text: 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.
target: 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).
feat_title: Microenterprise and Asset Development Act