SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pathways to Independence Act of 
2003''.

SEC. 2. STATE OPTION TO COUNT REHABILITATION SERVICES FOR CERTAIN 
              INDIVIDUALS AS WORK FOR PURPOSES OF THE TEMPORARY 
              ASSISTANCE FOR NEEDY FAMILIES PROGRAM.

    (a) In General.--Section 407(c)(2) of the Social Security Act (42 
U.S.C. 607(c)(2)) is amended by adding at the end the following:
                    ``(E) State option to treat an individual with a 
                disability, including a substance abuse problem, who is 
                participating in rehabilitation services as being 
                engaged in work.--
                            ``(i) Initial 3-month period.--Subject to 
                        clauses (ii) and (iii), for purposes of 
                        determining monthly participation rates under 
                        paragraphs (1)(B)(i) and (2)(B) of subsection 
                        (b), a State may deem an individual described 
                        in clause (iv) as being engaged in work for not 
                        more than 3 months in any 24-month period.
                            ``(ii) Additional 3-month period.--A State 
                        may extend the 3-month period under clause (i) 
                        for an additional 3 months only if, during such 
                        additional 3-month period, the individual 
                        engages in a work activity described in 
                        subsection (d) for such number of hours per 
                        month as the State determines appropriate.
                            ``(iii) Succeeding months.--
                                    ``(I) Credit for individuals 
                                participating in work activities and 
                                rehabilitation services.--If a State 
                                has deemed an individual described in 
                                clause (iv) as being engaged in work 
                                for 6 months in accordance with clauses 
                                (i) and (ii), and the State determines 
                                that the individual is unable to 
                                satisfy the work requirement under the 
                                State program funded under this part 
                                that applies to the individual without 
                                regard to this subparagraph because of 
                                the individual's disability, including 
                                a substance abuse problem, the State 
                                shall receive the credit determined 
                                under subclause (II) toward the monthly 
                                participation rate for the State.
                                    ``(II) Determination of credit.--
                                For purposes of subclause (I), the 
                                credit the State shall receive under 
                                that subclause is, with respect to a 
                                month, the lesser of--
                                            ``(aa) the sum of the 
                                        number of hours the individual 
                                        participates in an activity 
                                        described in paragraph (1), 
                                        (2), (3), (4), (5), (6), (7), 
                                        (8), or (12) of subsection (d) 
                                        for the month and the number of 
                                        hours that the individual 
                                        participates in rehabilitation 
                                        services under this 
                                        subparagraph for the month; or
                                            ``(bb) twice the number of 
                                        hours the individual 
                                        participates in an activity 
                                        described in paragraph (1), 
                                        (2), (3), (4), (5), (6), (7), 
                                        (8), or (12) of subsection (d) 
                                        for the month.
                            ``(iv) Individual described.--For purposes 
                        of this subparagraph, an individual described 
                        in this clause is an individual who the State 
                        has determined has a disability, including a 
                        substance abuse problem, and would benefit from 
                        participating in rehabilitative services.
                            ``(v) Definition of disability.--In this 
                        subparagraph, the term `disability' means--
                                    ``(I) a physical or mental 
                                impairment that constitutes or results 
                                in a substantial impediment to 
                                employment; or
                                    ``(II) a physical or mental 
                                impairment that substantially limits 1 
                                or more major life activities.''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on October 1, 2003.

SEC. 3. STATE OPTION TO COUNT CARING FOR A CHILD OR ADULT DEPENDENT FOR 
              CARE WITH A PHYSICAL OR MENTAL IMPAIRMENT AS MEETING ALL 
              OR PART OF THE WORK REQUIREMENT.

    (a) In General.--Section 407(c)(2) of the Social Security Act (42 
U.S.C. 607(c)(2)), as amended by section 2, is amended by adding at the 
end the following:
                    ``(F) Recipient caring for a child or adult 
                dependent for care with a physical or mental impairment 
                deemed to be meeting all or part of a family's work 
                participation requirements for a month.--
                            ``(i) In general.--Subject to clause (ii), 
                        for purposes of determining monthly 
                        participation rates under paragraphs (1)(B)(i) 
                        and (2)(B) of subsection (b), a State may count 
                        the number of hours per week that a recipient 
                        engages in providing substantial ongoing care 
                        for a child or adult dependent for care with a 
                        physical or mental impairment if the State 
                        determines that--
                                    ``(I) the child or adult dependent 
                                for care has been verified through a 
                                medically acceptable clinical or 
                                laboratory diagnostic technique as 
                                having a significant physical or mental 
                                impairment or combination of 
                                impairments and as a result of that 
                                impairment, it is necessary that the 
                                child or adult dependent for care have 
                                substantial ongoing care;
                                    ``(II) the recipient providing such 
                                care is the most appropriate means, as 
                                determined by the State, by which the 
                                care can be provided to the child or 
                                adult dependent for care;
                                    ``(III) for each month in which 
                                this subparagraph applies to the 
                                recipient, the recipient is in 
                                compliance with the requirements of the 
                                recipient's self-sufficiency plan; and
                                    ``(IV) the recipient is unable to 
                                participate fully in work activities, 
                                after consideration of whether there 
                                are supports accessible and available 
                                to the family for the care of the child 
                                or adult dependent for care.
                            ``(ii) Total number of hours limited to 
                        being counted as 1 family.--In no event may a 
                        family that includes a recipient to which 
                        clause (i) applies be counted as more than 1 
                        family for purposes of determining monthly 
                        participation rates under paragraphs (1)(B)(i) 
                        and (2)(B) of subsection (b).
                            ``(iii) State requirements.--In the case of 
                        a recipient to which clause (i) applies, the 
                        State shall--
                                    ``(I) conduct regular, periodic 
                                evaluations of the recipient's family; 
                                and
                                    ``(II) include as part of the 
                                recipient's self-sufficiency plan, 
                                regular updates on what special needs 
                                of the child or the adult dependent for 
                                care, including substantial ongoing 
                                care, could be accommodated either by 
                                individuals other than the recipient or 
                                outside of the home.
                            ``(iv) 2-parent families.--
                                    ``(I) In general.--If a parent in a 
                                2-parent family is caring for a child 
                                or adult dependent for care with a 
                                physical or mental impairment--
                                            ``(aa) the State may treat 
                                        the family as a 1-parent family 
                                        for purposes of determining 
                                        monthly participation rates 
                                        under paragraphs (1)(B)(i) and 
                                        (2)(B) of subsection (b); and
                                            ``(bb) the State may not 
                                        count any hours of care for the 
                                        child or adult dependent for 
                                        care for purposes of 
                                        determining such rates.
                                    ``(II) Special rule.--If the adult 
                                dependent for care in a 2-parent family 
                                is 1 of the parents and the State has 
                                complied with the requirements of 
                                clause (iii), the State may count the 
                                number of hours per week that a 
                                recipient engages in providing 
                                substantial ongoing care for that adult 
                                dependent for care.
                            ``(v) Rule of construction.--Nothing in 
                        this subparagraph shall be construed as 
                        prohibiting a State from including in a 
                        recipient's self-sufficiency plan a requirement 
                        to engage in work activities described in 
                        subsection (d).''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on October 1, 2003.
Pathways to Independence Act of 2003 - Amends part A (Temporary Assistance for Needy Families) of title IV of the Social Security Act to give States the option to: (1) treat an individual with a disability, including a substance abuse problem, who is participating in rehabilitation services as being engaged in work; and (2) count as a work activity certain care provided to a child with a physical or mental impairment or to an adult dependent with a physical or mental impairment. Limits to three months in any 24-month period the length of time an individual may be deemed as being engaged in work under this Act. Permits an additional three-month extension only if the individual engages in specified work activity for a State-determined appropriate number of hours per month.
A bill to amend part A of title IV of the Social Security Act to allow a State to treat an individual with a disability, including a substance abuse problem, who is participating in rehabilitation services and who is increasing participation in core work activities as being engaged in work for purposes of the temporary assistance for needy families program, and to allow a State to count as a work activity under that program care provided to a child with a physical or mental impairment or an adult dependent for care with a physical or mental impairment.