; and (C) other indicators of family stability and well-being as established by the Secretary. (2) Level of performance benchmark The Secretary and a State selected under paragraph (1) shall agree to the requisite level of performance on these benchmarks after developing baseline data in the State and comparative data in other States. (3) Failure of State to meet benchmark If a State fails to meet a measured benchmark standard agreed to under paragraph (2) for 2 successive fiscal years, the State, in order to continue in the pilot shall enter into a plan with the Secretary to achieve the required level of performance or, if mutually agreed to, adjust the benchmark based on new information about the feasibility of meeting such benchmark. (4) Duration The pilot under this subsection shall be in effect for 6 fiscal years, with one year to establish benchmark data and negotiate targets and five years to measure performance against the targets, and shall supersede the requirements under section 407 for such fiscal years, notwithstanding any other provision of law. (5) Application of penalty for failure to reduce assistance for recipients refusing without good cause to work For purposes of section 409(a)(14), a State operating a pilot must have a system for reducing the amount of assistance payable to a family if an individual refuses, without good cause (including for reasons described in 407(e)(2)), to engage in any such activities as the State has required of such an individual. A State without such a system shall be considered to have failed to comply with the requirements of section 407(e) for so long as the failure to comply continues. (6) Collection of performance data Each State selected under paragraph (1), in consultation with the Secretary, shall collect and submit to the Secretary data on the performance of the State operating such a pilot program. (7) Reports (A) Initial report Not later than 12 months after the date of the enactment of this subsection the Secretary shall submit a report to Congress on the