Promoting accountability by measuring work outcomes

(a) In general Section 407(a) (42 U.S.C. 607(a)) is amended to read as follows: (a) Performance accountability and work outcomes (1) Work outcomes (A) In general A State to which a grant is made under section 403 shall achieve the requisite minimum level of performance for a fiscal year described in this paragraph with respect to the percentage of employment exits for families receiving assistance under the State program funded under this part, or be subject to penalty as described in section 409(a)(3). (B) Calculation of percentage of employment exits For purposes of this paragraph, the percentage of employment exits with respect to a State equals the ratio of the number of work-eligible individuals who are in unsubsidized employment 6 months after their exit to the average monthly number of families receiving assistance under the State program funded under this part. (C) Agreement on requisite level of performance The Secretary and the State shall negotiate the requisite level of performance for the State with respect to employment exits for each fiscal year beginning with fiscal year 2028. (2) Performance accountability (A) Purpose The purpose of this paragraph is to provide for the establishment of performance accountability measures to assess the effectiveness of States in increasing employment, retention, and advancement among families receiving assistance under the State program funded under this part. (B) In general A State to which a grant is made under section 403 for a fiscal year shall achieve the requisite level of performance on an indicator described in subparagraph (D) of this paragraph for the fiscal year. (C) Measuring state performance Each State, in consultation with the Secretary, shall collect and submit to the Secretary the information necessary to measure the level of performance of the State for each indicator described in subparagraph (D), for fiscal year 2027 and each fiscal year thereafter, and the Secretary shall use the information collected for fiscal year 2027 to establish the baseline level of performance for each State for each such indicator. (D) Indicators of performance The indicators described in this subparagraph, for a fiscal year, are the following: (i) The percentage of individuals who were work-eligible individuals as of the time of exit from the program, who are in unsubsidized employment during the 2nd quarter after the exit. (ii) The percentage of individuals who were work-eligible individuals who were in unsubsidized employment in the 2nd quarter after the exit, who are also in unsubsidized employment during the 4th quarter after the exit. (iii) The median earnings of individuals who were work-eligible individuals as of the time of exit from the program, who are in unsubsidized employment during the 2nd quarter after the exit. (iv) The percentage of individuals who have not attained 24 years of age, are attending high school or enrolled in an equivalency program, and are work-eligible individuals or were work-eligible individuals as of the time of exit from the program, who obtain a high school degree or its recognized equivalent while receiving assistance under the State program funded under this part or within 1 year after the exit. (E) Levels of performance (i) In general For each State submitting a State plan pursuant to section 402(a), there shall be established, in accordance with this subparagraph, levels of performance for each of the indicators described in subparagraph (D). (ii) Weight The weight assigned to such an indicator shall be the following: (I) Forty percent, in the case of the indicator described in subparagraph (D)(i). (II) Twenty-five percent, in the case of the indicator described in subparagraph (D)(ii). (III) Twenty-five percent, in the case of the indicator described in subparagraph (D)(iii). (IV) Ten percent, in the case of the indicator described in subparagraph (D)(iv). (iii) Agreement on requisite performance level for each indicator (I) In general The Secretary and the State shall negotiate the requisite level of performance for the State with respect to each indicator described in clause (ii), for each fiscal year beginning with fiscal year 2028, and shall do so before the beginning of the fiscal year involved. (II) Requirements in establishing performance levels In establishing the requisite levels of performance, the State and the Secretary shall— (aa) take into account how the levels involved compare with the levels established for other States; and (bb) ensure the levels involved are adjusted, using the objective statistical model referred to in clause (v), based on— (AA) the differences among States in economic conditions, including differences in unemployment rates or employment losses or gains in particular industries; (BB) the characteristics of participants on entry into the program, including indicators of prior work history, lack of educational or occupational skills attainment, or other factors that may affect employment and earnings; and (CC) take into account the extent to which the levels involved promote continuous improvement in performance by each State. (iv) Revisions based on economic conditions and individuals receiving assistance during the fiscal year The Secretary shall, in accordance with the objective statistical model referred to in clause (v), revise the requisite levels of performance for a State and a fiscal year to reflect the economic conditions and characteristics of the relevant individuals in the State during the fiscal year. (v) Statistical adjustment model The Secretary shall use an objective statistical model to make adjustments to the requisite levels of performance for the economic conditions and characteristics of the relevant individuals, and shall consult with the Secretary of Labor to develop a model that is the same as or similar to the model described in section 116(b)(3)(A)(viii) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3141(b)(3)(A)(viii)). (vi) Definition of exit In this paragraph, the term exit means, with respect to a State program funded under this part, ceases to a receive a benefit under the program. (F) State option to establish common exit measures Notwithstanding subparagraph (E)(vi) of this paragraph, a State that has not provided the notification under section 121(b)(1)(C)(ii) of the Workforce Innovation and Opportunity Act to exclude the State program funded under this part as a mandatory one-stop partner may adopt an alternative definition of exit for the purpose of creating common exit measures to improve alignment with workforce programs operated under title I of such Act. (G) Regulations In order to ensure nationwide comparability of data, the Secretary, after consultation with the Secretary of Labor and with States, shall issue regulations governing the establishment of the performance accountability system under this paragraph and a template for performance reports to be used by all States consistent with subsection (b).. (b) Reports on state performance on HHS online dashboard Section 407(b) (42 U.S.C. 607(b)) is amended to read as follows: (b) Publication of State performance The Secretary shall, directly or through the use of grants or contracts, and in collaboration with each State, establish and operate an internet website that is accessible to the public, with a dashboard that is regularly updated and provides easy-to-understand information on the performance of each State program funded under this part, including a profile for each such program, expressed by use of a template, which shall include— (1) information on the indicators and requisite performance levels established for the State under subsection (a), including, with respect to each such level, whether the State achieves, exceeds, or fails to achieve the level on an ongoing basis, including— (A) information on any adjustments made to the requisite levels using the statistical adjustment model described in subsection (a)(2)(E)(v); and (B) a grade based on the overall performance of the State, as determined by the Secretary and in consultation with the State, and the overall performance shall be graded based on the performance indicators and weights for each such indicator as described in subsection (a); (2) information reported under section 411 on the characteristics and demographics of individuals receiving assistance under the State program, including— (A) the number and percentage of child-only cases and reason why the cases are child-only; and (B) the average weekly number of hours that each work-eligible individual in the State program participates in work activities, including a separate section showing the number and percentage of the work-eligible individuals with zero hours of the participation and the reason for non-participation; (3) information on the results of improper payments reviews; (4) a link to the State plan approved under section 402; and (5) information regarding any penalty imposed, or other corrective action taken, by the Secretary against a State for failing to achieve a requisite performance level or any other requirement imposed by or under this part.. (c) Modification of rules for determining whether an individual is engaged in work Section 407(c) (42 U.S.C. 607(c)) is amended— (1) in paragraph (1)— (A) in subparagraph (A)— (i) by striking For purposes of subsection (b)(1)(B)(i), a and inserting A; and (ii) by striking, not fewer than and all that follows through this subsection; and (B) in subparagraph (B)— (i) in the matter preceding clause (i), by striking For purposes of subsection (b)(2)(B), an and inserting An; (ii) in clause (i), by striking, not fewer than and all that follows through this subsection; and (iii) in clause (ii), by striking, not fewer than and all that follows through subsection (d); and (2) in paragraph (2)— (A) by striking subparagraphs (A) and (D); (B) in each of subparagraphs (B) and (C), by striking For purposes of determining monthly participation rates under subsection (b)(1)(B)(i), a and inserting A; (C) by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively; and (D) by adding at the end the following: (C) State option for participation requirement exemptions For any fiscal year, a State may, at its option, not require an individual who is a single custodial parent caring for a child who has not attained 12 months of age to engage in work, for not more than 12 months.. (d) Modifications to allowable work activities Section 407(d) (42 U.S.C. 607(d)) is amended— (1) in paragraph (5), by inserting, including apprenticeships before the semicolon; (2) in paragraph (6), by inserting supervised before job search; and (3) in paragraph (8), by striking (not to exceed 12 months with respect to any individual) and inserting, including career technical education. (e) Penalty against States (1) In general Section 409(a)(3) (42 U.S.C. 609(a)(3)) is amended by striking all that precedes subparagraph (B) and inserting the following: (3) Failure to satisfy work outcomes and work engagement (A) In general If the Secretary determines that a State to which a grant is made under section 403 for a fiscal year has failed to comply with any of section 407(a)(1), section 408(b)(3), or section 408(b)(4) for 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 the applicable percentage of the State family assistance grant.. (2) Transition rule The Secretary of Health and Human Services may not impose a penalty under section 409(a)(3) of the Social Security Act by reason of the failure of a State to comply with section 407(a) of such Act for any fiscal year before fiscal year 2027. (f) Pro rata reduction of assistance for individual noncompliance Section 407(e) (42 U.S.C. 607(e)) is amended by adding at the end the following: (3) Pro rata reduction For purposes of paragraph (1)(A), the amount of a pro rata reduction in assistance shall be determined by multiplying the total amount of monthly assistance that would, in the absence of the application of this paragraph, be paid to the entire family, by the ratio of— (A) the number of hours of required work activities as designated in subsection (d) actually performed by the individual during the month; to (B) the number of hours of work activities that the individual was required to perform during the month in accordance with subsection (c). (4) Penalties and engagement (A) In general Subject to the limitation in (B), if in a given month an individual who received assistance under this part was required to engage in work under section 408(b)(4), failed to fulfill those obligations and was subsequently sanctioned in accordance with section 407(e)(2) and (3), that individual shall be judged to be engaged in work for that month for purposes of section 408(b)(4). (B) Limitation If an individual receives no benefits for two consecutive months due to sanctioning under section 407(e)(2) and (3), that individual shall not be counted as engaged in work in subsequent months for purposes of section 408(b)(4) unless actual work in accordance with section 407(d) was resumed.. (g) Conforming amendment The heading of section 412(c) (42 U.S.C. 612(c)) is amended by striking Minimum Work Participation Requirements and inserting Requirements for work outcome measures.