A bill to amend part A of title IV of the Social Security Act to preserve and improve existing provisions and practices relating to special needs allowances and emergency assistance for the homeless under the AFDC program, to limit the use of welfare hotels to provide shelter for homeless families, and to establish a demonstration program to encourage the provision of permanent housing for needy families that might otherwise require emergency shelter in welfare hotels.

Amends part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Social Security Act to require that State AFDC plans describe special need items which will be recognized for inclusion in the State's need standard and the circumstances under which they will be included. Authorizes a State to include in its need standard an amount for shelter and related needs that varies according to geographic location, family circumstance, or the type of dwelling occupied. Limits AFDC emergency assistance to assistance furnished for no more than 30 days in any 12-month period or authorized for one period of 30 consecutive days in any 12 consecutive months. Provides that States need not specify the maximum amount of emergency assistance which may be furnished for any type of emergency need.

Prohibits the shelter of a family in commercial or similar transient accommodations from being deemed a basic or special need, or furnished as emergency assistance after such family has occupied those accommodations for 60 days during any 12-month period. Excepts the City of New York from full implementation of such prohibition until October 1, 1993.

Authorizes the Secretary of Health and Human Services to approve demonstration projects under which States encourage landlords to make permanent shelter available to families receiving AFDC housing assistance by paying rent for such shelter for the first year at the rate paid for comparable commercial or similar transient accommodations and for the remainder of the lease, which must run for at least two more years, at the applicable AFDC housing allowance.