SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fathers Count Act of 1998''.

SEC. 2. GRANTS TO STATES TO ENCOURAGE FATHERS TO BECOME BETTER PARENTS.

    Title IV of the Social Security Act (42 U.S.C. 601-679b) is amended 
by inserting after part B the following:

   ``PART C--GRANTS TO STATES TO ENCOURAGE FATHERS TO BECOME BETTER 
                                PARENTS

``SEC. 441. STATE PLAN.

    ``A State desiring to receive a grant under this part shall submit 
to the Secretary a plan which describes how the State will--
            ``(1) review applications from governmental and private 
        (nonprofit and for profit) organizations for funds provided to 
        the State under this part, including the criteria that will be 
        used to award such funds; and
            ``(2) administer the funds provided to the State under this 
        part.

``SEC. 442. GRANTS TO STATES.

    ``(a) Grant Authority.--Subject to the availability of funds, the 
Secretary shall make a grant to a State that complies with section 441, 
for each fiscal year beginning with fiscal year 2000 that begins after 
the date the Secretary receives the State plan submitted pursuant to 
section 441, in the amount described in subsection (b).
    ``(b) Grant Amount.--
            ``(1) In general.--The amount of the grant to be made to a 
        State under this part for a fiscal year shall be the amount 
        that bears the same relation to the amount specified in 
        paragraph (2) for the fiscal year as the population of the 
        State (as determined by the Bureau of the Census for the most 
        recent fiscal year for which information is available) bears to 
        the population of the United States (as so determined), subject 
        to section 447.
            ``(2) Amount specified.--The amount specified in this 
        paragraph is--
                    ``(A) $200,000,000 for fiscal year 2000;
                    ``(B) $300,000,000 for fiscal year 2001;
                    ``(C) $400,000,000 for fiscal year 2002;
                    ``(D) $500,000,000 for fiscal year 2003; and
                    ``(E) $500,000,000 for fiscal year 2004.

``SEC. 443. USE OF FUNDS.

    ``(a) In General.--A State to which a grant is made under this 
section--
            ``(1) shall use the grant to fund projects which--
                    ``(A) encourage unmarried or prospective fathers to 
                get married, and encourage better parenting by fathers 
                who are living with 1 or more of their children; or
                    ``(B) include activities that help fathers obtain 
                gainful employment, or help fathers increase their 
                skills in order to qualify for higher-paying jobs; and
            ``(2) may use the grant funds to support projects which 
        emphasize ways for fathers who do not live with 1 or more of 
        their children to become better parents.
    ``(b) Targeting of Nongovernmental Organizations.--A State to which 
a grant is made under this section shall provide not less than 75 
percent of the grant funds to nongovernmental organizations.
    ``(c) Targeting of Fathers With Annual Income Below State Average 
Income of Male Earners.--A State to which a grant is made under this 
section shall ensure that not less than 80 percent of the grant funds 
are used to provide services for fathers whose income is less than the 
State or local average income level for male earners.
    ``(d) Availability of Funds.--A State to which a grant is made 
under this section for a fiscal year shall remit to the Secretary any 
funds remaining from the grant that have not been expended by the end 
of the next fiscal year.

``SEC. 444. COORDINATION WITH OTHER PROGRAMS.

    ``(a) Authority To Use Welfare-to-Work and Title XX Funds for 
Activities Under This Part.--A State to which a grant is made under 
section 441 may use funds provided under section 403(a)(5) or title XX 
in any manner described in section 443.
    ``(b) Administration of Welfare-to-Work Funds.--A State that uses 
funds provided under section 403(a)(5) for activities under this part 
may administer the funds so used through the State agency responsible 
for administering the funds provided under the other provisions of 
section 403(a).
    ``(c) Coordination With TANF Program.--The State shall coordinate 
the State program funded under this part with the State program funded 
under part A.

``SEC. 445. DISBURSEMENT OF FUNDS BY STATES.

    ``(a) Appropriation by State Legislature.--Any funds received by a 
State under this part shall be subject to appropriation by the State 
legislature, consistent with this part.
    ``(b) Disbursement by Governor.--The Governor of a State to which 
funds are provided under this part may disburse the funds consistent 
with this part, except as otherwise provided by State law.

``SEC. 446. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, OR PRIVATE 
              ORGANIZATIONS.

    ``(a) State Option.--A State may--
            ``(1) administer and provide services under the program 
        under this part through contracts with charitable, religious, 
        or private organizations; and
            ``(2) provide beneficiaries of assistance under the program 
        with certificates, vouchers, or other forms of disbursement 
        which are redeemable with such organizations.
    ``(b) Religious Organizations.--The purpose of this section is to 
allow States to contract with religious organizations, or to allow 
religious organizations to accept certificates, vouchers, or other 
forms of disbursement under any program under this part, on the same 
basis as any other nongovernmental provider without impairing the 
religious character of such organizations, and without diminishing the 
religious freedom of beneficiaries of assistance funded under such 
program.
    ``(c) Nondiscrimination Against Religious Organizations.--In the 
event a State exercises its authority under subsection (a), religious 
organizations are eligible, on the same basis as any other private 
organization, as contractors to provide assistance, or to accept 
certificates, vouchers, or other forms of disbursement, under any 
program under this part so long as the programs are implemented 
consistent with the Establishment Clause of the United States 
Constitution. Except as provided in subsection (k), neither the Federal 
Government nor a State receiving funds under such programs shall 
discriminate against an organization which is or applies to be a 
contractor to provide assistance, or which accepts certificates, 
vouchers, or other forms of disbursement, on the basis that the 
organization has a religious character.
    ``(d) Religious Character and Freedom.--
            ``(1) Religious organizations.--A religious organization 
        with a contract described in subsection (a)(1), or which 
        accepts certificates, vouchers, or other forms of disbursement 
        under subsection (a)(2), shall retain its independence from 
        Federal, State, and local governments, including such 
        organization's control over the definition, development, 
        practice, and expression of its religious beliefs.
            ``(2) Additional safeguards.--Neither the Federal 
        Government nor a State shall require a religious organization 
        to--
                    ``(A) alter its form of internal governance; or
                    ``(B) remove religious art, icons, scripture, or 
                other symbols;
        in order to be eligible to contract to provide assistance, or 
        to accept certificates, vouchers, or other forms of 
        disbursement, funded under a program under this part.
    ``(e) Rights of Beneficiaries of Assistance.--
            ``(1) In general.--If an individual described in paragraph 
        (2) has an objection to the religious character of the 
        organization or institution from which the individual receives, 
        or would receive, assistance funded under any program under 
        this part, the State in which the individual resides shall 
        provide such individual (if otherwise eligible for such 
        assistance) within a reasonable period of time after the date 
        of such objection with assistance from an alternative provider 
        that is accessible to the individual and the value of which is 
        not less than the value of the assistance which the individual 
        would have received from such organization.
            ``(2) Individual described.--An individual described in 
        this paragraph is an individual who receives, applies for, or 
        requests to apply for, assistance under a program under this 
        part.
    ``(f) Employment Practices.--A religious organization's exemption 
provided under section 702 of the Civil Rights Act of 1964 (42 U.S.C. 
2000e-1a) regarding employment practices shall not be affected by its 
participation in, or receipt of funds from, programs under this part.
    ``(g) Nondiscrimination Against Beneficiaries.--Except as otherwise 
provided in law, a religious organization shall not discriminate 
against an individual in regard to rendering assistance funded under 
any program under this part on the basis of religion, a religious 
belief, or refusal to actively participate in a religious practice.
    ``(h) Fiscal Accountability.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        religious organization contracting to provide assistance funded 
        under any program under this part shall be subject to the same 
        regulations as other contractors to account in accord with 
        generally accepted auditing principles for the use of such 
        funds provided under such programs.
            ``(2) Limited audit.--If such organization segregates 
        Federal funds provided under such programs into separate 
        accounts, then only the financial assistance provided with such 
        funds shall be subject to audit.
    ``(i) Compliance.--Any party which seeks to enforce its rights 
under this section may assert a civil action for injunctive relief 
exclusively in an appropriate State court against the entity or agency 
that allegedly commits such violation.
    ``(j) Limitations on Use of Funds for Certain Purposes.--No funds 
provided directly to institutions or organizations to provide services 
and administer programs under subsection (a)(1) shall be expended for 
sectarian worship, instruction, or proselytization.
    ``(k) Preemption.--Nothing in this section shall be construed to 
preempt any provision of a State constitution or State statute that 
prohibits or restricts the expenditure of State funds in or by 
religious organizations.

``SEC. 447. ENFORCEMENT PROVISIONS.

    ``(a) In General.--If the Secretary finds that a State has used 
funds provided under this part in violation of this part or of any 
provision of the State plan submitted under section 441, the Secretary 
shall reduce the amount otherwise payable under section 442 to the 
State by the amount so misused as the Secretary considers appropriate.
    ``(b) Limitation on Amount of Penalties.--
            ``(1) In general.--In imposing penalties under subsection 
        (a), the Secretary shall not reduce any payment to a State by 
        more than 10 percent.
            ``(2) Carryforward of unrecovered penalties.--To the extent 
        that paragraph (1) of this subsection prevents the Secretary 
        from recovering during a fiscal year the full amount of 
        penalties imposed on a State under subsection (a) of this 
        section for a prior fiscal year, the Secretary shall apply any 
        remaining amount of such penalties to the grant payable to the 
        State under this part for the succeeding fiscal year.
    ``(c) Appeal of Adverse Decisions.--Section 410 shall apply to an 
adverse action taken under this part in the same manner in which the 
section applies to an adverse action taken under part A.

``SEC. 448. RESEARCH, EVALUATIONS, AND TECHNICAL ASSISTANCE.

    ``(a) Research.--The Secretary, directly or through grants, 
contracts, or interagency agreements, shall conduct research on the 
State programs funded under this part.
    ``(b) Evaluations.--
            ``(1) In general.--Beginning in fiscal year 2000, the 
        Secretary, directly or through grants, contracts, or 
        interagency agreements, shall annually evaluate how grants made 
        under this part are used, and a State to which a grant is so 
        made shall cooperate with the Secretary in the conduct of the 
        evaluations.
            ``(2) Reports to the congress.--Beginning with fiscal year 
        2003, and every 2 fiscal years thereafter, the Secretary shall 
        submit to the Congress a report on the evaluations conducted 
        under paragraph (1) before the fiscal year.
    ``(c) Technical Assistance.--The Secretary, directly or through 
grants, contracts, or interagency agreements, shall provide States with 
technical assistance for the purpose of disseminating information about 
successful programs and program components to entities potentially 
eligible to receive funds provided under this part.
    ``(d) Limitations on Authorization of Appropriations.--
            ``(1) Research and evaluations.--For research and 
        evaluations under this section, there are authorized to be 
        appropriated to the Secretary not more than $10,000,000 for 
        each of fiscal years 2000 through 2004.
            ``(2) Technical assistance.--For technical assistance under 
        this section, there are authorized to be appropriated to the 
        Secretary not more than $10,000,000 for each of fiscal years 
        2000 through 2004.
    ``(e) Limited Reprogramming Authority.--During a fiscal year, the 
Secretary may use not more than 20 percent of any amount appropriated 
under a paragraph of subsection (d) for the fiscal year for the purpose 
described in the other subparagraph of subsection (d).

``SEC. 449. DEFINITIONS.

    ``In this part:
            ``(1) Fiscal year.--The term `fiscal year' means any 12-
        month period ending on September 30 of a calendar year.
            ``(2) State.--The term `State' means the 50 States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, and 
        American Samoa.''.
Fathers Count Act of 1998 - Amends title IV of the Social Security Act to replace part C (Work Incentive Program) with a new part C (Grants to States to Encourage Fathers to Become Better Parents) instructing the Secretary of Health and Human Services, beginning FY 2000, to award grants to States for projects designed to encourage fathers to become better parents.  Prescribes grant amounts for FY 2000 through 2004, and State uses for such funds. 
Permits States to contract with religious, charitable, or private organizations to provide and administer services under such grants. 
Declares religious organizations eligible as contractors to provide assistance or to accept disbursements on the same basis as any other private organization, so long as program implementation complies with the Establishment Clause of the Constitution. 
Prohibits discrimination against religious organizations that apply as contractors or accept disbursements under this Act.  Delineates safeguards against certain Federal and State requirements with respect to such religious organizations, including an organization's control over the definition, development, practice, and expression of religious beliefs. 
Proscribes the use of funds under this Act for sectarian worship, instruction, or proselytization. 
Declares that this Act does not preempt any State constitution or statute that prohibits or restricts the expenditure of State funds in or by religious organizations. 
Authorizes appropriations.
Fathers Count Act of 1998