article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Microenterprise and Asset Development Act''. SEC. 2. DISREGARD OF INCOME AND RESOURCES DESIGNATED FOR EDUCATION, TRAINING, AND EMPLOYABILITY. (a) Disregard as Resource.--Section 402(a)(7)(B) of the Social Security Act (42 U.S.C. 602(a)(7)(B)) is amended-- (1) by striking ``or'' before ``(iv)''; and (2) by inserting ``, or (v) in the case of a family receiving aid under the State plan (and a family not receiving such aid but which received such aid in at least 1 of the preceding 4 months or became ineligible for such aid during the preceding 12 months because of excessive earnings), any amount not to exceed $10,000 in a qualified asset account (as defined in section 406(i)) of such family'' before ``; and''. (b) Disregard as Income.-- (1) In general.--Section 402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)) is amended-- (A) by striking ``and'' at the end of clause (vii); and (B) by inserting after clause (viii) the following new clause: ``(ix) shall disregard any interest or income earned on a qualified asset account (as defined in section 406(i)); and''. (2) Nonrecurring lump sum exempt from lump sum rule.-- Section 402(a)(17) of such Act (42 U.S.C. 602(a)(17)) is amended by adding at the end the following: ``; and that this paragraph shall not apply to earned or unearned income received in a month on a nonrecurring basis to the extent that such income is placed in a qualified asset account (as defined in section 406(i)) the total amounts in which, after such placement, does not exceed $10,000;''. (3) Treatment as income.--Section 402(a)(7) of such Act (42 U.S.C. 602(a)(7)) is amended-- (A) by striking ``and'' at the end of subparagraph (B); (B) by striking the semicolon at the end of subparagraph (C) and inserting ``; and''; and (C) by adding at the end the following new subparagraph: ``(D) shall treat as income any distributions from a qualified asset account (as defined in section 406(i)(1)) which do not meet the definition of a qualified distribution under section 406(i)(2);''. (c) Qualified Asset Accounts.--Section 406 of such Act (42 U.S.C. 606) is amended by adding at the end the following: ``(i)(1) The term `qualified asset account' means a mechanism approved by the State (such as individual retirement accounts, escrow accounts, or savings bonds) that allows savings of a family receiving aid to families with dependent children to be used for qualified distributions. ``(2) The term `qualified distributions' means distributions for expenses directly related to 1 or more of the following purposes: ``(A) The attendance of a member of the family at any education or training program. ``(B) The improvement of the employability (including self- employment) of a member of the family (such as through the purchase of an automobile). ``(C) The purchase of a home for the family. ``(D) A change of the family residence.''. (d) Study of Use of Qualified Asset Accounts; Report.--The Secretary of Health and Human Services shall conduct a study of the use of qualified asset accounts established pursuant to the amendments made by this section, and shall report on such study and any recommendations for modifications of such amendments to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives not later than January 1, 1996. (e) Report on AFDC Asset Limit on Automobiles.--Within 3 months after the date of the enactment of this section, the Secretary of Health and Human Services shall submit to the Congress a report on-- (1) the need to revise the limitation, established in regulations pursuant to section 402(a)(7)(B)(i) of the Social Security Act, on the value of a family automobile required to be disregarded by a State in determining the eligibility of the family for aid to families with dependent children under the State plan approved under part A of title IV of such Act; and (2) the extent to which such a revision would increase the employability of recipients of such aid. (f) Effective Date.--The amendments made by this section shall take effect on October 1, 1993. SEC. 3. DISREGARD OF INCOME AND RESOURCES RELATED TO SELF-EMPLOYMENT. (a) State Plan Requirements.--Section 402(a) of the Social Security Act (42 U.S.C. 602(a)) is amended-- (1) by striking ``and'' at the end of paragraph (44); (2) by striking the period at the end of paragraph (45) and inserting ``; and''; and (3) by inserting after paragraph (45) the following: ``(46) provide that the State agency-- ``(A)(i) shall not include as a resource of the family of which a child referred to in paragraph (7)(A) is a member, for purposes of paragraph (7)(B), the first $10,000 of the net worth (assets reduced by liabilities with respect thereto) of all microenterprises (as defined in section 406(j)(1)) owned, in whole or in part, by the child or by a relative or other individual referred to in paragraph (7)(A), for a period not to exceed 2 years; and ``(ii) shall take into consideration as earned income of the family of which the child is a member, only the net profits (as defined in section 406(j)(2)) of such microenterprises, for a period not to exceed 2 years; and ``(B) shall ensure that caseworkers are able to properly advise recipients of aid under the State plan of the option of microenterprise as a legitimate route towards self-sufficiency, and that caseworkers encourage recipients of such aid who are interested in starting a microenterprise to participate in a program designed to assist them in such effort.''. (b) Definitions.--Section 406 of such Act (42 U.S.C. 606), as amended by section 2(c) of this Act, is amended by adding at the end the following: ``(j)(1) The term `microenterprise' means a commercial enterprise which has 5 or fewer employees, 1 or more of whom owns the enterprise. ``(2) The term `net profits' means, with respect to a microenterprise, the gross receipts of the business, minus-- ``(A) payments of principal or interest on a loan to the microenterprise; ``(B) transportation expenses; ``(C) inventory costs; ``(D) expenditures to purchase capital equipment; ``(E) cash retained by the microenterprise for future use by the business; ``(F) taxes paid by reason of the business; ``(G) if the business is covered under a policy of insurance against loss-- ``(i) the premiums paid for such insurance; and ``(ii) the losses incurred by the business that are not reimbursed by the insurer solely by reason of the existence of a deductible with respect to the insurance policy; ``(H) the reasonable costs of obtaining 1 motor vehicle necessary for the conduct of the business; and ``(I) the other expenses of the business.''. (c) Inclusion of Microenterprise Training and Activities in the JOBS Program.-- (1) In general.--Section 482(d)(1) of such Act (42 U.S.C. 682(d)(1)) is amended by adding at the end the following: ``(C) The services and activities referred to in subparagraph (A)-- ``(i) in the case that at least 3 percent of the adult recipients of aid under the State plan approved under part A (as of the close of the immediately preceding fiscal year) elect to participate in microenterprise activities, shall include programs described in paragraph (4); or ``(ii) in the case that not more than 3 percent of the adult recipients of such aid elect to participate in microenterprise activities, may include programs described in paragraph (4).''. (2) Microenterprise programs.--Section 482(d) of such Act (42 U.S.C. 682(d)) is amended by adding at the end the following: ``(4) The programs described in this paragraph are programs of public and private organizations, agencies, and other entities (including nonprofit and for-profit entities) to enable such entities to facilitate economic development by-- ``(A) providing technical assistance, advice, and business support services (including assistance, advice, and support relating to business planning, financing, marketing, and other microenterprise development activities) to owners of microenterprises and persons developing microenterprises; and ``(B) providing general support (such as peer support and self-esteem programs) to owners of microenterprises and persons developing microenterprises.''. (d) Effective Date.--The amendments made by this section shall apply to payments under part A of title IV of the Social Security Act for calendar quarters beginning on or after October 1, 1993.
summary: Microenterprise and Asset Development Act - Amends part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Social Security Act (SSA) to exclude from AFDC eligibility determinations certain income and resources that are to be used for education, training, and employability purposes. Requires the Secretary of Health and Human Services to report to the Congress on a revision of the AFDC limit on automobiles in order to increase the employability of AFDC recipients. Provides for State agency exclusion from AFDC eligibility determinations of certain resources related to microenterprise initiatives by AFDC recipients towards self-sufficiency. Requires State agencies to ensure that caseworkers advise AFDC recipients of the option for microenterprises. Provides for the inclusion of microenterprise training and activities in the JOBS program under SSA title IV part F (Job Opportunities and Basic Skills Training Program).