practice and its intended outcome, based on measures of the direction and size of a change, and the extent to which a change may be attributed to the practice; and

(ii) the use of scientific methods rules out, to the extent possible, alternative explanations for the documented change.

(B) SCIENTIFIC METHODS.—For the purposes of subparagraph (A), the term “scientific methods” means—

(i) evaluation by an experimental trial, in which participants are randomly assigned to participate in the practice that is subject to such trial; or

(ii) evaluation by a quasi-experimental trial, in which the outcomes for participants are compared with outcomes for a control group that is made up of individuals who are similar to such participants.

(5) INTERVENTION.—The term “intervention” means the provision of programs and services that are supported by research, are evidence-based or promising practices, and are provided to youth who are involved in, or who are identified by evidence-based risk assessment methods as being at high risk of continued involvement in, juvenile delinquency or criminal street gangs, as a result of indications that demonstrate involvement with problems such as truancy, substance abuse, mental health treatment needs, or siblings who have had involvement with juvenile or criminal justice systems.

(6) JUVENILE DELINQUENCY AND CRIMINAL STREET GANG ACTIVITY PREVENTION.—The term “juvenile delinquency and criminal street gang activity prevention” means the provision of programs and resources to children and families who have not yet had substantial contact with criminal justice or juvenile justice systems, that—

(A) are designed to reduce potential juvenile delinquency and criminal street gang activity risks; and

(B) are evidence-based or promising educational, health, mental health, school-based, community-based, faith-based, parenting, job training, social opportunities and experiences, or other programs, for youth and their families, that have been demonstrated to be effective in reducing juvenile delinquency and criminal street gang activity risks.

(7) PROMISING.—The term “promising”, when used with respect to a practice relating to juvenile delinquency and criminal street gang activity prevention and intervention, means a practice (including a service, program, activity, intervention, technology, or strategy) that, based on statistical analyses or a theory of change, the Administrator has determined—

(A) has outcomes from an evaluation that demonstrate such practice reduces juvenile delinquency and criminal street gang activity; and

(B) is part of a study being conducted to determine if such a practice is evidence-based.

(8) STATE.—The term “State” means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, American Samoa, Guam, the Northern Mariana Islands, and any other territories or possessions of the United States.

(9) THEORY OF CHANGE.—The term “theory of change” means a program planning strategy approved by the Administrator that outlines the types of interventions and outcomes essential to achieving a set of program goals.

(10) YOUTH.—The term “youth” means—

(A) an individual who is 18 years of age or younger; or

(B) in any State in which the maximum age at which the juvenile justice system of such State has jurisdiction over individuals exceeds 18 years of age, an individual who is such maximum age or younger.

(a) Grants authorized.—The Administrator is authorized to award grants to units of local government and Indian tribes to assist PROMISE Coordinating Councils with planning and assessing evidence-based and promising practices relating to juvenile delinquency and criminal street gang activity prevention and intervention, especially for youth who are involved in, or who are at risk of involvement in, juvenile delinquency and criminal street gang activity. Such PROMISE Coordinating Councils shall—

(1) conduct an objective needs and strengths assessment in accordance with section 512; and

(2) develop a PROMISE Plan in accordance with section 513, based on the assessment conducted in accordance with section 512.

(b) Grant duration, amount, and allocation.—

(1) DURATION.—A grant awarded under this section shall be for a period not to exceed one year.

(2) MAXIMUM GRANT AMOUNT.—A grant awarded under this section shall not exceed $300,000.

(c) Allocation.—

(1) MINIMUM ALLOCATION.—Subject to the availability of appropriations, the Administrator shall ensure that the total funds allocated under this section to units of local governments and Indian tribes in a State shall not be less than $1,000,000.

(2) RATABLE REDUCTION.—If the amount made available for grants under this section for any fiscal year is less than the amount required to provide the minimum allocation of funds under paragraph (1) to units of local government and Indian tribes in each State, then the amount of such minimum allocation shall be ratably reduced.

To be eligible to receive a grant under this subtitle, a unit of local government or an Indian tribe shall establish a PROMISE Coordinating Council for each community of such unit or tribe, respectively, for which such unit or tribe is applying for a grant under this subtitle. Each such community shall include one or more designated geographic areas identified on the list required under section 402(a)(2). The members of such a PROMISE Coordinating Council shall be representatives of public and private sector entities and individuals that—

(1) shall include, to the extent possible, at least one representative from each of the following:

(A) the local chief executive’s office;

(B) a local educational agency;

(C) a local health agency or provider;

(D) a local mental health agency or provider, unless the representative under subparagraph (C) also meets the requirements of this subparagraph;

(E) a local public housing agency;

(F) a local law enforcement agency;

(G) a local child welfare agency;

(H) a local juvenile court;

(I) a local juvenile prosecutor’s office;

(J) a private juvenile residential care entity;

(K) a local juvenile public defender’s office;

(L) a State juvenile correctional entity;

(M) a local business community representative; and

(N) a local faith-based community representative;

(2) shall include two representatives from each of the following:

(A) parents who have minor children, and who have an interest in the local juvenile or criminal justice systems;

(B) youth between the ages of 15 and 24 who reside in the jurisdiction of the unit or tribe; and

(C) members from nonprofit community-based organizations that provide effective delinquency prevention and intervention to youth in the jurisdiction of the unit or tribe; and

(3) may include other members, as the unit or tribe determines to be appropriate.

(a) Assessment.—Each PROMISE Coordinating Council receiving funds from a unit of local government or Indian tribe under this subtitle shall conduct an objective strengths and needs assessment of the resources of the community for which such PROMISE Coordinating Council was established, to identify the unmet needs of youth in the community with respect to evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention. Such assessment shall include, with respect to the community for which such PROMISE Coordinating Council was established—

(1) the number of youth who are at risk of involvement in juvenile delinquency or street gang activity;

(2) the number of youth who are involved in juvenile delinquency or criminal street gang activity, including the number of such youth who are at high risk of continued involvement;

(3) youth unemployment rates during the summer;

(4) the number of individuals on public financial assistance (including a breakdown of the numbers of men, women, and children on such assistance);

(5) the estimated number of youth who are chronically truant;

(6) the number of youth who have dropped out of school in the previous year;

(7) for the year before such assessment, the estimated total amount expended (by the community and other entities) for the incarceration of offenders who were convicted or adjudicated delinquent for an offense that was committed in such community, including amounts expended for the incarceration of offenders in prisons, jails, and juvenile facilities that are located in the United States but are not located in such community;

(8) a comparison of the amount under paragraph (7) with an estimation of the amount that would be expended for the incarceration of offenders described in such paragraph if the number of offenders described in such paragraph was equal to the national average incarceration rate per 100,000 population;

(9) a description of evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention available for youth in the community, including school-based programs, after school programs (particularly programs that have activities available for youth between 3 p.m. and 6 p.m. in the afternoon), weekend activities and programs, youth mentoring programs, faith and community-based programs, summer activities, and summer jobs, if any; and

(10) a description of evidence-based and promising intervention practices available for youth in the community.

(b) Limitation on use of assessment information.—Information gathered pursuant to this section may be used for the sole purpose of developing a PROMISE Plan in accordance with this subtitle.

(a) In general.—Each PROMISE Coordinating Council receiving funds from a unit of local government or Indian tribe under this subtitle shall develop a PROMISE Plan to provide for the coordination of, and, as appropriate, to support the delivery of, evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention to youth and families who reside in the community for which such PROMISE Coordinating Council was established. Such a PROMISE Plan shall—

(1) include the strategy by which the PROMISE Coordinating Council plans to prioritize and allocate resources and services toward the unmet needs of youth in the community, consistent with the needs and available resources of communities with the greatest need for assistance, as determined pursuant to section 402;

(2) include a combination of evidence-based and promising prevention and intervention practices that are responsive to the needs of the community; and

(3) ensure that cultural and linguistic needs of the community are met.

(b) Mandatory components.—Each PROMISE Plan shall—

(1) include a plan to connect youth identified in paragraphs (1) and (2) of section 512(a) to evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention;

(2) identify the amount or percentage of local funds that are available to the PROMISE Coordinating Council to carry out the PROMISE Plan;

(3) provide strategies to improve indigent defense delivery systems, with particular attention given to groups of children who are disproportionately represented in the State delinquency system and Federal criminal justice system, as compared to the representation of such groups in the general population of the State;

(4) provide for training (which complies with the American Bar Association Juvenile Justice Standards for the representation and care of youth in the juvenile justice system) of prosecutors, defenders, probation officers, judges and other court personnel related to issues concerning the developmental needs, challenges, and potential of youth in the juvenile justice system (including training related to adolescent development and mental health issues, and the expected impact of evidence-based practices and cost reduction strategies);

(5) ensure that the number of youth involved in the juvenile delinquency and criminal justice systems does not increase as a result of the activities undertaken with the funds provided under this subtitle;

(6) describe the coordinated strategy that will be used by the PROMISE Coordinating Council to provide at-risk youth with evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention;

(7) propose the performance evaluation process to be used to carry out section 530(d), which shall include performance measures to assess efforts to address the unmet needs of youth in the community with evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention; and

(8) identify the research partner the PROMISE Coordinating Council will use to obtain information on evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention, and for the evaluation under section 530(d) of the results of the activities carried out with funds under this subtitle.

(c) Voluntary components.—In addition to the components under subsection (b), a PROMISE Plan may include evidence-based or promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention in the following categories:

(1) Early childhood development services (such as pre-natal and neo-natal health services), early childhood prevention, voluntary home visiting programs, nurse-family partnership programs, parenting and healthy relationship skills training, child abuse prevention programs, Early Head Start, and Head Start.

(2) Child protection and safety services (such as foster care and adoption assistance programs), family stabilization programs, child welfare services, and family violence intervention programs.

(3) Youth and adolescent development services, including job training and apprenticeship programs, job placement and retention training, education and after school programs (such as school programs with shared governance by students, teachers, and parents, and activities for youth between the hours of 3 p.m. and 6 p.m. in the afternoon), mentoring programs, conflict resolution skills training, sports, arts, life skills, employment and recreation programs, summer jobs, and summer recreation programs, and alternative school resources for youth who have dropped out of school or demonstrate chronic truancy.

(4) Health and mental health services, including cognitive behavioral therapy, play therapy, and peer mentoring and counseling.

(5) Substance abuse counseling and treatment services, including harm-reduction strategies.

(6) Emergency, transitional, and permanent housing assistance (such as safe shelter and housing for runaway and homeless youth).

(7) Targeted gang prevention, intervention, and exit services such as tattoo removal, successful models of anti-gang crime outreach programs (such as “street worker” programs), and other criminal street gang truce or peacemaking activities.

(8) Training and education programs for pregnant teens and teen parents.

(9) Alternatives to detention and confinement programs (such as mandated participation in community service, restitution, counseling, and intensive individual and family therapeutic approaches).

(10) Pre-release, post-release, and reentry services to assist detained and incarcerated youth with transitioning back into and reentering the community.

Subject to the limitation under section 402(e), there are authorized to be appropriated for fiscal year 2018, such sums as may be necessary to carry out this subtitle and section 402.

(a) PROMISE Implementation grants authorized.—The Administrator of the Office of Juvenile Justice and Delinquency Prevention is authorized to award grants to units of local government and Indian tribes to assist PROMISE Coordinating Councils with implementing PROMISE Plans developed pursuant to subtitle A.

(b) Grant duration and amount.—

(1) DURATION.—A grant awarded under this subtitle shall be for a three-year period.

(2) MAXIMUM GRANT AMOUNT.—A grant awarded under this subtitle shall not be for more than $10,000,000 per year for each year of the grant period.

(c) Non-Federal funds required.—For each fiscal year during the three-year grant period for a grant under this subtitle, each unit of local government or Indian tribe receiving such a grant for a PROMISE Coordinating Council shall provide, from non-Federal funds, in cash or in-kind, 25 percent of the costs of the activities carried out with such grant.

(d) Evaluation.—Of any funds provided to a unit of local government or an Indian tribe for a grant under this subtitle, not more than $100,000 shall be used to provide a contract to a competitively selected organization to assess the progress of the unit or tribe in addressing the unmet needs of youth in the community, in accordance with the performance measures under section 513(b)(7).

(a) Application required.—To be eligible to receive a PROMISE Implementation grant under this subtitle, a unit of local government or Indian tribe that received a PROMISE Assessment and Planning grant under subtitle A shall submit an application to the Administrator of the Office of Juvenile Justice and Delinquency Prevention not later than one year after the date such unit of local government or Indian tribe was awarded such grant under subtitle A, in such manner, and accompanied by such information, as the Administrator, after consultation with the organization under section 223(f)(1) of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5633(f)(1)), may require.

(b) Contents of application.—Each application submitted under subsection (a) shall—

(1) identify potential savings from criminal justice costs, public assistance costs, and other costs avoided by utilizing evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention;

(2) document—

(A) investment in evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention to be provided by the unit of local government or Indian tribe;

(B) the activities to be undertaken with the grants funds;

(C) any expected efficiencies in the juvenile justice or other local systems to be attained as a result of implementation of the programs funded by the grant; and

(D) outcomes from such activities, in terms of the expected numbers related to reduced criminal activity;

(3) describe how savings sustained from investment in prevention and intervention practices will be reinvested in the continuing implementation of the PROMISE Plan; and

(4) provide an assurance that the local fiscal contribution with respect to evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention in the community for which the PROMISE Coordinating Council was established for each year of the grant period will not be less than the local fiscal contribution with respect to such practices in the community for the year preceding the first year of the grant period.

(a) Selection and distribution.—Grants awarded under this subtitle shall be awarded on a competitive basis. The Administrator shall—

(1) take such steps as may be necessary to ensure that grants are awarded to units of local governments and Indian tribes in areas with the highest concentrations of youth who are—

(A) at risk of involvement in juvenile delinquency or criminal street gang activity; and

(B) involved in juvenile delinquency or street gang activity and who are at high risk of continued involvement; and

(2) give consideration to the need for grants to be awarded to units of local governments and Indian tribes in each region of the United States, and among urban, suburban, and rural areas.

(b) Extension of grant award.—The Administrator may extend the grant period under section 530(b)(1) for a PROMISE Implementation grant to a unit of local government or an Indian tribe, in accordance with regulations issued by the Administrator.

(c) Renewal of grant award.—Subject to the availability of appropriations, the Administrator may renew a PROMISE Implementation grant to a unit of local government or an Indian tribe to provide such unit or tribe with additional funds to continue implementation of a PROMISE Plan. Such a renewal—

(1) shall be initiated by an application for renewal from a unit of local government or an Indian tribe;

(2) shall be carried out in accordance with regulations issued by the Administrator; and

(3) shall not be granted unless the Administrator determines such a renewal to be appropriate based on the results of the evaluation conducted under section 523(a) with respect to the community of such unit or tribe for which a PROMISE Coordinating Council was established, and for which such unit or tribe is applying for renewal.

Not later than one year after the end of the grant period for which a unit of local government or an Indian tribe receives a PROMISE Implementation grant, and annually thereafter for as long as such unit or tribe continues to receive Federal funding for a PROMISE Coordinating Council, such unit or tribe shall report to the Administrator regarding the use of Federal funds to implement the PROMISE Plan developed under subtitle A.

There are authorized to be appropriated to carry out this subtitle such sums as may be necessary for each of the fiscal years 2018 through 2020.

A unit of local government or Indian tribe receiving a grant under this title shall use such grant only to supplement, and not supplant, the amount of funds that, in the absence of such grant, would be available to address the needs of youth in the community with respect to evidence-based and promising practices related to juvenile delinquency and criminal street gang activity prevention and intervention.

The Administrator of the Office of Juvenile Justice and Delinquency Prevention, in conjunction with the PROMISE Advisory Panel, shall establish and utilize a transparent, reliable, and valid system for evaluating applications for PROMISE Assessment and Planning grants and for PROMISE Implementation grants, and shall determine which applicants meet the criteria for funding, based primarily on a determination of greatest need (in accordance with section 402), with due consideration to other enumerated factors and the indicated ability of the applicant to successfully implement the program described in the application.

Subject to the availability of appropriations under this title, the Administrator shall, in consultation with the organization provided assistance under section 223(f)(1) of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5633(f)(1)), provide for an evaluation of the programs and activities carried out with grants under this title. In carrying out this section, the Administrator shall—

(1) award grants to institutions of higher education (including institutions that are eligible to receive funds under part F of title III of the Higher Education Act of 1965 (20 U.S.C. 1067q et seq.)), to facilitate the evaluation process and measurement of achieved outcomes;

(2) identify evidence-based and promising practices used by PROMISE Coordinating Councils under PROMISE Implementation grants that have proven to be effective in preventing involvement in, or diverting further involvement in, juvenile delinquency or criminal street gang activity; and

(3) ensure—

(A) that such evaluation is based on the performance standards that are developed by the PROMISE Advisory Panel in accordance with section 223(g) of the Juvenile Justice and Delinquency Prevention Act of 1974 (as added by section 401(b) of title IV of this division);

(B) the development of longitudinal and clinical trial evaluation and performance measurements with regard to the evidence-based and promising practices funded under this title; and

(C) the dissemination of the practices identified in paragraph (2) to units of local government and Indian tribes to promote the use of such practices by such units and tribes to prevent involvement in, or to divert further involvement in, juvenile delinquency or criminal street gang activity.

This title may be cited as the “Pell Grant Preservation and Expansion Act”.

Congress finds the following:

(1) The United States needs individuals with the knowledge, skills, and abilities that enable them to thrive as educated citizens in society and successfully participate in an interconnected economy.

(2) Investments in higher education through student aid such as the Federal Pell Grant program under section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a) help students and families reach, afford, and complete education and training opportunities beyond high school.

(3) The Federal Pell Grant program is the largest source of federally funded grant aid for postsecondary education.

(4) The Federal Pell Grant program allows millions of people of the United States to attend college and is especially vital to students of color. Three in five African-American undergraduate students, and one-half of all Latino undergraduate students, rely on the Federal Pell Grant program.

(5) The Federal Pell Grant program should continue to be a reliable source of funding for aspiring students, their families, and future generations that they can count on to be there for them when they seek higher education.

(6) To stabilize Federal Pell Grant funding and ensure the grant will continue to serve millions of students now and in the future, the program should become a fully mandatory program that grows with inflation.

(7) Protecting surplus funds, restoring prior eligibility cuts, and expanding access to underserved students will give millions of students and families the critical student aid support they need and deserve.

Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

(a) Mandatory funding; reinstating eligibility for incarcerated individuals.—Section 401 (20 U.S.C. 1070a) is amended—

(1) in subsection (a)(1), by striking “through fiscal year 2017”;

(2) in subsection (b)—

(A) by striking paragraphs (1), (6), and (7);

(B) by redesignating paragraph (8) as paragraph (7);

(C) by striking subparagraph (A) of paragraph (2);

(D) by redesignating subparagraph (B) of paragraph (2) as paragraph (2);

(E) by inserting before paragraph (2) (as redesignated by subparagraph (D)) the following:

“(1) Amount.—The amount of the Federal Pell Grant for a student eligible under this subpart shall be—

“(A) the maximum Federal Pell Grant described in paragraph (6); less

“(B) the amount equal to the amount determined to be the expected family contribution with respect to such student for such year.”;

(F) in paragraph (4), by striking “maximum amount of a Federal Pell Grant award determined under paragraph (2)(A)” and inserting “maximum Federal Pell Grant described in paragraph (6)”;

(G) in paragraph (5), by striking “maximum amount of a Federal Pell Grant award determined under paragraph (2)(A)” and inserting “maximum amount of a Federal Pell Grant award described in paragraph (6)”;

(H) by inserting after paragraph (5) the following:

“(6) MAXIMUM FEDERAL PELL GRANT.—

“(A) AWARD YEAR 2018–2019.—For award year 2018–2019, the maximum Federal Pell Grant shall be $6,420.

“(B) SUBSEQUENT AWARD YEARS.—For award year 2019–2020 and each subsequent award year, the maximum Federal Pell Grant shall be equal to the total maximum Federal Pell Grant for the preceding award year under this paragraph—

“(i) increased by the annual adjustment percentage for the award year for which the amount under this subparagraph is being determined; and

“(ii) rounded to the nearest $5.

“(C) DEFINITION OF ANNUAL ADJUSTMENT PERCENTAGE.—In this paragraph, the term ‘annual adjustment percentage’, as applied to an award year, is equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary, using the definition in section 478(f)) for the most recent calendar year ending prior to the beginning of that award year.”; and

(I) in paragraph (7), as redesignated by subparagraph (B), by striking “may exceed” and all that follows through the period and inserting “may exceed the maximum Federal Pell Grant available for an award year.”;

(3) in subsection (f)—

(A) in paragraph (1), by striking the matter preceding subparagraph (A) and inserting the following: “After receiving an application for a Federal Pell Grant under this subpart, the Secretary (including any contractor of the Secretary processing applications for Federal Pell Grants under this subpart) shall, in a timely manner, furnish to the student financial aid administrator at each institution of higher education that a student awarded a Federal Pell Grant under this subpart is attending, the expected family contribution for each such student. Each such student financial administrator shall— ”; and

(B) in paragraph (3)—

(i) by striking “after academic year 1986–1987”; and

(ii) in paragraph (3), by striking “the Committee on Appropriations of the Senate, the Committee on Appropriations of the House of Representatives, and”;

(4) by striking subsections (g) and (h);

(5) by redesignating subsections (i) and (j) as subsections (g) and (h), respectively; and

(6) by adding at the end the following:

“(k) Appropriation of funds.—There are authorized to be appropriated, and there are appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for fiscal year 2017 and each subsequent fiscal year to provide the maximum Federal Pell Grant for which a student shall be eligible under this section during an award year.”.

(b) Repeal of scoring requirement.—Section 406 of H. Con. Res. 95 (109th Congress) is amended—

(1) by striking subsection (b); and

(2) by striking “(a) In general.—Upon” and inserting the following: “Upon”.

Section 401(c)(5) (20 U.S.C. 1070a(c)(5)) is amended—

(1) by striking “(5) The period” and inserting the following: “(5) Maximum period.—

“(A) IN GENERAL.—Except as provided in subparagraph (B), the period”; and

(2) by adding at the end the following:

“(B) EXCEPTION.—

“(i) IN GENERAL.—Any Federal Pell Grant that a student received during a period described in subclause (I) or (II) of clause (ii) shall not count towards the student’s duration limits under this paragraph.

“(ii) APPLICABLE PERIODS.—Clause (i) shall apply with respect to any Federal Pell Grant awarded to a student to attend an institution—

“(I) during a period—

“(aa) for which the student received a loan under this title; and

“(bb) for which the loan described in item (aa) is forgiven under—

“(AA) section 437(c)(1) or 464(g)(1) due to the closing of the institution;

“(BB) section 455(h) due to the student’s successful assertion of a defense to repayment of the loan; or

“(CC) section 432(a)(6), section 685.215 of title 34, Code of Federal Regulations (or a successor regulation), or any other loan forgiveness provision or regulation under this Act, as a result of a determination by the Secretary or a court that the institution committed fraud or other misconduct; or

“(II) during a period for which the student did not receive a loan under this title but for which, if the student had received such a loan, the student would have qualified for loan forgiveness under subclause (I)(bb).”.

Section 484 (20 U.S.C. 1091) is amended—

(1) in subsection (a)(5), by inserting “, or be a Dreamer student, as defined in subsection (u)” after “becoming a citizen or permanent resident”; and

(2) by adding at the end the following:

“(u) Dreamer students.—

“(1) IN GENERAL.—In this section, the term ‘Dreamer student’ means an individual who—

“(A) was younger than 16 years of age on the date on which the individual initially entered the United States;

“(B) has provided a list of each secondary school that the student attended in the United States; and

“(C) (i) has earned a high school diploma, the recognized equivalent of such diploma from a secondary school, or a high school equivalency diploma in the United States or is scheduled to complete the requirements for such a diploma or equivalent before the next academic year begins;

“(ii) has acquired a degree from an institution of higher education or has completed not less than 2 years in a program for a baccalaureate degree or higher degree at an institution of higher education in the United States and has made satisfactory academic progress, as defined in subsection (c), during such time period;

“(iii) at any time was eligible for a grant of deferred action under—

“(I) the June 15, 2012, memorandum from the Secretary of Homeland Security entitled ‘Exercising Prosecutorial Discretion with Respect to Individuals Who Came to the United States as Children’; or

“(II) the November 20, 2014, memorandum from the Secretary of Homeland Security entitled ‘Exercising Prosecutorial Discretion with Respect to Individuals Who Came to the United States as Children and with Respect to Certain Individuals Who Are the Parents of U.S. Citizens or Permanent Residents’; or

“(iv) has served in the uniformed services, as defined in section 101 of title 10, United States Code, for not less than 4 years and, if discharged, received an honorable discharge.

“(2) HARDSHIP EXCEPTION.—The Secretary shall issue regulations that direct when the Department shall waive the requirement of subparagraph (A) or (B), or both, of paragraph (1) for an individual to qualify as a Dreamer student under such paragraph, if the individual—

“(A) demonstrates compelling circumstances for the inability to satisfy the requirement of such subparagraph (A) or (B), or both; and

“(B) satisfies the requirement of paragraph (1)(C).”.

(a) Repeal.—Subsection (r) of section 484 (20 U.S.C. 1091(r)) is repealed.

(b) Revision of FAFSA form.—Section 483 of the Higher Education Act of 1965 (20 U.S.C. 1090) is amended by adding at the end the following:

“(i) Convictions.—The Secretary shall not include any question about the conviction of an applicant for the possession or sale of illegal drugs on the FAFSA (or any other form developed under subsection (a)).”.

(c) Conforming amendments.—The Act (20 U.S.C. 1001 et seq.) is amended—

(1) in section 428(b)(3) (20 U.S.C. 1078(b)(3))—

(A) in subparagraph (C), by striking “485(l)” and inserting “485(k)”; and

(B) in subparagraph (D), by striking “485(l)” and inserting “485(k)”;

(2) in section 435(d)(5) (20 U.S.C. 1085(d)(5))—

(A) in subparagraph (E), by striking “485(l)” and inserting “485(k)”; and

(B) in subparagraph (F), by striking “485(l)” and inserting “485(k)”;

(3) in section 484 (20 U.S.C. 1091), as amended by section 6, by redesignating subsections (s), (t), and (u) as subsections (r), (s), and (t), respectively;

(4) in section 485 (20 U.S.C. 1092)—

(A) by striking subsection (k); and

(B) by redesignating subsections (l) and (m) as subsections (k) and (l), respectively; and

(5) in section 487(e)(2)(B)(ii)(IV) (20 U.S.C. 1094(e)(2)(B)(ii)(IV)), by striking “(l) of section 485” and inserting “(k) of section 485”.

(a) In general.—Section 401 (20 U.S.C. 1070a), as amended by section 404, is further amended by inserting after subsection (h) the following:

“(i) Job training Federal Pell Grant program.—

“(1) DEFINITIONS.—In this subsection:

“(A) ELIGIBLE CAREER PATHWAY PROGRAM.—The term ‘eligible career pathway program’ means a program that—

“(i) meets the requirements of section 484(d)(2);

“(ii) is a program of training services listed under section 122(d) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3152(d)); and

“(iii) is part of a career pathway, as defined in section 3 of such Act (29 U.S.C. 3102).

“(B) JOB TRAINING PROGRAM.—The term ‘job training program’ means a career and technical education program at an institution of higher education that—

“(i) provides not less than 150, and not more than 600, clock hours of instructional time over a period of not less than 8, and not more than 15, weeks;

“(ii) provides training aligned with the requirements of employers in the State or local area, which may include in-demand industry sectors or occupations, as defined in section 3 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102), in the State or local area (as defined in such section);

“(iii) is a program of training services, and provided through an eligible provider of training services, listed under section 122(d) of such Act (29 U.S.C. 3152(d));

“(iv) provides a student, upon completion of the program, with a recognized postsecondary credential, as defined in section 3 of such Act, that is recognized by employers in the relevant industry, including credentials recognized by industry or sector partnerships in the State or local area where the industry is located;

“(v) has been determined, by the institution of higher education, to provide academic content, an amount of instructional time, and a recognized postsecondary credential that are sufficient to—

“(I) meet the hiring requirements of potential employers; and

“(II) satisfy any applicable educational prerequisite requirement for professional licensure or certification, so that the student who completes the program and seeks employment qualifies to take any licensure or certification examination needed to practice or find employment in an occupation that the program prepares students to enter;

“(vi) may include integrated or basic skills courses; and

“(vii) may be offered as part of an eligible career pathway program.

“(2) IN GENERAL.—For the award year beginning on July 1, 2018, and each subsequent award year, the Secretary shall carry out a program through which the Secretary shall award job training Federal Pell Grants to students in job training programs. Each job training Federal Pell Grant awarded under this subsection shall have the same terms and conditions, and be awarded in the same manner, as a Federal Pell Grant awarded under subsection (a), except as follows:

“(A) A student who is eligible to receive a job training Federal Pell Grant under this subsection is a student who—

“(i) has not yet attained a baccalaureate degree or postbaccalaureate degree;

“(ii) attends an institution of higher education;

“(iii) is enrolled, or accepted for enrollment, in a job training program at such institution of higher education; and

“(iv) meets all other eligibility requirements for a Federal Pell Grant (except with respect to the type of program of study, as provided in clause (iii)).

“(B) The amount of a job training Federal Pell Grant for an eligible student shall be determined under subsection (b)(1), except that—

“(i) the maximum Federal Pell Grant awarded under this subsection for an award year shall be 50 percent of the maximum Federal Pell Grant awarded under subsection (b)(5) applicable to that award year; and

“(ii) subsection (b)(4) shall not apply.

“(3) INCLUSION IN TOTAL ELIGIBILITY PERIOD.—Any period during which a student receives a job training Federal Pell Grant under this subsection shall be included in calculating the student's period of eligibility for Federal Pell Grants under subsection (c), and any regulations under such subsection regarding students who are enrolled in an undergraduate program on less than a full-time basis shall similarly apply to students who are enrolled in a job training program at an eligible institution on less than a full-time basis.”.

(b) Additional safeguards.—Section 496(a)(4) (20 U.S.C. 1099b(a)(4)) is amended—

(1) in subparagraph (A), by striking “and” after the semicolon;

(2) in subparagraph (B)(ii), by inserting “and” after the semicolon; and

(3) by adding at the end the following:

“(C) if such agency or association has or seeks to include within its scope of recognition the evaluation of the quality of institutions of higher education participating in the job training Federal Pell Grant program under section 401(i), such agency or association shall, in addition to meeting the other requirements of this subpart, demonstrate to the Secretary that, with respect to such job training programs—

“(i) the agency or association’s standards include a process for determining whether the program provides training aligned with the requirements of employers in the State or local area served by the program; and

“(ii) the agency or association requires a demonstration that the program—

“(I) has identified each recognized postsecondary credential offered and the corresponding industry or sector partnership that actively recognizes each credential in the relevant industry in the State or local area where the industry is located; and

“(II) provides the academic content and amount of instructional time that is sufficient to—

“(aa) meet the hiring requirements of potential employers; and

“(bb) satisfy any applicable educational prerequisites for professional licensure or certification requirements so that the student who completes the program and seeks employment qualifies to take any licensure or certification examination that is needed to practice or find employment in an occupation that the program prepares students to enter;”.

(a) Amendments.—Part A of title IV (20 U.S.C. 1070a et seq.) is amended—

(1) in section 401, as amended by section 408, by inserting after subsection (i) the following:

“(j) Scholarships for veteran's dependents.—

“(1) DEFINITION OF ELIGIBLE VETERAN'S DEPENDENT.—In this subsection, the term ‘eligible veteran's dependent’ means a dependent or an independent student—

“(A) whose parent or guardian was a member of the Armed Forces of the United States and died as a result of performing military service in Iraq or Afghanistan after September 11, 2001; and

“(B) who, at the time of the parent or guardian's death, was—

“(i) less than 24 years of age; or

“(ii) enrolled at an institution of higher education on a part-time or full-time basis.

“(2) GRANTS.—

“(A) IN GENERAL.—The Secretary shall award a Federal Pell Grant, as modified in accordance with the requirements of this subsection, to each eligible veteran's dependent to assist in paying the eligible veteran's dependent's cost of attendance at an institution of higher education.

“(B) DESIGNATION.—Federal Pell Grants made under this subsection may be known as ‘Iraq and Afghanistan Service Grants’.

“(3) PREVENTION OF DOUBLE BENEFITS.—No eligible veteran's dependent may receive a grant under both this subsection and subsection (a).

“(4) TERMS AND CONDITIONS.—The Secretary shall award Iraq and Afghanistan Service Grants under this subsection in the same manner and with the same terms and conditions, including the length of the period of eligibility, as the Secretary awards Federal Pell Grants under subsection (a), except that—

“(A) the award rules and determination of need applicable to the calculation of Federal Pell Grants under subsection (a) shall not apply to Iraq and Afghanistan Service Grants;

“(B) the provisions of paragraphs (1)(B) and (3) of subsection (b), and subsection (f), shall not apply;

“(C) the maximum period determined under subsection (c)(5) shall be determined by including all Iraq and Afghanistan Service Grants received by the eligible veteran's dependent, including such Grants received under subpart 10 before the effective date of this subsection; and

“(D) an Iraq and Afghanistan Service Grant to an eligible veteran's dependent for any award year shall equal the maximum Federal Pell Grant available under subsection (b)(5) for that award year, except that an Iraq and Afghanistan Service Grant—

“(i) shall not exceed the cost of attendance of the eligible veteran's dependent for that award year; and

“(ii) shall be adjusted to reflect the attendance by the eligible veteran's dependent on a less than full-time basis in the same manner as such adjustments are made for a Federal Pell Grant under subsection (a).

“(5) ESTIMATED FINANCIAL ASSISTANCE.—For purposes of determinations of need under part F, an Iraq and Afghanistan Service Grant shall not be treated as estimated financial assistance as described in sections 471(3) and 480(j).”; and

(2) by striking subpart 10 of part A (20 U.S.C. 1070h).

(b) Effective date; transition.—

(1) EFFECTIVE DATE.—The amendments made by this section shall take effect with respect to the award year immediately following the date of enactment of this Act.

(2) TRANSITION.—The Secretary shall take such steps as are necessary to transition from the Iraq and Afghanistan Service Grants program under subpart 10 of part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070h), as in effect on the day before the effective date of this section, and the Iraq and Afghanistan Service Grants program under section 401(j) of the Higher Education Act of 1965 (20 U.S.C. 1070a(j)), as amended by this section.

(a) Dependent students.—Section 475(g)(2)(D) (20 U.S.C. 1087oo(g)(2)(D)) is amended to read as follows:

“(D) an income protection allowance (or a successor amount prescribed by the Secretary under section 478) of $9,010 for academic year 2018–2019;”.

(b) Independent students without dependents other than a spouse.—Section 476(b)(1)(A)(iv) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended to read as follows:

“(iv) an income protection allowance (or a successor amount prescribed by the Secretary under section 478)—

“(I) for single or separated students, or married students where both are enrolled pursuant to subsection (a)(2), of $14,010 for academic year 2018–2019; and

“(II) for married students where one is enrolled pursuant to subsection (a)(2), of $22,460 for academic year 2018–2019;”.

(c) Independent students with dependents other than a spouse.—Section 477(b)(4) (20 U.S.C. 1087qq(b)(4)) is amended to read as follows:

“(4) INCOME PROTECTION ALLOWANCE.—The income protection allowance is determined by the following table (or a successor table prescribed by the Secretary under section 478), for academic year 2018–2019:

(d) Updated tables and amounts.—Section 478(b) (20 U.S.C. 1087rr(b)) is amended—

(1) in paragraph (1), by striking subparagraphs (A) and (B) and inserting the following:

“(A) IN GENERAL.—For each academic year after academic year 2018–2019, the Secretary shall publish in the Federal Register a revised table of income protection allowances for the purpose of sections 475(c)(4) and 477(b)(4), subject to subparagraphs (B) and (C).

“(B) TABLE FOR INDEPENDENT STUDENTS.—For each academic year after academic year 2018–2019, the Secretary shall develop the revised table of income protection allowances by increasing each of the dollar amounts contained in the table of income protection allowances under section 477(b)(4) by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary for the most recent calendar year ending prior to the beginning of the academic year for which the determination is being made), and rounding the result to the nearest $10.”; and

(2) in paragraph (2), by striking “shall be developed” and all that follows through the period at the end and inserting “shall be developed for each academic year after academic year 2018–2019, by increasing each of the dollar amounts contained in such section for academic year 2018–2019 by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary for the most recent calendar year ending prior to the beginning of the academic year for which the determination is being made), and rounding the result to the nearest $10.”.

Section 479(c) (20 U.S.C. 1087ss(c)) is amended—

(1) in paragraph (1)(B), by striking “$23,000” and inserting “$34,000”;

(2) in paragraph (2)(B), by striking “$23,000” and inserting “$34,000”; and

(3) in the matter following paragraph (2)(B), by striking “adjusted according to increases in the Consumer Price Index, as defined in section 478(f)” and inserting “annually increased by the estimated percentage change in the Consumer Price Index, as defined in section 478(f), for the most recent calendar year ending prior to the beginning of an award year, and rounded to the nearest $1,000”.

Section 401(c)(5)(A) (20 U.S.C. 1070a(c)(5)(A)), as amended by section 405, is further amended by striking “12” each place the term appears and inserting “14”.

The Act (20 U.S.C. 1001 et seq.) is amended—

(1) in section 401A(d)(1)(B)(i) (20 U.S.C. 1070a–1(d)(1)(B)(i)), by striking “section 401(b)(2)(B)” and inserting “section 401(b)(2)”;

(2) in section 402D(d)(1) (20 U.S.C. 1070a–14(d)(1)), by striking “section 401(b)(2)(A)” and inserting “section 401(b)(1)”;

(3) in section 420R(d)(2) (20 U.S.C. 1070h(d)(2)), by striking “subsection (b)(1), the matter following subsection (b)(2)(A)(v),”;

(4) in section 435(a)(5)(A)(i)(I) (20 U.S.C. 1085(a)(5)(A)(i)(I)), by striking “under section 401(b)(2)(A)” and inserting “, as appropriate, under section 401(b)(2)(A) (as in effect on the day before the effective date of the Pell Grant Preservation and Expansion Act) or section 401(b)(1)”;

(5) in section 483(e)(3)(A)(ii) (20 U.S.C. 1090(e)(3)(A)(ii)), by striking “section 401(b)(2)(A)” and inserting “section 401(b)(1)”;

(6) in section 485E(b)(1)(A) (20 U.S.C. 1092f(b)(1)(A)), by striking “section 401(b)(2)(A)” and inserting “section 401(b)(1)”; and

(7) in section 894(f)(2)(C)(ii)(I) (20 U.S.C. 1161y(f)(2)(C)(ii)(I)), by striking “section 401(b)(2)(A)” and inserting “section 401(b)(1)”.

Except as otherwise provided, this title, and the amendments made by this title, shall take effect beginning on July 1, 2018, and shall apply to grant and award determinations made under title IV of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) beginning with the 2018–2019 award year.

The Congress finds the following:

(1) Two principal Federal housing goals are to increase the rate of home ownership and make rental housing affordable for low-income families and individuals.

(2) Much more progress has been achieved on the first goal than on the second goal.

(3) The Federal Government devotes more than three times the amount of budgetary resources to supporting home ownership than it devotes to making affordable rental housing available.

(4) The burden of housing costs is more pronounced among renters than among owners.

(5) There is a shortage of more than 7 million homes affordable to families in the bottom 20 percent of income, meaning that there are only 30 affordable units for every 100 families.

(6) Only one in four families that qualify for rental housing assistance receives benefits.

(7) Housing assistance waiting lists can be 10 years long and in many communities are closed.

(8) The shortage of rental homes that are affordable for extremely low-income households to be the principal cause of homelessness in the United States.

(9) Public housing facilities in the United States have more than $26 billion in deferred maintenance after decades of neglect which results in a loss of 10,000 units each year.

(10) The low-income housing tax credit successfully provides 100,000 units of affordable housing every year.

(11) Every tax reform commission has recommended capping the mortgage interest deduction and converting it to a fairer and simpler credit.

(12) More than 75 percent of the value of the mortgage interest deduction inures to the benefit of the top 20 percent of earners.

(13) Fewer than half of tax filers with a home mortgage claim the mortgage interest deduction.

(14) Only 9 percent of rural tax filers claim the mortgage interest deduction.

(15) Ninety-six percent of homes sold between 2005 and 2011 sold for less than $500,000.

(16) A better approach that provides equitable benefits for families who buy homes, enables more low- and moderate-income homeowners to receive a benefit, and invests in affordable rental housing to assist those who used to be homeless or who have extremely or very low incomes is needed to strengthen families and communities.

(a) Nonrefundable credit.—Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:

(b) Phaseout of deduction.—Section 163(h) of such Code is amended by adding at the end the following new paragraph:

“(5) PHASEOUT.—

“(A) IN GENERAL.—In the case of any taxable year beginning in a calendar year after 2017, the amount otherwise allowable as a deduction by reason of paragraph (2)(D) shall be the applicable percentage of such amount.

“(B) APPLICABLE PERCENTAGE.—For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table:

(c) Phasedown of mortgage limit.—Subparagraph (B) of section 163(h)(3) of such Code is amended by adding at the end the following:

“(iii) PHASEDOWN.—

“(I) IN GENERAL.—In the case of any taxable year beginning in calendar years 2018 through 2022, clause (ii) shall be applied by substituting the amounts specified in the table in subclause (II) of this clause for ‘$1,000,000’ and ‘$500,000’, respectively.

“(II) PHASEDOWN AMOUNTS.—For purposes of subclause (I), the amounts specified in this subclause for a taxable year shall be the amounts specified in the following table:

(d) Clerical amendment.—The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after section 25D the following new item:

“Sec. 25E. Interest on indebtedness secured by qualified residence.”.

(e) Effective date.—The amendments made by this section shall apply with respect to interest paid or accrued after December 31, 2017.

(a) In general.—Subparagraph (B) of section 216(b)(1) of the Internal Revenue Code of 1986 is amended by inserting “or land,” after “building,”.

(b) Effective date.—The amendment made by subsection (a) shall apply to amounts paid or accrued after December 31, 2016.

(a) In general.—Subclause (I) of section 42(h)(3)(C)(ii) of the Internal Revenue Code of 1986 is amended by striking “$1.75” and inserting “$2.70”.

(b) Inflation adjustment.—Subparagraph (H) of section 42(h)(3) of such Code is amended to read as follows:

“(H) COST-OF-LIVING ADJUSTMENT.—

“(i) IN GENERAL.—In the case of a calendar year after 2016, the $2,000,000 amount in subparagraph (C) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting ‘calendar year 2001’ for ‘calendar year 1992’ in subparagraph (B) thereof.

“(ii) PER CAPITA AMOUNT.—In the case of a calendar year after 2017, the $2.70 amount in subparagraph (C) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting ‘calendar year 2016’ for ‘calendar year 1992’ in subparagraph (B) thereof.

“(iii) ROUNDING.—

“(I) In the case of the $2,000,000 amount, any increase under clause (i) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.

“(II) In the case of the $2.70 amount, any increase under clause (ii) which is not a multiple of 5 cents shall be rounded to the next lowest multiple of 5 cents.”.

(c) Eligible basis.—Clause (i) of section 42(d)(5)(B) of such Code is amended by striking “and” at the end of subclause (I), by striking the period at the end of subclause (II) and inserting “, and”, and by adding at the end the following:

“(III) in the case of a building containing units which are designated to serve extremely low-income households by the State housing credit agency and require the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified low-income housing project, the eligible basis of such building determined by the portion of such units shall be 150 percent of such basis determined without regard to this subparagraph.”.

(d) Effective date.—The amendments made by this section shall apply to allocations made in calendar years beginning after December 31, 2016.

(a) Use of savings.—For each year, the Secretary of the Treasury shall determine the amount of revenues accruing to the general fund of the Treasury by reason of the enactment of section 602 that remain after use of such revenues in accordance with section 604 and shall credit an amount equal to such remaining revenues as follows:

(1) HOUSING TRUST FUND.—The Secretary shall credit the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4568) with an amount equal to 60 percent of the amount of such remaining revenues.

(2) SECTION 8 RENTAL ASSISTANCE.—The Secretary shall credit an amount equal to 30 percent of the amount of such remaining revenues to the Secretary of Housing and Urban Development for use only for providing tenant- and project-based rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).

(3) PUBLIC HOUSING CAPITAL FUND.—The Secretary shall credit an amount equal to 10 percent of the amount of such remaining revenues to the Public Housing Capital Fund under section 9(d) of the United States Housing Act of 1937 (42 U.S.C. 1437g(d)).

(b) Changes to Housing Trust Fund.—Not later than the expiration of the 6-month period beginning on the date of the enactment of this Act, the Secretary of Housing and Urban Development shall revise the regulations relating to the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4568) to provide that such section is carried out with the maximum amount of flexibility possible while complying with such section, which shall include revising such regulations—

(1) to increase the limitation on amounts from the Fund that are available for use for operating assistance for housing;

(2) to allow public housing agencies and tribally designated housing entities to be recipient of grants amounts from the Fund that are allocated to a State or State designated entity; and

(3) eliminate the applicability of rules for the Fund that are based on the HOME Investment Partnerships Act (42 U.S.C. 1721 et seq.).

(a) In general.—Section 42(i)(3)(D)(i) of the Internal Revenue Code of 1986 is amended by redesignating subclauses (II) and (III) as subclauses (IV) and (V) and inserting after subclause (I) the following new subclauses:

“(II) a student who was (prior to occupying such unit) a homeless child or youth (as defined in section 725 of the McKinney-Vento Homeless Assistance Act),

“(III) a student who was (prior to occupying such unit) a homeless veteran (as defined in section 2002 of title 38, United States Code),”.

(b) Effective date.—The amendments made by this section shall apply to determinations made on or after the date of the enactment of this Act.

(a) In general.—Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

(b) Credit To be part of general business credit.—

(1) IN GENERAL.—Subsection (b) of section 38 of such Code is amended by striking “plus” at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting “, plus”, and by adding at the end the following new paragraph:

“(37) the renters credit determined under section 45S(a).”.

(2) CREDIT ALLOWABLE AGAINST ALTERNATIVE MINIMUM TAX.—Subparagraph (B) of section 38(c)(4) of such Code is amended by redesignating clauses (vii) through (ix) as clauses (viii) through (x), respectively, and by inserting after clause (vi) the following new clause:

“(vii) the credit determined under section 45S,”.

(c) Clerical amendment.—The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

“Sec. 45S. Renters credit.”.

(d) Effective date.—The amendments made by this section shall apply to allocations made for calendar years after 2016 and to taxable years ending after December 31, 2016.

Except as otherwise expressly provided in this title, wherever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the amendment or repeal shall be considered to be made to a section or other provision of the Social Security Act.

Section 402(a)(1)(A)(i) (42 U.S.C. 602(a)(1)(A)(i)) is amended by inserting “, including whether and how the State will give priority to providing benefits and services in areas of the State with the greatest need (such as areas with the greatest unemployment rates, the greatest poverty rates, and the least job opportunity to population ratios)” before the period.

(a) State family assistance grant.—

(1) IN GENERAL.—Section 403(a)(1) (42 U.S.C. 603(a)(1)) is amended—

(A) in subparagraph (A), by striking “fiscal year 2012” and inserting “fiscal year 2013 and each succeeding fiscal year”; and

(B) by striking subparagraphs (B) and (C) and inserting the following:

“(B) STATE FAMILY ASSISTANCE GRANT.—

“(i) IN GENERAL.—The State family assistance grant payable to a State for a fiscal year shall be the greater of—

“(I) the adjusted basic block grant, plus the amount required to be paid to the State under paragraph (3) (as in effect on September 30, 2010) for fiscal year 2010; or

“(II) the amount required to be paid to the State under this paragraph for the preceding fiscal year.

“(ii) ADJUSTED BASIC BLOCK GRANT.—In clause (i), the term ‘adjusted block grant’ means, with respect to a State, the product of—

“(I) the amount required to be paid to the State under this paragraph for fiscal year 2010 (determined without regard to any reduction pursuant to section 409 or 412(a)(1));

“(II) 1.00, plus the percentage (if any) by which the average of the CPI for the 12-month period ending with June of the preceding fiscal year exceeds the average of the CPI for the 12-month period ending with June 1996, expressed as a decimal; and

“(III) 1.00, plus the percentage (if any) by which the most recent estimate by the Bureau of the Census of the population of the State that has not attained 18 years of age exceeds the most recent estimate by the Bureau of the Census of that population as of July 1, 1996, expressed as a decimal.

“(iii) CPI DEFINED.—In clause (ii), the term ‘CPI’ means the last Consumer Price Index for All Urban Consumers published by the Department of Labor for the period involved.

“(C) APPROPRIATION.—Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated such sums as are necessary for grants under this paragraph for each fiscal year.”.

(2) CONFORMING AMENDMENT TO ELIMINATE SUPPLEMENTAL GRANTS FOR POPULATION INCREASES IN CERTAIN STATES.—Section 403(a) (42 U.S.C. 603(a)) is amended by striking paragraph (3).

(b) Penalty for failure To maintain effort adjusted for inflation.—Section 409(a)(7) (42 U.S.C. 609(a)(7)) is amended—

(1) in subparagraph (A), by inserting “the inflation-adjusted” before “historic State expenditures”; and

(2) in subparagraph (B), by redesignating clauses (iii) through (v) as clauses (iv) through (vi), respectively, and inserting after clause (ii) the following:

“(iii) INFLATION-ADJUSTED HISTORIC STATE EXPENDITURES.—The term ‘inflation-adjusted historic State expenditures’ means, with respect to a fiscal year—

“(I) historic State expenditures; multiplied by

“(II) 1.00, plus (in the case of fiscal year 2018 or any succeeding fiscal year) the percentage (if any) by which the average of the CPI (as defined in section 403(a)(1)(B)(iii)) for the 12-month period ending with June of the preceding fiscal year exceeds the average of the CPI (as so defined) for the 12-month period ending with June 2016, expressed as a decimal.”.

(c) Modification of contingency fund.—

(1) IN GENERAL.—Section 403(b) (42 U.S.C. 603(b)) is amended by striking all that follows paragraph (1) and inserting the following:

“(2) GRANTS.—

“(A) IN GENERAL.—The Secretary shall make a grant to each eligible State and each Indian tribe that is an economically needy entity for a calendar quarter, in an amount equal to 80 percent of the amount (if any) by which the total amount of relevant expenditures of the entity for the quarter exceeds the total amount of the relevant expenditures of the entity for the corresponding quarter in the base year of the entity, subject to paragraph (2).

“(B) LIMITATION.—The total amount payable to an entity under this subsection for a fiscal year shall not exceed an amount equal to 25 percent of the amount payable to the entity—

“(i) if the entity is a State, under section 403(a)(1) for the fiscal year; or

“(ii) if the entity is an Indian tribe, under section 412(a)(1) for the fiscal year.

“(3) DEFINITIONS.—In paragraph (2):

“(A) ECONOMICALLY NEEDY ENTITY.—The term ‘economically needy entity’ means an entity with respect to a calendar quarter—

“(i) if the seasonally adjusted average unemployment rate with respect to the entity for the quarter or any of the preceding 4 calendar quarters exceeds 6.5 percent; or

“(ii) in the case that the unemployment rate information described in clause (i) is not available with respect to the entity, if the entity meets such qualifications as the Secretary, in consultation with the Secretary of Labor, shall, by regulation, prescribe.

“(B) BASE YEAR.—The term ‘base year’ means, with respect to an entity, and a calendar quarter in a fiscal year—

“(i) except as provided in clause (ii), whichever of the 2 fiscal years most recently preceding the first fiscal year of the most recent contingency fund eligibility period for the entity, is the fiscal year in which the relevant expenditures of the entity were the lesser; or

“(ii) if the first year of the period referred to in clause (i) is fiscal year 2018, whichever of fiscal year 2007 or 2008 is the fiscal year in which the relevant expenditures of the entity were the lesser.

“(C) CONTINGENCY FUND ELIGIBILITY PERIOD.—The term ‘contingency fund eligibility period’ means, with respect to an entity, a period of 1 or more consecutive calendar quarters for which the entity is an economically needy entity.

“(D) RELEVANT EXPENDITURES.—

“(i) IN GENERAL.—The term ‘relevant expenditures’ means expenditures—

“(I) for assistance under the program funded under this part of the entity (including, in the case of a State, any qualified State expenditures (as defined in section 409(a)(7)(B)(i)) and any expenditures under any other State program funded by such expenditures);

“(II) for child care;

“(III) for subsidized employment under the program funded under this part of the entity (including, in the case of a State, such expenditures under any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i))), other than expenditures made using Federal funds or with respect to which the entity received a grant made under paragraph (3) of this subsection; and

“(IV) for administrative costs associated with making the expenditures referred to in the preceding subclauses of this clause.

“(ii) CHILD CARE EXPENDITURES.—For purposes of clause (i), expenditures for child care consist of the following:

“(I) Amounts transferred under section 404(d)(1)(B).

“(II) Expenditures for child care assistance from Federal funds provided under this part.

“(III) In the case of an entity that is a State, expenditures for child care assistance that are qualified State expenditures (as defined in section 409(a)(7)(B)(i)), but only to the extent exceeding the total expenditures of the State (other than from Federal funds) for child care in fiscal year 1994 or 1995 (whichever is the greater).

“(iii) AUTHORITY TO COLLECT AND ADJUST DATA.—In determining the amount of the expenditures of a State for basic assistance, child care, and subsidized employment, during any period for which the State requests funds under this subsection, and during the base year of the State, the Secretary may make appropriate adjustments to the data, on a State-by-State basis, to ensure that the data are comparable with respect to the groups of families served and the types of aid provided. The Secretary may develop a mechanism for collecting expenditure data, including procedures which allow States to make reasonable estimates, and may set deadlines for making revisions to the data.

“(4) USE OF GRANT.—Each State to which a grant is made under this subsection shall use the grant to serve areas of the State with the greatest need (as referred to in section 402(a)(1)(A)).

“(5) APPROPRIATION.—

“(A) IN GENERAL.—Out of any funds in the Treasury of the United States not otherwise appropriated, there are appropriated for payment to the Fund—

“(i) $2,500,000,000 for fiscal year 2018; and

“(ii) for each succeeding fiscal year, the amount appropriated under this paragraph for the then preceding fiscal year, increased by the percentage (if any) by which the amount appropriated under section 403(a)(1) for the fiscal year involved exceeds the amount appropriated under such section for the then preceding fiscal year.

“(B) AVAILABILITY.—Amounts made available under this paragraph for a fiscal year shall remain available until expended.

“(6) ACTIONS TO BE TAKEN IN ANTICIPATION OF EXHAUSTION OF FUND.—The Secretary shall monitor the amount in, and the rate at which amounts are paid from, the Fund, and if the Secretary determines that the Fund will be exhausted within 6 months, the Secretary shall—

“(A) notify the Congress of the determination; and

“(B) develop and communicate to each State and Indian tribe that is an economically needy entity as of the date of the determination, the procedure for allocating amounts in the Fund among such entities.”.

(2) ELIMINATION OF PENALTY FOR FAILURE OF STATE RECEIVING AMOUNTS FROM CONTINGENCY FUND TO MAINTAIN 100 PERCENT OF HISTORIC EFFORT.—

(A) IN GENERAL.—Section 409(a) (42 U.S.C. 609(a)) is amended by striking paragraph (10) and redesignating paragraphs (11) through (16) as paragraphs (10) through (15), respectively.

(B) CONFORMING AMENDMENTS.—Section 409 (42 U.S.C. 609) is amended in each of subsections (b)(2) and (c)(4), by striking “(10), (12), or (13)” and inserting “(11), or (12)”.

(3) CONFORMING AMENDMENT.—Section 409(a)(3)(C) (42 U.S.C. 609(a)(3)(C)) is amended by striking “needy State (as defined in section 403(b)(6))” and inserting “economically needy entity (as defined in section 403(b)(3)(A))”.

(4) AMOUNTS PROVIDED TO TERRITORIES FROM THE CONTINGENCY FUND TO BE DISREGARDED FOR PURPOSES OF LIMITATION ON PAYMENTS TO THE TERRITORIES.—Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by inserting “403(b),” before “406,”.

(d) Matching grants for subsidized employment.—

(1) IN GENERAL.—Section 403(a) (42 U.S.C. 603(a)), as amended by subsection (a)(2) of this section, is further amended by inserting after paragraph (2) the following:

“(3) MATCHING GRANTS FOR SUBSIDIZED EMPLOYMENT.—

“(A) IN GENERAL.—The Secretary shall make a grant—

“(i) to each eligible State that is 1 of the 50 States or the District of Columbia, for each fiscal year for which the State is an MOE State; and

“(ii) to each State that is not 1 of the 50 States or the District of Columbia, and to each Indian tribe, for each fiscal year for which the State or tribe, as the case may be, meets such terms and conditions as the Secretary shall, by regulation, establish, which shall be comparable to the terms and conditions under which grants are made under clause (i).

“(B) MOE STATE.—In subparagraph (A), the term ‘MOE State’ means a State if the qualified expenditures of the State (as defined in section 409(a)(7)(B)(i)) for the fiscal year exceeds the applicable percentage (as defined in clause (ii) of such section) of inflation-adjusted historic State expenditures (as defined in clause (iii) of such section) of the State with respect to the fiscal year.

“(C) AMOUNT OF GRANT.—

“(i) STATES.—

“(I) IN GENERAL.—The grant to be made to a State under subparagraph (A)(i) for a fiscal year shall be in an amount equal to 50 percent of the excess expenditures of the State for subsidized employment during the fiscal year.

“(II) EXCESS EXPENDITURES OF THE STATE FOR SUBSIDIZED EMPLOYMENT.—The term ‘excess expenditures of the State for subsidized employment’ means, with respect to a fiscal year, the lesser of—

“(aa) the excess described in subparagraph (B) with respect to the State for the fiscal year; or

“(bb) an amount equal to the total expenditures of the State for subsidized employment funded under this part or under any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i)), excluding those with respect to which a grant is made to the State under subsection (b) of this section, during the fiscal year.

“(ii) INDIAN TRIBES.—The grant to be made to an Indian tribe under this paragraph shall be in such amount as the Secretary deems appropriate.

“(D) USE OF GRANT.—Notwithstanding section 404, a State or Indian tribe to which a grant is made under this paragraph shall use the grant solely to finance subsidized employment activities, and to serve areas of the State with the greatest need (as referred to in section 402(a)(1)(A)).

“(E) APPROPRIATION.—Out of any funds in the Treasury of the United States not otherwise appropriated, there are appropriated such sums as are necessary for grants under this paragraph for each fiscal year.”.

(2) AMOUNTS PROVIDED TO TERRITORIES FROM THE MATCHING GRANT TO BE DISREGARDED FOR PURPOSES OF LIMITATION ON PAYMENTS TO THE TERRITORIES.—Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by inserting “403(a)(3),” after “403(a)(2),”.

(3) DATA REPORTS REQUIRED WITH RESPECT TO FAMILIES THAT INCLUDE AN INDIVIDUAL PARTICIPATING IN SUBSIDIZED EMPLOYMENT PROGRAMS.—Section 411(a)(1)(A) (42 U.S.C. 611(a)(1)(A)) is amended, in the matter before clause (i), by inserting “, and families that include an individual participating in subsidized employment funded with Federal funds or qualified State expenditures (as so defined)” before the colon.

(e) Tribal family assistance grants.—Section 412(a)(1) (42 U.S.C. 612(a)(1)) is amended—

(1) in subparagraph (A), by striking “fiscal year 2012” and inserting “each fiscal year”; and

(2) in subparagraph (B)—

(A) by redesignating clause (ii) as clause (iii); and

(B) by striking clause (i) and inserting the following:

“(i) IN GENERAL.—The amount determined under this subparagraph for a fiscal year is an amount equal to the sum of the adjusted historic expenditures for the fiscal year with respect to each State in which a service area of the Indian tribe is located.

“(ii) ADJUSTED HISTORIC EXPENDITURES DEFINED.—In clause (i), the term ‘adjusted historic expenditures’ means, with respect to a fiscal year, a State, and an Indian tribe, the total amount of the Federal payments to the State under section 403 (as then in effect) for fiscal year 1994 attributable to expenditures (other than child care expenditures) by the State under parts A and F (as so in effect) for fiscal year 1994 for Indian families residing in the service areas identified by the tribe pursuant to subsection (b)(1)(C) of this section that are in the State, increased by the percentage (if any) by which the amount of the grant payable under section 403(a)(1) for the fiscal year to the State exceeds the amount of the grant so payable to the State for fiscal year 2010.”.

(f) Census bureau study.—Section 414 (42 U.S.C. 614) is amended—

(1) by striking subsection (a) and inserting the following:

“(a) In general.—The Director of the Bureau of the Census shall conduct a study to assess the effects of policies and programs related to low-income families, including policies and programs under State programs funded under this part or funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)), including changes and policies in such programs made pursuant to the Rewriting to Improve and Secure an Exit Out of Poverty Act. The Director shall design the study in consultation with the Secretary. Every 5 years, the Director shall, in consultation with the Secretary, revise the content and nature of the study to reflect emerging policy issues related to low-income families.”; and

(2) in subsection (b), by striking “fiscal year 2012” and inserting “each fiscal year”.

(g) Funding of studies and evaluations.—Section 413(h)(1) (42 U.S.C. 613(h)(1)) is amended by striking “fiscal year 2012” and inserting “each fiscal year”.

(h) Matching grants to certain territories.—Section 1108 (42 U.S.C. 1308) is amended—

(1) in subsection (a)(2), by inserting “section 403(a)(1) (to the extent exceeding the amount required to be so paid to the territory for fiscal year 2011),” before “403(a)(2)”; and

(2) in subsection (b)(2), by striking “fiscal year 2012” and inserting “each fiscal year”.

(a) Participation rate requirement.—Section 407 (42 U.S.C. 607) is amended by striking subsections (a) and (b) and inserting the following:

“(a) Participation rate requirement.—

“(1) IN GENERAL.—A State to which a grant is made under section 403 for a fiscal year shall achieve a minimum participation rate of 50 percent with respect to all families residing in the State that include a work-eligible individual.

“(2) WORK-ELIGIBLE INDIVIDUAL DEFINED.—

“(A) IN GENERAL.—In subsection (a), the term ‘work-eligible individual’, subject to subparagraphs (B) and (C), means—

“(i) an adult recipient of assistance under the State program funded under this part or under any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i));

“(ii) a former recipient of such assistance who is—

“(I) a parent of a dependent child who is such a recipient; and

“(II) no longer eligible for assistance under the State program funded under this part by reason of section 408(a)(7); and

“(iii) a participant in a subsidized employment program funded under this part or under any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i)).

“(B) EXCLUSION OF INDIVIDUALS SANCTIONED OR UNDERGOING PRE-SANCTION REVIEW.—The term ‘work-eligible individual’ does not include any individual with respect to whom—

“(i) there is in effect a penalty imposed by the State under subsection (e) of this section; or

“(ii) the State has initiated (but not completed) the pre-sanction review process pursuant to section 408(a)(14)(A).

“(C) STATE OPTION TO EXCLUDE CERTAIN INDIVIDUALS.—A State may exclude from the term ‘work-eligible individual’ any resident of the State who is—

“(i) a single parent caring for a child who has not attained 1 year of age;

“(ii) a recipient of supplemental security income benefits under title XVI, disability insurance benefits under title II, or other Federal or State benefits based on disability;

“(iii) an applicant for supplemental security income benefits under title XVI;

“(iv) an individual who is needed in the home of the individual to care for a disabled member of the family of the individual; or

“(v) an individual who (but for the exercise of the State option under this clause) would be a work-eligible individual under a tribal family assistance plan approved under section 412 or under a tribal work program to which funds are provided under this part.

“(b) Calculation of participation rates.—

“(1) AVERAGE MONTHLY RATE.—For purposes of subsection (a), the participation rate of a State for a fiscal year is the average of the participation rates of the State for each month in the fiscal year.

“(2) MONTHLY PARTICIPATION RATE.—For purposes of paragraph (1), the participation rate of a State for a month, expressed as a percentage, is—

“(A) the number of families residing in the State that include a work-eligible individual who is engaged in work for the month; divided by

“(B) the number of families residing in the State that include a work-eligible individual.”.

(b) Participation requirements.—Section 407(c) (42 U.S.C. 607(c)) is amended to read as follows:

“(c) Engaged in work.—For purposes of subsection (b):

“(1) GENERAL RULE.—An individual is engaged in work for a month in a fiscal year if the recipient is participating in work activities for an average of at least 20 hours per week during the month.

“(2) INDIVIDUALS COMPLYING WITH A MODIFIED EMPLOYABILITY PLAN DEEMED TO BE ENGAGED IN WORK.—An individual is deemed to be engaged in work for a month if the State determines that the individual is in substantial compliance with the activities and hourly participation requirements of a modified employability plan developed for the individual in accordance with section 408(h).

“(3) SINGLE TEEN HEAD OF HOUSEHOLD OR MARRIED TEEN WHO MAINTAINS SATISFACTORY SCHOOL ATTENDANCE DEEMED TO BE ENGAGED IN WORK.—An individual who is married or a head of household and has not attained 20 years of age is deemed to be engaged in work for a month if the recipient maintains satisfactory attendance at secondary school or the equivalent during the month.”.

(c) Elimination of 12-Month limit on counting vocational educational training as a work activity.—Section 407(d)(8) (42 U.S.C. 607(d)(8)) is amended by striking “(not to exceed 12 months with respect to any individual)”.

(a) Option of recipient To have trained personnel assess certain barriers to employment; additional matters required To be assessed.—Section 408(b)(1) (42 U.S.C. 608(b)(1)) is amended—

(1) by inserting “(which, at the option of the recipient, shall be conducted by trained personnel with respect to barriers to employment specified by the recipient)” after “assessment”; and

(2) by striking “and employability” and inserting “employability, physical and mental impairments, English proficiency, child care needs, and whether the recipient is a victim of domestic or sexual violence,”.

(b) Individual responsibility plans.—

(1) PLANS REQUIRED; PLANS TO INCLUDE WELL-BEING PLANS FOR CHILDREN.—Section 408(b)(2)(A) (42 U.S.C. 608(b)(2)(A)) is amended—

(A) in the matter preceding clause (i), by striking “may” and inserting “shall”;

(B) in clause (iv)—

(i) by inserting “, supports,” after “counseling”; and

(ii) by striking “and” at the end;

(C) in clause (v), by striking the period and inserting “; and”; and

(D) by adding at the end the following:

“(vi) describe a well-being plan for each child in the family.”.

(2) DEADLINE FOR COMPLETION OF PLAN.—Section 408(b)(2)(B) (42 U.S.C. 608(b)(2)(B)) is amended by striking “individual—” and all that follows and inserting “individual within 90 days after the individual is determined eligible for the assistance.”.

(3) SANCTION FOR FAILURE OF STATE TO DEVELOP PLAN.—Section 409(a) (42 U.S.C. 609(a)), as amended by section 903(c)(2)(A) of this title, is amended by adding at the end the following:

“(16) PENALTY FOR FAILURE OF STATE TO DEVELOP REQUIRED INDIVIDUAL RESPONSIBILITY PLAN.—

“(A) IN GENERAL.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(b)(2) during the 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 not more than 5 percent of the State family assistance grant.

“(B) PENALTY BASED ON SEVERITY OF FAILURE.—The Secretary shall impose reductions under subparagraph (A) with respect to a fiscal year based on the degree of noncompliance.”.

(4) CONFORMING AMENDMENT.—Section 408(b) (42 U.S.C. 608(b)) is amended by striking paragraph (4).

(c) Modified employability plans for certain individuals with disabilities.—Section 408 (42 U.S.C. 608) is amended by adding at the end the following:

“(h) Authority To develop modified employability plan for a recipient of assistance with, or caring for a family member with, a disability.—

“(1) IN GENERAL.—A State may develop a modified employability plan for a recipient of assistance under the State program funded under this part—

“(A) who—

“(i) is a work-eligible individual (as defined in section 407(a)(2)); and

“(ii) has been determined by a qualified medical, mental health, addiction, or social services professional (as determined by the State) to have a disability; or

“(B) who is caring for a family member with a disability (as so determined).

“(2) CONTENTS OF PLAN.—The modified employability plan shall—

“(A) include a determination that, because of the disability of the recipient or the individual for whom the recipient is caring, reasonable modification of work activities, hourly participation requirements, or both, is needed in order for the recipient to participate in the activities;

“(B) describe the modified work activities in which the recipient is required to participate;

“(C) specify the number of hours per week for which the recipient is required to participate in the modified work activities, based on an evaluation by the State of the circumstances of the family;

“(D) describe the services, supports, and modifications that the State will provide to the recipient or the family of the recipient;

“(E) be developed in cooperation with the recipient; and

“(F) be reviewed not less often than every 6 months.

“(3) DEFINITIONS.—In this subsection:

“(A) DISABILITY.—The term ‘disability’ means a mental or physical impairment, including substance abuse or addiction, that—

“(i) constitutes or results in a substantial impediment to employment; or

“(ii) substantially limits 1 or more major life activities.

“(B) MODIFIED WORK ACTIVITIES.—The term ‘modified work activities’ means activities which the State has determined will help the recipient become employable.”.

(d) Sanctions.—

(1) GENERAL SANCTION PROVISIONS.—

(A) PROHIBITION ON IMPOSING LIFETIME OR FULL FAMILY SANCTION.—

(i) PROHIBITION.—Section 408(a) (42 U.S.C. 608(a)) is amended by adding at the end the following:

“(13) PROHIBITION ON IMPOSING LIFETIME OR FULL FAMILY SANCTION.—A State to which a grant is made under section 403 shall not impose a lifetime prohibition on the provision of assistance to any individual or 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)) on the basis of the failure of a member of the family to comply with a program requirement.”.

(ii) PENALTY.—Section 409(a) (42 U.S.C. 609), as amended by section 903(c)(2)(A) of this title and subsection (b)(3) of this section, is amended by adding at the end the following:

“(17) PENALTY FOR IMPOSING LIFETIME OR FULL FAMILY SANCTION.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(a)(13) during the 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.”.

(B) DUE PROCESS PROTECTIONS.—

(i) IN GENERAL.—Section 408(a) (42 U.S.C. 608(a)), as amended by subparagraph (A)(i) of this paragraph, is amended by adding at the end the following:

“(14) SANCTION PROCEDURES.—

“(A) PRE-SANCTION REVIEW PROCESS.—Before imposing a sanction against an individual or family receiving assistance 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)) for failure to comply with program requirements, the State shall take the following steps:

“(i) Provide or send notice to the individual or family, and, if the recipient’s native language is not English, through a culturally competent written or verbal translation, of the following information:

“(I) The specific reason for the proposed sanction.

“(II) The amount of the proposed sanction.

“(III) The length of time during which the proposed sanction would be in effect.

“(IV) The steps required to come into compliance or to show good cause for noncompliance.

“(V) That the agency will provide assistance to help the individual demonstrate good cause for noncompliance, or come into compliance with program requirements.

“(VI) That the individual may appeal the determination to impose a sanction, and the steps that the individual must take to pursue such an appeal.

“(ii) (I) Ensure that, subject to clause (iii)—

“(aa) an individual, other than the individual who determined that a sanction be imposed, will review the determination and have the authority to take the actions described in subclause (II); and

“(bb) the individual or family against whom the sanction is to be imposed shall be afforded the opportunity to meet with the individual who is reviewing the determination to impose the sanction.

“(II) The actions described in this subclause are the following:

“(aa) Modify the determination to impose a sanction.

“(bb) Determine that there was good cause for the failure to comply.

“(cc) Recommend modifications to the individual responsibility or employment plan of an individual.

“(dd) Make such other determinations and take such other actions as may be appropriate.

“(iii) The review required under clause (ii) shall include consideration of the following:

“(I) To the extent applicable, whether barriers to compliance exist, such as a physical or mental impairment (including mental illness, substance abuse, mental retardation, or a learning disability), domestic or sexual violence, limited proficiency in English, limited literacy, homelessness, or the need to care for a child with a disability or health condition, that contributed to the noncompliance.

“(II) Whether the noncompliance resulted from failure to receive or have access to services identified as necessary in an individual responsibility or employment plan.

“(III) Whether changes to the individual responsibility or employment plan of an individual should be made in order for the individual to come into compliance.

“(IV) Whether there is good cause for any noncompliance.

“(V) Whether the sanction policies of the State have been applied properly.

“(B) SANCTION FOLLOW-UP REQUIREMENTS.—If a State imposes a sanction on a family or individual for failing to comply with program requirements, the State shall—

“(i) provide or send notice to the individual or family, in language calculated to be understood by the individual or family, and, if the individual’s or family’s native language is not English, through a culturally competent translation, of the reason for the sanction and the steps the individual or family must take to end the sanction;

“(ii) resume full assistance, services, or benefits to the individual or family under the program (if the individual or family is otherwise eligible for the assistance, services, or benefits) once the individual who was not in compliance with program requirements that led to the sanction complies with the requirements for a reasonable period of time, as determined by the State and subject to State discretion to reduce the period; and

“(iii) if the State has not resumed providing the assistance, services, or benefits as of the end of the 120-day period that begins on the date that is 60 days after the date on which the sanction was imposed, provide notice to the individual or family, in language calculated to be understood by the individual or family, of the steps the individual or family must take to end the sanction, and of the availability of assistance to come into compliance or demonstrate good cause for noncompliance.

“(C) NOTICE TO EVICTED PERSONS.—The State shall make a reasonable effort to provide to an individual or family that has been evicted from a residence for failure to pay rent or as a result of another problem related to poverty, any notice required by this paragraph to be provided to the individual or family.”.

(ii) PENALTY.—Section 409(a) (42 U.S.C. 609(a)), as amended by section 903(c)(2)(A) of this title, subsection (b)(3) of this section, and subparagraph (A)(ii) of this paragraph, is amended by adding at the end the following:

“(18) PENALTY FOR FAILURE TO FOLLOW SANCTION PROCEDURES.—

“(A) IN GENERAL.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(a)(14) during the 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 not more than 5 percent of the State family assistance grant.

“(B) PENALTY BASED ON SEVERITY OF FAILURE.—The Secretary shall impose reductions under subparagraph (A) with respect to a fiscal year based on the degree of noncompliance.”.

(iii) STATE PLAN REQUIREMENT TO DESCRIBE HOW STATES WILL NOTIFY APPLICANTS AND RECIPIENTS OF THEIR RIGHTS UNDER THE PROGRAM AND OF POTENTIAL BENEFITS AND SERVICES AVAILABLE UNDER THE PROGRAM.—Section 402(a)(1)(B)(iii) (42 U.S.C. 602(a)(1)(B)(iii)) is amended by inserting “, and will notify applicants and recipients of assistance under the program of the rights of individuals under all laws applicable to program activities and of all potential benefits and services available under the program” before the period.

(2) MODIFICATIONS TO WORK SANCTION.—

(A) ELIMINATION OF FULL FAMILY SANCTION; STATE REQUIRED TO ESTABLISH CERTAIN GOOD CAUSE EXCEPTIONS.—Section 407(e)(1) (42 U.S.C. 607(e)(1)) is amended—

(i) by striking “shall—” and all that follows through subparagraph (B) and inserting “shall reduce the amount of assistance otherwise payable to the family pro rata with respect to any period during a month in which the individual so refuses,”; and

(ii) by striking “may establish” and inserting the following “shall establish, which shall include the decline of an offer of employment at a wage less than the greater of the applicable Federal or State minimum wage, or 80 percent of the wage that would have governed had the minimum hourly rate under the Fair Labor Standards Act been applicable to the offer of employment, at a site subject to a strike or lockout at the time of refusal, or for medical reasons or a lack of sufficient physical strength or stamina”.

(B) PROHIBITION ON SANCTIONING INDIVIDUAL FOR FAILURE TO ENGAGE IN WORK IF INDIVIDUAL HAS A CHILD UNDER AGE 6 MONTHS OR IF FAILURE RESULTS FROM INABILITY TO SECURE CHILD CARE OR AFTER-SCHOOL ARRANGEMENTS FOR A CHILD UNDER AGE 13.—Section 407(e)(2) (42 U.S.C. 607(e)(2)) is amended by striking “refusal” and all that follows and inserting “failure of an individual to engage in work required in accordance with this section if—

“(A) the individual is a single custodial parent caring for a child who has not attained 6 months of age; or

“(B) the individual is the single custodial parent caring for a child who has not attained 13 years of age, and the failure resulted from the inability of the individual to secure child care or after-school arrangements for the child”.

(3) MODIFICATIONS TO CHILD SUPPORT SANCTION.—Section 408(a)(2) (42 U.S.C. 608(a)(2)) is amended by striking “State—” and all that follows and inserting “State shall deduct from the assistance that would otherwise be provided to the family of the individual under the State program funded under this part an amount equal to 25 percent of the amount of the assistance.”.

(e) Related state plan requirement.—Section 402(a) (42 U.S.C. 602(a)) is amended by adding at the end the following:

“(8) CERTIFICATION THAT EMPLOYMENT ASSESSMENTS AND SANCTION REVIEWS WILL BE CONDUCTED BY COMPETENT PERSONNEL.—A certification by the chief executive officer of the State that the employment assessments conducted pursuant to section 408(b)(1) and the sanction reviews conducted pursuant to section 408(a)(14)(A) will be conducted by personnel who have sufficient education, training, and professional competence to do so, which shall include information on the education, training, and professional competence that State will require of the personnel.”.

(a) Prohibition.—

(1) IN GENERAL.—Section 408(a)(7) (42 U.S.C. 608(a)(7)) is amended—

(A) in the paragraph heading, by striking “No assistance for more than 5 years” and inserting “Durational limits on assistance”;

(B) in the heading for subparagraph (A), by striking “In general” and inserting “No assistance for more than 5 years”; and

(C) by adding at the end the following:

“(H) PROHIBITION ON LIMITING DURATION OF ASSISTANCE TO LESS THAN 60 MONTHS.—A State to which a grant is made under section 403 shall not impose a limit of less than 60 months on the duration for which a family may be provided assistance from Federal or State funds 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)).”.

(2) CONFORMING AMENDMENT.—The heading of section 409(a)(9) (42 U.S.C. 609(a)(9)) is amended by striking “5-year limit” and inserting “rules governing durational limits”.

(b) Requirement To conduct outreach To inform potentially eligible families of elimination of durational limit on assistance of less than 60 months.—

(1) IN GENERAL.—Section 408(a) (42 U.S.C. 608(a)), as amended by section 905(d)(1) of this title, is amended by adding at the end the following:

“(15) REQUIREMENT TO CONDUCT OUTREACH TO INFORM POTENTIALLY ELIGIBLE RECIPIENTS OF ASSISTANCE OF ELIMINATION OF DURATIONAL LIMIT ON ASSISTANCE OF LESS THAN 60 MONTHS.—A State to which a grant is made under section 403 for a fiscal year that, before the effective date of this paragraph, denied assistance under the State program funded under this part or any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i)) to an individual or family on the basis of a durational limit on the assistance that was imposed other than under section 408(a)(7) shall conduct outreach to inform individuals and families who were so denied that they may be eligible for additional months of the assistance.”.

(2) PENALTY.—Section 409(a) (42 U.S.C. 609(a)), as amended by sections 903(c)(2)(A) and 905(d)(1) of this title, is amended by adding at the end the following:

“(19) FAILURE TO CONDUCT OUTREACH TO INFORM POTENTIALLY ELIGIBLE RECIPIENTS OF ASSISTANCE OF ELIMINATION OF DURATIONAL LIMIT ON ASSISTANCE OF LESS THAN 60 MONTHS.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(a)(15) during the 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) State plan required To include description of how potentially eligible recipients will be informed of elimination of durational limit on assistance of less than 60 months.—Section 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)) is amended by adding at the end the following:

“(vi) In the case of a State that, before the date this clause takes effect, denied assistance under the program to an individual or family on the basis of a durational limit on the assistance that was imposed other than under section 408(a)(7), the document shall describe how the State intends to inform the individuals and families who were so denied that they may be eligible for additional months of the assistance.”.

(a) Inapplicability of durational limit on assistance.—Section 408(a)(7) (42 U.S.C. 608(a)(7)), as amended by section 906(a)(1)(C) of this title, is amended by adding at the end the following:

“(I) INAPPLICABILITY OF DURATIONAL LIMIT DURING RECESSION.—Subparagraph (A) shall not apply in a State during any month which is in a high unemployment period with respect to the State.

“(J) DISREGARD OF ASSISTANCE PROVIDED DURING RECESSION.—In determining the number of months for which an adult has received assistance under a State or tribal program funded under this part or any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i)), the State or tribe shall disregard any month which is in a high unemployment period with respect to the State.

“(K) 6-MONTH GRACE PERIOD REQUIRED AFTER RECESSION.—Subparagraph (A) shall not apply to a recipient of assistance under the State program funded under this part or any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i)) during the 6-month period that begins with the month immediately following a high unemployment period with respect to the State if the recipient received the assistance for the last month of the period.”.

(b) Requirement To conduct outreach To inform potentially eligible families of suspension of durational limit on assistance.—

(1) IN GENERAL.—Section 408(a) (42 U.S.C. 608(a)), as amended by sections 905(d)(1) and 906(b)(1) of this title, is amended by adding at the end the following:

“(16) REQUIREMENT TO CONDUCT OUTREACH TO INFORM POTENTIALLY ELIGIBLE RECIPIENTS OF ASSISTANCE OF SUSPENSION OF DURATIONAL LIMIT ON ASSISTANCE.—In each month which is a high unemployment period with respect to a State to which a grant is made under section 403 for a fiscal year, the State shall conduct outreach to inform individuals and families who are potentially eligible for assistance under the State program funded under this part or any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i)) of the suspension of any durational limit on assistance under the program.”.

(2) PENALTY.—Section 409(a) (42 U.S.C. 609(a)), as amended by sections 903(c)(2)(A), 905(d)(1), and 906(b)(2), is amended by adding at the end the following:

“(20) FAILURE TO CONDUCT OUTREACH TO INFORM POTENTIALLY ELIGIBLE RECIPIENTS OF ASSISTANCE OF SUSPENSION OF DURATIONAL LIMIT ON ASSISTANCE.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(a)(16) during the 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) State plan required To include description of how potentially eligible recipients will be informed of suspension of time limits during recession.—Section 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)), as amended by section 906(c) of this title, is amended by adding at the end the following:

“(vii) The document shall describe how the State intends to inform potentially eligible recipients of assistance under the program of the suspension of durational limits on the assistance during a high unemployment period with respect to the State.”.

(d) High unemployment period defined.—Section 419 (42 U.S.C. 619) is amended by adding at the end the following:

“(6) HIGH UNEMPLOYMENT PERIOD DEFINED.—The term ‘high unemployment period’ means, with respect to a State, a period of 1 or more consecutive months if the average rate of total unemployment in the State (seasonally adjusted) for the period consisting of the then most recent 3 months for which data for all States are published equals or exceeds 6.5 percent.”.

(a) Program requirement.—Section 408(a) (42 U.S.C. 608(a)), as amended by sections 905(d)(1), 906(b)(1), and 907(b)(1) of this title, is amended by adding at the end the following:

“(17) REQUIREMENT TO USE MERIT-BASED SYSTEM IN ADMINISTERING PROGRAM.—A State to which a grant is made under section 403 shall establish and maintain personnel standards through a merit-based system, in administering the State program funded under this part and any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i)).”.

(b) Penalty.—Section 409(a) (42 U.S.C. 609), as amended by sections 903(c)(2)(A), 905(d)(1), 906(b)(2), and 907(b)(2) of this title, is amended by adding at the end the following:

“(21) PENALTY FOR FAILURE TO USE MERIT-BASED SYSTEM IN ADMINISTERING PROGRAM.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(a)(17) during the 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.”.

(a) Prohibition.—Section 408(a) (42 U.S.C. 608(a)), as amended by sections 905(d)(1), 906(b)(1), 907(b)(1), and 908(a) of this title, is amended by adding at the end the following:

“(18) BAN ON USING FEDERAL TANF FUNDS TO REPLACE STATE OR LOCAL SPENDING THAT IS NOT A QUALIFIED STATE EXPENDITURE.—A State to which a grant is made under section 403, and a sub-State entity that receives funds from such a grant, shall not expend any part of the grant funds to supplant State or local spending for benefits or services which are not qualified State expenditures (within the meaning of section 409(a)(7)(B)(i)).”.

(b) Penalty.—Section 409(a) (42 U.S.C. 609), as amended by sections 903(c)(2)(A), 905(d)(1), 906(b)(2), 907(b)(2), and 908(b) of this title, is amended by adding at the end the following:

“(22) USE OF FEDERAL TANF FUNDS TO REPLACE STATE OR LOCAL SPENDING THAT IS NOT A QUALIFIED STATE EXPENDITURE.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(a)(18) during the 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.”.

(a) State plan requirement.—Section 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)), as amended by sections 906(c) and 907(d) of this title, is amended by adding at the end the following:

“(viii) FAMILY BUDGET PROVISIONS.—The document shall set forth a family budget of a dollar amount sufficient to meet the basic economic needs (including food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses) of a family, how the family budget is adjusted for family size, the method used to estimate the family budget (including a statement of the relationship between shelter and utility costs and the fair market rents in localities in the State), and the relationship between the amount of assistance provided to each family under the program and the amount of the family budget for the family.”.

(b) Program requirement.—Section 408(a) (42 U.S.C. 608(a)), as amended by sections 905(d)(1), 906(b)(1), 907(b)(1), 908(a), and 909(a) of this title, is amended by adding at the end the following:

“(19) REQUIREMENT THAT AMOUNT OF ASSISTANCE MEET BASIC ECONOMIC NEEDS.—A State to which a grant is made under section 403 shall ensure that the total amount of assistance provided to a family under the State program funded under this part and all programs funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) for which the family is eligible is sufficient to meet the basic economic needs of the family, taking into account all earned and unearned income of the family and an amount not to exceed the value of the supplemental nutrition assistance benefits provided to the family under the Food and Nutrition Act of 2008.”.

(c) Penalty.—Section 409(a) (42 U.S.C. 609), as amended by sections 903(c)(2)(A), 905(d)(1), 906(b)(2), 907(b)(2), 908(b), and 909(b) of this title, is amended by adding at the end the following:

“(23) PENALTY FOR FAILURE OF STATE TANF ASSISTANCE TO MEET BASIC ECONOMIC NEEDS OF A RECIPIENT FAMILY.—If the Secretary determines that a State to which a grant is made under section 403 in a fiscal year has violated section 408(a)(19) during the 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.”.

(a) Child poverty reduction as a purpose of the TANF program.—Section 401(a)(1) (42 U.S.C. 601(a)(1)) is amended by redesignating paragraphs (1) through (4) as paragraphs (2) through (5), respectively, and by inserting before paragraph (2) (as so redesignated) the following:

“(1) reduce poverty among children;”.

(b) State plan provisions.—

(1) MATTERS REQUIRED TO BE ADDRESSED.—Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by adding at the end the following:

“(ix) GOALS AND METHODS FOR REDUCING CHILD POVERTY.—Reduce child poverty using Federal funds provided under this part and State funds, including establishing numerical goals for reducing child poverty.

“(x) GOALS AND TRACKING OF WORK OUTCOMES.—Track work-related outcomes for recipients of assistance under the program, such as employment entries, wages, and job retention, including establishing numerical goals for work-related outcomes for recipients.

“(xi) PROVIDE PREVENTATIVE SERVICES TO FAMILIES AT RISK OF ABUSE OR NEGLECT.—Provide benefits and services to families at risk of having their children removed from the home because of abuse and neglect, using Federal funds provided under this part and State funds.

“(xii) HOW NONCUSTODIAL PARENTS WILL BE SERVED.—Serve noncustodial parents, using Federal funds provided under this part and State funds.”.

(2) PUBLIC AVAILABILITY.—Section 402(c) (42 U.S.C. 602(c)) is amended to read as follows:

“(c) Public availability.—

“(1) IN GENERAL.—The State shall make available to the public, including by posting on a public website of the State or another appropriate website—

“(A) each draft of any plan or plan amendment to be submitted by the State under this section, for at least 45 days before the submission; and

“(B) any such plan or amendment certified by the Secretary to be complete.

“(2) PROCEDURES.—The State shall establish procedures to receive and respond to comments from the public, private sector organizations, and local governments on any draft referred to in paragraph (1).”.

(c) Annual performance report.—Section 411 (42 U.S.C. 611) is amended by adding at the end the following:

“(e) Annual performance report by States.—Not later than December 31 of each year, each eligible State shall submit to the Secretary (in accordance with such form and content rules as the Secretary, in consultation with the National Governor’s Association, National Association of State Legislatures, and the American Public Human Services Association, develops) a report on the following aspects of the State program funded under this part in the preceding fiscal year:

“(1) Whether the State met the child poverty reduction goals set forth in the State plan. This part of the report shall include a discussion of the factors, including benefits, services, and activities funded with Federal funds provided under this part or State funds, which contributed to the meeting of, or the failure to meet, the goals.

“(2) Whether the work programs of the State were effective in meeting the objectives and numerical goals of the State plan. This part of the report shall include a discussion of data derived from the tracking of recipients, including—

“(A) the number of families that left the State program funded under this part;

“(B) the employment rate for those who left the program in each calendar quarter;

“(C) the wage rates of those who left the program, including the percentage of leavers who, in each calendar quarter, earned an amount equal to at least 50 percent of the average wage then paid in the State; and

“(D) the employment outcomes of those who left the program because of a durational limit on assistance, reported at 6 months, 12 months, 24 months, and 36 months after leaving the program.

The Secretary shall provide States with technical assistance in preparing this part of the report, including by providing States with data from the National Directory of New Hires.

“(3) Whether the State has been effective in providing benefits and services under the program to persons with disabilities. This part of the report shall include a report on recipients of assistance under the State program funded under this part who participated in work activities (as defined in section 407(d)) pursuant to a modified employability plan due to disability, including the following:

“(A) The aggregate number of recipients with modified employability plans due to a disability.

“(B) The percentage of all recipients with modified employability plans who substantially complied with activities set forth in the plans each month of the fiscal year.

“(C) Information regarding the most prevalent types of physical and mental impairments that provided the basis for the disability determinations.

“(D) The percentage of cases with a modified employability plan in which the recipient had a disability, was caring for a child with a disability, or was caring for another family member with a disability.

“(E) A description of the most prevalent types of modification in work activities or hours of participation that were included in the modified employability plans.

“(F) A description of the qualifications of the staff who determined whether individuals had a disability, of the staff who determined that individuals needed modifications to their work requirements, and of the staff who developed the modified employability plans.

“(4) The effectiveness of the benefits and services provided under the State program in reducing the number of children removed from their homes because of abuse and neglect. This part of the report shall include an analysis which includes the following:

“(A) The number of families provided the benefits or services that were at risk of having their children removed from the home.

“(B) The number of families served by the program that had 1 or more children removed from the home because of abuse or neglect.

“(5) An analysis of the extent to which the benefits and services under the State program were provided to noncustodial parents.

“(6) How funds provided to the State under this part, with a separate accounting for funds provided under section 403(a)(3) and funds provided under section 403(b), were used to serve areas of the State with the greatest need (as referred to in section 402(a)(1)(A)(i)). This part of the report shall include supporting data.”.

(d) Annual report to Congress on the efforts of State programs To promote and support employment for individuals with disabilities.—Section 411 (42 U.S.C. 611), as amended by subsection (c) of this section, is amended by adding at the end the following:

“(f) Report by Secretary.—Not later than July 31 of each fiscal year, the Secretary shall submit to the Congress a report, entitled ‘Efforts in State TANF Programs to Promote and Support Employment for Individuals with Disabilities’, that includes information on State efforts to engage individuals with disabilities in work activities during the preceding fiscal year. The report shall include the following information:

“(1) For each State, the number of individuals for whom the State has developed a modified employability plan.

“(2) The types of physical and mental impairments that provided the basis for the disability determination, and whether the individual with the disability was an adult recipient or minor child head of household, a child, or a non-recipient family member.

“(3) The types of modifications that States have included in modified employability plans.

“(4) The extent to which individuals with a modified employability plan are participating in work activities.

“(5) For each State, an analysis of the extent to which the option to establish modified employability plans was a factor in the State achieving or not achieving the minimum participation rate required by section 407(a).”.

(e) Report to Congress on legislative options To reward States with high employment rates and high rates of employment at good wages.—Within 4 years after the effective date of this section, the Secretary of Health and Human Services shall submit to the Congress a report that sets forth options for the enactment of legislation to provide financial or other rewards to States that have high rates of employment and high rates of employment at good wages.

(a) In general.—Section 402(a)(7) (42 U.S.C. 602(a)(7)) is amended—

(1) by striking the paragraph heading and inserting “Certification of standards and procedures regarding domestic and sexual violence”;

(2) by striking subparagraph (A) and inserting the following:

“(A) IN GENERAL.—A certification by the chief executive officer of the State that the State has established and is enforcing standards and procedures to ensure the right and entitlement of victims of domestic or sexual violence (notwithstanding section 401(b)) seeking or receiving assistance under the State program funded under this part or any other State program funded by qualified State expenditures (as defined in section 409(a)(7)(B)(i))—

“(i) to be screened and identified while maintaining the confidentiality of the victims;

“(ii) to be referred to counseling and supportive services;

“(iii) to be granted a waiver, pursuant to a determination of good cause, of program requirements such as time limits (for so long as necessary), residency requirements, child support cooperation requirements, and family cap provisions, in cases where compliance with the requirements would make it more difficult for the victims to escape domestic or sexual violence or unfairly penalize the victims or other individuals who are at risk of further domestic or sexual violence;

“(iv) to apply to participate in the program on the same day the victim appears in person in a program office during office hours;

“(v) to have an application that contains the name, address, and signature of the victim considered to be filed on the date the application is submitted;

“(vi) to receive at the time of application a clear, written statement explaining what the victim must do to cooperate in obtaining verification and otherwise completing the application process; and

“(vii) if the victim has completed the application process, to have the eligibility of the victim for assistance determined promptly, and to be provided assistance retroactive to the application date if determined eligible within 30 days after the application date.”; and

(3) in subparagraph (B)—

(A) in the subparagraph heading, by inserting “or sexual” after “Domestic”; and

(B) in the text, by inserting “or sexual” after “domestic”.

(b) Report to the Congress on best practices of States.—Section 413 (42 U.S.C. 613) is amended by adding at the end the following:

“(k) Report to Congress on best practices of States in addressing domestic and sexual violence suffered by TANF recipients.—Every 4 years, the Secretary shall prepare and submit to the Congress a report which examines the practices of States in implementing section 402(a)(7), and identifies the best practices used to do so.”.

(c) Effective date.—The amendments made by this section shall take effect on October 1, 2017.

(a) Replacement of requirement that portion of funds be used for certain populations with child care guarantee.—Section 418(b)(2) (42 U.S.C. 618(b)(2)) is amended to read as follows:

“(2) CHILD CARE TO BE GUARANTEED FOR CERTAIN POPULATIONS.—As a condition of receiving funds under this section, a State shall guarantee the provision of child care services to—

“(A) each recipient of assistance under the State program funded under this part or under a State program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) of this Act, and to each work-eligible individual (as defined in section 407(a)(2) of this Act), for any period in which the recipient or individual is—

“(i) participating in a work activity (as defined in section 407(d) of this Act);

“(ii) employed, and in a family the total income of which does not exceed 250 percent of the poverty line (within the meaning of section 673(2) of the Omnibus Budget Reconciliation Act of 1981, including any revision required by such section applicable to a family of the size involved); or

“(iii) engaged in employment subsidized by the State; or

“(B) each individual who is a former recipient of assistance under such a program or a former work-eligible individual, for any portion of the 24-month period, beginning with the date the individual left the program involved, in which the individual is employed and in a family that meets the income requirement of subparagraph (A)(ii).”.

(b) Elimination of State caps.—Section 418(a) (42 U.S.C. 618(a)) is amended—

(1) in paragraph (2)—

(A) by striking subparagraphs (B) and (D) and redesignating subparagraph (C) as subparagraph (B); and

(B) in subparagraph (B) (as so redesignated), by striking “the lesser of the State's allotment under subparagraph (B) or”; and

(2) in paragraph (5), by striking “(2)(C)” and inserting “(2)(B)”.

(c) Open-Ended entitlement.—Section 418(a) (42 U.S.C. 618(a)) is amended—

(1) in paragraph (1), by striking “Subject to the amount appropriated under paragraph (3), each” and inserting “Each”; and