1996 TANF Legislation

pdf Conference Report on TANF Bill-104-725

By In 1996 TANF Legislation 1882 downloads

Download (pdf, 1.61 MB)

Conference Report on TANF Bill-104-725.pdf

” HOUSE OF REPRESENTATIVES\” ! 104TH CONGRESS 2d Session REPORT 104 725 PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996 CONFERENCE REPORT TO ACCOMPANY H.R. 3734 JULY 30, 1996.\u2014Ordered to be printed P E R S O N A L R E S P O N S IB IL IT Y A N D W O R K O P P O R T U N IT Y R E C O N C IL IA T IO N A C T O F 1996 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1 26 206 HOUSE OF REPRESENTATIVES\” ! 104TH CONGRESS 2d Session REPORT 1996 104 725 PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996 CONFERENCE REPORT TO ACCOMPANY H.R. 3734 JULY 30, 1996.\u2014Ordered to be printed 104TH CONGRESS REPORT \” !HOUSE OF REPRESENTATIVES2d Session 104 725 PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996 JULY 30, 1996.\u2014Ordered to be printed Mr. KASICH, from the committee of conference, submitted the following CONFERENCE REPORT [To accompany H.R. 3734] The committee of conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H.R. 3734), to provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows: That the House recede from its disagreement to the amend- ment of the Senate and agree to the same with an amendment as follows: In lieu of the matter proposed to be inserted by the Senate amendment, insert the following: SECTION 1. SHORT TITLE. This Act may be cited as the ”Personal Responsibility and Work Opportunity Reconciliation Act of 1996”. SEC. 2. TABLE OF CONTENTS. The table of contents for this Act is as follows: TITLE I\u2014BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES Sec. 101. Findings. Sec. 102. Reference to Social Security Act. Sec. 103. Block grants to States. Sec. 104. Services provided by charitable, religious, or private organizations. Sec. 105. Census data on grandparents as primary caregivers for their grand- children. Sec. 106. Report on data processing. Sec. 107. Study on alternative outcomes measures. Sec. 108. Conforming amendments to the Social Security Act. Sec. 109. Conforming amendments to the Food Stamp Act of 1977 and related provi- sions. Sec. 110. Conforming amendments to other laws. 2 Sec. 111. Development of prototype of counterfeit-resistant social security card re- quired. Sec. 112. Modifications to the job opportunities for certain low-income individuals program. Sec. 113. Secretarial submission of legislative proposal for technical and conforming amendments. Sec. 114. Assuring medicaid coverage for low-income families. Sec. 115. Denial of assistance and benefits for certain drug-related convictions. Sec. 116. Effective date; transition rule. TITLE II\u2014SUPPLEMENTAL SECURITY INCOME Sec. 200. Reference to Social Security Act. Subtitle A\u2014Eligibility Restrictions Sec. 201. Denial of SSI benefits for 10 years to individuals found to have fraudu- lently misrepresented residence in order to obtain benefits simulta- neously in 2 or more States. Sec. 202. Denial of SSI benefits for fugitive felons and probation and parole viola- tors. Sec. 203. Treatment of prisoners. Sec. 204. Effective date of application for benefits. Subtitle B\u2014Benefits for Disabled Children Sec. 211. Definition and eligibility rules. Sec. 212. Eligibility redeterminations and continuing disability reviews. Sec. 213. Additional accountability requirements. Sec. 214. Reduction in cash benefits payable to institutionalized individuals whose medical costs are covered by private insurance. Sec. 215. Regulations. Subtitle C\u2014Additional Enforcement Provision Sec. 221. Installment payment of large past-due supplemental security income bene- fits. Sec. 222. Regulations. Subtitle D\u2014Studies Regarding Supplemental Security Income Program Sec. 231. Annual report on the supplemental security income program. Sec. 232. Study by General Accounting Office. TITLE III\u2014CHILD SUPPORT Sec. 300. Reference to Social Security Act. Subtitle A\u2014Eligibility for Services; Distribution of Payments Sec. 301. State obligation to provide child support enforcement services. Sec. 302. Distribution of child support collections. Sec. 303. Privacy safeguards. Sec. 304. Rights to notification of hearings. Subtitle B\u2014Locate and Case Tracking Sec. 311. State case registry. Sec. 312. Collection and disbursement of support payments. Sec. 313. State directory of new hires. Sec. 314. Amendments concerning income withholding. Sec. 315. Locator information from interstate networks. Sec. 316. Expansion of the Federal parent locator service. Sec. 317. Collection and use of social security numbers for use in child support en- forcement. Subtitle C\u2014Streamlining and Uniformity of Procedures Sec. 321. Adoption of uniform State laws. Sec. 322. Improvements to full faith and credit for child support orders. Sec. 323. Administrative enforcement in interstate cases. Sec. 324. Use of forms in interstate enforcement. Sec. 325. State laws providing expedited procedures. 3 Subtitle D\u2014Paternity Establishment Sec. 331. State laws concerning paternity establishment. Sec. 332. Outreach for voluntary paternity establishment. Sec. 333. Cooperation by applicants for and recipients of part A assistance. Subtitle E\u2014Program Administration and Funding Sec. 341. Performance-based incentives and penalties. Sec. 342. Federal and State reviews and audits. Sec. 343. Required reporting procedures. Sec. 344. Automated data processing requirements. Sec. 345. Technical assistance. Sec. 346. Reports and data collection by the Secretary. Subtitle F\u2014Establishment and Modification of Support Orders Sec. 351. Simplified process for review and adjustment of child support orders. Sec. 352. Furnishing consumer reports for certain purposes relating to child support. Sec. 353. Nonliability for financial institutions providing financial records to State child support enforcement agencies in child support cases. Subtitle G\u2014Enforcement of Support Orders Sec. 361. Internal Revenue Service collection of arrearages. Sec. 362. Authority to collect support from Federal employees. Sec. 363. Enforcement of child support obligations of members of the Armed Forces. Sec. 364. Voiding of fraudulent transfers. Sec. 365. Work requirement for persons owing past-due child support. Sec. 366. Definition of support order. Sec. 367. Reporting arrearages to credit bureaus. Sec. 368. Liens. Sec. 369. State law authorizing suspension of licenses. Sec. 370. Denial of passports for nonpayment of child support. Sec. 371. International support enforcement. Sec. 372. Financial institution data matches. Sec. 373. Enforcement of orders against paternal or maternal grandparents in cases of minor parents. Sec. 374. Nondischargeability in bankruptcy of certain debts for the support of a child. Sec. 375. Child support enforcement for Indian tribes. Subtitle H\u2014Medical Support Sec. 381. Correction to ERISA definition of medical child support order. Sec. 382. Enforcement of orders for health care coverage. Subtitle I\u2014Enhancing Responsibility and Opportunity for Non-Residential Parents Sec. 391. Grants to States for access and visitation programs. Subtitle J\u2014Effective Dates and Conforming Amendments Sec. 395. Effective dates and conforming amendments. TITLE IV\u2014RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS Sec. 400. Statements of national policy concerning welfare and immigration. Subtitle A\u2014Eligibility for Federal Benefits Sec. 401. Aliens who are not qualified aliens ineligible for Federal public benefits. Sec. 402. Limited eligibility of qualified aliens for certain Federal programs. Sec. 403. Five-year limited eligibility of qualified aliens for Federal means-tested public benefit. Sec. 404. Notification and information reporting. Subtitle B\u2014Eligibility for State and Local Public Benefits Programs Sec. 411. Aliens who are not qualified aliens or nonimmigrants ineligible for State and local public benefits. Sec. 412. State authority to limit eligibility of qualified aliens for State public bene- fits. 4 Subtitle C\u2014Attribution of Income and Affidavits of Support Sec. 421. Federal attribution of sponsor’s income and resources to alien. Sec. 422. Authority for States to provide for attribution of sponsors income and re- sources to the alien with respect to State programs. Sec. 423. Requirements for sponsor’s affidavit of support. Subtitle D\u2014General Provisions Sec. 431. Definitions. Sec. 432. Verification of eligibility for Federal public benefits. Sec. 433. Statutory construction. Sec. 434. Communication between State and local government agencies and the Im- migration and Naturalization Service. Sec. 435. Qualifying quarters. Subtitle E\u2014Conforming Amendments Relating to Assisted Housing Sec. 441. Conforming amendments relating to assisted housing. Subtitle F\u2014Earning Income Credit Denied to Unauthorized Employees Sec. 451. Earned income credit denied to individuals not authorized to be employed in the United States. TITLE V\u2014CHILD PROTECTION Sec. 501. Authority of States to make foster care maintenance payments on behalf of children in any private child care institution. Sec. 502. Extension of enhanced match for implementation of statewide automated child welfare information systems. Sec. 503. National random sample study of child welfare. Sec. 504. Redesignation of section 1123. Sec. 505. Kinship care. TITLE VI\u2014CHILD CARE Sec. 601. Short title and references. Sec. 602. Goals. Sec. 603. Authorization of appropriations and entitlement authority. Sec. 604. Lead agency. Sec. 605. Application and plan. Sec. 606. Limitation on State allotments. Sec. 607. Activities to improve the quality of child care. Sec. 608. Repeal of early childhood development and before- and after-school care requirement. Sec. 609. Administration and enforcement. Sec. 610. Payments. Sec. 611. Annual report and audits. Sec. 612. Report by the Secretary. Sec. 613. Allotments. Sec. 614. Definitions. Sec. 615. Effective date. TITLE VII\u2014CHILD NUTRITION PROGRAMS Subtitle A\u2014National School Lunch Act Sec. 701. State disbursement to schools. Sec. 702. Nutritional and other program requirements. Sec. 703. Free and reduced price policy statement. Sec. 704. Special assistance. Sec. 705. Miscellaneous provisions and definitions. Sec. 706. Summer food service program for children. Sec. 707. Commodity distribution. Sec. 708. Child and adult care food program. Sec. 709. Pilot projects. Sec. 710. Reduction of paperwork. Sec. 711. Information on income eligibility. Sec. 712. Nutrition guidance for child nutrition programs. Subtitle B\u2014Child Nutrition Act of 1966 Sec. 721. Special milk program. 5 Sec. 722. Free and reduced price policy statement. Sec. 723. School breakfast program authorization. Sec. 724. State administrative expenses. Sec. 725. Regulations. Sec. 726. Prohibitions. Sec. 727. Miscellaneous provisions and definitions. Sec. 728. Accounts and records. Sec. 729. Special supplemental nutrition program for women, infants, and children. Sec. 730. Cash grants for nutrition education. Sec. 731. Nutrition education and training. Subtitle C\u2014Miscellaneous Provisions Sec. 741. Coordination of school lunch, school breakfast, and summer food service programs. Sec. 742. Requirements relating to provision of benefits based on citizenship, alienage, or immigration status under the National School Lunch Act, the Child Nutrition Act of 1966, and certain other acts. TITLE VIII\u2014FOOD STAMPS AND COMMODITY DISTRIBUTION Subtitle A\u2014Food Stamp Program Sec. 801. Definition of certification period. Sec. 802. Definition of coupon. Sec. 803. Treatment of children living at home. Sec. 804. Adjustment of thrifty food plan. Sec. 805. Definition of homeless individual. Sec. 806. State option for eligibility standards. Sec. 807. Earnings of students. Sec. 808. Energy assistance. Sec. 809. Deductions from income. Sec. 810. Vehicle allowance. Sec. 811. Vendor payments for transitional housing counted as income. Sec. 812. Simplified calculation of income for the self-employed. Sec. 813. Doubled penalties for violating food stamp program requirements. Sec. 814. Disqualification of convicted individuals. Sec. 815. Disqualification. Sec. 816. Caretaker exemption. Sec. 817. Employment and training. Sec. 818. Food stamp eligibility. Sec. 819. Comparable treatment for disqualification. Sec. 820. Disqualification for receipt of multiple food stamp benefits. Sec. 821. Disqualification of fleeing felons. Sec. 822. Cooperation with child support agencies. Sec. 823. Disqualification relating to child support arrears. Sec. 824. Work requirement. Sec. 825. Encouragement of electronic benefit transfer systems. Sec. 826. Value of minimum allotment. Sec. 827. Benefits on recertification. Sec. 828. Optional combined allotment for expedited households. Sec. 829. Failure to comply with other means-tested public assistance programs. Sec. 830. Allotments for households residing in centers. Sec. 831. Condition precedent for approval of retail food stores and wholesale food concerns. Sec. 832. Authority to establish authorization periods. Sec. 833. Information for verifying eligibility for authorization. Sec. 834. Waiting period for stores that fail to meet authorization criteria. Sec. 835. Operation of food stamp offices. Sec. 836. State employee and training standards. Sec. 837. Exchange of law enforcement information. Sec. 838. Expedited coupon service. Sec. 839. Withdrawing fair hearing requests. Sec. 840. Income, eligibility, and immigration status verification systems. Sec. 841. Investigations. Sec. 842. Disqualification of retailers who intentionally submit falsified applica- tions. Sec. 843. Disqualification of retailers who are disqualified under the WIC program. Sec. 844. Collection of overissuances. 6 Sec. 845. Authority to suspend stores violating program requirements pending ad- ministrative and judicial review. Sec. 846. Expanded criminal forfeiture for violations. Sec. 847. Limitation on Federal match. Sec. 848. Standards for administration. Sec. 849. Work supplementation or support program. Sec. 850. Waiver authority. Sec. 851. Response to waivers. Sec. 852. Employment initiatives program. Sec. 853. Reauthorization. Sec. 854. Simplified food stamp program. Sec. 855. Study of the use of food stamps to purchase vitamins and minerals. Sec. 856. Deficit reduction. Subtitle B\u2014Commodity Distribution Programs Sec. 871. Emergency food assistance program. Sec. 872. Food bank demonstration project. Sec. 873. Hunger prevention programs. Sec. 874. Report on entitlement commodity processing. Subtitle C\u2014Electronic Benefit Transfer Systems Sec. 891. Provisions to encourage electronic benefit transfer systems. TITLE IX\u2014MISCELLANEOUS Sec. 901. Appropriation by State legislatures. Sec. 902. Sanctioning for testing positive for controlled substances. Sec. 903. Elimination of housing assistance with respect to fugitive felons and pro- bation and parole violators. Sec. 904. Sense of the Senate regarding the inability of the noncustodial parent to pay child support. Sec. 905. Establishing national goals to prevent teenage pregnancies. Sec. 906. Sense of the Senate regarding enforcement of statutory rape laws. Sec. 907. Provisions to encourage electronic benefit transfer systems. Sec. 908. Reduction of block grants to States for social services; use of vouchers. Sec. 909. Rules relating to denial of earned income credit on basis of disqualified income. Sec. 910. Modification of adjusted gross income definition for earned income credit. Sec. 911. Fraud under means-tested welfare and public assistance programs. Sec. 912. Abstinence education. Sec. 913. Change in reference. TITLE I\u2014BLOCK GRANTS FOR TEM- PORARY ASSISTANCE FOR NEEDY FAMILIES SEC. 101. FINDINGS. The Congress makes the following findings: (1) Marriage is the foundation of a successful society. (2) Marriage is an essential institution of a successful soci- ety which promotes the interests of children. (3) Promotion of responsible fatherhood and motherhood is integral to successful child rearing and the well-being of chil- dren. (4) In 1992, only 54 percent of single-parent families with children had a child support order established and, of that 54 percent, only about one-half received the full amount due. Of the cases enforced through the public child support enforcement system, only 18 percent of the caseload has a collection. (5) The number of individuals receiving aid to families with dependent children (in this section referred to as ”AFDC”) 7 has more than tripled since 1965. More than two-thirds of these recipients are children. Eighty-nine percent of children receiving AFDC benefits now live in homes in which no father is present. (A)(i) The average monthly number of children receiv- ing AFDC benefits\u2014 (I) was 3,300,000 in 1965; (II) was 6,200,000 in 1970; (III) was 7,400,000 in 1980; and (IV) was 9,300,000 in 1992. (ii) While the number of children receiving AFDC bene- fits increased nearly threefold between 1965 and 1992, the total number of children in the United States aged 0 to 18 has declined by 5.5 percent. (B) The Department of Health and Human Services has estimated that 12,000,000 children will receive AFDC benefits within 10 years. (C) The increase in the number of children receiving public assistance is closely related to the increase in births to unmarried women. Between 1970 and 1991, the percent- age of live births to unmarried women increased nearly threefold, from 10.7 percent to 29.5 percent. (6) The increase of out-of-wedlock pregnancies and births is well documented as follows: (A) It is estimated that the rate of nonmarital teen pregnancy rose 23 percent from 54 pregnancies per 1,000 unmarried teenagers in 1976 to 66.7 pregnancies in 1991. The overall rate of nonmarital pregnancy rose 14 percent from 90.8 pregnancies per 1,000 unmarried women in 1980 to 103 in both 1991 and 1992. In contrast, the overall preg- nancy rate for married couples decreased 7.3 percent be- tween 1980 and 1991, from 126.9 pregnancies per 1,000 married women in 1980 to 117.6 pregnancies in 1991. (B) The total of all out-of-wedlock births between 1970 and 1991 has risen from 10.7 percent to 29.5 percent and if the current trend continues, 50 percent of all births by the year 2015 will be out-of-wedlock. (7) An effective strategy to combat teenage pregnancy must address the issue of male responsibility, including statutory rape culpability and prevention. The increase of teenage preg- nancies among the youngest girls is particularly severe and is linked to predatory sexual practices by men who are signifi- cantly older. (A) It is estimated that in the late 1980’s, the rate for girls age 14 and under giving birth increased 26 percent. (B) Data indicates that at least half of the children born to teenage mothers are fathered by adult men. Avail- able data suggests that almost 70 percent of births to teen- age girls are fathered by men over age 20. (C) Surveys of teen mothers have revealed that a ma- jority of such mothers have histories of sexual and physical abuse, primarily with older adult men. (8) The negative consequences of an out-of-wedlock birth on the mother, the child, the family, and society are well docu- mented as follows: 8 (A) Young women 17 and under who give birth outside of marriage are more likely to go on public assistance and to spend more years on welfare once enrolled. These com- bined effects of ”younger and longer” increase total AFDC costs per household by 25 percent to 30 percent for 17-year- olds. (B) Children born out-of-wedlock have a substantially higher risk of being born at a very low or moderately low birth weight. (C) Children born out-of-wedlock are more likely to ex- perience low verbal cognitive attainment, as well as more child abuse, and neglect. (D) Children born out-of-wedlock were more likely to have lower cognitive scores, lower educational aspirations, and a greater likelihood of becoming teenage parents them- selves. (E) Being born out-of-wedlock significantly reduces the chances of the child growing up to have an intact marriage. (F) Children born out-of-wedlock are 3 times more like- ly to be on welfare when they grow up. (9) Currently 35 percent of children in single-parent homes were born out-of-wedlock, nearly the same percentage as that of children in single-parent homes whose parents are divorced (37 percent). While many parents find themselves, through divorce or tragic circumstances beyond their control, facing the difficult task of raising children alone, nevertheless, the negative con- sequences of raising children in single-parent homes are well documented as follows: (A) Only 9 percent of married-couple families with chil- dren under 18 years of age have income below the national poverty level. In contrast, 46 percent of female-headed households with children under 18 years of age are below the national poverty level. (B) Among single-parent families, nearly 1\u20442 of the mothers who never married received AFDC while only 1\u20445 of divorced mothers received AFDC. (C) Children born into families receiving welfare assist- ance are 3 times more likely to be on welfare when they reach adulthood than children not born into families re- ceiving welfare. (D) Mothers under 20 years of age are at the greatest risk of bearing low-birth-weight babies. (E) The younger the single parent mother, the less like- ly she is to finish high school. (F) Young women who have children before finishing high school are more likely to receive welfare assistance for a longer period of time. (G) Between 1985 and 1990, the public cost of births to teenage mothers under the aid to families with dependent children program, the food stamp program, and the medic- aid program has been estimated at $120,000,000,000. (H) The absence of a father in the life of a child has a negative effect on school performance and peer adjust- ment. 9 (I) Children of teenage single parents have lower cog- nitive scores, lower educational aspirations, and a greater likelihood of becoming teenage parents themselves. (J) Children of single-parent homes are 3 times more likely to fail and repeat a year in grade school than are children from intact 2-parent families. (K) Children from single-parent homes are almost 4 times more likely to be expelled or suspended from school. (L) Neighborhoods with larger percentages of youth aged 12 through 20 and areas with higher percentages of single-parent households have higher rates of violent crime. (M) Of those youth held for criminal offenses within the State juvenile justice system, only 29.8 percent lived pri- marily in a home with both parents. In contrast to these in- carcerated youth, 73.9 percent of the 62,800,000 children in the Nation’s resident population were living with both par- ents. (10) Therefore, in light of this demonstration of the crisis in our Nation, it is the sense of the Congress that prevention of out-of-wedlock pregnancy and reduction in out-of-wedlock birth are very important Government interests and the policy con- tained in part A of title IV of the Social Security Act (as amend- ed by section 103(a) of this Act) is intended to address the cri- sis. SEC. 102. REFERENCE TO SOCIAL SECURITY ACT. Except as otherwise specifically provided, wherever in this title an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act. SEC. 103. BLOCK GRANTS TO STATES. (a) IN GENERAL.\u2014Part A of title IV (42 U.S.C. 601 et seq.) is amended\u2014 (1) by striking all that precedes section 418 (as added by section 603(b)(2) of this Act) and inserting the following: ”PART A\u2014BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY FAMI- LIES ”SEC. 401. PURPOSE. ”(a) IN GENERAL.\u2014The purpose of this part is to increase the flexibility of States in operating a program designed to\u2014 ”(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of rel- atives; ”(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; ”(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for prevent- ing and reducing the incidence of these pregnancies; and ”(4) encourage the formation and maintenance of two-par- ent families. 10 ”(b) NO INDIVIDUAL ENTITLEMENT.\u2014This part shall not be in- terpreted to entitle any individual or family to assistance under any State program funded under this part. ”SEC. 402. ELIGIBLE STATES; STATE PLAN. ”(a) IN GENERAL.\u2014As used in this part, the term ‘eligible State’ means, with respect to a fiscal year, a State that, during the 2-year period immediately preceding the fiscal year, has submitted to the Secretary a plan that the Secretary has found includes the follow- ing: ”(1) OUTLINE OF FAMILY ASSISTANCE PROGRAM.\u2014 ”(A) GENERAL PROVISIONS.\u2014A written document that outlines how the State intends to do the following: ”(i) Conduct a program, designed to serve all polit- ical subdivisions in the State (not necessarily in a uni- form manner), that provides assistance to needy fami- lies with (or expecting) children and provides parents with job preparation, work, and support services to en- able them to leave the program and become self-suffi- cient. ”(ii) Require a parent or caretaker receiving assist- ance under the program to engage in work (as defined by the State) once the State determines the parent or caretaker is ready to engage in work, or once the parent or caretaker has received assistance under the program for 24 months (whether or not consecutive), whichever is earlier. ”(iii) Ensure that parents and caretakers receiving assistance under the program engage in work activities in accordance with section 407. ”(iv) Take such reasonable steps as the State deems necessary to restrict the use and disclosure of informa- tion about individuals and families receiving assist- ance under the program attributable to funds provided by the Federal Government. ”(v) Establish goals and take action to prevent and reduce the incidence of out-of-wedlock pregnancies, with special emphasis on teenage pregnancies, and es- tablish numerical goals for reducing the illegitimacy ratio of the State (as defined in section 403(a)(2)(B)) for calendar years 1996 through 2005. ”(vi) Conduct a program, designed to reach State and local law enforcement officials, the education sys- tem, and relevant counseling services, that provides education and training on the problem of statutory rape so that teenage pregnancy prevention programs may be expanded in scope to include men. ”(B) SPECIAL PROVISIONS.\u2014 ”(i) The document shall indicate whether the State intends to treat families moving into the State from an- other State differently than other families under the program, and if so, how the State intends to treat such families under the program. ”(ii) The document shall indicate whether the State intends to provide assistance under the program to in- 11 dividuals who are not citizens of the United States, and if so, shall include an overview of such assistance. ”(iii) The document shall set forth objective criteria for the delivery of benefits and the determination of eli- gibility and for fair and equitable treatment, including an explanation of how the State will provide opportuni- ties for recipients who have been adversely affected to be heard in a State administrative or appeal process. ”(iv) Not later than 1 year after the date of enact- ment of this Act, unless the chief executive officer of the State opts out of this provision by notifying the Sec- retary, a State shall, consistent with the exception pro- vided in section 407(e)(2), require a parent or caretaker receiving assistance under the program who, after re- ceiving such assistance for 2 months is not exempt from work requirements and is not engaged in work, as determined under section 407(c), to participate in com- munity service employment, with minimum hours per week and tasks to be determined by the State. ”(2) CERTIFICATION THAT THE STATE WILL OPERATE A CHILD SUPPORT ENFORCEMENT PROGRAM.\u2014A certification by the chief executive officer of the State that, during the fiscal year, the State will operate a child support enforcement program under the State plan approved under part D. ”(3) CERTIFICATION THAT THE STATE WILL OPERATE A FOS- TER CARE AND ADOPTION ASSISTANCE PROGRAM.\u2014A certification by the chief executive officer of the State that, during the fiscal year, the State will operate a foster care and adoption assist- ance program under the State plan approved under part E, and that the State will take such actions as are necessary to ensure that children receiving assistance under such part are eligible for medical assistance under the State plan under title XIX. ”(4) CERTIFICATION OF THE ADMINISTRATION OF THE PRO- GRAM.\u2014A certification by the chief executive officer of the State specifying which State agency or agencies will administer and supervise the program referred to in paragraph (1) for the fiscal year, which shall include assurances that local governments and private sector organizations\u2014 ”(A) have been consulted regarding the plan and design of welfare services in the State so that services are provided in a manner appropriate to local populations; and ”(B) have had at least 45 days to submit comments on the plan and the design of such services. ”(5) CERTIFICATION THAT THE STATE WILL PROVIDE INDIANS WITH EQUITABLE ACCESS TO ASSISTANCE.\u2014A certification by the chief executive officer of the State that, during the fiscal year, the State will provide each member of an Indian tribe, who is domiciled in the State and is not eligible for assistance under a tribal family assistance plan approved under section 412, with equitable access to assistance under the State program funded under this part attributable to funds provided by the Federal Government. ”(6) CERTIFICATION OF STANDARDS AND PROCEDURES TO EN- SURE AGAINST PROGRAM FRAUD AND ABUSE.\u2014A certification by 12 the chief executive officer of the State that the State has estab- lished and is enforcing standards and procedures to ensure against program fraud and abuse, including standards and procedures concerning nepotism, conflicts of interest among in- dividuals responsible for the administration and supervision of the State program, kickbacks, and the use of political patron- age. ”(7) OPTIONAL CERTIFICATION OF STANDARDS AND PROCE- DURES TO ENSURE THAT THE STATE WILL SCREEN FOR AND IDEN- TIFY DOMESTIC VIOLENCE.\u2014 ”(A) IN GENERAL.\u2014At the option of the State, a certifi- cation by the chief executive officer of the State that the State has established and is enforcing standards and pro- cedures to\u2014 ”(i) screen and identify individuals receiving as- sistance under this part with a history of domestic vio- lence while maintaining the confidentiality of such in- dividuals; ”(ii) refer such individuals to counseling and sup- portive services; and ”(iii) waive, pursuant to a determination of good cause, other program requirements such as time limits (for so long as necessary) for individuals receiving as- sistance, residency requirements, child support coopera- tion requirements, and family cap provisions, in cases where compliance with such requirements would make it more difficult for individuals receiving assistance under this part to escape domestic violence or unfairly penalize such individuals who are or have been victim- ized by such violence, or individuals who are at risk of further domestic violence. ”(B) DOMESTIC VIOLENCE DEFINED.\u2014For purposes of this paragraph, the term ‘domestic violence’ has the same meaning as the term ‘battered or subjected to extreme cru- elty’, as defined in section 408(a)(7)(C)(iii). ”(b) PUBLIC AVAILABILITY OF STATE PLAN SUMMARY.\u2014The State shall make available to the public a summary of any plan submit- ted by the State under this section. ”SEC. 403. GRANTS TO STATES. ”(a) GRANTS.\u2014 ”(1) FAMILY ASSISTANCE GRANT.\u2014 ”(A) IN GENERAL.\u2014Each eligible State shall be entitled to receive from the Secretary, for each of fiscal years 1996, 1997, 1998, 1999, 2000, 2001, and 2002, a grant in an amount equal to the State family assistance grant. ”(B) STATE FAMILY ASSISTANCE GRANT DEFINED.\u2014As used in this part, the term ‘State family assistance grant’ means the greatest of\u2014 ”(i) 1\u20443 of the total amount required to be paid to the State under former section 403 (as in effect on Sep- tember 30, 1995) for fiscal years 1992, 1993, and 1994 (other than with respect to amounts expended by the State for child care under subsection (g) or (i) of former section 402 (as so in effect)); 13 ”(ii)(I) the total amount required to be paid to the State under former section 403 for fiscal year 1994 (other than with respect to amounts expended by the State for child care under subsection (g) or (i) of former section 402 (as so in effect)); plus ”(II) an amount equal to 85 percent of the amount (if any) by which the total amount required to be paid to the State under former section 403(a)(5) for emer- gency assistance for fiscal year 1995 exceeds the total amount required to be paid to the State under former section 403(a)(5) for fiscal year 1994, if, during fiscal year 1994 or 1995, the Secretary approved under former section 402 an amendment to the former State plan with respect to the provision of emergency assist- ance; or ”(iii) 3\u20444 of the total amount required to be paid to the State under former section 403 (as in effect on Sep- tember 30, 1995) for the 1st 3 quarters of fiscal year 1995 (other than with respect to amounts expended by the State under the State plan approved under part F (as so in effect) or for child care under subsection (g) or (i) of former section 402 (as so in effect)), plus the total amount required to be paid to the State for fiscal year 1995 under former section 403(l) (as so in effect). ”(C) TOTAL AMOUNT REQUIRED TO BE PAID TO THE STATE UNDER FORMER SECTION 403 DEFINED.\u2014As used in this part, the term ‘total amount required to be paid to the State under former section 403’ means, with respect to a fis- cal year\u2014 ”(i) in the case of a State to which section 1108 does not apply, the sum of\u2014 ”(I) the Federal share of maintenance assist- ance expenditures for the fiscal year, before reduc- tion pursuant to subparagraph (B) or (C) of section 403(b)(2) (as in effect on September 30, 1995), as reported by the State on ACF Form 231; ”(II) the Federal share of administrative ex- penditures (including administrative expenditures for the development of management information systems) for the fiscal year, as reported by the State on ACF Form 231; ”(III) the Federal share of emergency assist- ance expenditures for the fiscal year, as reported by the State on ACF Form 231; ”(IV) the Federal share of expenditures for the fiscal year with respect to child care pursuant to subsections (g) and (i) of former section 402 (as in effect on September 30, 1995), as reported by the State on ACF Form 231; and ”(V) the Federal obligations made to the State under section 403 for the fiscal year with respect to the State program operated under part F (as in ef- fect on September 30, 1995), as determined by the Secretary, including additional obligations or re- 14 ductions in obligations made after the close of the fiscal year; and ”(ii) in the case of a State to which section 1108 applies, the lesser of\u2014 ”(I) the sum described in clause (i); or ”(II) the total amount certified by the Secretary under former section 403 (as in effect during the fiscal year) with respect to the territory. ”(D) INFORMATION TO BE USED IN DETERMINING AMOUNTS.\u2014 ”(i) FOR FISCAL YEARS 1992 AND 1993.\u2014 ”(I) In determining the amounts described in subclauses (I) through (IV) of subparagraph (C)(i) for any State for each of fiscal years 1992 and 1993, the Secretary shall use information available as of April 28, 1995. ”(II) In determining the amount described in subparagraph (C)(i)(V) for any State for each of fiscal years 1992 and 1993, the Secretary shall use information available as of January 6, 1995. ”(ii) FOR FISCAL YEAR 1994.\u2014In determining the amounts described in subparagraph (C)(i) for any State for fiscal year 1994, the Secretary shall use infor- mation available as of April 28, 1995. ”(iii) FOR FISCAL YEAR 1995.\u2014 ”(I) In determining the amount described in subparagraph (B)(ii)(II) for any State for fiscal year 1995, the Secretary shall use the information which was reported by the States and estimates made by the States with respect to emergency as- sistance expenditures and was available as of Au- gust 11, 1995. ”(II) In determining the amounts described in subclauses (I) through (III) of subparagraph (C)(i) for any State for fiscal year 1995, the Secretary shall use information available as of October 2, 1995. ”(III) In determining the amount described in subparagraph (C)(i)(IV) for any State for fiscal year 1995, the Secretary shall use information available as of February 28, 1996. ”(IV) In determining the amount described in subparagraph (C)(i)(V) for any State for fiscal year 1995, the Secretary shall use information available as of October 5, 1995. ”(E) APPROPRIATION.\u2014Out of any money in the Treas- ury of the United States not otherwise appropriated, there are appropriated for fiscal years 1996, 1997, 1998, 1999, 2000, 2001, and 2002 such sums as are necessary for grants under this paragraph. ”(2) BONUS TO REWARD DECREASE IN ILLEGITIMACY.\u2014 ”(A) IN GENERAL.\u2014Each eligible State shall be entitled to receive from the Secretary a grant for each bonus year 15 for which the State demonstrates a net decrease in out-of- wedlock births. ”(B) AMOUNT OF GRANT.\u2014 ”(i) IF 5 ELIGIBLE STATES.\u2014If there are 5 eligible States for a bonus year, the amount of the grant shall be $20,000,000. ”(ii) IF FEWER THAN 5 ELIGIBLE STATES.\u2014If there are fewer than 5 eligible States for a bonus year, the amount of the grant shall be $25,000,000. ”(C) DEFINITIONS.\u2014As used in this paragraph: ”(i) ELIGIBLE STATE.\u2014 ”(I) IN GENERAL.\u2014The term ‘eligible State’ means a State that the Secretary determines meets the following requirements: ”(aa) The State demonstrates that the number of out-of-wedlock births that occurred in the State during the most recent 2-year pe- riod for which such information is available decreased as compared to the number of such births that occurred during the previous 2- year period, and the magnitude of the decrease for the State for the period is not exceeded by the magnitude of the corresponding decrease for 5 or more other States for the period. ”(bb) The rate of induced pregnancy termi- nations in the State for the fiscal year is less than the rate of induced pregnancy termi- nations in the State for fiscal year 1995. ”(II) DISREGARD OF CHANGES IN DATA DUE TO CHANGED REPORTING METHODS.\u2014In making the determination required by subclause (I), the Sec- retary shall disregard\u2014 ”(aa) any difference between the number of out-of-wedlock births that occurred in a State for a fiscal year and the number of out-of-wed- lock births that occurred in a State for fiscal year 1995 which is attributable to a change in State methods of reporting data used to cal- culate the number of out-of-wedlock births; and ”(bb) any difference between the rate of in- duced pregnancy terminations in a State for a fiscal year and such rate for fiscal year 1995 which is attributable to a change in State methods of reporting data used to calculate such rate. ”(ii) BONUS YEAR.\u2014The term ‘bonus year’ means fiscal years 1999, 2000, 2001, and 2002. ”(D) APPROPRIATION.\u2014Out of any money in the Treas- ury of the United States not otherwise appropriated, there are appropriated for fiscal years 1999 through 2002, such sums as are necessary for grants under this paragraph. ”(3) SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN CERTAIN STATES.\u2014 16 ”(A) IN GENERAL.\u2014Each qualifying State shall, subject to subparagraph (F), be entitled to receive from the Sec- retary\u2014 ”(i) for fiscal year 1998 a grant in an amount equal to 2.5 percent of the total amount required to be paid to the State under former section 403 (as in effect during fiscal year 1994) for fiscal year 1994; and ”(ii) for each of fiscal years 1999, 2000, and 2001, a grant in an amount equal to the sum of\u2014 ”(I) the amount (if any) required to be paid to the State under this paragraph for the imme- diately preceding fiscal year; and ”(II) 2.5 percent of the sum of\u2014 ”(aa) the total amount required to be paid to the State under former section 403 (as in ef- fect during fiscal year 1994) for fiscal year 1994; and ”(bb) the amount (if any) required to be paid to the State under this paragraph for the fiscal year preceding the fiscal year for which the grant is to be made. ”(B) PRESERVATION OF GRANT WITHOUT INCREASES FOR STATES FAILING TO REMAIN QUALIFYING STATES.\u2014Each State that is not a qualifying State for a fiscal year speci- fied in subparagraph (A)(ii) but was a qualifying State for a prior fiscal year shall, subject to subparagraph (F), be en- titled to receive from the Secretary for the specified fiscal year, a grant in an amount equal to the amount required to be paid to the State under this paragraph for the most recent fiscal year for which the State was a qualifying State. ”(C) QUALIFYING STATE.\u2014 ”(i) IN GENERAL.\u2014For purposes of this paragraph, a State is a qualifying State for a fiscal year if\u2014 ”(I) the level of welfare spending per poor per- son by the State for the immediately preceding fis- cal year is less than the national average level of State welfare spending per poor person for such preceding fiscal year; and ”(II) the population growth rate of the State (as determined by the Bureau of the Census) for the most recent fiscal year for which information is available exceeds the average population growth rate for all States (as so determined) for such most recent fiscal year. ”(ii) STATE MUST QUALIFY IN FISCAL YEAR 1997.\u2014 Notwithstanding clause (i), a State shall not be a qualifying State for any fiscal year after 1998 by rea- son of clause (i) if the State is not a qualifying State for fiscal year 1998 by reason of clause (i). ”(iii) CERTAIN STATES DEEMED QUALIFYING STATES.\u2014For purposes of this paragraph, a State is deemed to be a qualifying State for fiscal years 1998, 1999, 2000, and 2001 if\u2014 17 ”(I) the level of welfare spending per poor per- son by the State for fiscal year 1994 is less than 35 percent of the national average level of State welfare spending per poor person for fiscal year 1994; or ”(II) the population of the State increased by more than 10 percent from April 1, 1990 to July 1, 1994, according to the population estimates in publication CB94 204 of the Bureau of the Census. ”(D) DEFINITIONS.\u2014As used in this paragraph: ”(i) LEVEL OF WELFARE SPENDING PER POOR PER- SON.\u2014The term ‘level of State welfare spending per poor person’ means, with respect to a State and a fiscal year\u2014 ”(I) the sum of\u2014 ”(aa) the total amount required to be paid to the State under former section 403 (as in ef- fect during fiscal year 1994) for fiscal year 1994; and ”(bb) the amount (if any) paid to the State under this paragraph for the immediately pre- ceding fiscal year; divided by ”(II) the number of individuals, according to the 1990 decennial census, who were residents of the State and whose income was below the poverty line. ”(ii) NATIONAL AVERAGE LEVEL OF STATE WELFARE SPENDING PER POOR PERSON.\u2014The term ‘national aver- age level of State welfare spending per poor person’ means, with respect to a fiscal year, an amount equal to\u2014 ”(I) the total amount required to be paid to the States under former section 403 (as in effect dur- ing fiscal year 1994) for fiscal year 1994; divided by ”(II) the number of individuals, according to the 1990 decennial census, who were residents of any State and whose income was below the poverty line. ”(iii) STATE.\u2014The term ‘State’ means each of the 50 States of the United States and the District of Co- lumbia. ”(E) APPROPRIATION.\u2014Out of any money in the Treas- ury of the United States not otherwise appropriated, there are appropriated for fiscal years 1998, 1999, 2000, and 2001 such sums as are necessary for grants under this paragraph, in a total amount not to exceed $800,000,000. ”(F) GRANTS REDUCED PRO RATA IF INSUFFICIENT AP- PROPRIATIONS.\u2014If the amount appropriated pursuant to this paragraph for a fiscal year is less than the total amount of payments otherwise required to be made under this paragraph for the fiscal year, then the amount other- wise payable to any State for the fiscal year under this 18 paragraph shall be reduced by a percentage equal to the amount so appropriated divided by such total amount. ”(G) BUDGET SCORING.\u2014Notwithstanding section 257(b)(2) of the Balanced Budget and Emergency Deficit Control Act of 1985, the baseline shall assume that no grant shall be made under this paragraph after fiscal year 2001. ”(4) BONUS TO REWARD HIGH PERFORMANCE STATES.\u2014 ”(A) IN GENERAL.\u2014The Secretary shall make a grant pursuant to this paragraph to each State for each bonus year for which the State is a high performing State. ”(B) AMOUNT OF GRANT.\u2014 ”(i) IN GENERAL.\u2014Subject to clause (ii) of this sub- paragraph, the Secretary shall determine the amount of the grant payable under this paragraph to a high performing State for a bonus year, which shall be based on the score assigned to the State under sub- paragraph (D)(i) for the fiscal year that immediately precedes the bonus year. ”(ii) LIMITATION.\u2014The amount payable to a State under this paragraph for a bonus year shall not exceed 5 percent of the State family assistance grant. ”(C) FORMULA FOR MEASURING STATE PERFORMANCE.\u2014 Not later than 1 year after the date of the enactment of the Personal Responsibility and Work Opportunity Reconcili- ation Act of 1996, the Secretary, in consultation with the National Governors’ Association and the American Public Welfare Association, shall develop a formula for measuring State performance in operating the State program funded under this part so as to achieve the goals set forth in sec- tion 401(a). ”(D) SCORING OF STATE PERFORMANCE; SETTING OF PERFORMANCE THRESHOLDS.\u2014For each bonus year, the Sec- retary shall\u2014 ”(i) use the formula developed under subparagraph (C) to assign a score to each eligible State for the fiscal year that immediately precedes the bonus year; and ”(ii) prescribe a performance threshold in such a manner so as to ensure that\u2014 ”(I) the average annual total amount of grants to be made under this paragraph for each bonus year equals $200,000,000; and ”(II) the total amount of grants to be made under this paragraph for all bonus years equals $1,000,000,000. ”(E) DEFINITIONS.\u2014As used in this paragraph: ”(i) BONUS YEAR.\u2014The term ‘bonus year’ means fiscal years 1999, 2000, 2001, 2002, and 2003. ”(ii) HIGH PERFORMING STATE.\u2014The term ‘high performing State’ means, with respect a bonus year, an eligible State whose score assigned pursuant to sub- paragraph (D)(i) for the fiscal year immediately preced- ing the bonus year equals or exceeds the performance 19 threshold prescribed under subparagraph (D)(ii) for such preceding fiscal year. ”(F) APPROPRIATION.\u2014Out of any money in the Treas- ury of the United States not otherwise appropriated, there are appropriated for fiscal years 1999 through 2003 $1,000,000,000 for grants under this paragraph. ”(b) CONTINGENCY FUND.\u2014 ”(1) ESTABLISHMENT.\u2014There is hereby established in the Treasury of the United States a fund which shall be known as the ‘Contingency Fund for State Welfare Programs’ (in this sec- tion referred to as the ‘Fund’). ”(2) DEPOSITS INTO FUND.\u2014Out of any money in the Treas- ury of the United States not otherwise appropriated, there are appropriated for fiscal years 1997, 1998, 1999, 2000, and 2001 such sums as are necessary for payment to the Fund in a total amount not to exceed $2,000,000,000. ”(3) GRANTS.\u2014 ”(A) PROVISIONAL PAYMENTS.\u2014If an eligible State sub- mits to the Secretary a request for funds under this para- graph during an eligible month, the Secretary shall, subject to this paragraph, pay to the State, from amounts appro- priated pursuant to paragraph (2), an amount equal to the amount of funds so requested. ”(B) PAYMENT PRIORITY.\u2014The Secretary shall make payments under subparagraph (A) in the order in which the Secretary receives requests for such payments. ”(C) LIMITATIONS.\u2014 ”(i) MONTHLY PAYMENT TO A STATE.\u2014The total amount paid to a single State under subparagraph (A) during a month shall not exceed 1\u204412 of 20 percent of the State family assistance grant. ”(ii) PAYMENTS TO ALL STATES.\u2014The total amount paid to all States under subparagraph (A) during fis- cal years 1997 through 2001 shall not exceed the total amount appropriated pursuant to paragraph (2). ”(4) ANNUAL RECONCILIATION.\u2014Notwithstanding para- graph (3), at the end of each fiscal year, each State shall remit to the Secretary an amount equal to the amount (if any) by which the total amount paid to the State under paragraph (3) during the fiscal year exceeds\u2014 ”(A) the Federal medical assistance percentage for the State for the fiscal year (as defined in section 1905(b), as in effect on September 30, 1995) of the amount (if any) by which\u2014 ”(i) if the Secretary makes a payment to the State under section 418(a)(2) in the fiscal year\u2014 ”(I) the expenditures under the State program funded under this part for the fiscal year, exclud- ing any amounts made available by the Federal Government (except amounts paid to the State under paragraph (3) during the fiscal year that have been expended by the State) and any amounts expended by the State during the fiscal year for child care; exceeds 20 ”(II) historic State expenditures (as defined in section 409(a)(7)(B)(iii)), excluding the expendi- tures by the State for child care under subsection (g) or (i) of section 402 (as in effect during fiscal year 1994) for fiscal year 1994 minus any Federal payment with respect to such child care expendi- tures; or ”(ii) if the Secretary does not make a payment to the State under section 418(a)(2) in the fiscal year\u2014 ”(I) the expenditures under the State program funded under this part for the fiscal year (exclud- ing any amounts made available by the Federal Government, except amounts paid to the State under paragraph (3) during the fiscal year that have been expended by the State); exceeds ”(II) historic State expenditures (as defined in section 409(a)(7)(B)(iii)); multiplied by ”(B) 1\u204412 times the number of months during the fiscal year for which the Secretary makes a payment to the State under this subsection. ”(5) ELIGIBLE MONTH.\u2014As used in paragraph (3)(A), the term ‘eligible month’ means, with respect to a State, a month in the 2-month period that begins with any month for which the State is a needy State. ”(6) NEEDY STATE.\u2014For purposes of paragraph (5), a State is a needy State for a month if\u2014 ”(A) the average rate of\u2014 ”(i) total unemployment in such State (seasonally adjusted) for the period consisting of the most recent 3 months for which data for all States are published equals or exceeds 6.5 percent; and ”(ii) total unemployment in such State (seasonally adjusted) for the 3-month period equals or exceeds 110 percent of such average rate for either (or both) of the corresponding 3-month periods ending in the 2 preced- ing calendar years; or ”(B) as determined by the Secretary of Agriculture (in the discretion of the Secretary of Agriculture), the monthly average number of individuals (as of the last day of each month) participating in the food stamp program in the State in the then most recently concluded 3-month period for which data are available exceeds by not less than 10 percent the lesser of\u2014 ”(i) the monthly average number of individuals (as of the last day of each month) in the State that would have participated in the food stamp program in the corresponding 3-month period in fiscal year 1994 if the amendments made by titles IV and VIII of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 had been in effect throughout fiscal year 1994; or ”(ii) the monthly average number of individuals (as of the last day of each month) in the State that would have participated in the food stamp program in 21 the corresponding 3-month period in fiscal year 1995 if the amendments made by titles IV and VIII of the Per- sonal Responsibility and Work Opportunity Reconcili- ation Act of 1996 had been in effect throughout fiscal year 1995. ”(7) OTHER TERMS DEFINED.\u2014As used in this subsection: ”(A) STATE.\u2014The term ‘State’ means each of the 50 States of the United States and the District of Columbia. ”(B) SECRETARY.\u2014The term ‘Secretary’ means the Sec- retary of the Treasury. ”(8) ANNUAL REPORTS.\u2014The Secretary shall annually re- port to the Congress on the status of the Fund. ”SEC. 404. USE OF GRANTS. ”(a) GENERAL RULES.\u2014Subject to this part, a State to which a grant is made under section 403 may use the grant\u2014 ”(1) in any manner that is reasonably calculated to accom- plish the purpose of this part, including to provide low income households with assistance in meeting home heating and cool- ing costs; or ”(2) in any manner that the State was authorized to use amounts received under part A or F, as such parts were in effect on September 30, 1995. ”(b) LIMITATION ON USE OF GRANT FOR ADMINISTRATIVE PUR- POSES.\u2014 ”(1) LIMITATION.\u2014A State to which a grant is made under section 403 shall not expend more than 15 percent of the grant for administrative purposes. ”(2) EXCEPTION.\u2014Paragraph (1) shall not apply to the use of a grant for information technology and computerization needed for tracking or monitoring required by or under this part. ”(c) AUTHORITY TO TREAT INTERSTATE IMMIGRANTS UNDER RULES OF FORMER STATE.\u2014A State operating a program funded under this part may apply to a family the rules (including benefit amounts) of the program funded under this part of another State if the family has moved to the State from the other State and has resided in the State for less than 12 months. ”(d) AUTHORITY TO USE PORTION OF GRANT FOR OTHER PUR- POSES.\u2014 ”(1) IN GENERAL.\u2014A State may use not more than 30 per- cent of the amount of any grant made to the State under section 403(a) for a fiscal year to carry out a State program pursuant to any or all of the following provisions of law: ”(A) Title XX of this Act. ”(B) The Child Care and Development Block Grant Act of 1990. ”(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX PROGRAMS.\u2014Notwithstanding paragraph (1), not more than 1\u20443 of the total amount paid to a State under this part for a fiscal year that is used to carry out State programs pursuant to provi- sions of law specified in paragraph (1) may be used to carry out State programs pursuant to title XX. ”(3) APPLICABLE RULES.\u2014 22 ”(A) IN GENERAL.\u2014Except as provided in subparagraph (B) of this paragraph, any amount paid to a State under this part that is used to carry out a State program pursu- ant to a provision of law specified in paragraph (1) shall not be subject to the requirements of this part, but shall be subject to the requirements that apply to Federal funds pro- vided directly under the provision of law to carry out the program, and the expenditure of any amount so used shall not be considered to be an expenditure under this part. ”(B) EXCEPTION RELATING TO TITLE XX PROGRAMS.\u2014All amounts paid to a State under this part that are used to carry out State programs pursuant to title XX shall be used only for programs and services to children or their families whose income is less than 200 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved. ”(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS FOR ASSIST- ANCE.\u2014A State may reserve amounts paid to the State under this part for any fiscal year for the purpose of providing, without fiscal year limitation, assistance under the State program funded under this part. ”(f) AUTHORITY TO OPERATE EMPLOYMENT PLACEMENT PRO- GRAM.\u2014A State to which a grant is made under section 403 may use the grant to make payments (or provide job placement vouchers) to State-approved public and private job placement agencies that provide employment placement services to individuals who receive assistance under the State program funded under this part. ”(g) IMPLEMENTATION OF ELECTRONIC BENEFIT TRANSFER SYS- TEM.\u2014A State to which a grant is made under section 403 is en- couraged to implement an electronic benefit transfer system for pro- viding assistance under the State program funded under this part, and may use the grant for such purpose. ”(h) USE OF FUNDS FOR INDIVIDUAL DEVELOPMENT AC- COUNTS.\u2014 ”(1) IN GENERAL.\u2014A State to which a grant is made under section 403 may use the grant to carry out a program to fund individual development accounts (as defined in paragraph (2)) established by individuals eligible for assistance under the State program funded under this part. ”(2) INDIVIDUAL DEVELOPMENT ACCOUNTS.\u2014 ”(A) ESTABLISHMENT.\u2014Under a State program carried out under paragraph (1), an individual development ac- count may be established by or on behalf of an individual eligible for assistance under the State program operated under this part for the purpose of enabling the individual to accumulate funds for a qualified purpose described in subparagraph (B). ”(B) QUALIFIED PURPOSE.\u2014A qualified purpose de- scribed in this subparagraph is 1 or more of the following, as provided by the qualified entity providing assistance to the individual under this subsection: 23 ”(i) POSTSECONDARY EDUCATIONAL EXPENSES.\u2014 Postsecondary educational expenses paid from an indi- vidual development account directly to an eligible edu- cational institution. ”(ii) FIRST HOME PURCHASE.\u2014Qualified acquisition costs with respect to a qualified principal residence for a qualified first-time homebuyer, if paid from an indi- vidual development account directly to the persons to whom the amounts are due. ”(iii) BUSINESS CAPITALIZATION.\u2014Amounts paid from an individual development account directly to a business capitalization account which is established in a federally insured financial institution and is re- stricted to use solely for qualified business capitaliza- tion expenses. ”(C) CONTRIBUTIONS TO BE FROM EARNED INCOME.\u2014An individual may only contribute to an individual develop- ment account such amounts as are derived from earned in- come, as defined in section 911(d)(2) of the Internal Reve- nue Code of 1986. ”(D) WITHDRAWAL OF FUNDS.\u2014The Secretary shall es- tablish such regulations as may be necessary to ensure that funds held in an individual development account are not withdrawn except for 1 or more of the qualified purposes described in subparagraph (B). ”(3) REQUIREMENTS.\u2014 ”(A) IN GENERAL.\u2014An individual development account established under this subsection shall be a trust created or organized in the United States and funded through peri- odic contributions by the establishing individual and matched by or through a qualified entity for a qualified purpose (as described in paragraph (2)(B)). ”(B) QUALIFIED ENTITY.\u2014As used in this subsection, the term ‘qualified entity’ means\u2014 ”(i) a not-for-profit organization described in sec- tion 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or ”(ii) a State or local government agency acting in cooperation with an organization described in clause (i). ”(4) NO REDUCTION IN BENEFITS.\u2014Notwithstanding any other provision of Federal law (other than the Internal Revenue Code of 1986) that requires consideration of 1 or more financial circumstances of an individual, for the purpose of determining eligibility to receive, or the amount of, any assistance or benefit authorized by such law to be provided to or for the benefit of such individual, funds (including interest accruing) in an indi- vidual development account under this subsection shall be dis- regarded for such purpose with respect to any period during which such individual maintains or makes contributions into such an account. ”(5) DEFINITIONS.\u2014As used in this subsection\u2014 24 ”(A) ELIGIBLE EDUCATIONAL INSTITUTION.\u2014The term ‘eligible educational institution’ means the following: ”(i) An institution described in section 481(a)(1) or 1201(a) of the Higher Education Act of 1965 (20 U.S.C. 1088(a)(1) or 1141(a)), as such sections are in effect on the date of the enactment of this subsection. ”(ii) An area vocational education school (as de- fined in subparagraph (C) or (D) of section 521(4) of the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471(4))) which is in any State (as defined in section 521(33) of such Act), as such sections are in effect on the date of the enactment of this subsection. ”(B) POST-SECONDARY EDUCATIONAL EXPENSES.\u2014The term ‘post-secondary educational expenses’ means\u2014 ”(i) tuition and fees required for the enrollment or attendance of a student at an eligible educational insti- tution, and ”(ii) fees, books, supplies, and equipment required for courses of instruction at an eligible educational in- stitution. ”(C) QUALIFIED ACQUISITION COSTS.\u2014The term ‘quali- fied acquisition costs’ means the costs of acquiring, con- structing, or reconstructing a residence. The term includes any usual or reasonable settlement, financing, or other clos- ing costs. ”(D) QUALIFIED BUSINESS.\u2014The term ‘qualified busi- ness’ means any business that does not contravene any law or public policy (as determined by the Secretary). ”(E) QUALIFIED BUSINESS CAPITALIZATION EXPENSES.\u2014 The term ‘qualified business capitalization expenses’ means qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan. ”(F) QUALIFIED EXPENDITURES.\u2014The term ‘qualified expenditures’ means expenditures included in a qualified plan, including capital, plant, equipment, working capital, and inventory expenses. ”(G) QUALIFIED FIRST-TIME HOMEBUYER.\u2014 ”(i) IN GENERAL.\u2014The term ‘qualified first-time homebuyer’ means a taxpayer (and, if married, the tax- payer’s spouse) who has no present ownership interest in a principal residence during the 3-year period end- ing on the date of acquisition of the principal residence to which this subsection applies. ”(ii) DATE OF ACQUISITION.\u2014The term ‘date of ac- quisition’ means the date on which a binding contract to acquire, construct, or reconstruct the principal resi- dence to which this subparagraph applies is entered into. ”(H) QUALIFIED PLAN.\u2014The term ‘qualified plan’ means a business plan which\u2014 ”(i) is approved by a financial institution, or by a nonprofit loan fund having demonstrated fiduciary in- tegrity, 25 ”(ii) includes a description of services or goods to be sold, a marketing plan, and projected financial statements, and ”(iii) may require the eligible individual to obtain the assistance of an experienced entrepreneurial advi- sor. ”(I) QUALIFIED PRINCIPAL RESIDENCE.\u2014The term ‘qualified principal residence’ means a principal residence (within the meaning of section 1034 of the Internal Revenue Code of 1986), the qualified acquisition costs of which do not exceed 100 percent of the average area purchase price applicable to such residence (determined in accordance with paragraphs (2) and (3) of section 143(e) of such Code). ”(i) SANCTION WELFARE RECIPIENTS FOR FAILING TO ENSURE THAT MINOR DEPENDENT CHILDREN ATTEND SCHOOL.\u2014A State to which a grant is made under section 403 shall not be prohibited from sanctioning a family that includes an adult who has received assistance under any State program funded under this part attrib- utable to funds provided by the Federal Government or under the food stamp program, as defined in section 3(h) of the Food Stamp Act of 1977, if such adult fails to ensure that the minor dependent children of such adult attend school as required by the law of the State in which the minor children reside. ”(j) REQUIREMENT FOR HIGH SCHOOL DIPLOMA OR EQUIVA- LENT.\u2014A State to which a grant is made under section 403 shall not be prohibited from sanctioning a family that includes an adult who is older than age 20 and younger than age 51 and who has received assistance under any State program funded under this part attributable to funds provided by the Federal Government or under the food stamp program, as defined in section 3(h) of the Food Stamp Act of 1977, if such adult does not have, or is not working toward attaining, a secondary school diploma or its recognized equivalent unless such adult has been determined in the judgment of medical, psychiatric, or other appropriate professionals to lack the requisite capacity to complete successfully a course of study that would lead to a secondary school diploma or its recognized equiva- lent. ”SEC. 405. ADMINISTRATIVE PROVISIONS. ”(a) QUARTERLY.\u2014The Secretary shall pay each grant payable to a State under section 403 in quarterly installments, subject to this section. ”(b) NOTIFICATION.\u2014Not later than 3 months before the pay- ment of any such quarterly installment to a State, the Secretary shall notify the State of the amount of any reduction determined under section 412(a)(1)(B) with respect to the State. ”(c) COMPUTATION AND CERTIFICATION OF PAYMENTS TO STATES.\u2014 ”(1) COMPUTATION.\u2014The Secretary shall estimate the amount to be paid to each eligible State for each quarter under this part, such estimate to be based on a report filed by the State containing an estimate by the State of the total sum to be expended by the State in the quarter under the State program funded under this part and such other information as the Sec- retary may find necessary. 26 ”(2) CERTIFICATION.\u2014The Secretary of Health and Human Services shall certify to the Secretary of the Treasury the amount estimated under paragraph (1) with respect to a State, reduced or increased to the extent of any overpayment or under- payment which the Secretary of Health and Human Services determines was made under this part to the State for any prior quarter and with respect to which adjustment has not been made under this paragraph. ”(d) PAYMENT METHOD.\u2014Upon receipt of a certification under subsection (c)(2) with respect to a State, the Secretary of the Treas- ury shall, through the Fiscal Service of the Department of the Treas- ury and before audit or settlement by the General Accounting Office, pay to the State, at the time or times fixed by the Secretary of Health and Human Services, the amount so certified. ”SEC. 406. FEDERAL LOANS FOR STATE WELFARE PROGRAMS. ”(a) LOAN AUTHORITY.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall make loans to any loan-eligible State, for a period to maturity of not more than 3 years. ”(2) LOAN-ELIGIBLE STATE.\u2014As used in paragraph (1), the term ‘loan-eligible State’ means a State against which a penalty has not been imposed under section 409(a)(1). ”(b) RATE OF INTEREST.\u2014The Secretary shall charge and collect interest on any loan made under this section at a rate equal to the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the period to maturity of the loan. ”(c) USE OF LOAN.\u2014A State shall use a loan made to the State under this section only for any purpose for which grant amounts re- ceived by the State under section 403(a) may be used, including\u2014 ”(1) welfare anti-fraud activities; and ”(2) the provision of assistance under the State program to Indian families that have moved from the service area of an In- dian tribe with a tribal family assistance plan approved under section 412. ”(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO A STATE.\u2014 The cumulative dollar amount of all loans made to a State under this section during fiscal years 1997 through 2002 shall not exceed 10 percent of the State family assistance grant. ”(e) LIMITATION ON TOTAL AMOUNT OF OUTSTANDING LOANS.\u2014 The total dollar amount of loans outstanding under this section may not exceed $1,700,000,000. ”(f) APPROPRIATION.\u2014Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated such sums as may be necessary for the cost of loans under this sec- tion. ”SEC. 407. MANDATORY WORK REQUIREMENTS. ”(a) PARTICIPATION RATE REQUIREMENTS.\u2014 ”(1) ALL FAMILIES.\u2014A State to which a grant is made under section 403 for a fiscal year shall achieve the minimum participation rate specified in the following table for the fiscal year with respect to all families receiving assistance under the State program funded under this part: 27 The minimum participation ”If the fiscal year is: rate is: 1997 ……………………………………………………………………….. 25 1998 ……………………………………………………………………….. 30 1999 ……………………………………………………………………….. 35 2000 ……………………………………………………………………….. 40 2001 ……………………………………………………………………….. 45 2002 or thereafter ……………………………………………………. 50. ”(2) 2-PARENT FAMILIES.\u2014A State to which a grant is made under section 403 for a fiscal year shall achieve the minimum participation rate specified in the following table for the fiscal year with respect to 2-parent families receiving assistance under the State program funded under this part: The minimum participation ”If the fiscal year is: rate is: 1997 ……………………………………………………………………….. 75 1998 ……………………………………………………………………….. 75 1999 or thereafter ……………………………………………………. 90. ”(b) CALCULATION OF PARTICIPATION RATES.\u2014 ”(1) ALL FAMILIES.\u2014 ”(A) AVERAGE MONTHLY RATE.\u2014For purposes of sub- section (a)(1), the participation rate for all families of a State for a fiscal year is the average of the participation rates for all families of the State for each month in the fis- cal year. ”(B) MONTHLY PARTICIPATION RATES.\u2014The participa- tion rate of a State for all families of the State for a month, expressed as a percentage, is\u2014 ”(i) the number of families receiving assistance under the State program funded under this part that include an adult or a minor child head of household who is engaged in work for the month; divided by ”(ii) the amount by which\u2014 ”(I) the number of families receiving such as- sistance during the month that include an adult or a minor child head of household receiving such as- sistance; exceeds ”(II) the number of families receiving such as- sistance that are subject in such month to a pen- alty described in subsection (e)(1) but have not been subject to such penalty for more than 3 months within the preceding 12-month period (whether or not consecutive). ”(2) 2-PARENT FAMILIES.\u2014 ”(A) AVERAGE MONTHLY RATE.\u2014For purposes of sub- section (a)(2), the participation rate for 2-parent families of a State for a fiscal year is the average of the participation rates for 2-parent families of the State for each month in the fiscal year. ”(B) MONTHLY PARTICIPATION RATES.\u2014The participa- tion rate of a State for 2-parent families of the State for a month shall be calculated by use of the formula set forth in paragraph (1)(B), except that in the formula the term ‘number of 2-parent families’ shall be substituted for the 28 term ‘number of families’ each place such latter term ap- pears. ”(3) PRO RATA REDUCTION OF PARTICIPATION RATE DUE TO CASELOAD REDUCTIONS NOT REQUIRED BY FEDERAL LAW.\u2014 ”(A) IN GENERAL.\u2014The Secretary shall prescribe regu- lations for reducing the minimum participation rate other- wise required by this section for a fiscal year by the number of percentage points equal to the number of percentage points (if any) by which\u2014 ”(i) the average monthly number of families receiv- ing assistance during the immediately preceding fiscal year under the State program funded under this part is less than ”(ii) the average monthly number of families that received aid under the State plan approved under part A (as in effect on September 30, 1995) during fiscal year 1995. The minimum participation rate shall not be reduced to the extent that the Secretary determines that the reduction in the number of families receiving such assistance is required by Federal law. ”(B) ELIGIBILITY CHANGES NOT COUNTED.\u2014The regula- tions required by subparagraph (A) shall not take into ac- count families that are diverted from a State program funded under this part as a result of differences in eligi- bility criteria under a State program funded under this part and eligibility criteria under the State program oper- ated under the State plan approved under part A (as such plan and such part were in effect on September 30, 1995). Such regulations shall place the burden on the Secretary to prove that such families were diverted as a direct result of differences in such eligibility criteria. ”(4) STATE OPTION TO INCLUDE INDIVIDUALS RECEIVING AS- SISTANCE UNDER A TRIBAL FAMILY ASSISTANCE PLAN.\u2014For pur- poses of paragraphs (1)(B) and (2)(B), a State may, at its op- tion, include families in the State that are receiving assistance under a tribal family assistance plan approved under section 412. ”(5) STATE OPTION FOR PARTICIPATION REQUIREMENT EX- EMPTIONS.\u2014For any fiscal year, a State may, at its option, not require an individual who is a single custodial parent caring for a child who has not attained 12 months of age to engage in work, and may disregard such an individual in determining the participation rates under subsection (a) for not more than 12 months. ”(c) ENGAGED IN WORK.\u2014 ”(1) GENERAL RULES.\u2014 ”(A) ALL FAMILIES.\u2014For purposes of subsection (b)(1)(B)(i), a recipient is engaged in work for a month in a fiscal year if the recipient is participating in work activi- ties for at least the minimum average number of hours per week specified in the following table during the month, not fewer than 20 hours per week of which are attributable to 29 an activity described in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d), subject to this subsection: The minimum ”If the month is average number of in fiscal year: hours per week is: 1997 ……………………………………………………………………. 20 1998 ……………………………………………………………………. 20 1999 ……………………………………………………………………. 25 2000 or thereafter …………………………………………………. 30. ”(B) 2-PARENT FAMILIES.\u2014For purposes of subsection (b)(2)(B), an individual is engaged in work for a month in a fiscal year if\u2014 ”(i) the individual is making progress in work ac- tivities for at least 35 hours per week during the month, not fewer than 30 hours per week of which are attributable to an activity described in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d), subject to this subsection; and ”(ii) if the family of the individual receives feder- ally-funded child care assistance and an adult in the family is not disabled or caring for a severely disabled child, the individual’s spouse is making progress in work activities during the month, not fewer than 20 hours per week of which are attributable to an activity described in paragraph (1), (2), (3), (4), (5), or (7) of subsection (d). ”(2) LIMITATIONS AND SPECIAL RULES.\u2014 ”(A) NUMBER OF WEEKS FOR WHICH JOB SEARCH COUNTS AS WORK.\u2014 ”(i) LIMITATION.\u2014Notwithstanding paragraph (1) of this subsection, an individual shall not be consid- ered to be engaged in work by virtue of participation in an activity described in subsection (d)(6) of a State program funded under this part, after the individual has participated in such an activity for 6 weeks (or, if the unemployment rate of the State is at least 50 per- cent greater than the unemployment rate of the United States, 12 weeks), or if the participation is for a week that immediately follows 4 consecutive weeks of such participation. ”(ii) LIMITED AUTHORITY TO COUNT LESS THAN FULL WEEK OF PARTICIPATION.\u2014For purposes of clause (i) of this subparagraph, on not more than 1 occasion per individual, the State shall consider participation of the individual in an activity described in subsection (d)(6) for 3 or 4 days during a week as a week of par- ticipation in the activity by the individual. ”(B) SINGLE PARENT WITH CHILD UNDER AGE 6 DEEMED TO BE MEETING WORK PARTICIPATION REQUIREMENTS IF PARENT IS ENGAGED IN WORK FOR 20 HOURS PER WEEK.\u2014 For purposes of determining monthly participation rates under subsection (b)(1)(B)(i), a recipient in a 1-parent fam- ily who is the parent of a child who has not attained 6 years of age is deemed to be engaged in work for a month 30 if the recipient is engaged in work for an average of at least 20 hours per week during the month. ”(C) TEEN HEAD OF HOUSEHOLD WHO MAINTAINS SATIS- FACTORY SCHOOL ATTENDANCE DEEMED TO BE MEETING WORK PARTICIPATION REQUIREMENTS.\u2014For purposes of de- termining monthly participation rates under subsection (b)(1)(B)(i), a recipient who is a single head of household and has not attained 20 years of age is deemed, subject to subparagraph (D) of this paragraph, to be engaged in work for a month in a fiscal year if the recipient\u2014 ”(i) maintains satisfactory attendance at secondary school or the equivalent during the month; or ”(ii) participates in education directly related to employment for at least the minimum average number of hours per week specified in the table set forth in paragraph (1)(A) of this subsection. ”(D) NUMBER OF PERSONS THAT MAY BE TREATED AS ENGAGED IN WORK BY VIRTUE OF PARTICIPATION IN VOCA- TIONAL EDUCATION ACTIVITIES OR BEING A TEEN HEAD OF HOUSEHOLD WHO MAINTAINS SATISFACTORY SCHOOL AT- TENDANCE.\u2014For purposes of determining monthly partici- pation rates under paragraphs (1)(B)(i) and (2)(B) of sub- section (b), not more than 20 percent of individuals in all families and in 2-parent families may be determined to be engaged in work in the State for a month by reason of par- ticipation in vocational educational training or deemed to be engaged in work by reason of subparagraph (C) of this paragraph. ”(d) WORK ACTIVITIES DEFINED.\u2014As used in this section, the term ‘work activities’ means\u2014 ”(1) unsubsidized employment; ”(2) subsidized private sector employment; ”(3) subsidized public sector employment; ”(4) work experience (including work associated with the re- furbishing of publicly assisted housing) if sufficient private sec- tor employment is not available; ”(5) on-the-job training; ”(6) job search and job readiness assistance; ”(7) community service programs; ”(8) vocational educational training (not to exceed 12 months with respect to any individual); ”(9) job skills training directly related to employment; ”(10) education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency; ”(11) satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate; and ”(12) the provision of child care services to an individual who is participating in a community service program. ”(e) PENALTIES AGAINST INDIVIDUALS.\u2014 ”(1) IN GENERAL.\u2014Except as provided in paragraph (2), if an individual in a family receiving assistance under the State 31 program funded under this part refuses to engage in work re- quired in accordance with this section, the State shall\u2014 ”(A) reduce the amount of assistance otherwise payable to the family pro rata (or more, at the option of the State) with respect to any period during a month in which the in- dividual so refuses; or ”(B) terminate such assistance, subject to such good cause and other exceptions as the State may establish. ”(2) EXCEPTION.\u2014Notwithstanding paragraph (1), a State may not reduce or terminate assistance under the State pro- gram funded under this part based on a refusal of an individ- ual to work if the individual is a single custodial parent caring for a child who has not attained 6 years of age, and the indi- vidual proves that the individual has a demonstrated inability (as determined by the State) to obtain needed child care, for 1 or more of the following reasons: ”(A) Unavailability of appropriate child care within a reasonable distance from the individual’s home or work site. ”(B) Unavailability or unsuitability of informal child care by a relative or under other arrangements. ”(C) Unavailability of appropriate and affordable for- mal child care arrangements. ”(f) NONDISPLACEMENT IN WORK ACTIVITIES.\u2014 ”(1) IN GENERAL.\u2014Subject to paragraph (2), an adult in a family receiving assistance under a State program funded under this part attributable to funds provided by the Federal Government may fill a vacant employment position in order to engage in a work activity described in subsection (d). ”(2) NO FILLING OF CERTAIN VACANCIES.\u2014No adult in a work activity described in subsection (d) which is funded, in whole or in part, by funds provided by the Federal Government shall be employed or assigned\u2014 ”(A) when any other individual is on layoff from the same or any substantially equivalent job; or ”(B) if the employer has terminated the employment of any regular employee or otherwise caused an involuntary reduction of its workforce in order to fill the vacancy so cre- ated with an adult described in paragraph (1). ”(3) GRIEVANCE PROCEDURE.\u2014A State with a program funded under this part shall establish and maintain a griev- ance procedure for resolving complaints of alleged violations of paragraph (2). ”(4) NO PREEMPTION.\u2014Nothing in this subsection shall pre- empt or supersede any provision of State or local law that pro- vides greater protection for employees from displacement. ”(g) SENSE OF THE CONGRESS.\u2014It is the sense of the Congress that in complying with this section, each State that operates a pro- gram funded under this part is encouraged to assign the highest priority to requiring adults in 2-parent families and adults in sin- gle-parent families that include older preschool or school-age chil- dren to be engaged in work activities. 32 ”(h) SENSE OF THE CONGRESS THAT STATES SHOULD IMPOSE CERTAIN REQUIREMENTS ON NONCUSTODIAL, NONSUPPORTING MINOR PARENTS.\u2014It is the sense of the Congress that the States should require noncustodial, nonsupporting parents who have not attained 18 years of age to fulfill community work obligations and attend appropriate parenting or money management classes after school. ”(i) REVIEW OF IMPLEMENTATION OF STATE WORK PROGRAMS.\u2014 During fiscal year 1999, the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Sen- ate shall hold hearings and engage in other appropriate activities to review the implementation of this section by the States, and shall invite the Governors of the States to testify before them regarding such implementation. Based on such hearings, such Committees may introduce such legislation as may be appropriate to remedy any problems with the State programs operated pursuant to this section. ”SEC. 408. PROHIBITIONS; REQUIREMENTS. ”(a) IN GENERAL.\u2014 ”(1) NO ASSISTANCE FOR FAMILIES WITHOUT A MINOR CHILD.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance to a family\u2014 ”(A) unless the family includes\u2014 ”(i) a minor child who resides with a custodial parent or other adult caretaker relative of the child; or ”(ii) a pregnant individual; and ”(B) if the family includes an adult who has received assistance under any State program funded under this part attributable to funds provided by the Federal Government, for 60 months (whether or not consecutive) after the date the State program funded under this part commences (un- less an exception described in subparagraph (B), (C), or (D) of paragraph (7) applies). ”(2) REDUCTION OR ELIMINATION OF ASSISTANCE FOR NON- COOPERATION IN ESTABLISHING PATERNITY OR OBTAINING CHILD SUPPORT.\u2014If the agency responsible for administering the State plan approved under part D determines that an individual is not cooperating with the State in establishing paternity or in es- tablishing, modifying, or enforcing a support order with respect to a child of the individual, and the individual does not qualify for any good cause or other exception established by the State pursuant to section 454(29), then the State\u2014 ”(A) shall deduct from the assistance that would other- wise be provided to the family of the individual under the State program funded under this part an amount equal to not less than 25 percent of the amount of such assistance; and ”(B) may deny the family any assistance under the State program. ”(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGNING CERTAIN SUPPORT RIGHTS TO THE STATE.\u2014 ”(A) IN GENERAL.\u2014A State to which a grant is made under section 403 shall require, as a condition of providing assistance to a family under the State program funded 33 under this part, that a member of the family assign to the State any rights the family member may have (on behalf of the family member or of any other person for whom the family member has applied for or is receiving such assist- ance) to support from any other person, not exceeding the total amount of assistance so provided to the family, which accrue (or have accrued) before the date the family leaves the program, which assignment, on and after the date the family leaves the program, shall not apply with respect to any support (other than support collected pursuant to sec- tion 464) which accrued before the family received such as- sistance and which the State has not collected by\u2014 ”(i) September 30, 2000, if the assignment is exe- cuted on or after October 1, 1997, and before October 1, 2000; or ”(ii) the date the family leaves the program, if the assignment is executed on or after October 1, 2000. ”(B) LIMITATION.\u2014A State to which a grant is made under section 403 shall not require, as a condition of pro- viding assistance to any family under the State program funded under this part, that a member of the family assign to the State any rights to support described in subpara- graph (A) which accrue after the date the family leaves the program. ”(4) NO ASSISTANCE FOR TEENAGE PARENTS WHO DO NOT ATTEND HIGH SCHOOL OR OTHER EQUIVALENT TRAINING PRO- GRAM.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance to an individual who has not attained 18 years of age, is not married, has a minor child at least 12 weeks of age in his or her care, and has not successfully completed a high-school education (or its equivalent), if the individual does not participate in\u2014 ”(A) educational activities directed toward the attain- ment of a high school diploma or its equivalent; or ”(B) an alternative educational or training program that has been approved by the State. ”(5) NO ASSISTANCE FOR TEENAGE PARENTS NOT LIVING IN ADULT-SUPERVISED SETTINGS.\u2014 ”(A) IN GENERAL.\u2014 ”(i) REQUIREMENT.\u2014Except as provided in sub- paragraph (B), a State to which a grant is made under section 403 shall not use any part of the grant to pro- vide assistance to an individual described in clause (ii) of this subparagraph if the individual and the minor child referred to in clause (ii)(II) do not reside in a place of residence maintained by a parent, legal guard- ian, or other adult relative of the individual as such parent’s, guardian’s, or adult relative’s own home. ”(ii) INDIVIDUAL DESCRIBED.\u2014For purposes of clause (i), an individual described in this clause is an individual who\u2014 ”(I) has not attained 18 years of age; and ”(II) is not married, and has a minor child in his or her care. 34 ”(B) EXCEPTION.\u2014 ”(i) PROVISION OF, OR ASSISTANCE IN LOCATING, ADULT-SUPERVISED LIVING ARRANGEMENT.\u2014In the case of an individual who is described in clause (ii), the State agency referred to in section 402(a)(4) shall pro- vide, or assist the individual in locating, a second chance home, maternity home, or other appropriate adult-supervised supportive living arrangement, taking into consideration the needs and concerns of the indi- vidual, unless the State agency determines that the in- dividual’s current living arrangement is appropriate, and thereafter shall require that the individual and the minor child referred to in subparagraph (A)(ii)(II) reside in such living arrangement as a condition of the continued receipt of assistance under the State pro- gram funded under this part attributable to funds pro- vided by the Federal Government (or in an alternative appropriate arrangement, should circumstances change and the current arrangement cease to be appropriate). ”(ii) INDIVIDUAL DESCRIBED.\u2014For purposes of clause (i), an individual is described in this clause if the individual is described in subparagraph (A)(ii), and\u2014 ”(I) the individual has no parent, legal guard- ian or other appropriate adult relative described in subclause (II) of his or her own who is living or whose whereabouts are known; ”(II) no living parent, legal guardian, or other appropriate adult relative, who would otherwise meet applicable State criteria to act as the individ- ual’s legal guardian, of such individual allows the individual to live in the home of such parent, guardian, or relative; ”(III) the State agency determines that\u2014 ”(aa) the individual or the minor child re- ferred to in subparagraph (A)(ii)(II) is being or has been subjected to serious physical or emo- tional harm, sexual abuse, or exploitation in the residence of the individual’s own parent or legal guardian; or ”(bb) substantial evidence exists of an act or failure to act that presents an imminent or serious harm if the individual and the minor child lived in the same residence with the in- dividual’s own parent or legal guardian; or ”(IV) the State agency otherwise determines that it is in the best interest of the minor child to waive the requirement of subparagraph (A) with respect to the individual or the minor child. ”(iii) SECOND-CHANCE HOME.\u2014For purposes of this subparagraph, the term ‘second-chance home’ means an entity that provides individuals described in clause (ii) with a supportive and supervised living arrange- ment in which such individuals are required to learn 35 parenting skills, including child development, family budgeting, health and nutrition, and other skills to promote their long-term economic independence and the well-being of their children. ”(6) NO MEDICAL SERVICES.\u2014 ”(A) IN GENERAL.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide medical services. ”(B) EXCEPTION FOR PREPREGNANCY FAMILY PLANNING SERVICES.\u2014As used in subparagraph (A), the term ‘medical services’ does not include prepregnancy family planning services. ”(7) NO ASSISTANCE FOR MORE THAN 5 YEARS.\u2014 ”(A) IN GENERAL.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance to a family that includes an adult who has received assistance under any State program funded under this part attributable to funds provided by the Fed- eral Government, for 60 months (whether or not consecu- tive) after the date the State program funded under this part commences, subject to this paragraph. ”(B) MINOR CHILD EXCEPTION.\u2014In determining the number of months for which an individual who is a parent or pregnant has received assistance under the State pro- gram funded under this part, the State shall disregard any month for which such assistance was provided with respect to the individual and during which the individual was\u2014 ”(i) a minor child; and ”(ii) not the head of a household or married to the head of a household. ”(C) HARDSHIP EXCEPTION.\u2014 ”(i) IN GENERAL.\u2014The State may exempt a family from the application of subparagraph (A) by reason of hardship or if the family includes an individual who has been battered or subjected to extreme cruelty. ”(ii) LIMITATION.\u2014The number of families with re- spect to which an exemption made by a State under clause (i) is in effect for a fiscal year shall not exceed 20 percent of the average monthly number of families to which assistance is provided under the State pro- gram funded under this part. ”(iii) BATTERED OR SUBJECT TO EXTREME CRUELTY DEFINED.\u2014For purposes of clause (i), an individual has been battered or subjected to extreme cruelty if the indi- vidual has been subjected to\u2014 ”(I) physical acts that resulted in, or threat- ened to result in, physical injury to the individual; ”(II) sexual abuse; ”(III) sexual activity involving a dependent child; ”(IV) being forced as the caretaker relative of a dependent child to engage in nonconsensual sex- ual acts or activities; 36 ”(V) threats of, or attempts at, physical or sex- ual abuse; ”(VI) mental abuse; or ”(VII) neglect or deprivation of medical care. ”(D) DISREGARD OF MONTHS OF ASSISTANCE RECEIVED BY ADULT WHILE LIVING ON AN INDIAN RESERVATION OR IN AN ALASKAN NATIVE VILLAGE WITH 50 PERCENT UNEMPLOY- MENT.\u2014In determining the number of months for which an adult has received assistance under the State program funded under this part, the State shall disregard any month during which the adult lived on an Indian reserva- tion or in an Alaskan Native village if, during the month\u2014 ”(i) at least 1,000 individuals were living on the reservation or in the village; and ”(ii) at least 50 percent of the adults living on the reservation or in the village were unemployed. ”(E) RULE OF INTERPRETATION.\u2014Subparagraph (A) shall not be interpreted to require any State to provide as- sistance to any individual for any period of time under the State program funded under this part. ”(F) RULE OF INTERPRETATION.\u2014This part shall not be interpreted to prohibit any State from expending State funds not originating with the Federal Government on ben- efits for children or families that have become ineligible for assistance under the State program funded under this part by reason of subparagraph (A). ”(8) DENIAL OF ASSISTANCE FOR 10 YEARS TO A PERSON FOUND TO HAVE FRAUDULENTLY MISREPRESENTED RESIDENCE IN ORDER TO OBTAIN ASSISTANCE IN 2 OR MORE STATES.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide cash assistance to an individual during the 10-year period that begins on the date the individual is convicted in Federal or State court of having made a fraudu- lent statement or representation with respect to the place of resi- dence of the individual in order to receive assistance simulta- neously from 2 or more States under programs that are funded under this title, title XIX, or the Food Stamp Act of 1977, or benefits in 2 or more States under the supplemental security in- come program under title XVI. The preceding sentence shall not apply with respect to a conviction of an individual, for any month beginning after the President of the United States grants a pardon with respect to the conduct which was the subject of the conviction. ”(9) DENIAL OF ASSISTANCE FOR FUGITIVE FELONS AND PRO- BATION AND PAROLE VIOLATORS.\u2014 ”(A) IN GENERAL.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance to any individual who is\u2014 ”(i) fleeing to avoid prosecution, or custody or con- finement after conviction, under the laws of the place from which the individual flees, for a crime, or an at- tempt to commit a crime, which is a felony under the laws of the place from which the individual flees, or 37 which, in the case of the State of New Jersey, is a high misdemeanor under the laws of such State; or ”(ii) violating a condition of probation or parole imposed under Federal or State law. The preceding sentence shall not apply with respect to conduct of an individual, for any month beginning after the President of the Unit- ed States grants a pardon with respect to the conduct. ”(B) EXCHANGE OF INFORMATION WITH LAW ENFORCE- MENT AGENCIES.\u2014If a State to which a grant is made under section 403 establishes safeguards against the use or disclosure of information about applicants or recipients of assistance under the State program funded under this part, the safeguards shall not prevent the State agency admin- istering the program from furnishing a Federal, State, or local law enforcement officer, upon the request of the offi- cer, with the current address of any recipient if the officer furnishes the agency with the name of the recipient and no- tifies the agency that\u2014 ”(i) the recipient\u2014 ”(I) is described in subparagraph (A); or ”(II) has information that is necessary for the officer to conduct the official duties of the officer; and ”(ii) the location or apprehension of the recipient is within such official duties. ”(10) DENIAL OF ASSISTANCE FOR MINOR CHILDREN WHO ARE ABSENT FROM THE HOME FOR A SIGNIFICANT PERIOD.\u2014 ”(A) IN GENERAL.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance for a minor child who has been, or is ex- pected by a parent (or other caretaker relative) of the child to be, absent from the home for a period of 45 consecutive days or, at the option of the State, such period of not less than 30 and not more than 180 consecutive days as the State may provide for in the State plan submitted pursuant to section 402. ”(B) STATE AUTHORITY TO ESTABLISH GOOD CAUSE EX- CEPTIONS.\u2014The State may establish such good cause excep- tions to subparagraph (A) as the State considers appro- priate if such exceptions are provided for in the State plan submitted pursuant to section 402. ”(C) DENIAL OF ASSISTANCE FOR RELATIVE WHO FAILS TO NOTIFY STATE AGENCY OF ABSENCE OF CHILD.\u2014A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance for an individ- ual who is a parent (or other caretaker relative) of a minor child and who fails to notify the agency administering the State program funded under this part of the absence of the minor child from the home for the period specified in or provided for pursuant to subparagraph (A), by the end of the 5-day period that begins with the date that it becomes clear to the parent (or relative) that the minor child will be absent for such period so specified or provided for. 38 ”(11) MEDICAL ASSISTANCE REQUIRED TO BE PROVIDED FOR CERTAIN FAMILIES HAVING EARNINGS FROM EMPLOYMENT OR CHILD SUPPORT.\u2014 ”(A) EARNINGS FROM EMPLOYMENT.\u2014A State to which a grant is made under section 403 and which has a State plan approved under title XIX shall provide that in the case of a family that is treated (under section 1931(b)(1)(A) for purposes of title XIX) as receiving aid under a State plan approved under this part (as in effect on July 16, 1996), that would become ineligible for such aid because of hours of or income from employment of the caretaker rel- ative (as defined under this part as in effect on such date) or because of section 402(a)(8)(B)(ii)(II) (as so in effect), and that was so treated as receiving such aid in at least 3 of the 6 months immediately preceding the month in which such ineligibility begins, the family shall remain eligible for medical assistance under the State’s plan approved under title XIX for an extended period or periods as pro- vided in section 1925 or 1902(e)(1) (as applicable), and that the family will be appropriately notified of such extension as required by section 1925(a)(2). ”(B) CHILD SUPPORT.\u2014A State to which a grant is made under section 403 and which has a State plan ap- proved under title XIX shall provide that in the case of a family that is treated (under section 1931(b)(1)(A) for pur- poses of title XIX) as receiving aid under a State plan ap- proved under this part (as in effect on July 16, 1996), that would become ineligible for such aid as a result (wholly or partly) of the collection of child or spousal support under part D and that was so treated as receiving such aid in at least 3 of the 6 months immediately preceding the month in which such ineligibility begins, the family shall remain eligible for medical assistance under the State’s plan ap- proved under title XIX for an extended period or periods as provided in section 1931(c)(1). ”(b) INDIVIDUAL RESPONSIBILITY PLANS.\u2014 ”(1) ASSESSMENT.\u2014The State agency responsible for ad- ministering the State program funded under this part shall make an initial assessment of the skills, prior work experience, and employability of each recipient of assistance under the pro- gram who\u2014 ”(A) has attained 18 years of age; or ”(B) has not completed high school or obtained a cer- tificate of high school equivalency, and is not attending sec- ondary school. ”(2) CONTENTS OF PLANS.\u2014 ”(A) IN GENERAL.\u2014On the basis of the assessment made under subsection (a) with respect to an individual, the State agency, in consultation with the individual, may develop an individual responsibility plan for the individ- ual, which\u2014 ”(i) sets forth an employment goal for the individ- ual and a plan for moving the individual immediately into private sector employment; 39 ”(ii) sets forth the obligations of the individual, which may include a requirement that the individual attend school, maintain certain grades and attendance, keep school age children of the individual in school, immunize children, attend parenting and money man- agement classes, or do other things that will help the individual become and remain employed in the private sector; ”(iii) to the greatest extent possible is designed to move the individual into whatever private sector em- ployment the individual is capable of handling as quickly as possible, and to increase the responsibility and amount of work the individual is to handle over time; ”(iv) describes the services the State will provide the individual so that the individual will be able to ob- tain and keep employment in the private sector, and describe the job counseling and other services that will be provided by the State; and ”(v) may require the individual to undergo appro- priate substance abuse treatment. ”(B) TIMING.\u2014The State agency may comply with para- graph (1) with respect to an individual\u2014 ”(i) within 90 days (or, at the option of the State, 180 days) after the effective date of this part, in the case of an individual who, as of such effective date, is a recipient of aid under the State plan approved under part A (as in effect immediately before such effective date); or ”(ii) within 30 days (or, at the option of the State, 90 days) after the individual is determined to be eligi- ble for such assistance, in the case of any other individ- ual. ”(3) PENALTY FOR NONCOMPLIANCE BY INDIVIDUAL.\u2014In ad- dition to any other penalties required under the State program funded under this part, the State may reduce, by such amount as the State considers appropriate, the amount of assistance otherwise payable under the State program to a family that in- cludes an individual who fails without good cause to comply with an individual responsibility plan signed by the individual. ”(4) STATE DISCRETION.\u2014The exercise of the authority of this subsection shall be within the sole discretion of the State. ”(c) NONDISCRIMINATION PROVISIONS.\u2014The following provisions of law shall apply to any program or activity which receives funds provided under this part: ”(1) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.). ”(2) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). ”(3) The Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.). ”(4) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.). 40 ”(d) ALIENS.\u2014For special rules relating to the treatment of aliens, see section 402 of the Personal Responsibility and Work Op- portunity Reconciliation Act of 1996. ”SEC. 409. PENALTIES. ”(a) IN GENERAL.\u2014Subject to this section: ”(1) USE OF GRANT IN VIOLATION OF THIS PART.\u2014 ”(A) GENERAL PENALTY.\u2014If an audit conducted under chapter 75 of title 31, United States Code, finds that an amount paid to a State under section 403 for a fiscal year has been used in violation of this part, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year quarter by the amount so used. ”(B) ENHANCED PENALTY FOR INTENTIONAL VIOLA- TIONS.\u2014If the State does not prove to the satisfaction of the Secretary that the State did not intend to use the amount in violation of this part, the Secretary shall further reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year quarter by an amount equal to 5 percent of the State family assistance grant. ”(2) FAILURE TO SUBMIT REQUIRED REPORT.\u2014 ”(A) IN GENERAL.\u2014If the Secretary determines that a State has not, within 1 month after the end of a fiscal quarter, submitted the report required by section 411(a) for the quarter, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately suc- ceeding fiscal year by an amount equal to 4 percent of the State family assistance grant. ”(B) RESCISSION OF PENALTY.\u2014The Secretary shall re- scind a penalty imposed on a State under subparagraph (A) with respect to a report if the State submits the report before the end of the fiscal quarter that immediately suc- ceeds the fiscal quarter for which the report was required. ”(3) FAILURE TO SATISFY MINIMUM PARTICIPATION RATES.\u2014 ”(A) IN GENERAL.\u2014If the Secretary determines that a State to which a grant is made under section 403 for a fis- cal year has failed to comply with section 407(a) for the fis- cal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeed- ing fiscal year by an amount equal to not more than the ap- plicable percentage of the State family assistance grant. ”(B) APPLICABLE PERCENTAGE DEFINED.\u2014As used in subparagraph (A), the term ‘applicable percentage’ means, with respect to a State\u2014 ”(i) if a penalty was not imposed on the State under subparagraph (A) for the immediately preceding fiscal year, 5 percent; or ”(ii) if a penalty was imposed on the State under subparagraph (A) for the immediately preceding fiscal year, the lesser of\u2014 ”(I) the percentage by which the grant payable to the State under section 403(a)(1) was reduced 41 for such preceding fiscal year, increased by 2 per- centage points; or ”(II) 21 percent. ”(C) PENALTY BASED ON SEVERITY OF FAILURE.\u2014The Secretary shall impose reductions under subparagraph (A) with respect to a fiscal year based on the degree of non- compliance, and may reduce the penalty if the noncompli- ance is due to circumstances that caused the State to be- come a needy State (as defined in section 403(b)(6)) during the fiscal year. ”(4) FAILURE TO PARTICIPATE IN THE INCOME AND ELIGI- BILITY VERIFICATION SYSTEM.\u2014If the Secretary determines that a State program funded under this part is not participating during a fiscal year in the income and eligibility verification system required by section 1137, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the imme- diately succeeding fiscal year by an amount equal to not more than 2 percent of the State family assistance grant. ”(5) FAILURE TO COMPLY WITH PATERNITY ESTABLISHMENT AND CHILD SUPPORT ENFORCEMENT REQUIREMENTS UNDER PART D.\u2014Notwithstanding any other provision of this Act, if the Sec- retary determines that the State agency that administers a pro- gram funded under this part does not enforce the penalties re- quested by the agency administering part D against recipients of assistance under the State program who fail to cooperate in establishing paternity or in establishing, modifying, or enforc- ing a child support order in accordance with such part and who do not qualify for any good cause or other exception estab- lished by the State under section 454(29), the Secretary shall re- duce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year (without regard to this section) by not more than 5 percent. ”(6) FAILURE TO TIMELY REPAY A FEDERAL LOAN FUND FOR STATE WELFARE PROGRAMS.\u2014If the Secretary determines that a State has failed to repay any amount borrowed from the Fed- eral Loan Fund for State Welfare Programs established under section 406 within the period of maturity applicable to the loan, plus any interest owed on the loan, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year quarter (without regard to this section) by the outstanding loan amount, plus the interest owed on the outstanding amount. The Secretary shall not for- give any outstanding loan amount or interest owed on the out- standing amount. ”(7) FAILURE OF ANY STATE TO MAINTAIN CERTAIN LEVEL OF HISTORIC EFFORT.\u2014 ”(A) IN GENERAL.\u2014The Secretary shall reduce the grant payable to the State under section 403(a)(1) for fiscal year 1998, 1999, 2000, 2001, 2002, or 2003 by the amount (if any) by which qualified State expenditures for the then immediately preceding fiscal year are less than the applica- ble percentage of historic State expenditures with respect to such preceding fiscal year. ”(B) DEFINITIONS.\u2014As used in this paragraph: 42 ”(i) QUALIFIED STATE EXPENDITURES.\u2014 ”(I) IN GENERAL.\u2014The term ‘qualified State ex- penditures’ means, with respect to a State and a fiscal year, the total expenditures by the State dur- ing the fiscal year, under all State programs, for any of the following with respect to eligible fami- lies: ”(aa) Cash assistance. ”(bb) Child care assistance. ”(cc) Educational activities designed to in- crease self-sufficiency, job training, and work, excluding any expenditure for public education in the State except expenditures which involve the provision of services or assistance to a member of an eligible family which is not gen- erally available to persons who are not mem- bers of an eligible family. ”(dd) Administrative costs in connection with the matters described in items (aa), (bb), (cc), and (ee), but only to the extent that such costs do not exceed 15 percent of the total amount of qualified State expenditures for the fiscal year. ”(ee) Any other use of funds allowable under section 404(a)(1). ”(II) EXCLUSION OF TRANSFERS FROM OTHER STATE AND LOCAL PROGRAMS.\u2014Such term does not include expenditures under any State or local pro- gram during a fiscal year, except to the extent that\u2014 ”(aa) the expenditures exceed the amount expended under the State or local program in the fiscal year most recently ending before the date of the enactment of this part; or ”(bb) the State is entitled to a payment under former section 403 (as in effect imme- diately before such date of enactment) with re- spect to the expenditures. ”(III) ELIGIBLE FAMILIES.\u2014As used in sub- clause (I), the term ‘eligible families’ means fami- lies eligible for assistance under the State program funded under this part, and families that would be eligible for such assistance but for the application of section 408(a)(7) of this Act or section 402 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. ”(ii) APPLICABLE PERCENTAGE.\u2014The term ‘applica- ble percentage’ means for fiscal years 1997 through 2002, 80 percent (or, if the State meets the require- ments of section 407(a) for the fiscal year, 75 percent) reduced (if appropriate) in accordance with subpara- graph (C)(ii). 43 ”(iii) HISTORIC STATE EXPENDITURES.\u2014The term ‘historic State expenditures’ means, with respect to a State, the lesser of\u2014 ”(I) the expenditures by the State under parts A and F (as in effect during fiscal year 1994) for fiscal year 1994; or ”(II) the amount which bears the same ratio to the amount described in subclause (I) as\u2014 ”(aa) the State family assistance grant, plus the total amount required to be paid to the State under former section 403 for fiscal year 1994 with respect to amounts expended by the State for child care under subsection (g) or (i) of section 402 (as in effect during fiscal year 1994); bears to ”(bb) the total amount required to be paid to the State under former section 403 (as in ef- fect during fiscal year 1994) for fiscal year 1994. Such term does not include any expenditures under the State plan approved under part A (as so in effect) on behalf of individuals covered by a tribal family assist- ance plan approved under section 412, as determined by the Secretary. ”(iv) EXPENDITURES BY THE STATE.\u2014The term ‘ex- penditures by the State’ does not include\u2014 ”(I) any expenditures from amounts made available by the Federal Government; ”(II) any State funds expended for the medic- aid program under title XIX; ”(III) any State funds which are used to match Federal funds; or ”(IV) any State funds which are expended as a condition of receiving Federal funds under Fed- eral programs other than under this part. Notwithstanding subclause (IV) of the preceding sen- tence, such term includes expenditures by a State for child care in a fiscal year to the extent that the total amount of such expenditures does not exceed an amount equal to the amount of State expenditures in fiscal year 1994 or 1995 (whichever is greater) that equal the non-Federal share for the programs described in section 418(a)(1)(A). ”(8) SUBSTANTIAL NONCOMPLIANCE OF STATE CHILD SUP- PORT ENFORCEMENT PROGRAM WITH REQUIREMENTS OF PART D.\u2014 ”(A) IN GENERAL.\u2014If a State program operated under part D is found as a result of a review conducted under sec- tion 452(a)(4) not to have complied substantially with the requirements of such part for any quarter, and the Sec- retary determines that the program is not complying sub- stantially with such requirements at the time the finding is made, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the quarter and each sub- 44 sequent quarter that ends before the 1st quarter throughout which the program is found to be in substantial compliance with such requirements by\u2014 ”(i) not less than 1 nor more than 2 percent; ”(ii) not less than 2 nor more than 3 percent, if the finding is the 2nd consecutive such finding made as a result of such a review; or ”(iii) not less than 3 nor more than 5 percent, if the finding is the 3rd or a subsequent consecutive such finding made as a result of such a review. ”(B) DISREGARD OF NONCOMPLIANCE WHICH IS OF A TECHNICAL NATURE.\u2014For purposes of subparagraph (A) and section 452(a)(4), a State which is not in full compli- ance with the requirements of this part shall be determined to be in substantial compliance with such requirements only if the Secretary determines that any noncompliance with such requirements is of a technical nature which does not adversely affect the performance of the State’s program operated under part D. ”(9) FAILURE TO COMPLY WITH 5-YEAR LIMIT ON ASSIST- ANCE.\u2014If the Secretary determines that a State has not com- plied with section 408(a)(1)(B) during a fiscal year, the Sec- retary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year by an amount equal to 5 percent of the State family assistance grant. ”(10) FAILURE OF STATE RECEIVING AMOUNTS FROM CONTIN- GENCY FUND TO MAINTAIN 100 PERCENT OF HISTORIC EFFORT.\u2014 If, at the end of any fiscal year during which amounts from the Contingency Fund for State Welfare Programs have been paid to a State, the Secretary finds that the expenditures under the State program funded under this part for the fiscal year (ex- cluding any amounts made available by the Federal Govern- ment) are less than 100 percent of historic State expenditures (as defined in paragraph (7)(B)(iii) of this subsection), the Sec- retary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year by the total of the amounts so paid to the State. ”(11) FAILURE TO MAINTAIN ASSISTANCE TO ADULT SINGLE CUSTODIAL PARENT WHO CANNOT OBTAIN CHILD CARE FOR CHILD UNDER AGE 6.\u2014 ”(A) IN GENERAL.\u2014If the Secretary determines that a State to which a grant is made under section 403 for a fis- cal year has violated section 407(e)(2) during the fiscal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeed- ing fiscal year by an amount equal to not more than 5 per- cent of the State family assistance grant. ”(B) PENALTY BASED ON SEVERITY OF FAILURE.\u2014The Secretary shall impose reductions under subparagraph (A) with respect to a fiscal year based on the degree of non- compliance. ”(12) FAILURE TO EXPEND ADDITIONAL STATE FUNDS TO RE- PLACE GRANT REDUCTIONS.\u2014If the grant payable to a State under section 403(a)(1) for a fiscal year is reduced by reason of 45 this subsection, the State shall, during the immediately succeed- ing fiscal year, expend under the State program funded under this part an amount equal to the total amount of such reduc- tions. ”(b) REASONABLE CAUSE EXCEPTION.\u2014 ”(1) IN GENERAL.\u2014The Secretary may not impose a penalty on a State under subsection (a) with respect to a requirement if the Secretary determines that the State has reasonable cause for failing to comply with the requirement. ”(2) EXCEPTION.\u2014Paragraph (1) of this subsection shall not apply to any penalty under paragraph (7) or (8) of subsection (a). ”(c) CORRECTIVE COMPLIANCE PLAN.\u2014 ”(1) IN GENERAL.\u2014 ”(A) NOTIFICATION OF VIOLATION.\u2014Before imposing a penalty against a State under subsection (a) with respect to a violation of this part, the Secretary shall notify the State of the violation and allow the State the opportunity to enter into a corrective compliance plan in accordance with this subsection which outlines how the State will correct the vio- lation and how the State will insure continuing compliance with this part. ”(B) 60-DAY PERIOD TO PROPOSE A CORRECTIVE COMPLI- ANCE PLAN.\u2014During the 60-day period that begins on the date the State receives a notice provided under subpara- graph (A) with respect to a violation, the State may submit to the Federal Government a corrective compliance plan to correct the violation. ”(C) CONSULTATION ABOUT MODIFICATIONS.\u2014During the 60-day period that begins with the date the Secretary receives a corrective compliance plan submitted by a State in accordance with subparagraph (B), the Secretary may consult with the State on modifications to the plan. ”(D) ACCEPTANCE OF PLAN.\u2014 A corrective compliance plan submitted by a State in accordance with subpara- graph (B) is deemed to be accepted by the Secretary if the Secretary does not accept or reject the plan during 60-day period that begins on the date the plan is submitted. ”(2) EFFECT OF CORRECTING VIOLATION.\u2014The Secretary may not impose any penalty under subsection (a) with respect to any violation covered by a State corrective compliance plan accepted by the Secretary if the State corrects the violation pur- suant to the plan. ”(3) EFFECT OF FAILING TO CORRECT VIOLATION.\u2014The Sec- retary shall assess some or all of a penalty imposed on a State under subsection (a) with respect to a violation if the State does not, in a timely manner, correct the violation pursuant to a State corrective compliance plan accepted by the Secretary. ”(4) INAPPLICABILITY TO FAILURE TO TIMELY REPAY A FED- ERAL LOAN FUND FOR A STATE WELFARE PROGRAM.\u2014This sub- section shall not apply to the imposition of a penalty against a State under subsection (a)(6). ”(d) LIMITATION ON AMOUNT OF PENALTIES.\u2014 46 ”(1) IN GENERAL.\u2014In imposing the penalties described in subsection (a), the Secretary shall not reduce any quarterly pay- ment to a State by more than 25 percent. ”(2) CARRYFORWARD OF UNRECOVERED PENALTIES.\u2014To the extent that paragraph (1) of this subsection prevents the Sec- retary from recovering during a fiscal year the full amount of penalties imposed on a State under subsection (a) of this section for a prior fiscal year, the Secretary shall apply any remaining amount of such penalties to the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year. ”SEC. 410. APPEAL OF ADVERSE DECISION. ”(a) IN GENERAL.\u2014Within 5 days after the date the Secretary takes any adverse action under this part with respect to a State, the Secretary shall notify the chief executive officer of the State of the adverse action, including any action with respect to the State plan submitted under section 402 or the imposition of a penalty under section 409. ”(b) ADMINISTRATIVE REVIEW.\u2014 ”(1) IN GENERAL.\u2014Within 60 days after the date a State re- ceives notice under subsection (a) of an adverse action, the State may appeal the action, in whole or in part, to the Departmental Appeals Board established in the Department of Health and Human Services (in this section referred to as the ‘Board’) by filing an appeal with the Board. ”(2) PROCEDURAL RULES.\u2014The Board shall consider an ap- peal filed by a State under paragraph (1) on the basis of such documentation as the State may submit and as the Board may require to support the final decision of the Board. In deciding whether to uphold an adverse action or any portion of such an action, the Board shall conduct a thorough review of the issues and take into account all relevant evidence. The Board shall make a final determination with respect to an appeal filed under paragraph (1) not less than 60 days after the date the ap- peal is filed. ”(c) JUDICIAL REVIEW OF ADVERSE DECISION.\u2014 ”(1) IN GENERAL.\u2014Within 90 days after the date of a final decision by the Board under this section with respect to an ad- verse action taken against a State, the State may obtain judi- cial review of the final decision (and the findings incorporated into the final decision) by filing an action in\u2014 ”(A) the district court of the United States for the judi- cial district in which the principal or headquarters office of the State agency is located; or ”(B) the United States District Court for the District of Columbia. ”(2) PROCEDURAL RULES.\u2014The district court in which an action is filed under paragraph (1) shall review the final deci- sion of the Board on the record established in the administra- tive proceeding, in accordance with the standards of review pre- scribed by subparagraphs (A) through (E) of section 706(2) of title 5, United States Code. The review shall be on the basis of the documents and supporting data submitted to the Board. 47 ”SEC. 411. DATA COLLECTION AND REPORTING. ”(a) QUARTERLY REPORTS BY STATES.\u2014 ”(1) GENERAL REPORTING REQUIREMENT.\u2014 ”(A) CONTENTS OF REPORT.\u2014Each eligible State shall collect on a monthly basis, and report to the Secretary on a quarterly basis, the following disaggregated case record information on the families receiving assistance under the State program funded under this part: ”(i) The county of residence of the family. ”(ii) Whether a child receiving such assistance or an adult in the family is disabled. ”(iii) The ages of the members of such families. ”(iv) The number of individuals in the family, and the relation of each family member to the youngest child in the family. ”(v) The employment status and earnings of the employed adult in the family. ”(vi) The marital status of the adults in the family, including whether such adults have never married, are widowed, or are divorced. ”(vii) The race and educational status of each adult in the family. ”(viii) The race and educational status of each child in the family. ”(ix) Whether the family received subsidized hous- ing, medical assistance under the State plan approved under title XIX, food stamps, or subsidized child care, and if the latter 2, the amount received. ”(x) The number of months that the family has re- ceived each type of assistance under the program. ”(xi) If the adults participated in, and the number of hours per week of participation in, the following ac- tivities: ”(I) Education. ”(II) Subsidized private sector employment. ”(III) Unsubsidized employment. ”(IV) Public sector employment, work experi- ence, or community service. ”(V) Job search. ”(VI) Job skills training or on-the-job training. ”(VII) Vocational education. ”(xii) Information necessary to calculate participa- tion rates under section 407. ”(xiii) The type and amount of assistance received under the program, including the amount of and rea- son for any reduction of assistance (including sanc- tions). ”(xiv) Any amount of unearned income received by any member of the family. ”(xv) The citizenship of the members of the family. ”(xvi) From a sample of closed cases, whether the family left the program, and if so, whether the family left due to\u2014 ”(I) employment; 48 ”(II) marriage; ”(III) the prohibition set forth in section 408(a)(7); ”(IV) sanction; or ”(V) State policy. ”(B) USE OF ESTIMATES.\u2014 ”(i) AUTHORITY.\u2014A State may comply with sub- paragraph (A) by submitting an estimate which is ob- tained through the use of scientifically acceptable sam- pling methods approved by the Secretary. ”(ii) SAMPLING AND OTHER METHODS.\u2014The Sec- retary shall provide the States with such case sampling plans and data collection procedures as the Secretary deems necessary to produce statistically valid estimates of the performance of State programs funded under this part. The Secretary may develop and implement procedures for verifying the quality of data submitted by the States. ”(2) REPORT ON USE OF FEDERAL FUNDS TO COVER ADMINIS- TRATIVE COSTS AND OVERHEAD.\u2014The report required by para- graph (1) for a fiscal quarter shall include a statement of the percentage of the funds paid to the State under this part for the quarter that are used to cover administrative costs or overhead. ”(3) REPORT ON STATE EXPENDITURES ON PROGRAMS FOR NEEDY FAMILIES.\u2014The report required by paragraph (1) for a fiscal quarter shall include a statement of the total amount ex- pended by the State during the quarter on programs for needy families. ”(4) REPORT ON NONCUSTODIAL PARENTS PARTICIPATING IN WORK ACTIVITIES.\u2014The report required by paragraph (1) for a fiscal quarter shall include the number of noncustodial parents in the State who participated in work activities (as defined in section 407(d)) during the quarter. ”(5) REPORT ON TRANSITIONAL SERVICES.\u2014The report re- quired by paragraph (1) for a fiscal quarter shall include the total amount expended by the State during the quarter to pro- vide transitional services to a family that has ceased to receive assistance under this part because of employment, along with a description of such services. ”(6) REGULATIONS.\u2014The Secretary shall prescribe such reg- ulations as may be necessary to define the data elements with respect to which reports are required by this subsection. ”(b) ANNUAL REPORTS TO THE CONGRESS BY THE SECRETARY.\u2014 Not later than 6 months after the end of fiscal year 1997, and each fiscal year thereafter, the Secretary shall transmit to the Congress a report describing\u2014 ”(1) whether the States are meeting\u2014 ”(A) the participation rates described in section 407(a); and ”(B) the objectives of\u2014 ”(i) increasing employment and earnings of needy families, and child support collections; and ”(ii) decreasing out-of-wedlock pregnancies and child poverty; 49 ”(2) the demographic and financial characteristics of fami- lies applying for assistance, families receiving assistance, and families that become ineligible to receive assistance; ”(3) the characteristics of each State program funded under this part; and ”(4) the trends in employment and earnings of needy fami- lies with minor children living at home. ”SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES. ”(a) GRANTS FOR INDIAN TRIBES.\u2014 ”(1) TRIBAL FAMILY ASSISTANCE GRANT.\u2014 ”(A) IN GENERAL.\u2014For each of fiscal years 1997, 1998, 1999, 2000, 2001, and 2002, the Secretary shall pay to each Indian tribe that has an approved tribal family assistance plan a tribal family assistance grant for the fiscal year in an amount equal to the amount determined under subpara- graph (B), and shall reduce the grant payable under section 403(a)(1) to any State in which lies the service area or areas of the Indian tribe by that portion of the amount so determined that is attributable to expenditures by the State. ”(B) AMOUNT DETERMINED.\u2014 ”(i) IN GENERAL.\u2014The amount determined under this subparagraph is an amount equal to the total amount of the Federal payments to a State or States under section 403 (as in effect during such fiscal year) for fiscal year 1994 attributable to expenditures (other than child care expenditures) by the State or States under parts A and F (as so in effect) for fiscal year 1994 for Indian families residing in the service area or areas identified by the Indian tribe pursuant to sub- section (b)(1)(C) of this section. ”(ii) USE OF STATE SUBMITTED DATA.\u2014 ”(I) IN GENERAL.\u2014The Secretary shall use State submitted data to make each determination under clause (i). ”(II) DISAGREEMENT WITH DETERMINATION.\u2014If an Indian tribe or tribal organization disagrees with State submitted data described under sub- clause (I), the Indian tribe or tribal organization may submit to the Secretary such additional infor- mation as may be relevant to making the deter- mination under clause (i) and the Secretary may consider such information before making such de- termination. ”(2) GRANTS FOR INDIAN TRIBES THAT RECEIVED JOBS FUNDS.\u2014 ”(A) IN GENERAL.\u2014The Secretary shall pay to each eli- gible Indian tribe for each of fiscal years 1997, 1998, 1999, 2000, 2001, and 2002 a grant in an amount equal to the amount received by the Indian tribe in fiscal year 1994 under section 482(i) (as in effect during fiscal year 1994). ”(B) ELIGIBLE INDIAN TRIBE.\u2014For purposes of subpara- graph (A), the term ‘eligible Indian tribe’ means an Indian tribe or Alaska Native organization that conducted a job 50 opportunities and basic skills training program in fiscal year 1995 under section 482(i) (as in effect during fiscal year 1995). ”(C) USE OF GRANT.\u2014Each Indian tribe to which a grant is made under this paragraph shall use the grant for the purpose of operating a program to make work activities available to members of the Indian tribe. ”(D) APPROPRIATION.\u2014Out of any money in the Treas- ury of the United States not otherwise appropriated, there are appropriated $7,638,474 for each fiscal year specified in subparagraph (A) for grants under subparagraph (A). ”(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.\u2014 ”(1) IN GENERAL.\u2014Any Indian tribe that desires to receive a tribal family assistance grant shall submit to the Secretary a 3-year tribal family assistance plan that\u2014 ”(A) outlines the Indian tribe’s approach to providing welfare-related services for the 3-year period, consistent with this section; ”(B) specifies whether the welfare-related services pro- vided under the plan will be provided by the Indian tribe or through agreements, contracts, or compacts with inter- tribal consortia, States, or other entities; ”(C) identifies the population and service area or areas to be served by such plan; ”(D) provides that a family receiving assistance under the plan may not receive duplicative assistance from other State or tribal programs funded under this part; ”(E) identifies the employment opportunities in or near the service area or areas of the Indian tribe and the man- ner in which the Indian tribe will cooperate and participate in enhancing such opportunities for recipients of assistance under the plan consistent with any applicable State stand- ards; and ”(F) applies the fiscal accountability provisions of sec- tion 5(f)(1) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450c(f)(1)), relating to the sub- mission of a single-agency audit report required by chapter 75 of title 31, United States Code. ”(2) APPROVAL.\u2014The Secretary shall approve each tribal family assistance plan submitted in accordance with paragraph (1). ”(3) CONSORTIUM OF TRIBES.\u2014Nothing in this section shall preclude the development and submission of a single tribal fam- ily assistance plan by the participating Indian tribes of an intertribal consortium. ”(c) MINIMUM WORK PARTICIPATION REQUIREMENTS AND TIME LIMITS.\u2014The Secretary, with the participation of Indian tribes, shall establish for each Indian tribe receiving a grant under this section minimum work participation requirements, appropriate time limits for receipt of welfare-related services under the grant, and penalties against individuals\u2014 ”(1) consistent with the purposes of this section; ”(2) consistent with the economic conditions and resources available to each tribe; and 51 ”(3) similar to comparable provisions in section 407(e). ”(d) EMERGENCY ASSISTANCE.\u2014Nothing in this section shall preclude an Indian tribe from seeking emergency assistance from any Federal loan program or emergency fund. ”(e) ACCOUNTABILITY.\u2014Nothing in this section shall be con- strued to limit the ability of the Secretary to maintain program funding accountability consistent with\u2014 ”(1) generally accepted accounting principles; and ”(2) the requirements of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450 et seq.). ”(f) PENALTIES.\u2014 ”(1) Subsections (a)(1), (a)(6), and (b) of section 409, shall apply to an Indian tribe with an approved tribal assistance plan in the same manner as such subsections apply to a State. ”(2) Section 409(a)(3) shall apply to an Indian tribe with an approved tribal assistance plan by substituting ‘meet mini- mum work participation requirements established under section 412(c)’ for ‘comply with section 407(a)’. ”(g) DATA COLLECTION AND REPORTING.\u2014Section 411 shall apply to an Indian tribe with an approved tribal family assistance plan. ”(h) SPECIAL RULE FOR INDIAN TRIBES IN ALASKA.\u2014 ”(1) IN GENERAL.\u2014Notwithstanding any other provision of this section, and except as provided in paragraph (2), an Indian tribe in the State of Alaska that receives a tribal family assist- ance grant under this section shall use the grant to operate a program in accordance with requirements comparable to the re- quirements applicable to the program of the State of Alaska funded under this part. Comparability of programs shall be es- tablished on the basis of program criteria developed by the Sec- retary in consultation with the State of Alaska and such Indian tribes. ”(2) WAIVER.\u2014An Indian tribe described in paragraph (1) may apply to the appropriate State authority to receive a waiver of the requirement of paragraph (1). ”SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES. ”(a) RESEARCH.\u2014The Secretary shall conduct research on the benefits, effects, and costs of operating different State programs funded under this part, including time limits relating to eligibility for assistance. The research shall include studies on the effects of different programs and the operation of such programs on welfare dependency, illegitimacy, teen pregnancy, employment rates, child well-being, and any other area the Secretary deems appropriate. The Secretary shall also conduct research on the costs and benefits of State activities under section 409. ”(b) DEVELOPMENT AND EVALUATION OF INNOVATIVE AP- PROACHES TO REDUCING WELFARE DEPENDENCY AND INCREASING CHILD WELL-BEING.\u2014 ”(1) IN GENERAL.\u2014The Secretary may assist States in devel- oping, and shall evaluate, innovative approaches for reducing welfare dependency and increasing the well-being of minor chil- dren living at home with respect to recipients of assistance under programs funded under this part. The Secretary may 52 provide funds for training and technical assistance to carry out the approaches developed pursuant to this paragraph. ”(2) EVALUATIONS.\u2014In performing the evaluations under paragraph (1), the Secretary shall, to the maximum extent fea- sible, use random assignment as an evaluation methodology. ”(c) DISSEMINATION OF INFORMATION.\u2014The Secretary shall de- velop innovative methods of disseminating information on any re- search, evaluations, and studies conducted under this section, in- cluding the facilitation of the sharing of information and best prac- tices among States and localities through the use of computers and other technologies. ”(d) ANNUAL RANKING OF STATES AND REVIEW OF MOST AND LEAST SUCCESSFUL WORK PROGRAMS.\u2014 ”(1) ANNUAL RANKING OF STATES.\u2014The Secretary shall rank annually the States to which grants are paid under sec- tion 403 in the order of their success in placing recipients of as- sistance under the State program funded under this part into long-term private sector jobs, reducing the overall welfare case- load, and, when a practicable method for calculating this infor- mation becomes available, diverting individuals from formally applying to the State program and receiving assistance. In ranking States under this subsection, the Secretary shall take into account the average number of minor children living at home in families in the State that have incomes below the pov- erty line and the amount of funding provided each State for such families. ”(2) ANNUAL REVIEW OF MOST AND LEAST SUCCESSFUL WORK PROGRAMS.\u2014The Secretary shall review the programs of the 3 States most recently ranked highest under paragraph (1) and the 3 States most recently ranked lowest under paragraph (1) that provide parents with work experience, assistance in finding employment, and other work preparation activities and support services to enable the families of such parents to leave the program and become self-sufficient. ”(e) ANNUAL RANKING OF STATES AND REVIEW OF ISSUES RE- LATING TO OUT-OF-WEDLOCK BIRTHS.\u2014 ”(1) ANNUAL RANKING OF STATES.\u2014 ”(A) IN GENERAL.\u2014The Secretary shall annually rank States to which grants are made under section 403 based on the following ranking factors: ”(i) ABSOLUTE OUT-OF-WEDLOCK RATIOS.\u2014The ratio represented by\u2014 ”(I) the total number of out-of-wedlock births in families receiving assistance under the State program under this part in the State for the most recent fiscal year for which information is avail- able; over ”(II) the total number of births in families re- ceiving assistance under the State program under this part in the State for such year. ”(ii) NET CHANGES IN THE OUT-OF-WEDLOCK RATIO.\u2014The difference between the ratio described in subparagraph (A)(i) with respect to a State for the most recent fiscal year for which such information is avail- 53 able and the ratio with respect to the State for the im- mediately preceding year. ”(2) ANNUAL REVIEW.\u2014The Secretary shall review the pro- grams of the 5 States most recently ranked highest under para- graph (1) and the 5 States most recently ranked the lowest under paragraph (1). ”(f) STATE-INITIATED EVALUATIONS.\u2014A State shall be eligible to receive funding to evaluate the State program funded under this part if\u2014 ”(1) the State submits a proposal to the Secretary for the evaluation; ”(2) the Secretary determines that the design and approach of the evaluation is rigorous and is likely to yield information that is credible and will be useful to other States, and ”(3) unless otherwise waived by the Secretary, the State contributes to the cost of the evaluation, from non-Federal sources, an amount equal to at least 10 percent of the cost of the evaluation. ”(g) REPORT ON CIRCUMSTANCES OF CERTAIN CHILDREN AND FAMILIES.\u2014 ”(1) IN GENERAL.\u2014Beginning 3 years after the date of the enactment of this Act, the Secretary of Health and Human Serv- ices shall prepare and submit to the Committees on Ways and Means and on Economic and Educational Opportunities of the House of Representatives and to the Committees on Finance and on Labor and Resources of the Senate annual reports that examine in detail the matters described in paragraph (2) with respect to each of the following groups for the period after such enactment: ”(A) Individuals who were children in families that have become ineligible for assistance under a State pro- gram funded under this part by reason of having reached a time limit on the provision of such assistance. ”(B) Children born after such date of enactment to par- ents who, at the time of such birth, had not attained 20 years of age. ”(C) Individuals who, after such date of enactment, be- came parents before attaining 20 years of age. ”(2) MATTERS DESCRIBED.\u2014The matters described in this paragraph are the following: ”(A) The percentage of each group that has dropped out of secondary school (or the equivalent), and the percentage of each group at each level of educational attainment. ”(B) The percentage of each group that is employed. ”(C) The percentage of each group that has been con- victed of a crime or has been adjudicated as a delinquent. ”(D) The rate at which the members of each group are born, or have children, out-of-wedlock, and the percentage of each group that is married. ”(E) The percentage of each group that continues to participate in State programs funded under this part. ”(F) The percentage of each group that has health in- surance provided by a private entity (broken down by whether the insurance is provided through an employer or 54 otherwise), the percentage that has health insurance pro- vided by an agency of government, and the percentage that does not have health insurance. ”(G) The average income of the families of the members of each group. ”(H) Such other matters as the Secretary deems appro- priate. ”(h) FUNDING OF STUDIES AND DEMONSTRATIONS.\u2014 ”(1) IN GENERAL.\u2014Out of any money in the Treasury of the United States not otherwise appropriated, there are appro- priated $15,000,000 for each of fiscal years 1997 through 2002 for the purpose of paying\u2014 ”(A) the cost of conducting the research described in subsection (a); ”(B) the cost of developing and evaluating innovative approaches for reducing welfare dependency and increasing the well-being of minor children under subsection (b); ”(C) the Federal share of any State-initiated study ap- proved under subsection (f); and ”(D) an amount determined by the Secretary to be nec- essary to operate and evaluate demonstration projects, re- lating to this part, that are in effect or approved under sec- tion 1115 as of September 30, 1995, and are continued after such date. ”(2) ALLOCATION.\u2014Of the amount appropriated under paragraph (1) for a fiscal year\u2014 ”(A) 50 percent shall be allocated for the purposes de- scribed in subparagraphs (A) and (B) of paragraph (1), and ”(B) 50 percent shall be allocated for the purposes de- scribed in subparagraphs (C) and (D) of paragraph (1). ”(3) DEMONSTRATIONS OF INNOVATIVE STRATEGIES.\u2014The Secretary may implement and evaluate demonstrations of inno- vative and promising strategies which\u2014 ”(A) provide one-time capital funds to establish, ex- pand, or replicate programs; ”(B) test performance-based grant-to-loan financing in which programs meeting performance targets receive grants while programs not meeting such targets repay funding on a prorated basis; and ”(C) test strategies in multiple States and types of com- munities. ”(i) CHILD POVERTY RATES.\u2014 ”(1) IN GENERAL.\u2014Not later than 90 days after the date of the enactment of this part, and annually thereafter, the chief ex- ecutive officer of each State shall submit to the Secretary a statement of the child poverty rate in the State as of such date of enactment or the date of the most recent prior statement under this paragraph. ”(2) SUBMISSION OF CORRECTIVE ACTION PLAN.\u2014Not later than 90 days after the date a State submits a statement under paragraph (1) which indicates that, as a result of the amend- ments made by section 103 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the child poverty rate of the State has increased by 5 percent or more since the 55 most recent prior statement under paragraph (1), the State shall prepare and submit to the Secretary a corrective action plan in accordance with paragraph (3). ”(3) CONTENTS OF PLAN.\u2014A corrective action plan submit- ted under paragraph (2) shall outline that manner in which the State will reduce the child poverty rate in the State. The plan shall include a description of the actions to be taken by the State under such plan. ”(4) COMPLIANCE WITH PLAN.\u2014A State that submits a cor- rective action plan that the Secretary has found contains the in- formation required by this subsection shall implement the cor- rective action plan until the State determines that the child pov- erty rate in the State is less than the lowest child poverty rate on the basis of which the State was required to submit the cor- rective action plan. ”(5) METHODOLOGY.\u2014The Secretary shall prescribe regula- tions establishing the methodology by which a State shall deter- mine the child poverty rate in the State. The methodology shall take into account factors including the number of children who receive free or reduced-price lunches, the number of food stamp households, and the county-by-county estimates of children in poverty as determined by the Census Bureau. ”SEC. 414. STUDY BY THE CENSUS BUREAU. ”(a) IN GENERAL.\u2014The Bureau of the Census shall continue to collect data on the 1992 and 1993 panels of the Survey of Income and Program Participation as necessary to obtain such information as will enable interested persons to evaluate the impact of the amendments made by title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 on a random national sample of recipients of assistance under State programs funded under this part and (as appropriate) other low income families, and in doing so, shall pay particular attention to the issues of out-of- wedlock birth, welfare dependency, the beginning and end of welfare spells, and the causes of repeat welfare spells, and shall obtain in- formation about the status of children participating in such panels. ”(b) APPROPRIATION.\u2014Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated $10,000,000 for each of fiscal years 1996, 1997, 1998, 1999, 2000, 2001, and 2002 for payment to the Bureau of the Census to carry out subsection (a). ”SEC. 415. WAIVERS. ”(a) CONTINUATION OF WAIVERS.\u2014 ”(1) WAIVERS IN EFFECT ON DATE OF ENACTMENT OF WEL- FARE REFORM.\u2014 ”(A) IN GENERAL.\u2014Except as provided in subparagraph (B), if any waiver granted to a State under section 1115 of this Act or otherwise which relates to the provision of as- sistance under a State plan under this part (as in effect on September 30, 1996) is in effect as of the date of the enact- ment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the amendments made by the Personal Responsibility and Work Opportunity Reconcili- ation Act of 1996 (other than by section 103(c) of the Per- 56 sonal Responsibility and Work Opportunity Reconciliation Act of 1996) shall not apply with respect to the State before the expiration (determined without regard to any exten- sions) of the waiver to the extent such amendments are in- consistent with the waiver. ”(B) FINANCING LIMITATION.\u2014Notwithstanding any other provision of law, beginning with fiscal year 1996, a State operating under a waiver described in subparagraph (A) shall be entitled to payment under section 403 for the fiscal year, in lieu of any other payment provided for in the waiver. ”(2) WAIVERS GRANTED SUBSEQUENTLY.\u2014 ”(A) IN GENERAL.\u2014Except as provided in subparagraph (B), if any waiver granted to a State under section 1115 of this Act or otherwise which relates to the provision of as- sistance under a State plan under this part (as in effect on September 30, 1996) is submitted to the Secretary before the date of the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and approved by the Secretary on or before July 1, 1997, and the State demonstrates to the satisfaction of the Secretary that the waiver will not result in Federal expenditures under title IV of this Act (as in effect without regard to the amend- ments made by the Personal Responsibility and Work Op- portunity Reconciliation Act of 1996) that are greater than would occur in the absence of the waiver, the amendments made by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (other than by section 103(c) of the Personal Responsibility and Work Opportunity Rec- onciliation Act of 1996) shall not apply with respect to the State before the expiration (determined without regard to any extensions) of the waiver to the extent the amendments made by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 are inconsistent with the waiver. ”(B) NO EFFECT ON NEW WORK REQUIREMENTS.\u2014Not- withstanding subparagraph (A), a waiver granted under section 1115 or otherwise which relates to the provision of assistance under a State program funded under this part (as in effect on September 30, 1996) shall not affect the ap- plicability of section 407 to the State. ”(b) STATE OPTION TO TERMINATE WAIVER.\u2014 ”(1) IN GENERAL.\u2014A State may terminate a waiver de- scribed in subsection (a) before the expiration of the waiver. ”(2) REPORT.\u2014A State which terminates a waiver under paragraph (1) shall submit a report to the Secretary summariz- ing the waiver and any available information concerning the re- sult or effect of the waiver. ”(3) HOLD HARMLESS PROVISION.\u2014 ”(A) IN GENERAL.\u2014Notwithstanding any other provi- sion of law, a State that, not later than the date described in subparagraph (B) of this paragraph, submits a written request to terminate a waiver described in subsection (a) shall be held harmless for accrued cost neutrality liabilities incurred under the waiver. 57 ”(B) DATE DESCRIBED.\u2014The date described in this sub- paragraph is 90 days following the adjournment of the first regular session of the State legislature that begins after the date of the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. ”(c) SECRETARIAL ENCOURAGEMENT OF CURRENT WAIVERS.\u2014 The Secretary shall encourage any State operating a waiver de- scribed in subsection (a) to continue the waiver and to evaluate, using random sampling and other characteristics of accepted sci- entific evaluations, the result or effect of the waiver. ”(d) CONTINUATION OF INDIVIDUAL WAIVERS.\u2014A State may elect to continue 1 or more individual waivers described in subsection (a). ”SEC. 416. ADMINISTRATION. ”The programs under this part and part D shall be adminis- tered by an Assistant Secretary for Family Support within the De- partment of Health and Human Services, who shall be appointed by the President, by and with the advice and consent of the Senate, and who shall be in addition to any other Assistant Secretary of Health and Human Services provided for by law, and the Secretary shall reduce the Federal workforce within the Department of Health and Human Services by an amount equal to the sum of 75 percent of the full-time equivalent positions at such Department that relate to any direct spending program, or any program funded through discretionary spending, that has been converted into a block grant program under the Personal Responsibility and Work Opportunity Act of 1996 and the amendments made by such Act, and by an amount equal to 75 percent of that portion of the total full-time equivalent departmental management positions at such Department that bears the same relationship to the amount appropriated for any direct spending program, or any program funded through discre- tionary spending, that has been converted into a block grant pro- gram under the Personal Responsibility and Work Opportunity Act of 1996 and the amendments made by such Act, as such amount re- lates to the total amount appropriated for use by such Department, and, notwithstanding any other provision of law, the Secretary shall take such actions as may be necessary, including reductions in force actions, consistent with sections 3502 and 3595 of title 5, United States Code, to reduce the full-time equivalent positions within the Department of Health and Human Services by 245 full-time equiva- lent positions related to the program converted into a block grant under the amendment made by section 2103 of the Personal Respon- sibility and Work Opportunity Act of 1996, and by 60 full-time equivalent managerial positions in the Department. ”SEC. 417. LIMITATION ON FEDERAL AUTHORITY. ”No officer or employee of the Federal Government may regulate the conduct of States under this part or enforce any provision of this part, except to the extent expressly provided in this part.”; and (2) by inserting after such section 418 the following: ”SEC. 419. DEFINITIONS. ”As used in this part: ”(1) ADULT.\u2014The term ‘adult’ means an individual who is not a minor child. 58 ”(2) MINOR CHILD.\u2014The term ‘minor child’ means an indi- vidual who\u2014 ”(A) has not attained 18 years of age; or ”(B) has not attained 19 years of age and is a full-time student in a secondary school (or in the equivalent level of vocational or technical training). ”(3) FISCAL YEAR.\u2014The term ‘fiscal year’ means any 12- month period ending on September 30 of a calendar year. ”(4) INDIAN, INDIAN TRIBE, AND TRIBAL ORGANIZATION.\u2014 ”(A) IN GENERAL.\u2014Except as provided in subparagraph (B), the terms ‘Indian’, ‘Indian tribe’, and ‘tribal organiza- tion’ have the meaning given such terms by section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b). ”(B) SPECIAL RULE FOR INDIAN TRIBES IN ALASKA.\u2014The term ‘Indian tribe’ means, with respect to the State of Alas- ka, only the Metlakatla Indian Community of the Annette Islands Reserve and the following Alaska Native regional nonprofit corporations: ”(i) Arctic Slope Native Association. ”(ii) Kawerak, Inc. ”(iii) Maniilaq Association. ”(iv) Association of Village Council Presidents. ”(v) Tanana Chiefs Conference. ”(vi) Cook Inlet Tribal Council. ”(vii) Bristol Bay Native Association. ”(viii) Aleutian and Pribilof Island Association. ”(ix) Chugachmuit. ”(x) Tlingit Haida Central Council. ”(xi) Kodiak Area Native Association. ”(xii) Copper River Native Association. ”(5) STATE.\u2014Except as otherwise specifically provided, the term ‘State’ means the 50 States of the United States, the Dis- trict of Columbia, the Commonwealth of Puerto Rico, the Unit- ed States Virgin Islands, Guam, and American Samoa.”. (b) GRANTS TO OUTLYING AREAS.\u2014Section 1108 (42 U.S.C. 1308) is amended\u2014 (1) by striking subsections (d) and (e); (2) by redesignating subsection (c) as subsection (f); and (3) by striking all that precedes subsection (c) and inserting the following: ”SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN IS- LANDS, GUAM, AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS. ”(a) LIMITATION ON TOTAL PAYMENTS TO EACH TERRITORY.\u2014 Notwithstanding any other provision of this Act, the total amount certified by the Secretary of Health and Human Services under ti- tles I, X, XIV, and XVI, under parts A and E of title IV, and under subsection (b) of this section, for payment to any territory for a fiscal year shall not exceed the ceiling amount for the territory for the fis- cal year. ”(b) ENTITLEMENT TO MATCHING GRANT.\u2014 59 ”(1) IN GENERAL.\u2014Each territory shall be entitled to receive from the Secretary for each fiscal year a grant in an amount equal to 75 percent of the amount (if any) by which\u2014 ”(A) the total expenditures of the territory during the fiscal year under the territory programs funded under parts A and E of title IV; exceeds ”(B) the sum of\u2014 ”(i) the amount of the family assistance grant pay- able to the territory without regard to section 409; and ”(ii) the total amount expended by the territory during fiscal year 1995 pursuant to parts A and F of title IV (as so in effect), other than for child care. ”(2) APPROPRIATION.\u2014Out of any money in the Treasury of the United States not otherwise appropriated, there are appro- priated for fiscal years 1997 through 2002, such sums as are necessary for grants under this paragraph. ”(c) DEFINITIONS.\u2014As used in this section: ”(1) TERRITORY.\u2014The term ‘territory’ means Puerto Rico, the Virgin Islands, Guam, and American Samoa. ”(2) CEILING AMOUNT.\u2014The term ‘ceiling amount’ means, with respect to a territory and a fiscal year, the mandatory ceil- ing amount with respect to the territory, reduced for the fiscal year in accordance with subsection (e), and reduced by the amount of any penalty imposed on the territory under any pro- vision of law specified in subsection (a) during the fiscal year. ”(3) FAMILY ASSISTANCE GRANT.\u2014The term ‘family assist- ance grant’ has the meaning given such term by section 403(a)(1)(B). ”(4) MANDATORY CEILING AMOUNT.\u2014The term ‘mandatory ceiling amount’ means\u2014 ”(A) $107,255,000 with respect to Puerto Rico; ”(B) $4,686,000 with respect to Guam; ”(C) $3,554,000 with respect to the Virgin Islands; and ”(D) $1,000,000 with respect to American Samoa. ”(5) TOTAL AMOUNT EXPENDED BY THE TERRITORY.\u2014The term ‘total amount expended by the territory’\u2014 ”(A) does not include expenditures during the fiscal year from amounts made available by the Federal Govern- ment; and ”(B) when used with respect to fiscal year 1995, also does not include\u2014 ”(i) expenditures during fiscal year 1995 under subsection (g) or (i) of section 402 (as in effect on Sep- tember 30, 1995); or ”(ii) any expenditures during fiscal year 1995 for which the territory (but for section 1108, as in effect on September 30, 1995) would have received reimburse- ment from the Federal Government. ”(d) AUTHORITY TO TRANSFER FUNDS TO CERTAIN PROGRAMS.\u2014 A territory to which an amount is paid under subsection (b) of this section may use the amount in accordance with section 404(d). ”(e) MAINTENANCE OF EFFORT.\u2014The ceiling amount with re- spect to a territory shall be reduced for a fiscal year by an amount equal to the amount (if any) by which\u2014 60 ”(1) the total amount expended by the territory under all programs of the territory operated pursuant to the provisions of law specified in subsection (a) (as such provisions were in effect for fiscal year 1995) for fiscal year 1995; exceeds ”(2) the total amount expended by the territory under all programs of the territory that are funded under the provisions of law specified in subsection (a) for the fiscal year that imme- diately precedes the fiscal year referred to in the matter preced- ing paragraph (1).”. (c) ELIMINATION OF CHILD CARE PROGRAMS UNDER THE SOCIAL SECURITY ACT.\u2014 (1) AFDC AND TRANSITIONAL CHILD CARE PROGRAMS.\u2014Sec- tion 402 (42 U.S.C. 602) is amended by striking subsection (g). (2) AT-RISK CHILD CARE PROGRAM.\u2014 (A) AUTHORIZATION.\u2014Section 402 (42 U.S.C. 602) is amended by striking subsection (i). (B) FUNDING PROVISIONS.\u2014Section 403 (42 U.S.C. 603) is amended by striking subsection (n). SEC. 104. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, OR PRI- VATE ORGANIZATIONS. (a) IN GENERAL.\u2014 (1) STATE OPTIONS.\u2014A State may\u2014 (A) administer and provide services under the pro- grams described in subparagraphs (A) and (B)(i) of para- graph (2) through contracts with charitable, religious, or private organizations; and (B) provide beneficiaries of assistance under the pro- grams described in subparagraphs (A) and (B)(ii) of para- graph (2) with certificates, vouchers, or other forms of dis- bursement which are redeemable with such organizations. (2) PROGRAMS DESCRIBED.\u2014The programs described in this paragraph are the following programs: (A) A State program funded under part A of title IV of the Social Security Act (as amended by section 103(a) of this Act). (B) Any other program established or modified under title I or II of this Act, that\u2014 (i) permits contracts with organizations; or (ii) permits certificates, vouchers, or other forms of disbursement to be provided to beneficiaries, as a means of providing assistance. (b) RELIGIOUS ORGANIZATIONS.\u2014The purpose of this section is to allow States to contract with religious organizations, or to allow religious organizations to accept certificates, vouchers, or other forms of disbursement under any program described in subsection (a)(2), on the same basis as any other nongovernmental provider without impairing the religious character of such organizations, and without diminishing the religious freedom of beneficiaries of as- sistance funded under such program. (c) NONDISCRIMINATION AGAINST RELIGIOUS ORGANIZATIONS.\u2014 In the event a State exercises its authority under subsection (a), reli- gious organizations are eligible, on the same basis as any other pri- vate organization, as contractors to provide assistance, or to accept certificates, vouchers, or other forms of disbursement, under any 61 program described in subsection (a)(2) so long as the programs are implemented consistent with the Establishment Clause of the United States Constitution. Except as provided in subsection (k), neither the Federal Government nor a State receiving funds under such pro- grams shall discriminate against an organization which is or ap- plies to be a contractor to provide assistance, or which accepts cer- tificates, vouchers, or other forms of disbursement, on the basis that the organization has a religious character. (d) RELIGIOUS CHARACTER AND FREEDOM.\u2014 (1) RELIGIOUS ORGANIZATIONS.\u2014A religious organization with a contract described in subsection (a)(1)(A), or which ac- cepts certificates, vouchers, or other forms of disbursement under subsection (a)(1)(B), shall retain its independence from Federal, State, and local governments, including such organiza- tion’s control over the definition, development, practice, and ex- pression of its religious beliefs. (2) ADDITIONAL SAFEGUARDS.\u2014Neither the Federal Govern- ment nor a State shall require a religious organization to\u2014 (A) alter its form of internal governance; or (B) remove religious art, icons, scripture, or other sym- bols; in order to be eligible to contract to provide assistance, or to ac- cept certificates, vouchers, or other forms of disbursement, fund- ed under a program described in subsection (a)(2). (e) RIGHTS OF BENEFICIARIES OF ASSISTANCE.\u2014 (1) IN GENERAL.\u2014If an individual described in paragraph (2) has an objection to the religious character of the organiza- tion or institution from which the individual receives, or would receive, assistance funded under any program described in sub- section (a)(2), the State in which the individual resides shall provide such individual (if otherwise eligible for such assist- ance) within a reasonable period of time after the date of such objection with assistance from an alternative provider that is accessible to the individual and the value of which is not less than the value of the assistance which the individual would have received from such organization. (2) INDIVIDUAL DESCRIBED.\u2014An individual described in this paragraph is an individual who receives, applies for, or re- quests to apply for, assistance under a program described in subsection (a)(2). (f) EMPLOYMENT PRACTICES.\u2014A religious organization’s exemp- tion provided under section 702 of the Civil Rights Act of 1964 (42 U.S.C. 2000e 1a) regarding employment practices shall not be af- fected by its participation in, or receipt of funds from, programs de- scribed in subsection (a)(2). (g) NONDISCRIMINATION AGAINST BENEFICIARIES.\u2014Except as otherwise provided in law, a religious organization shall not dis- criminate against an individual in regard to rendering assistance funded under any program described in subsection (a)(2) on the basis of religion, a religious belief, or refusal to actively participate in a religious practice. (h) FISCAL ACCOUNTABILITY.\u2014 (1) IN GENERAL.\u2014Except as provided in paragraph (2), any religious organization contracting to provide assistance funded 62 under any program described in subsection (a)(2) shall be sub- ject to the same regulations as other contractors to account in accord with generally accepted auditing principles for the use of such funds provided under such programs. (2) LIMITED AUDIT.\u2014If such organization segregates Fed- eral funds provided under such programs into separate ac- counts, then only the financial assistance provided with such funds shall be subject to audit. (i) COMPLIANCE.\u2014Any party which seeks to enforce its rights under this section may assert a civil action for injunctive relief ex- clusively in an appropriate State court against the entity or agency that allegedly commits such violation. (j) LIMITATIONS ON USE OF FUNDS FOR CERTAIN PURPOSES.\u2014 No funds provided directly to institutions or organizations to pro- vide services and administer programs under subsection (a)(1)(A) shall be expended for sectarian worship, instruction, or proselytiza- tion. (k) PREEMPTION.\u2014Nothing in this section shall be construed to preempt any provision of a State constitution or State statute that prohibits or restricts the expenditure of State funds in or by reli- gious organizations. SEC. 105. CENSUS DATA ON GRANDPARENTS AS PRIMARY CAREGIVERS FOR THEIR GRANDCHILDREN. (a) IN GENERAL.\u2014Not later than 90 days after the date of the enactment of this Act, the Secretary of Commerce, in carrying out section 141 of title 13, United States Code, shall expand the data collection efforts of the Bureau of the Census (in this section referred to as the ”Bureau”) to enable the Bureau to collect statistically sig- nificant data, in connection with its decennial census and its mid- decade census, concerning the growing trend of grandparents who are the primary caregivers for their grandchildren. (b) EXPANDED CENSUS QUESTION.\u2014In carrying out subsection (a), the Secretary of Commerce shall expand the Bureau’s census question that details households which include both grandparents and their grandchildren. The expanded question shall be formu- lated to distinguish between the following households: (1) A household in which a grandparent temporarily pro- vides a home for a grandchild for a period of weeks or months during periods of parental distress. (2) A household in which a grandparent provides a home for a grandchild and serves as the primary caregiver for the grandchild. SEC. 106. REPORT ON DATA PROCESSING. (a) IN GENERAL.\u2014Within 6 months after the date of the enact- ment of this Act, the Secretary of Health and Human Services shall prepare and submit to the Congress a report on\u2014 (1) the status of the automated data processing systems op- erated by the States to assist management in the administra- tion of State programs under part A of title IV of the Social Se- curity Act (whether in effect before or after October 1, 1995); and (2) what would be required to establish a system capable of\u2014 63 (A) tracking participants in public programs over time; and (B) checking case records of the States to determine whether individuals are participating in public programs of 2 or more States. (b) PREFERRED CONTENTS.\u2014The report required by subsection (a) should include\u2014 (1) a plan for building on the automated data processing systems of the States to establish a system with the capabilities described in subsection (a)(2); and (2) an estimate of the amount of time required to establish such a system and of the cost of establishing such a system. SEC. 107. STUDY ON ALTERNATIVE OUTCOMES MEASURES. (a) STUDY.\u2014The Secretary shall, in cooperation with the States, study and analyze outcomes measures for evaluating the success of the States in moving individuals out of the welfare system through employment as an alternative to the minimum participation rates described in section 407 of the Social Security Act. The study shall include a determination as to whether such alternative outcomes measures should be applied on a national or a State-by-State basis and a preliminary assessment of the effects of section 409(a)(7)(C) of such Act. (b) REPORT.\u2014Not later than September 30, 1998, the Secretary shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report containing the findings of the study required by subsection (a). SEC. 108. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT. (a) AMENDMENTS TO TITLE II.\u2014 (1) Section 205(c)(2)(C)(vi) (42 U.S.C. 405(c)(2)(C)(vi)), as so redesignated by section 321(a)(9)(B) of the Social Security Inde- pendence and Program Improvements Act of 1994, is amend- ed\u2014 (A) by inserting ”an agency administering a program funded under part A of title IV or” before ”an agency oper- ating”; and (B) by striking ”A or D of title IV of this Act” and in- serting ”D of such title”. (2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is amended by inserting ”under a State program funded under” before ”part A of title IV”. (b) AMENDMENTS TO PART B OF TITLE IV.\u2014Section 422(b)(2) (42 U.S.C. 622(b)(2)) is amended\u2014 (1) by striking ”plan approved under part A of this title” and inserting ”program funded under part A”; and (2) by striking ”part E of this title” and inserting ”under the State plan approved under part E”. (c) AMENDMENTS TO PART D OF TITLE IV.\u2014 (1) Section 451 (42 U.S.C. 651) is amended by striking ”aid” and inserting ”assistance under a State program funded”. (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is amended\u2014 64 (A) by striking ”aid to families with dependent chil- dren” and inserting ”assistance under a State program funded under part A”; (B) by striking ”such aid” and inserting ”such assist- ance”; and (C) by striking ”under section 402(a)(26) or” and insert- ing ”pursuant to section 408(a)(3) or under section”. (3) Section 452(a)(10)(F) (42 U.S.C. 652(a)(10)(F)) is amended\u2014 (A) by striking ”aid under a State plan approved” and inserting ”assistance under a State program funded”; and (B) by striking ”in accordance with the standards re- ferred to in section 402(a)(26)(B)(ii)” and inserting ”by the State”. (4) Section 452(b) (42 U.S.C. 652(b)) is amended in the first sentence by striking ”aid under the State plan approved under part A” and inserting ”assistance under the State program funded under part A”. (5) Section 452(d)(3)(B)(i) (42 U.S.C. 652(d)(3)(B)(i)) is amended by striking ”1115(c)” and inserting ”1115(b)”. (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C. 652(g)(2)(A)(ii)(I)) is amended by striking ”aid is being paid under the State’s plan approved under part A or E” and inserting ”assistance is being provided under the State program funded under part A”. (7) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended in the matter following clause (iii) by striking ”aid was being paid under the State’s plan approved under part A or E” and inserting ”assistance was being provided under the State pro- gram funded under part A”. (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended in the matter following subparagraph (B)\u2014 (A) by striking ”who is a dependent child” and insert- ing ”with respect to whom assistance is being provided under the State program funded under part A”; (B) by inserting ”by the State” after ”found”; and (C) by striking ”to have good cause for refusing to co- operate under section 402(a)(26)” and inserting ”to qualify for a good cause or other exception to cooperation pursuant to section 454(29)”. (9) Section 452(h) (42 U.S.C. 652(h)) is amended by strik- ing ”under section 402(a)(26)” and inserting ”pursuant to sec- tion 408(a)(3)”. (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is amended by striking ”aid under part A of this title” and inserting ”assist- ance under a State program funded under part A”. (11) Section 454(5)(A) (42 U.S.C. 654(5)(A))) is amended\u2014 (A) by striking ”under section 402(a)(26)” and inserting ”pursuant to section 408(a)(3)”; and (B) by striking ”; except that this paragraph shall not apply to such payments for any month following the first month in which the amount collected is sufficient to make such family ineligible for assistance under the State plan approved under part A;” and inserting a comma. 65 (12) Section 454(6)(D) (42 U.S.C. 654(6)(D)) is amended by striking ”aid under a State plan approved” and inserting ”as- sistance under a State program funded”. (13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is amended by striking ”under section 402(a)(26)”. (14) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is amend- ed by striking ”402(a)(26)” and inserting ”408(a)(3)”. (15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is amended by striking ”aid” and inserting ”assistance under a State program funded”. (16) Section 469(a) (42 U.S.C. 669(a)) is amended\u2014 (A) by striking ”aid under plans approved” and insert- ing ”assistance under State programs funded”; and (B) by striking ”such aid” and inserting ”such assist- ance”. (d) AMENDMENTS TO PART E OF TITLE IV.\u2014 (1) Section 470 (42 U.S.C. 670) is amended\u2014 (A) by striking ”would be” and inserting ”would have been”; and (B) by inserting ”(as such plan was in effect on June 1, 1995)” after ”part A”. (2) Section 471(a)(17) (42 U.S.C. 671(a)(17)) is amended by striking ”plans approved under parts A and D” and inserting ”program funded under part A and plan approved under part D”. (3) Section 472(a) (42 U.S.C. 672(a)) is amended\u2014 (A) in the matter preceding paragraph (1)\u2014 (i) by striking ”would meet” and inserting ”would have met”; (ii) by inserting ”(as such sections were in effect on June 1, 1995)” after ”407”; and (iii) by inserting ”(as so in effect)” after ”406(a)”; and (B) in paragraph (4)\u2014 (i) in subparagraph (A)\u2014 (I) by inserting ”would have” after ”(A)”; and (II) by inserting ”(as in effect on June 1, 1995)” after ”section 402”; and (ii) in subparagraph (B)(ii), by inserting ”(as in ef- fect on June 1, 1995)” after ”406(a)”. (4) Section 472(h) (42 U.S.C. 672(h)) is amended to read as follows: ”(h)(1) For purposes of title XIX, any child with respect to whom foster care maintenance payments are made under this section is deemed to be a dependent child as defined in section 406 (as in ef- fect as of June 1, 1995) and deemed to be a recipient of aid to fami- lies with dependent children under part A of this title (as so in ef- fect). For purposes of title XX, any child with respect to whom foster care maintenance payments are made under this section is deemed to be a minor child in a needy family under a State program funded under part A of this title and is deemed to be a recipient of assist- ance under such part. ”(2) For purposes of paragraph (1), a child whose costs in a fos- ter family home or child care institution are covered by the foster 66 care maintenance payments being made with respect to the child’s minor parent, as provided in section 475(4)(B), shall be considered a child with respect to whom foster care maintenance payments are made under this section.”. (5) Section 473(a)(2) (42 U.S.C. 673(a)(2)) is amended\u2014 (A) in subparagraph (A)(i)\u2014 (i) by inserting ”(as such sections were in effect on June 1, 1995)” after ”407”; (ii) by inserting ”(as so in effect)” after ”specified in section 406(a)”; and (iii) by inserting ”(as such section was in effect on June 1, 1995)” after ”403”; (B) in subparagraph (B)(i)\u2014 (i) by inserting ”would have” after ”(B)(i)”; and (ii) by inserting ”(as in effect on June 1, 1995)” after ”section 402”; and (C) in subparagraph (B)(ii)(II), by inserting ”(as in ef- fect on June 1, 1995)” after ”406(a)”. (6) Section 473(b) (42 U.S.C. 673(b)) is amended to read as follows: ”(b)(1) For purposes of title XIX, any child who is described in paragraph (3) is deemed to be a dependent child as defined in sec- tion 406 (as in effect as of June 1, 1995) and deemed to be a recipi- ent of aid to families with dependent children under part A of this title (as so in effect) in the State where such child resides. ”(2) For purposes of title XX, any child who is described in paragraph (3) is deemed to be a minor child in a needy family under a State program funded under part A of this title and deemed to be a recipient of assistance under such part. ”(3) A child described in this paragraph is any child\u2014 ”(A)(i) who is a child described in subsection (a)(2), and ”(ii) with respect to whom an adoption assistance agree- ment is in effect under this section (whether or nor adoption as- sistance payments are provided under the agreement or are being made under this section), including any such child who has been placed for adoption in accordance with applicable State and local law (whether or not an interlocutory or other ju- dicial decree of adoption has been issued), or ”(B) with respect to whom foster care maintenance pay- ments are being made under section 472. ”(4) For purposes of paragraphs (1) and (2), a child whose costs in a foster family home or child-care institution are covered by the foster care maintenance payments being made with respect to the child’s minor parent, as provided in section 475(4)(B), shall be con- sidered a child with respect to whom foster care maintenance pay- ments are being made under section 472.”. (e) REPEAL OF PART F OF TITLE IV.\u2014Part F of title IV (42 U.S.C. 681 687) is repealed. (f) AMENDMENT TO TITLE X.\u2014Section 1002(a)(7) (42 U.S.C. 1202(a)(7)) is amended by striking ”aid to families with dependent children under the State plan approved under section 402 of this Act” and inserting ”assistance under a State program funded under part A of title IV”. (g) AMENDMENTS TO TITLE XI.\u2014 67 (1) Section 1109 (42 U.S.C. 1309) is amended by striking ”or part A of title IV,”. (2) Section 1115 (42 U.S.C. 1315) is amended\u2014 (A) in subsection (a)(2)\u2014 (i) by inserting ”(A)” after ”(2)”; (ii) by striking ”403,”; (iii) by striking the period at the end and inserting ”, and”; and (iv) by adding at the end the following new sub- paragraph: ”(B) costs of such project which would not otherwise be a permissible use of funds under part A of title IV and which are not included as part of the costs of projects under section 1110, shall to the extent and for the period prescribed by the Sec- retary, be regarded as a permissible use of funds under such part.”; (B) in subsection (c)(3), by striking ”the program of aid to families with dependent children” and inserting ”part A of such title”; and (C) by striking subsection (b) and redesignating sub- sections (c) and (d) as subsections (b) and (c), respectively. (3) Section 1116 (42 U.S.C. 1316) is amended\u2014 (A) in each of subsections (a)(1), (b), and (d), by strik- ing ”or part A of title IV,”; and (B) in subsection (a)(3), by striking ”404,”. (4) Section 1118 (42 U.S.C. 1318) is amended\u2014 (A) by striking ”403(a),”; (B) by striking ”and part A of title IV,”; and (C) by striking ”, and shall, in the case of American Samoa, mean 75 per centum with respect to part A of title IV”. (5) Section 1119 (42 U.S.C. 1319) is amended\u2014 (A) by striking ”or part A of title IV”; and (B) by striking ”403(a),”. (6) Section 1133(a) (42 U.S.C. 1320b 3(a)) is amended by striking ”or part A of title IV,”. (7) Section 1136 (42 U.S.C. 1320b 6) is repealed. (8) Section 1137 (42 U.S.C. 1320b 7) is amended\u2014 (A) in subsection (b), by striking paragraph (1) and in- serting the following: ”(1) any State program funded under part A of title IV of this Act;”; and (B) in subsection (d)(1)(B)\u2014 (i) by striking ”In this subsection\u2014” and all that follows through ”(ii) in” and inserting ”In this sub- section, in”; (ii) by redesignating subclauses (I), (II), and (III) as clauses (i), (ii), and (iii); and (iii) by moving such redesignated material 2 ems to the left. (h) AMENDMENT TO TITLE XIV.\u2014Section 1402(a)(7) (42 U.S.C. 1352(a)(7)) is amended by striking ”aid to families with dependent children under the State plan approved under section 402 of this 68 Act” and inserting ”assistance under a State program funded under part A of title IV”. (i) AMENDMENT TO TITLE XVI AS IN EFFECT WITH RESPECT TO THE TERRITORIES.\u2014Section 1602(a)(11), as in effect without regard to the amendment made by section 301 of the Social Security Amendments of 1972 (42 U.S.C. 1382 note), is amended by striking ”aid under the State plan approved” and inserting ”assistance under a State program funded”. (j) AMENDMENT TO TITLE XVI AS IN EFFECT WITH RESPECT TO THE STATES.\u2014Section 1611(c)(5)(A) (42 U.S.C. 1382(c)(5)(A)) is amended to read as follows: ”(A) a State program funded under part A of title IV,”. (k) AMENDMENT TO TITLE XIX.\u2014Section 1902(j) (42 U.S.C. 1396a(j)) is amended by striking ”1108(c)” and inserting ”1108(f)”. SEC. 109. CONFORMING AMENDMENTS TO THE FOOD STAMP ACT OF 1977 AND RELATED PROVISIONS. (a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended\u2014 (1) in the second sentence of subsection (a), by striking ”plan approved” and all that follows through ”title IV of the So- cial Security Act” and inserting ”program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)”; (2) in subsection (d)\u2014 (A) in paragraph (5), by striking ”assistance to families with dependent children” and inserting ”assistance under a State program funded”; and (B) by striking paragraph (13) and redesignating para- graphs (14), (15), and (16) as paragraphs (13), (14), and (15), respectively; (3) in subsection (j), by striking ”plan approved under part A of title IV of such Act (42 U.S.C. 601 et seq.)” and inserting ”program funded under part A of title IV of the Act (42 U.S.C. 601 et seq.)”; and (4) by striking subsection (m). (b) Section 6 of such Act (7 U.S.C. 2015) is amended\u2014 (1) in subsection (c)(5), by striking ”the State plan ap- proved” and inserting ”the State program funded”; and (2) in subsection (e)(6), by striking ”aid to families with de- pendent children” and inserting ”benefits under a State pro- gram funded”. (c) Section 16(g)(4) of such Act (7 U.S.C. 2025(g)(4)) is amended by striking ”State plans under the Aid to Families with Dependent Children Program under” and inserting ”State programs funded under part A of”. (d) Section 17 of such Act (7 U.S.C. 2026) is amended\u2014 (1) in the first sentence of subsection (b)(1)(A), by striking ”to aid to families with dependent children under part A of title IV of the Social Security Act” and inserting ”or are receiving as- sistance under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)”; and (2) in subsection (b)(3), by adding at the end the following new subparagraph: ”(I) The Secretary may not grant a waiver under this para- graph on or after the date of enactment of this subparagraph. Any 69 reference in this paragraph to a provision of title IV of the Social Security Act shall be deemed to be a reference to such provision as in effect on the day before such date.”; (e) Section 20 of such Act (7 U.S.C. 2029) is amended\u2014 (1) in subsection (a)(2)(B) by striking ”operating\u2014” and all that follows through ”(ii) any other” and inserting ”operating any”; and (2) in subsection (b)\u2014 (A) in paragraph (1)\u2014 (i) by striking ”(b)(1) A household” and inserting ”(b) A household”; and (ii) in subparagraph (B), by striking ”training pro- gram” and inserting ”activity”; (B) by striking paragraph (2); and (C) by redesignating subparagraphs (A) through (F) as paragraphs (1) through (6), respectively. (f) Section 5(h)(1) of the Agriculture and Consumer Protection Act of 1973 (Public Law 93 186; 7 U.S.C. 612c note) is amended by striking ”the program for aid to families with dependent children” and inserting ”the State program funded”. (g) Section 9 of the National School Lunch Act (42 U.S.C. 1758) is amended\u2014 (1) in subsection (b)\u2014 (A) in paragraph (2)(C)(ii)(II)\u2014 (i) by striking ”program for aid to families with de- pendent children” and inserting ”State program fund- ed”; and (ii) by inserting before the period at the end the fol- lowing: ”that the Secretary determines complies with standards established by the Secretary that ensure that the standards under the State program are comparable to or more restrictive than those in effect on June 1, 1995”; and (B) in paragraph (6)\u2014 (i) in subparagraph (A)(ii)\u2014 (I) by striking ”an AFDC assistance unit (under the aid to families with dependent children program authorized” and inserting ”a family (under the State program funded”; and (II) by striking ”, in a State” and all that fol- lows through ”9902(2)))” and inserting ”that the Secretary determines complies with standards es- tablished by the Secretary that ensure that the standards under the State program are com- parable to or more restrictive than those in effect on June 1, 1995”; and (ii) in subparagraph (B), by striking ”aid to fami- lies with dependent children” and inserting ”assistance under the State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) that the Secretary determines complies with standards established by the Secretary that ensure that the stand- ards under the State program are comparable to or 70 more restrictive than those in effect on June 1, 1995”; and (2) in subsection (d)(2)(C)\u2014 (A) by striking ”program for aid to families with de- pendent children” and inserting ”State program funded”; and (B) by inserting before the period at the end the follow- ing: ”that the Secretary determines complies with standards established by the Secretary that ensure that the standards under the State program are comparable to or more restric- tive than those in effect on June 1, 1995”. (h) Section 17(d)(2)(A)(ii)(II) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(2)(A)(ii)(II)) is amended\u2014 (1) by striking ”program for aid to families with dependent children established” and inserting ”State program funded”; and (2) by inserting before the semicolon the following: ”that the Secretary determines complies with standards established by the Secretary that ensure that the standards under the State program are comparable to or more restrictive than those in ef- fect on June 1, 1995”. SEC. 110. CONFORMING AMENDMENTS TO OTHER LAWS. (a) Subsection (b) of section 508 of the Unemployment Com- pensation Amendments of 1976 (42 U.S.C. 603a; Public Law 94 566; 90 Stat. 2689) is amended to read as follows: ”(b) PROVISION FOR REIMBURSEMENT OF EXPENSES.\u2014For pur- poses of section 455 of the Social Security Act, expenses incurred to reimburse State employment offices for furnishing information re- quested of such offices\u2014 ”(1) pursuant to the third sentence of section 3(a) of the Act entitled ‘An Act to provide for the establishment of a national employment system and for cooperation with the States in the promotion of such system, and for other purposes’, approved June 6, 1933 (29 U.S.C. 49b(a)), or ”(2) by a State or local agency charged with the duty of car- rying a State plan for child support approved under part D of title IV of the Social Security Act, shall be considered to constitute expenses incurred in the adminis- tration of such State plan.”. (b) Section 9121 of the Omnibus Budget Reconciliation Act of 1987 (42 U.S.C. 602 note) is repealed. (c) Section 9122 of the Omnibus Budget Reconciliation Act of 1987 (42 U.S.C. 602 note) is repealed. (d) Section 221 of the Housing and Urban-Rural Recovery Act of 1983 (42 U.S.C. 602 note), relating to treatment under AFDC of certain rental payments for federally assisted housing, is repealed. (e) Section 159 of the Tax Equity and Fiscal Responsibility Act of 1982 (42 U.S.C. 602 note) is repealed. (f) Section 202(d) of the Social Security Amendments of 1967 (81 Stat. 882; 42 U.S.C. 602 note) is repealed. (g) Section 903 of the Stewart B. McKinney Homeless Assistance Amendments Act of 1988 (42 U.S.C. 11381 note), relating to dem- onstration projects to reduce number of AFDC families in welfare hotels, is amended\u2014 71 (1) in subsection (a), by striking ”aid to families with de- pendent children under a State plan approved” and inserting ”assistance under a State program funded”; and (2) in subsection (c), by striking ”aid to families with de- pendent children in the State under a State plan approved” and inserting ”assistance in the State under a State program fund- ed”. (h) The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended\u2014 (1) in section 404C(c)(3) (20 U.S.C. 1070a 23(c)(3)), by striking ”(Aid to Families with Dependent Children)”; and (2) in section 480(b)(2) (20 U.S.C. 1087vv(b)(2)), by striking ”aid to families with dependent children under a State plan ap- proved” and inserting ”assistance under a State program fund- ed”. (i) The Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2301 et seq.) is amended\u2014 (1) in section 231(d)(3)(A)(ii) (20 U.S.C. 2341(d)(3)(A)(ii)), by striking ”The program for aid to dependent children” and in- serting ”The State program funded”; (2) in section 232(b)(2)(B) (20 U.S.C. 2341a(b)(2)(B)), by striking ”the program for aid to families with dependent chil- dren” and inserting ”the State program funded”; and (3) in section 521(14)(B)(iii) (20 U.S.C. 2471(14)(B)(iii)), by striking ”the program for aid to families with dependent chil- dren” and inserting ”the State program funded”. (j) The Elementary and Secondary Education Act of 1965 (20 U.S.C. 2701 et seq.) is amended\u2014 (1) in section 1113(a)(5) (20 U.S.C. 6313(a)(5)), by striking ”Aid to Families with Dependent Children program” and insert- ing ”State program funded under part A of title IV of the Social Security Act”; (2) in section 1124(c)(5) (20 U.S.C. 6333(c)(5)), by striking ”the program of aid to families with dependent children under a State plan approved under” and inserting ”a State program funded under part A of”; and (3) in section 5203(b)(2) (20 U.S.C. 7233(b)(2))\u2014 (A) in subparagraph (A)(xi), by striking ”Aid to Fami- lies with Dependent Children benefits” and inserting ”as- sistance under a State program funded under part A of title IV of the Social Security Act”; and (B) in subparagraph (B)(viii), by striking ”Aid to Fami- lies with Dependent Children” and inserting ”assistance under the State program funded under part A of title IV of the Social Security Act”. (k) The 4th proviso of chapter VII of title I of Public Law 99 88 (25 U.S.C. 13d 1) is amended to read as follows: ”Provided fur- ther, That general assistance payments made by the Bureau of In- dian Affairs shall be made\u2014 ”(1) after April 29, 1985, and before October 1, 1995, on the basis of Aid to Families with Dependent Children (AFDC) standards of need; and 72 ”(2) on and after October 1, 1995, on the basis of standards of need established under the State program funded under part A of title IV of the Social Security Act, except that where a State ratably reduces its AFDC or State pro- gram payments, the Bureau shall reduce general assistance pay- ments in such State by the same percentage as the State has re- duced the AFDC or State program payment.”. (l) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) is amended\u2014 (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by striking all that follows ”agency as” and inserting ”being eligible for finan- cial assistance under part A of title IV of the Social Security Act and as having continually received such financial assist- ance during the 90-day period which immediately precedes the date on which such individual is hired by the employer.”; (2) in section 3304(a)(16) (26 U.S.C. 3304(a)(16)), by strik- ing ”eligibility for aid or services,” and all that follows through ”children approved” and inserting ”eligibility for assistance, or the amount of such assistance, under a State program funded”; (3) in section 6103(l)(7)(D)(i) (26 U.S.C. 6103(l)(7)(D)(i)), by striking ”aid to families with dependent children provided under a State plan approved” and inserting ”a State program funded”; (4) in section 6103(l)(10) (26 U.S.C. 6103(l)(10))\u2014 (A) by striking ”(c) or (d)” each place it appears and in- serting ”(c), (d), or (e)”; and (B) by adding at the end of subparagraph (B) the fol- lowing new sentence: ”Any return information disclosed with respect to section 6402(e) shall only be disclosed to of- ficers and employees of the State agency requesting such in- formation.”; (5) in section 6103(p)(4) (26 U.S.C. 6103(p)(4)), in the mat- ter preceding subparagraph (A)\u2014 (A) by striking ”(5), (10)” and inserting ”(5)”; and (B) by striking ”(9), or (12)” and inserting ”(9), (10), or (12)”; (6) in section 6334(a)(11)(A) (26 U.S.C. 6334(a)(11)(A)), by striking ”(relating to aid to families with dependent children)”; (7) in section 6402 (26 U.S.C. 6402)\u2014 (A) in subsection (a), by striking ”(c) and (d)” and in- serting ”(c), (d), and (e)”; (B) by redesignating subsections (e) through (i) as sub- sections (f) through (j), respectively; and (C) by inserting after subsection (d) the following: ”(e) COLLECTION OF OVERPAYMENTS UNDER TITLE IV A OF THE SOCIAL SECURITY ACT.\u2014The amount of any overpayment to be re- funded to the person making the overpayment shall be reduced (after reductions pursuant to subsections (c) and (d), but before a credit against future liability for an internal revenue tax) in accord- ance with section 405(e) of the Social Security Act (concerning recov- ery of overpayments to individuals under State plans approved under part A of title IV of such Act).”; and (8) in section 7523(b)(3)(C) (26 U.S.C. 7523(b)(3)(C)), by striking ”aid to families with dependent children” and inserting 73 ”assistance under a State program funded under part A of title IV of the Social Security Act”. (m) Section 3(b) of the Wagner-Peyser Act (29 U.S.C. 49b(b)) is amended by striking ”State plan approved under part A of title IV” and inserting ”State program funded under part A of title IV”. (n) The Job Training Partnership Act (29 U.S.C. 1501 et seq.) is amended\u2014 (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by strik- ing ”(42 U.S.C. 601 et seq.)”; (2) in section 106(b)(6)(C) (29 U.S.C. 1516(b)(6)(C)), by striking ”State aid to families with dependent children records,” and inserting ”records collected under the State program fund- ed under part A of title IV of the Social Security Act,”; (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))\u2014 (A) by striking ”the JOBS program” and inserting ”the work activities required under title IV of the Social Security Act”; and (B) by striking the second sentence; (4) in section 123(c) (29 U.S.C. 1533(c))\u2014 (A) in paragraph (1)(E), by repealing clause (vi); and (B) in paragraph (2)(D), by repealing clause (v); (5) in section 203(b)(3) (29 U.S.C. 1603(b)(3)), by striking ”, including recipients under the JOBS program”; (6) in subparagraphs (A) and (B) of section 204(a)(1) (29 U.S.C. 1604(a)(1) (A) and (B)), by striking ”(such as the JOBS program)” each place it appears; (7) in section 205(a) (29 U.S.C. 1605(a)), by striking para- graph (4) and inserting the following: ”(4) the portions of title IV of the Social Security Act relat- ing to work activities;”; (8) in section 253 (29 U.S.C. 1632)\u2014 (A) in subsection (b)(2), by repealing subparagraph (C); and (B) in paragraphs (1)(B) and (2)(B) of subsection (c), by striking ”the JOBS program or” each place it appears; (9) in section 264 (29 U.S.C. 1644)\u2014 (A) in subparagraphs (A) and (B) of subsection (b)(1), by striking ”(such as the JOBS program)” each place it ap- pears; and (B) in subparagraphs (A) and (B) of subsection (d)(3), by striking ”and the JOBS program” each place it appears; (10) in section 265(b) (29 U.S.C. 1645(b)), by striking para- graph (6) and inserting the following: ”(6) the portion of title IV of the Social Security Act relating to work activities;”; (11) in the second sentence of section 429(e) (29 U.S.C. 1699(e)), by striking ”and shall be in an amount that does not exceed the maximum amount that may be provided by the State pursuant to section 402(g)(1)(C) of the Social Security Act (42 U.S.C. 602(g)(1)(C))”; (12) in section 454(c) (29 U.S.C. 1734(c)), by striking ”JOBS and”; (13) in section 455(b) (29 U.S.C. 1735(b)), by striking ”the JOBS program,”; 74 (14) in section 501(1) (29 U.S.C. 1791(1)), by striking ”aid to families with dependent children under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)” and inserting ”assistance under the State program funded under part A of title IV of the Social Security Act”; (15) in section 506(1)(A) (29 U.S.C. 1791e(1)(A)), by striking ”aid to families with dependent children” and inserting ”assist- ance under the State program funded”; (16) in section 508(a)(2)(A) (29 U.S.C. 1791g(a)(2)(A)), by striking ”aid to families with dependent children” and inserting ”assistance under the State program funded”; and (17) in section 701(b)(2)(A) (29 U.S.C. 1792(b)(2)(A))\u2014 (A) in clause (v), by striking the semicolon and insert- ing ”; and”; and (B) by striking clause (vi). (o) Section 3803(c)(2)(C)(iv) of title 31, United States Code, is amended to read as follows: ”(iv) assistance under a State program funded under part A of title IV of the Social Security Act;”. (p) Section 2605(b)(2)(A)(i) of the Low-Income Home Energy As- sistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)(i)) is amended to read as follows: ”(i) assistance under the State program funded under part A of title IV of the Social Security Act;”. (q) Section 303(f)(2) of the Family Support Act of 1988 (42 U.S.C. 602 note) is amended\u2014 (1) by striking ”(A)”; and (2) by striking subparagraphs (B) and (C). (r) The Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et seq.) is amended\u2014 (1) in the first section 255(h) (2 U.S.C. 905(h)), by striking ”Aid to families with dependent children (75 0412 0 1 609);” and inserting ”Block grants to States for temporary assistance for needy families;”; and (2) in section 256 (2 U.S.C. 906)\u2014 (A) by striking subsection (k); and (B) by redesignating subsection (l) as subsection (k). (s) The Immigration and Nationality Act (8 U.S.C. 1101 et seq.) is amended\u2014 (1) in section 210(f) (8 U.S.C. 1160(f)), by striking ”aid under a State plan approved under” each place it appears and inserting ”assistance under a State program funded under”; (2) in section 245A(h) (8 U.S.C. 1255a(h))\u2014 (A) in paragraph (1)(A)(i), by striking ”program of aid to families with dependent children” and inserting ”State program of assistance”; and (B) in paragraph (2)(B), by striking ”aid to families with dependent children” and inserting ”assistance under a State program funded under part A of title IV of the Social Security Act”; and (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)), by striking ”State plan approved” and inserting ”State program funded”. (t) Section 640(a)(4)(B)(i) of the Head Start Act (42 U.S.C. 9835(a)(4)(B)(i)) is amended by striking ”program of aid to families 75 with dependent children under a State plan approved” and insert- ing ”State program of assistance funded”. (u) Section 9 of the Act of April 19, 1950 (64 Stat. 47, chapter 92; 25 U.S.C. 639) is repealed. (v) Subparagraph (E) of section 213(d)(6) of the School-To-Work Opportunities Act of 1994 (20 U.S.C. 6143(d)(6)) is amended to read as follows: ”(E) part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) relating to work activities;”. (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United States Code, is amended by striking ”section 464 or 1137 of the Social Security Act” and inserting ”section 404(e), 464, or 1137 of the Social Secu- rity Act”. SEC. 111. DEVELOPMENT OF PROTOTYPE OF COUNTERFEIT-RESIST- ANT SOCIAL SECURITY CARD REQUIRED. (a) DEVELOPMENT.\u2014 (1) IN GENERAL.\u2014The Commissioner of Social Security (in this section referred to as the ”Commissioner”) shall, in accord- ance with this section, develop a prototype of a counterfeit-re- sistant social security card. Such prototype card shall\u2014 (A) be made of a durable, tamper-resistant material such as plastic or polyester, (B) employ technologies that provide security features, such as magnetic stripes, holograms, and integrated cir- cuits, and (C) be developed so as to provide individuals with reli- able proof of citizenship or legal resident alien status. (2) ASSISTANCE BY ATTORNEY GENERAL.\u2014The Attorney Gen- eral of the United States shall provide such information and as- sistance as the Commissioner deems necessary to enable the Commissioner to comply with this section. (b) STUDY AND REPORT.\u2014 (1) IN GENERAL.\u2014The Commissioner shall conduct a study and issue a report to Congress which examines different meth- ods of improving the social security card application process. (2) ELEMENTS OF STUDY.\u2014The study shall include an eval- uation of the cost and work load implications of issuing a coun- terfeit-resistant social security card for all individuals over a 3-, 5-, and 10-year period. The study shall also evaluate the fea- sibility and cost implications of imposing a user fee for replace- ment cards and cards issued to individuals who apply for such a card prior to the scheduled 3-, 5-, and 10-year phase-in op- tions. (3) DISTRIBUTION OF REPORT.\u2014The Commissioner shall submit copies of the report described in this subsection along with a facsimile of the prototype card as described in subsection (a) to the Committees on Ways and Means and Judiciary of the House of Representatives and the Committees on Finance and Judiciary of the Senate within 1 year after the date of the en- actment of this Act. SEC. 112. MODIFICATIONS TO THE JOB OPPORTUNITIES FOR CERTAIN LOW-INCOME INDIVIDUALS PROGRAM. Section 505 of the Family Support Act of 1988 (42 U.S.C. 1315 note) is amended\u2014 76 (1) in the heading, by striking ”demonstration”; (2) by striking ”demonstration” each place such term ap- pears; (3) in subsection (a), by striking ”in each of fiscal years” and all that follows through ”10” and inserting ”shall enter into agreements with”; (4) in subsection (b)(3), by striking ”aid to families with de- pendent children under part A of title IV of the Social Security Act” and inserting ”assistance under the program funded part A of title IV of the Social Security Act of the State in which the individual resides”; (5) in subsection (c)\u2014 (A) in paragraph (1)(C), by striking ”aid to families with dependent children under title IV of the Social Secu- rity Act” and inserting ”assistance under a State program funded part A of title IV of the Social Security Act”; (B) in paragraph (2), by striking ”aid to families with dependent children under title IV of such Act” and insert- ing ”assistance under a State program funded part A of title IV of the Social Security Act”; (6) in subsection (d), by striking ”job opportunities and basic skills training program (as provided for under title IV of the Social Security Act)” and inserting ”the State program funded under part A of title IV of the Social Security Act”; and (7) by striking subsections (e) through (g) and inserting the following: ”(e) AUTHORIZATION OF APPROPRIATIONS.\u2014For the purpose of conducting projects under this section, there is authorized to be ap- propriated an amount not to exceed $25,000,000 for any fiscal year.”. SEC. 113. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR TECHNICAL AND CONFORMING AMENDMENTS. Not later than 90 days after the date of the enactment of this Act, the Secretary of Health and Human Services and the Commis- sioner of Social Security, in consultation, as appropriate, with the heads of other Federal agencies, shall submit to the appropriate committees of Congress a legislative proposal proposing such tech- nical and conforming amendments as are necessary to bring the law into conformity with the policy embodied in this title. SEC. 114. ASSURING MEDICAID COVERAGE FOR LOW-INCOME FAMI- LIES. (a) IN GENERAL.\u2014Title XIX is amended\u2014 (1) by redesignating section 1931 as section 1932; and (2) by inserting after section 1930 the following new section: ”ASSURING COVERAGE FOR CERTAIN LOW-INCOME FAMILIES ”SEC. 1931. (a) REFERENCES TO TITLE IV A ARE REFERENCES TO PRE-WELFARE-REFORM PROVISIONS.\u2014Subject to the succeeding provisions of this section, with respect to a State any reference in this title (or any other provision of law in relation to the operation of this title) to a provision of part A of title IV, or a State plan under such part (or a provision of such a plan), including income and resource standards and income and resource methodologies 77 under such part or plan, shall be considered a reference to such a provision or plan as in effect as of July 16, 1996, with respect to the State. ”(b) APPLICATION OF PRE-WELFARE-REFORM ELIGIBILITY CRI- TERIA.\u2014 ”(1) IN GENERAL.\u2014For purposes of this title, subject to paragraphs (2) and (3), in determining eligibility for medical assistance\u2014 ”(A) an individual shall be treated as receiving aid or assistance under a State plan approved under part A of title IV only if the individual meets\u2014 ”(i) the income and resource standards for deter- mining eligibility under such plan, and ”(ii) the eligibility requirements of such plan under subsections (a) through (c) of section 406 and section 407(a), as in effect as of July 16, 1996; and ”(B) the income and resource methodologies under such plan as of such date shall be used in the determination of whether any individual meets income and resource stand- ards under such plan. ”(2) STATE OPTION.\u2014For purposes of applying this section, a State\u2014 ”(A) may lower its income standards applicable with respect to part A of title IV, but not below the income stand- ards applicable under its State plan under such part on May 1, 1988; ”(B) may increase income or resource standards under the State plan referred to in paragraph (1) over a period (beginning after July 16, 1996) by a percentage that does not exceed the percentage increase in the consumer price index for all urban consumers (all items; U.S. city average) over such period; and ”(C) may use income and resource methodologies that are less restrictive than the methodologies used under the State plan under such part as of July 16, 1996. ”(3) OPTION TO TERMINATE MEDICAL ASSISTANCE FOR FAIL- URE TO MEET WORK REQUIREMENT.\u2014 ”(A) INDIVIDUALS RECEIVING CASH ASSISTANCE UNDER TANF.\u2014In the case of an individual who\u2014 ”(i) is receiving cash assistance under a State pro- gram funded under part A of title IV, ”(ii) is eligible for medical assistance under this title on a basis not related to section 1902(l), and ”(iii) has the cash assistance under such program terminated pursuant to section 407(e)(1)(B) (as in effect on or after the welfare reform effective date) because of refusing to work, the State may terminate such individual’s eligibility for medical assistance under this title until such time as there no longer is a basis for the termination of such cash assist- ance because of such refusal. ”(B) EXCEPTION FOR CHILDREN.\u2014Subparagraph (A) shall not be construed as permitting a State to terminate 78 medical assistance for a minor child who is not the head of a household receiving assistance under a State program funded under part A of title IV. ”(c) TREATMENT FOR PURPOSES OF TRANSITIONAL COVERAGE PROVISIONS.\u2014 ”(1) TRANSITION IN THE CASE OF CHILD SUPPORT COLLEC- TIONS.\u2014The provisions of section 406(h) (as in effect on July 16, 1996) shall apply, in relation to this title, with respect to in- dividuals (and families composed of individuals) who are de- scribed in subsection (b)(1)(A), in the same manner as they ap- plied before such date with respect to individuals who became ineligible for aid to families with dependent children as a result (wholly or partly) of the collection of child or spousal support under part D of title IV. ”(2) TRANSITION IN THE CASE OF EARNINGS FROM EMPLOY- MENT.\u2014For continued medical assistance in the case of individ- uals (and families composed of individuals) described in sub- section (b)(1)(A) who would otherwise become ineligible because of hours or income from employment, see sections 1925 and 1902(e)(1). ”(d) WAIVERS.\u2014In the case of a waiver of a provision of part A of title IV in effect with respect to a State as of July 16, 1996, or which is submitted to the Secretary before the date of the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and approved by the Secretary on or before July 1, 1997, if the waiver affects eligibility of individuals for medical as- sistance under this title, such waiver may (but need not) continue to be applied, at the option of the State, in relation to this title after the date the waiver would otherwise expire. ”(e) STATE OPTION TO USE 1 APPLICATION FORM.\u2014Nothing in this section, or part A of title IV, shall be construed as preventing a State from providing for the same application form for assistance under a State program funded under part A of title IV (on or after the welfare reform effective date) and for medical assistance under this title. ”(f) ADDITIONAL RULES OF CONSTRUCTION.\u2014 ”(1) With respect to the reference in section 1902(a)(5) to a State plan approved under part A of title IV, a State may treat such reference as a reference either to a State program funded under such part (as in effect on and after the welfare reform ef- fective date) or to the State plan under this title. ”(2) Any reference in section 1902(a)(55) to a State plan ap- proved under part A of title IV shall be deemed a reference to a State program funded under such part. ”(3) In applying section 1903(f), the applicable income limi- tation otherwise determined shall be subject to increase in the same manner as income or resource standards of a State may be increased under subsection (b)(2)(B). ”(g) RELATION TO OTHER PROVISIONS.\u2014The provisions of this section shall apply notwithstanding any other provision of this Act. ”(h) TRANSITIONAL INCREASED FEDERAL MATCHING RATE FOR INCREASED ADMINISTRATIVE COSTS.\u2014 ”(1) IN GENERAL.\u2014Subject to the succeeding provisions of this subsection, the Secretary shall provide that with respect to 79 administrative expenditures described in paragraph (2) the per centum specified in section 1903(a)(7) shall be increased to such percentage as the Secretary specifies. ”(2) ADMINISTRATIVE EXPENDITURES DESCRIBED.\u2014The ad- ministrative expenditures described in this paragraph are ex- penditures described in section 1903(a)(7) that a State dem- onstrates to the satisfaction of the Secretary are attributable to administrative costs of eligibility determinations that (but for the enactment of this section) would not be incurred. ”(3) LIMITATION.\u2014The total amount of additional Federal funds that are expended as a result of the application of this subsection for the period beginning with fiscal year 1997 and ending with fiscal year 2000 shall not exceed $500,000,000. In applying this paragraph, the Secretary shall ensure the equi- table distribution of additional funds among the States. ”(4) TIME LIMITATION.\u2014This subsection shall only apply with respect to a State for expenditures incurred during the first 12 calendar quarters in which the State program funded under part A of title IV (as in effect on and after the welfare reform effective date) is in effect. ”(i) WELFARE REFORM EFFECTIVE DATE.\u2014In this section, the term ‘welfare reform effective date’ means the effective date, with re- spect to a State, of title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (as specified in section 116 of such Act).”. (b) PLAN AMENDMENT.\u2014Section 1902(a) (42 U.S.C. 1396a(a)) is amended\u2014 (1) by striking ”and” at the end of paragraph (61), (2) by striking the period at the end of paragraph (62) and inserting ”; and”, and (3) by inserting after paragraph (62) the following new paragraph: ”(63) provide for administration and determinations of eli- gibility with respect to individuals who are (or seek to be) eligi- ble for medical assistance based on the application of section 1931.”. (c) EXTENSION OF WORK TRANSITION PROVISIONS.\u2014Sections 1902(e)(1)(B) and 1925(f) (42 U.S.C. 1396a(e)(1)(B), 1396r 6(f)) are each amended by striking ”1998” and inserting ”2001”. (d) ELIMINATION OF REQUIREMENT OF MINIMUM AFDC PAY- MENT LEVELS.\u2014(1) Section 1902(c) (42 U.S.C. 1396a(c)) is amended by striking ”if\u2014” and all that follows and inserting the following: ”if the State requires individuals described in subsection (l)(1) to apply for assistance under the State program funded under part A of title IV as a condition of applying for or receiving medical assist- ance under this title.”. (2) Section 1903(i) (42 U.S.C. 1396b(i)) is amended by striking paragraph (9). SEC. 115. DENIAL OF ASSISTANCE AND BENEFITS FOR CERTAIN DRUG- RELATED CONVICTIONS. (a) IN GENERAL.\u2014An individual convicted (under Federal or State law) of any offense which is classified as a felony by the law of the jurisdiction involved and which has as an element the posses- sion, use, or distribution of a controlled substance (as defined in sec- 80 tion 102(6) of the Controlled Substances Act (21 U.S.C. 802(6))) shall not be eligible for\u2014 (1) assistance under any State program funded under part A of title IV of the Social Security Act, or (2) benefits under the food stamp program (as defined in section 3(h) of the Food Stamp Act of 1977) or any State pro- gram carried out under the Food Stamp Act of 1977. (b) EFFECTS ON ASSISTANCE AND BENEFITS FOR OTHERS.\u2014 (1) PROGRAM OF TEMPORARY ASSISTANCE FOR NEEDY FAMI- LIES.\u2014The amount of assistance otherwise required to be pro- vided under a State program funded under part A of title IV of the Social Security Act to the family members of an individ- ual to whom subsection (a) applies shall be reduced by the amount which would have otherwise been made available to the individual under such part. (2) BENEFITS UNDER THE FOOD STAMP ACT OF 1977.\u2014The amount of benefits otherwise required to be provided to a house- hold under the food stamp program (as defined in section 3(h) of the Food Stamp Act of 1977), or any State program carried out under the Food Stamp Act of 1977, shall be determined by considering the individual to whom subsection (a) applies not to be a member of such household, except that the income and resources of the individual shall be considered to be income and resources of the household. (c) ENFORCEMENT.\u2014A State that has not exercised its authority under subsection (d)(1)(A) shall require each individual applying for assistance or benefits referred to in subsection (a), during the appli- cation process, to state, in writing, whether the individual, or any member of the household of the individual, has been convicted of a crime described in subsection (a). (d) LIMITATIONS.\u2014 (1) STATE ELECTIONS.\u2014 (A) OPT OUT.\u2014A State may, by specific reference in a law enacted after the date of the enactment of this Act, ex- empt any or all individuals domiciled in the State from the application of subsection (a). (B) LIMIT PERIOD OF PROHIBITION.\u2014A State may, by law enacted after the date of the enactment of this Act, limit the period for which subsection (a) shall apply to any or all individuals domiciled in the State. (2) INAPPLICABILITY TO CONVICTIONS OCCURRING ON OR BE- FORE ENACTMENT.\u2014Subsection (a) shall not apply to convic- tions occurring on or before the date of the enactment of this Act. (e) DEFINITIONS OF STATE.\u2014For purposes of this section, the term ”State” has the meaning given it\u2014 (1) in section 419(5) of the Social Security Act, when refer- ring to assistance provided under a State program funded under part A of title IV of the Social Security Act, and (2) in section 3(m) of the Food Stamp Act of 1977, when re- ferring to the food stamp program (as defined in section 3(h) of the Food Stamp Act of 1977) or any State program carried out under the Food Stamp Act of 1977. 81 (f) RULE OF INTERPRETATION.\u2014Nothing in this section shall be construed to deny the following Federal benefits: (1) Emergency medical services under title XIX of the So- cial Security Act. (2) Short-term, noncash, in-kind emergency disaster relief. (3)(A) Public health assistance for immunizations. (B) Public health assistance for testing and treatment of communicable diseases if the Secretary of Health and Human Services determines that it is necessary to prevent the spread of such disease. (4) Prenatal care. (5) Job training programs. (6) Drug treatment programs. SEC. 116. EFFECTIVE DATE; TRANSITION RULE. (a) EFFECTIVE DATES.\u2014 (1) IN GENERAL.\u2014Except as otherwise provided in this title, this title and the amendments made by this title shall take ef- fect on July 1, 1997. (2) DELAYED EFFECTIVE DATE FOR CERTAIN PROVISIONS.\u2014 Notwithstanding any other provision of this section, paragraphs (2), (3), (4), (5), (8), and (10) of section 409(a) and section 411(a) of the Social Security Act (as added by the amendments made by section 103(a) of this Act) shall not take effect with respect to a State until, and shall apply only with respect to conduct that occurs on or after, the later of\u2014 (A) July 1, 1997; or (B) the date that is 6 months after the date the Sec- retary of Health and Human Services receives from the State a plan described in section 402(a) of the Social Secu- rity Act (as added by such amendment). (3) GRANTS TO OUTLYING AREAS.\u2014The amendments made by section 103(b) shall take effect on October 1, 1996. (4) ELIMINATION OF CHILD CARE PROGRAMS.\u2014The amend- ments made by section 103(c) shall take effect on October 1, 1996. (5) DEFINITIONS APPLICABLE TO NEW CHILD CARE ENTITLE- MENT.\u2014Sections 403(a)(1)(C), 403(a)(1)(D), and 419(4) of the Social Security Act, as added by the amendments made by sec- tion 103(a) of this Act, shall take effect on October 1, 1996. (b) TRANSITION RULES.\u2014Effective on the date of the enactment of this Act: (1) STATE OPTION TO ACCELERATE EFFECTIVE DATE.\u2014 (A) IN GENERAL.\u2014If the Secretary of Health and Human Services receives from a State a plan described in section 402(a) of the Social Security Act (as added by the amendment made by section 103(a)(1) of this Act), then\u2014 (i) on and after the date of such receipt\u2014 (I) except as provided in clause (ii), this title and the amendments made by this title (other than by section 103(c) of this Act) shall apply with re- spect to the State; and (II) the State shall be considered an eligible State for purposes of part A of title IV of the Social 82 Security Act (as in effect pursuant to the amend- ments made by such section 103(a)); and (ii) during the period that begins on the date of such receipt and ends on June 30, 1997, there shall re- main in effect with respect to the State\u2014 (I) section 403(h) of the Social Security Act (as in effect on September 30, 1995); and (II) all State reporting requirements under parts A and F of title IV of the Social Security Act (as in effect on September 30, 1995), modified by the Secretary as appropriate, taking into account the State program under part A of title IV of the Social Security Act (as in effect pursuant to the amendments made by such section 103(a)). (B) LIMITATIONS ON FEDERAL OBLIGATIONS.\u2014 (i) UNDER AFDC PROGRAM.\u2014The total obligations of the Federal Government to a State under part A of title IV of the Social Security Act (as in effect on Sep- tember 30, 1995) with respect to expenditures in fiscal year 1997 shall not exceed an amount equal to the State family assistance grant. (ii) UNDER TEMPORARY FAMILY ASSISTANCE PRO- GRAM.\u2014Notwithstanding section 403(a)(1) of the Social Security Act (as in effect pursuant to the amendments made by section 103(a) of this Act), the total obliga- tions of the Federal Government to a State under such section 403(a)(1)\u2014 (I) for fiscal year 1996, shall be an amount equal to\u2014 (aa) the State family assistance grant; multiplied by (bb) 1\u2044366 of the number of days during the period that begins on the date the Secretary of Health and Human Services first receives from the State a plan described in section 402(a) of the Social Security Act (as added by the amendment made by section 103(a)(1) of this Act) and ends on September 30, 1996; and (II) for fiscal year 1997, shall be an amount equal to the lesser of\u2014 (aa) the amount (if any) by which the State family assistance grant exceeds the total obligations of the Federal Government to the State under part A of title IV of the Social Se- curity Act (as in effect on September 30, 1995) with respect to expenditures in fiscal year 1997; or (bb) the State family assistance grant, multiplied by 1\u2044365 of the number of days dur- ing the period that begins on October 1, 1996, or the date the Secretary of Health and Human Services first receives from the State a plan described in section 402(a) of the Social Security Act (as added by the amendment 83 made by section 103(a)(1) of this Act), which- ever is later, and ends on September 30, 1997. (iii) CHILD CARE OBLIGATIONS EXCLUDED IN DETER- MINING FEDERAL AFDC OBLIGATIONS.\u2014As used in this subparagraph, the term ”obligations of the Federal Government to the State under part A of title IV of the Social Security Act” does not include any obligation of the Federal Government with respect to child care ex- penditures by the State. (C) SUBMISSION OF STATE PLAN FOR FISCAL YEAR 1996 OR 1997 DEEMED ACCEPTANCE OF GRANT LIMITATIONS AND FORMULA AND TERMINATION OF AFDC ENTITLEMENT.\u2014The submission of a plan by a State pursuant to subparagraph (A) is deemed to constitute\u2014 (i) the State’s acceptance of the grant reductions under subparagraph (B) (including the formula for computing the amount of the reduction); and (ii) the termination of any entitlement of any indi- vidual or family to benefits or services under the State AFDC program. (D) DEFINITIONS.\u2014As used in this paragraph: (i) STATE AFDC PROGRAM.\u2014The term ”State AFDC program” means the State program under parts A and F of title IV of the Social Security Act (as in effect on September 30, 1995). (ii) STATE.\u2014The term ”State” means the 50 States and the District of Columbia. (iii) STATE FAMILY ASSISTANCE GRANT.\u2014The term ”State family assistance grant” means the State family assistance grant (as defined in section 403(a)(1)(B) of the Social Security Act, as added by the amendment made by section 103(a)(1) of this Act). (2) CLAIMS, ACTIONS, AND PROCEEDINGS.\u2014The amendments made by this title shall not apply with respect to\u2014 (A) powers, duties, functions, rights, claims, penalties, or obligations applicable to aid, assistance, or services pro- vided before the effective date of this title under the provi- sions amended; and (B) administrative actions and proceedings commenced before such date, or authorized before such date to be com- menced, under such provisions. (3) CLOSING OUT ACCOUNT FOR THOSE PROGRAMS TERMI- NATED OR SUBSTANTIALLY MODIFIED BY THIS TITLE.\u2014In closing out accounts, Federal and State officials may use scientifically acceptable statistical sampling techniques. Claims made with respect to State expenditures under a State plan approved under part A of title IV of the Social Security Act (as in effect on September 30, 1995) with respect to assistance or services provided on or before September 30, 1995, shall be treated as claims with respect to expenditures during fiscal year 1995 for purposes of reimbursement even if payment was made by a State on or after October 1, 1995. Each State shall complete the filing of all claims under the State plan (as so in effect) within 84 2 years after the date of the enactment of this Act. The head of each Federal department shall\u2014 (A) use the single audit procedure to review and resolve any claims in connection with the close out of programs under such State plans; and (B) reimburse States for any payments made for assist- ance or services provided during a prior fiscal year from funds for fiscal year 1995, rather than from funds author- ized by this title. (4) CONTINUANCE IN OFFICE OF ASSISTANT SECRETARY FOR FAMILY SUPPORT.\u2014The individual who, on the day before the ef- fective date of this title, is serving as Assistant Secretary for Family Support within the Department of Health and Human Services shall, until a successor is appointed to such position\u2014 (A) continue to serve in such position; and (B) except as otherwise provided by law\u2014 (i) continue to perform the functions of the Assist- ant Secretary for Family Support under section 417 of the Social Security Act (as in effect before such effective date); and (ii) have the powers and duties of the Assistant Secretary for Family Support under section 416 of the Social Security Act (as in effect pursuant to the amend- ment made by section 103(a)(1) of this Act). (c) TERMINATION OF ENTITLEMENT UNDER AFDC PROGRAM.\u2014 Effective October 1, 1996, no individual or family shall be entitled to any benefits or services under any State plan approved under part A or F of title IV of the Social Security Act (as in effect on Sep- tember 30, 1995). TITLE II\u2014SUPPLEMENTAL SECURITY INCOME SEC. 200. REFERENCE TO SOCIAL SECURITY ACT. Except as otherwise specifically provided, wherever in this title an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act. Subtitle A\u2014Eligibility Restrictions SEC. 201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDIVIDUALS FOUND TO HAVE FRAUDULENTLY MISREPRESENTED RESI- DENCE IN ORDER TO OBTAIN BENEFITS SIMULTA- NEOUSLY IN 2 OR MORE STATES. (a) IN GENERAL.\u2014Section 1611(e) (42 U.S.C. 1382(e)), as amended by section 105(b)(4)(A) of the Contract with America Ad- vancement Act of 1996, is amended by redesignating paragraph (5) as paragraph (3) and by adding at the end the following new para- graph: ”(4)(A) No person shall be considered an eligible individual or eligible spouse for purposes of this title during the 10-year period that begins on the date the person is convicted in Federal or State 85 court of having made a fraudulent statement or representation with respect to the place of residence of the person in order to receive as- sistance simultaneously from 2 or more States under programs that are funded under title IV, title XIX, or the Food Stamp Act of 1977, or benefits in 2 or more States under the supplemental security in- come program under this title. ”(B) As soon as practicable after the conviction of a person in a Federal or State court as described in subparagraph (A), an offi- cial of such court shall notify the Commissioner of such conviction.”. (b) EFFECTIVE DATE.\u2014The amendment made by this section shall take effect on the date of the enactment of this Act. SEC. 202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND PRO- BATION AND PAROLE VIOLATORS. (a) IN GENERAL.\u2014Section 1611(e) (42 U.S.C. 1382(e)), as amended by section 201(a) of this Act, is amended by adding at the end the following new paragraph: ”(5) No person shall be considered an eligible individual or eli- gible spouse for purposes of this title with respect to any month if during such month the person is\u2014 ”(A) fleeing to avoid prosecution, or custody or confinement after conviction, under the laws of the place from which the per- son flees, for a crime, or an attempt to commit a crime, which is a felony under the laws of the place from which the person flees, or which, in the case of the State of New Jersey, is a high misdemeanor under the laws of such State; or ”(B) violating a condition of probation or parole imposed under Federal or State law.”. (b) EXCHANGE OF INFORMATION.\u2014Section 1611(e) (42 U.S.C. 1382(e)), as amended by section 201(a) of this Act and subsection (a) of this section, is amended by adding at the end the following new paragraph: ”(6) Notwithstanding any other provision of law (other than sec- tion 6103 of the Internal Revenue Code of 1986), the Commissioner shall furnish any Federal, State, or local law enforcement officer, upon the written request of the officer, with the current address, So- cial Security number, and photograph (if applicable) of any recipi- ent of benefits under this title, if the officer furnishes the Commis- sioner with the name of the recipient, and other identifying informa- tion as reasonably required by the Commissioner to establish the unique identity of the recipient, and notifies the Commissioner that\u2014 ”(A) the recipient\u2014 ”(i) is described in subparagraph (A) or (B) of para- graph (5); and ”(ii) has information that is necessary for the officer to conduct the officer’s official duties; and ”(B) the location or apprehension of the recipient is within the officer’s official duties.”. (c) EFFECTIVE DATE.\u2014The amendments made by this section shall take effect on the date of the enactment of this Act. SEC. 203. TREATMENT OF PRISONERS. (a) IMPLEMENTATION OF PROHIBITION AGAINST PAYMENT OF BENEFITS TO PRISONERS.\u2014 86 (1) IN GENERAL.\u2014Section 1611(e)(1) (42 U.S.C. 1382(e)(1)) is amended by adding at the end the following new subpara- graph: ”(I)(i) The Commissioner shall enter into an agreement, with any interested State or local institution described in clause (i) or (ii) of section 202(x)(1)(A) the primary purpose of which is to confine in- dividuals as described in section 202(x)(1)(A), under which\u2014 ”(I) the institution shall provide to the Commissioner, on a monthly basis and in a manner specified by the Commissioner, the names, social security account numbers, dates of birth, con- finement commencement dates, and, to the extent available to the institution, such other identifying information concerning the inmates of the institution as the Commissioner may require for the purpose of carrying out paragraph (1); and ”(II) the Commissioner shall pay to any such institution, with respect to each inmate of the institution who is eligible for a benefit under this title for the month preceding the first month throughout which such inmate is in such institution and becomes ineligible for such benefit as a result of the application of this subparagraph, $400 if the institution furnishes the infor- mation described in subclause (I) to the Commissioner within 30 days after the date such individual becomes an inmate of such institution, or $200 if the institution furnishes such infor- mation after 30 days after such date but within 90 days after such date. ”(ii)(I) The provisions of section 552a of title 5, United States Code, shall not apply to any agreement entered into under clause (i) or to information exchanged pursuant to such agreement. ”(II) The Commissioner is authorized to provide, on a reimburs- able basis, information obtained pursuant to agreements entered into under clause (i) to any Federal or federally-assisted cash, food, or medical assistance program for eligibility purposes. ”(iii) Payments to institutions required by clause (i)(II) shall be made from funds otherwise available for the payment of benefits under this title and shall be treated as direct spending for purposes of the Balanced Budget and Emergency Deficit Control Act of 1985.”. (2) EFFECTIVE DATE.\u2014The amendment made by this sub- section shall apply to individuals whose period of confinement in an institution commences on or after the first day of the sev- enth month beginning after the month in which this Act is en- acted. (b) STUDY OF OTHER POTENTIAL IMPROVEMENTS IN THE COL- LECTION OF INFORMATION RESPECTING PUBLIC INMATES.\u2014 (1) STUDY.\u2014The Commissioner of Social Security shall con- duct a study of the desirability, feasibility, and cost of\u2014 (A) establishing a system under which Federal, State, and local courts would furnish to the Commissioner such information respecting court orders by which individuals are confined in jails, prisons, or other public penal, correc- tional, or medical facilities as the Commissioner may re- quire for the purpose of carrying out section 1611(e)(1) of the Social Security Act; and 87 (B) requiring that State and local jails, prisons, and other institutions that enter into agreements with the Com- missioner under section 1611(e)(1)(I) of the Social Security Act furnish the information required by such agreements to the Commissioner by means of an electronic or other so- phisticated data exchange system. (2) REPORT.\u2014Not later than 1 year after the date of the en- actment of this Act, the Commissioner of Social Security shall submit a report on the results of the study conducted pursuant to this subsection to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Rep- resentatives. (c) ADDITIONAL REPORT TO CONGRESS.\u2014Not later than October 1, 1998, the Commissioner of Social Security shall provide to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a list of the institutions that are and are not providing information to the Commissioner under section 1611(e)(1)(I) of the Social Security Act (as added by this section). SEC. 204. EFFECTIVE DATE OF APPLICATION FOR BENEFITS. (a) IN GENERAL.\u2014Subparagraphs (A) and (B) of section 1611(c)(7) (42 U.S.C. 1382(c)(7)) are amended to read as follows: ”(A) the first day of the month following the date such ap- plication is filed, or ”(B) the first day of the month following the date such indi- vidual becomes eligible for such benefits with respect to such application.”. (b) SPECIAL RULE RELATING TO EMERGENCY ADVANCE PAY- MENTS.\u2014Section 1631(a)(4)(A) (42 U.S.C. 1383(a)(4)(A)) is amend- ed\u2014 (1) by inserting ”for the month following the date the appli- cation is filed” after ”is presumptively eligible for such benefits”; and (2) by inserting ”, which shall be repaid through propor- tionate reductions in such benefits over a period of not more than 6 months” before the semicolon. (c) CONFORMING AMENDMENTS.\u2014 (1) Section 1614(b) (42 U.S.C. 1382c(b)) is amended\u2014 (A) by striking ”or requests” and inserting ”, on the first day of the month following the date the application is filed, or, in any case in which either spouse requests”; and (B) by striking ”application or”. (2) Section 1631(g)(3) (42 U.S.C. 1382j(g)(3)) is amended by inserting ”following the month” after ”beginning with the month”. (d) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014The amendments made by this section shall apply to applications for benefits under title XVI of the Social Security Act filed on or after the date of the enactment of this Act, without regard to whether regulations have been is- sued to implement such amendments. (2) BENEFITS UNDER TITLE XVI.\u2014For purposes of this sub- section, the term ”benefits under title XVI of the Social Security Act” includes supplementary payments pursuant to an agree- 88 ment for Federal administration under section 1616(a) of the Social Security Act, and payments pursuant to an agreement entered into under section 212(b) of Public Law 93 66. Subtitle B\u2014Benefits for Disabled Children SEC. 211. DEFINITION AND ELIGIBILITY RULES. (a) DEFINITION OF CHILDHOOD DISABILITY.\u2014Section 1614(a)(3) (42 U.S.C. 1382c(a)(3)), as amended by section 105(b)(1) of the Con- tract with America Advancement Act of 1996, is amended\u2014 (1) in subparagraph (A), by striking ”An individual” and inserting ”Except as provided in subparagraph (C), an individ- ual”; (2) in subparagraph (A), by striking ”(or, in the case of an individual under the age of 18, if he suffers from any medically determinable physical or mental impairment of comparable se- verity)”; (3) by redesignating subparagraphs (C) through (I) as sub- paragraphs (D) through (J), respectively; (4) by inserting after subparagraph (B) the following new subparagraph: ”(C)(i) An individual under the age of 18 shall be considered disabled for the purposes of this title if that individual has a medi- cally determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be ex- pected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. ”(ii) Notwithstanding clause (i), no individual under the age of 18 who engages in substantial gainful activity (determined in ac- cordance with regulations prescribed pursuant to subparagraph (E)) may be considered to be disabled.”; and (5) in subparagraph (F), as redesignated by paragraph (3), by striking ”(D)” and inserting ”(E)”. (b) CHANGES TO CHILDHOOD SSI REGULATIONS.\u2014 (1) MODIFICATION TO MEDICAL CRITERIA FOR EVALUATION OF MENTAL AND EMOTIONAL DISORDERS.\u2014The Commissioner of Social Security shall modify sections 112.00C.2. and 112.02B.2.c.(2) of appendix 1 to subpart P of part 404 of title 20, Code of Federal Regulations, to eliminate references to maladaptive behavior in the domain of personal\/behavorial function. (2) DISCONTINUANCE OF INDIVIDUALIZED FUNCTIONAL AS- SESSMENT.\u2014The Commissioner of Social Security shall dis- continue the individualized functional assessment for children set forth in sections 416.924d and 416.924e of title 20, Code of Federal Regulations. (c) MEDICAL IMPROVEMENT REVIEW STANDARD AS IT APPLIES TO INDIVIDUALS UNDER THE AGE OF 18.\u2014Section 1614(a)(4) (42 U.S.C. 1382(a)(4)) is amended\u2014 (1) by redesignating subclauses (I) and (II) of clauses (i) and (ii) of subparagraph (B) as items (aa) and (bb), respec- tively; 89 (2) by redesignating clauses (i) and (ii) of subparagraphs (A) and (B) as subclauses (I) and (II), respectively; (3) by redesignating subparagraphs (A) through (C) as clauses (i) through (iii), respectively; (4) by inserting before clause (i) (as redesignated by para- graph (3)) the following new subparagraph: ”(A) in the case of an individual who is age 18 or older\u2014 ”; (5) by inserting after and below subparagraph (A)(iii) (as so redesignated) the following new subparagraph: ”(B) in the case of an individual who is under the age of 18\u2014 ”(i) substantial evidence which demonstrates that there has been medical improvement in the individual’s impair- ment or combination of impairments, and that such im- pairment or combination of impairments no longer results in marked and severe functional limitations; or ”(ii) substantial evidence which demonstrates that, as determined on the basis of new or improved diagnostic techniques or evaluations, the individual’s impairment or combination of impairments, is not as disabling as it was considered to be at the time of the most recent prior deci- sion that the individual was under a disability or contin- ued to be under a disability, and such impairment or com- bination of impairments does not result in marked and se- vere functional limitations; or”; (6) by redesignating subparagraph (D) as subparagraph (C) and by inserting in such subparagraph ”in the case of any indi- vidual,” before ”substantial evidence”; and (7) in the first sentence following subparagraph (C) (as re- designated by paragraph (6)), by\u2014 (A) inserting ”(i)” before ”to restore”; and (B) inserting ”, or (ii) in the case of an individual under the age of 18, to eliminate or improve the individ- ual’s impairment or combination of impairments so that it no longer results in marked and severe functional limita- tions” immediately before the period. (d) EFFECTIVE DATES, ETC.\u2014 (1) EFFECTIVE DATES.\u2014 (A) SUBSECTIONS (a) AND (b).\u2014 (i) IN GENERAL.\u2014The provisions of, and amend- ments made by, subsections (a) and (b) of this section shall apply to any individual who applies for, or whose claim is finally adjudicated with respect to, benefits under title XVI of the Social Security Act on or after the date of the enactment of this Act, without regard to whether regulations have been issued to implement such provisions and amendments. (ii) DETERMINATION OF FINAL ADJUDICATION.\u2014For purposes of clause (i), no individual’s claim with re- spect to such benefits may be considered to be finally adjudicated before such date of enactment if, on or after such date, there is pending a request for either administrative or judicial review with respect to such 90 claim that has been denied in whole, or there is pend- ing, with respect to such claim, readjudication by the Commissioner of Social Security pursuant to relief in a class action or implementation by the Commissioner of a court remand order. (B) SUBSECTION (c).\u2014The amendments made by sub- section (c) of this section shall apply with respect to benefits under title XVI of the Social Security Act for months begin- ning on or after the date of the enactment of this Act, with- out regard to whether regulations have been issued to im- plement such amendments. (2) APPLICATION TO CURRENT RECIPIENTS.\u2014 (A) ELIGIBILITY REDETERMINATIONS.\u2014During the pe- riod beginning on the date of the enactment of this Act and ending on the date which is 1 year after such date of enact- ment, the Commissioner of Social Security shall redeter- mine the eligibility of any individual under age 18 who is eligible for supplemental security income benefits by reason of disability under title XVI of the Social Security Act as of the date of the enactment of this Act and whose eligi- bility for such benefits may terminate by reason of the pro- visions of, or amendments made by, subsections (a) and (b) of this section. With respect to any redetermination under this subparagraph\u2014 (i) section 1614(a)(4) of the Social Security Act (42 U.S.C. 1382c(a)(4)) shall not apply; (ii) the Commissioner of Social Security shall apply the eligibility criteria for new applicants for ben- efits under title XVI of such Act; (iii) the Commissioner shall give such redetermina- tion priority over all continuing eligibility reviews and other reviews under such title; and (iv) such redetermination shall be counted as a re- view or redetermination otherwise required to be made under section 208 of the Social Security Independence and Program Improvements Act of 1994 or any other provision of title XVI of the Social Security Act. (B) GRANDFATHER PROVISION.\u2014The provisions of, and amendments made by, subsections (a) and (b) of this sec- tion, and the redetermination under subparagraph (A), shall only apply with respect to the benefits of an individ- ual described in subparagraph (A) for months beginning on or after the later of July 1, 1997, or the date of the redeter- mination with respect to such individual. (C) NOTICE.\u2014Not later than January 1, 1997, the Commissioner of Social Security shall notify an individual described in subparagraph (A) of the provisions of this paragraph. (3) REPORT.\u2014The Commissioner of Social Security shall re- port to the Congress regarding the progress made in implement- ing the provisions of, and amendments made by, this section on child disability evaluations not later than 180 days after the date of the enactment of this Act. 91 (4) REGULATIONS.\u2014Notwithstanding any other provision of law, the Commissioner of Social Security shall submit for re- view to the committees of jurisdiction in the Congress any final regulation pertaining to the eligibility of individuals under age 18 for benefits under title XVI of the Social Security Act at least 45 days before the effective date of such regulation. The submis- sion under this paragraph shall include supporting documenta- tion providing a cost analysis, workload impact, and projections as to how the regulation will effect the future number of recipi- ents under such title. (5) CAP ADJUSTMENT FOR SSI ADMINISTRATIVE WORK RE- QUIRED BY WELFARE REFORM.\u2014 (A) AUTHORIZATION.\u2014For the additional costs of con- tinuing disability reviews and redeterminations under title XVI of the Social Security Act, there is hereby authorized to be appropriated to the Social Security Administration, in addition to amounts authorized under section 201(g)(1)(A) of the Social Security Act, $150,000,000 in fiscal year 1997 and $100,000,000 in fiscal year 1998. (B) CAP ADJUSTMENT.\u2014Section 251(b)(2)(H) of the Bal- anced Budget and Emergency Deficit Control Act of 1985, as amended by section 103(b) of the Contract with America Advancement Act of 1996, is amended\u2014 (i) in clause (i)\u2014 (I) in subclause (II) by\u2014 (aa) striking ”$25,000,000” and inserting ”$175,000,000”; and (bb) striking ”$160,000,000” and inserting ”$310,000,000”; and (II) in subclause (III) by\u2014 (aa) striking ”$145,000,000” and inserting ”$245,000,000”; and (bb) striking ”$370,000,000” and inserting ”$470,000,000”; and (ii) by amending clause (ii)(I) to read as follows: ”(I) the term ‘continuing disability reviews’ means reviews or redeterminations as defined under section 201(g)(1)(A) of the Social Security Act and reviews and redeterminations authorized under section 211 of the Personal Responsibility and Work Opportunity Rec- onciliation Act of 1996;”. (C) ADJUSTMENTS.\u2014Section 606(e)(1)(B) of the Con- gressional Budget Act of 1974 is amended by adding at the end the following new sentences: ”If the adjustments re- ferred to in the preceding sentence are made for an appro- priations measure that is not enacted into law, then the Chairman of the Committee on the Budget of the House of Representatives shall, as soon as practicable, reverse those adjustments. The Chairman of the Committee on the Budg- et of the House of Representatives shall submit any adjust- ments made under this subparagraph to the House of Rep- resentatives and have such adjustments published in the Congressional Record.”. 92 (D) CONFORMING AMENDMENT.\u2014Section 103(d)(1) of the Contract with America Advancement Act of 1996 (42 U.S.C. 401 note) is amended by striking ”medicaid pro- grams.” and inserting ”medicaid programs, except that the amounts appropriated pursuant to the authorization and discretionary spending allowance provisions in section 211(d)(2)(5) of the Personal Responsibility and Work Op- portunity Reconciliation Act of 1996 shall be used only for continuing disability reviews and redeterminations under title XVI of the Social Security Act.”. (6) BENEFITS UNDER TITLE XVI.\u2014For purposes of this sub- section, the term ”benefits under title XVI of the Social Security Act” includes supplementary payments pursuant to an agree- ment for Federal administration under section 1616(a) of the Social Security Act, and payments pursuant to an agreement entered into under section 212(b) of Public Law 93 66. SEC. 212. ELIGIBILITY REDETERMINATIONS AND CONTINUING DIS- ABILITY REVIEWS. (a) CONTINUING DISABILITY REVIEWS RELATING TO CERTAIN CHILDREN.\u2014Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as re- designated by section 211(a)(3) of this Act, is amended\u2014 (1) by inserting ”(i)” after ”(H)”; and (2) by adding at the end the following new clause: ”(ii)(I) Not less frequently than once every 3 years, the Commis- sioner shall review in accordance with paragraph (4) the continued eligibility for benefits under this title of each individual who has not attained 18 years of age and is eligible for such benefits by rea- son of an impairment (or combination of impairments) which is likely to improve (or, at the option of the Commissioner, which is unlikely to improve). ”(II) A representative payee of a recipient whose case is reviewed under this clause shall present, at the time of review, evidence dem- onstrating that the recipient is, and has been, receiving treatment, to the extent considered medically necessary and available, of the condition which was the basis for providing benefits under this title. ”(III) If the representative payee refuses to comply without good cause with the requirements of subclause (II), the Commissioner of Social Security shall, if the Commissioner determines it is in the best interest of the individual, promptly suspend payment of benefits to the representative payee, and provide for payment of benefits to an alternative representative payee of the individual or, if the inter- est of the individual under this title would be served thereby, to the individual. ”(IV) Subclause (II) shall not apply to the representative payee of any individual with respect to whom the Commissioner deter- mines such application would be inappropriate or unnecessary. In making such determination, the Commissioner shall take into con- sideration the nature of the individual’s impairment (or combina- tion of impairments). Section 1631(c) shall not apply to a finding by the Commissioner that the requirements of subclause (II) should not apply to an individual’s representative payee.”. (b) DISABILITY ELIGIBILITY REDETERMINATIONS REQUIRED FOR SSI RECIPIENTS WHO ATTAIN 18 YEARS OF AGE.\u2014 93 (1) IN GENERAL.\u2014Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as amended by subsection (a) of this section, is amended by adding at the end the following new clause: ”(iii) If an individual is eligible for benefits under this title by reason of disability for the month preceding the month in which the individual attains the age of 18 years, the Commissioner shall rede- termine such eligibility\u2014 ”(I) during the 1-year period beginning on the individual’s 18th birthday; and ”(II) by applying the criteria used in determining the initial eligibility for applicants who are age 18 or older. With respect to a redetermination under this clause, paragraph (4) shall not apply and such redetermination shall be considered a sub- stitute for a review or redetermination otherwise required under any other provision of this subparagraph during that 1-year period.”. (2) CONFORMING REPEAL.\u2014Section 207 of the Social Secu- rity Independence and Program Improvements Act of 1994 (42 U.S.C. 1382 note; 108 Stat. 1516) is hereby repealed. (c) CONTINUING DISABILITY REVIEW REQUIRED FOR LOW BIRTH WEIGHT BABIES.\u2014Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as amended by subsections (a) and (b) of this section, is amended by adding at the end the following new clause: ”(iv)(I) Not later than 12 months after the birth of an individ- ual, the Commissioner shall review in accordance with paragraph (4) the continuing eligibility for benefits under this title by reason of disability of such individual whose low birth weight is a contrib- uting factor material to the Commissioner’s determination that the individual is disabled. ”(II) A review under subclause (I) shall be considered a sub- stitute for a review otherwise required under any other provision of this subparagraph during that 12-month period. ”(III) A representative payee of a recipient whose case is re- viewed under this clause shall present, at the time of review, evi- dence demonstrating that the recipient is, and has been, receiving treatment, to the extent considered medically necessary and avail- able, of the condition which was the basis for providing benefits under this title. ”(IV) If the representative payee refuses to comply without good cause with the requirements of subclause (III), the Commissioner of Social Security shall, if the Commissioner determines it is in the best interest of the individual, promptly suspend payment of benefits to the representative payee, and provide for payment of benefits to an alternative representative payee of the individual or, if the inter- est of the individual under this title would be served thereby, to the individual. ”(V) Subclause (III) shall not apply to the representative payee of any individual with respect to whom the Commissioner deter- mines such application would be inappropriate or unnecessary. In making such determination, the Commissioner shall take into con- sideration the nature of the individual’s impairment (or combina- tion of impairments). Section 1631(c) shall not apply to a finding by the Commissioner that the requirements of subclause (III) should not apply to an individual’s representative payee.”. 94 (d) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to benefits for months beginning on or after the date of the enactment of this Act, without regard to whether regulations have been issued to implement such amendments. SEC. 213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS. (a) REQUIREMENT TO ESTABLISH ACCOUNT.\u2014Section 1631(a)(2) (42 U.S.C. 1383(a)(2)) is amended\u2014 (1) by redesignating subparagraphs (F) and (G) as sub- paragraphs (G) and (H), respectively; and (2) by inserting after subparagraph (E) the following new subparagraph: ”(F)(i)(I) Each representative payee of an eligible individual under the age of 18 who is eligible for the payment of benefits de- scribed in subclause (II) shall establish on behalf of such individual an account in a financial institution into which such benefits shall be paid, and shall thereafter maintain such account for use in ac- cordance with clause (ii). ”(II) Benefits described in this subclause are past-due monthly benefits under this title (which, for purposes of this subclause, in- clude State supplementary payments made by the Commissioner pursuant to an agreement under section 1616 or section 212(b) of Public Law 93 66) in an amount (after any withholding by the Commissioner for reimbursement to a State for interim assistance under subsection (g)) that exceeds the product of\u2014 ”(aa) 6, and ”(bb) the maximum monthly benefit payable under this title to an eligible individual. ”(ii)(I) A representative payee shall use funds in the account es- tablished under clause (i) to pay for allowable expenses described in subclause (II). ”(II) An allowable expense described in this subclause is an ex- pense for\u2014 ”(aa) education or job skills training; ”(bb) personal needs assistance; ”(cc) special equipment; ”(dd) housing modification; ”(ee) medical treatment; ”(ff) therapy or rehabilitation; or ”(gg) any other item or service that the Commissioner deter- mines to be appropriate; provided that such expense benefits such individual and, in the case of an expense described in item (bb), (cc), (dd), (ff), or (gg), is related to the impairment (or combination of impairments) of such individ- ual. ”(III) The use of funds from an account established under clause (i) in any manner not authorized by this clause\u2014 ”(aa) by a representative payee shall be considered a misapplication of benefits for all purposes of this paragraph, and any representative payee who knowingly misapplies bene- fits from such an account shall be liable to the Commissioner in an amount equal to the total amount of such benefits; and ”(bb) by an eligible individual who is his or her own payee shall be considered a misapplication of benefits for all purposes of this paragraph and the total amount of such benefits so used 95 shall be considered to be the uncompensated value of a disposed resource and shall be subject to the provisions of section 1613(c). ”(IV) This clause shall continue to apply to funds in the account after the child has reached age 18, regardless of whether benefits are paid directly to the beneficiary or through a representative payee. ”(iii) The representative payee may deposit into the account es- tablished pursuant to clause (i)\u2014 ”(I) past-due benefits payable to the eligible individual in an amount less than that specified in clause (i)(II), and ”(II) any other funds representing an underpayment under this title to such individual, provided that the amount of such underpayment is equal to or exceeds the maximum monthly benefit payable under this title to an eligible individual. ”(iv) The Commissioner of Social Security shall establish a sys- tem for accountability monitoring whereby such representative payee shall report, at such time and in such manner as the Commissioner shall require, on activity respecting funds in the account established pursuant to clause (i).”. (b) EXCLUSION FROM RESOURCES.\u2014Section 1613(a) (42 U.S.C. 1382b(a)) is amended\u2014 (1) by striking ”and” at the end of paragraph (10); (2) by striking the period at the end of paragraph (11) and inserting ”; and”; and (3) by inserting after paragraph (11) the following new paragraph: ”(12) any account, including accrued interest or other earn- ings thereon, established and maintained in accordance with section 1631(a)(2)(F).”. (c) EXCLUSION FROM INCOME.\u2014Section 1612(b) (42 U.S.C. 1382a(b)) is amended\u2014 (1) by striking ”and” at the end of paragraph (19); (2) by striking the period at the end of paragraph (20) and inserting ”; and”; and (3) by adding at the end the following new paragraph: ”(21) the interest or other earnings on any account estab- lished and maintained in accordance with section 1631(a)(2)(F).”. (d) EFFECTIVE DATE.\u2014The amendments made by this section shall apply to payments made after the date of the enactment of this Act. SEC. 214. REDUCTION IN CASH BENEFITS PAYABLE TO INSTITU- TIONALIZED INDIVIDUALS WHOSE MEDICAL COSTS ARE COVERED BY PRIVATE INSURANCE. (a) IN GENERAL.\u2014Section 1611(e)(1)(B) (42 U.S.C. 1382(e)(1)(B)) is amended by inserting ”or, in the case of an eligible individual who is a child under the age of 18, receiving payments (with respect to such individual) under any health insurance policy issued by a private provider of such insurance” after ”section 1614(f)(2)(B),”. (b) EFFECTIVE DATE.\u2014The amendment made by this section shall apply to benefits for months beginning 90 or more days after 96 the date of the enactment of this Act, without regard to whether reg- ulations have been issued to implement such amendments. SEC. 215. REGULATIONS. Within 3 months after the date of the enactment of this Act, the Commissioner of Social Security shall prescribe such regulations as may be necessary to implement the amendments made by this sub- title. Subtitle C\u2014Additional Enforcement Provision SEC. 221. INSTALLMENT PAYMENT OF LARGE PAST-DUE SUPPLE- MENTAL SECURITY INCOME BENEFITS. (a) IN GENERAL.\u2014Section 1631(a) (42 U.S.C. 1383) is amended by adding at the end the following new paragraph: ”(10)(A) If an individual is eligible for past-due monthly bene- fits under this title in an amount that (after any withholding for re- imbursement to a State for interim assistance under subsection (g)) equals or exceeds the product of\u2014 ”(i) 12, and ”(ii) the maximum monthly benefit payable under this title to an eligible individual (or, if appropriate, to an eligible indi- vidual and eligible spouse), then the payment of such past-due benefits (after any such reim- bursement to a State) shall be made in installments as provided in subparagraph (B). ”(B)(i) The payment of past-due benefits subject to this subpara- graph shall be made in not to exceed 3 installments that are made at 6-month intervals. ”(ii) Except as provided in clause (iii), the amount of each of the first and second installments may not exceed an amount equal to the product of clauses (i) and (ii) of subparagraph (A). ”(iii) In the case of an individual who has\u2014 ”(I) outstanding debt attributable to\u2014 ”(aa) food, ”(bb) clothing, ”(cc) shelter, or ”(dd) medically necessary services, supplies or equip- ment, or medicine; or ”(II) current expenses or expenses anticipated in the near term attributable to\u2014 ”(aa) medically necessary services, supplies or equip- ment, or medicine, or ”(bb) the purchase of a home, and such debt or expenses are not subject to reimbursement by a public assistance program, the Secretary under title XVIII, a State plan approved under title XIX, or any private entity legally liable to pro- vide payment pursuant to an insurance policy, pre-paid plan, or other arrangement, the limitation specified in clause (ii) may be ex- ceeded by an amount equal to the total of such debt and expenses. ”(C) This paragraph shall not apply to any individual who, at the time of the Commissioner’s determination that such individual 97 is eligible for the payment of past-due monthly benefits under this title\u2014 ”(i) is afflicted with a medically determinable impairment that is expected to result in death within 12 months; or ”(ii) is ineligible for benefits under this title and the Com- missioner determines that such individual is likely to remain ineligible for the next 12 months. ”(D) For purposes of this paragraph, the term ‘benefits under this title’ includes supplementary payments pursuant to an agree- ment for Federal administration under section 1616(a), and pay- ments pursuant to an agreement entered into under section 212(b) of Public Law 93 66.”. (b) CONFORMING AMENDMENT.\u2014Section 1631(a)(1) (42 U.S.C. 1383(a)(1)) is amended by inserting ”(subject to paragraph (10))” immediately before ”in such installments”. (c) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014The amendments made by this section are effective with respect to past-due benefits payable under title XVI of the Social Security Act after the third month following the month in which this Act is enacted. (2) BENEFITS PAYABLE UNDER TITLE XVI.\u2014For purposes of this subsection, the term ”benefits payable under title XVI of the Social Security Act” includes supplementary payments pursuant to an agreement for Federal administration under section 1616(a) of the Social Security Act, and payments pursuant to an agreement entered into under section 212(b) of Public Law 93 66. SEC. 222. REGULATIONS. Within 3 months after the date of the enactment of this Act, the Commissioner of Social Security shall prescribe such regulations as may be necessary to implement the amendments made by this sub- title. Subtitle D\u2014Studies Regarding Supplemental Security Income Program SEC. 231. ANNUAL REPORT ON THE SUPPLEMENTAL SECURITY IN- COME PROGRAM. Title XVI (42 U.S.C. 1381 et seq.), as amended by section 105(b)(3) of the Contract with America Advancement Act of 1996, is amended by adding at the end the following new section: ”ANNUAL REPORT ON PROGRAM ”SEC. 1637. (a) Not later than May 30 of each year, the Com- missioner of Social Security shall prepare and deliver a report an- nually to the President and the Congress regarding the program under this title, including\u2014 ”(1) a comprehensive description of the program; ”(2) historical and current data on allowances and denials, including number of applications and allowance rates for ini- tial determinations, reconsideration determinations, adminis- 98 trative law judge hearings, appeals council reviews, and Fed- eral court decisions; ”(3) historical and current data on characteristics of recipi- ents and program costs, by recipient group (aged, blind, dis- abled adults, and disabled children); ”(4) historical and current data on prior enrollment by re- cipients in public benefit programs, including State programs funded under part A of title IV of the Social Security Act and State general assistance programs; ”(5) projections of future number of recipients and program costs, through at least 25 years; ”(6) number of redeterminations and continuing disability reviews, and the outcomes of such redeterminations and re- views; ”(7) data on the utilization of work incentives; ”(8) detailed information on administrative and other pro- gram operation costs; ”(9) summaries of relevant research undertaken by the So- cial Security Administration, or by other researchers; ”(10) State supplementation program operations; ”(11) a historical summary of statutory changes to this title; and ”(12) such other information as the Commissioner deems useful. ”(b) Each member of the Social Security Advisory Board shall be permitted to provide an individual report, or a joint report if agreed, of views of the program under this title, to be included in the annual report required under this section.”. SEC. 232. STUDY BY GENERAL ACCOUNTING OFFICE. Not later than January 1, 1999, the Comptroller General of the United States shall study and report on\u2014 (1) the impact of the amendments made by, and the provi- sions of, this title on the supplemental security income program under title XVI of the Social Security Act; and (2) extra expenses incurred by families of children receiving benefits under such title that are not covered by other Federal, State, or local programs. TITLE III\u2014CHILD SUPPORT SEC. 300. REFERENCE TO SOCIAL SECURITY ACT. Except as otherwise specifically provided, wherever in this title an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act. 99 Subtitle A\u2014Eligibility for Services; Distribution of Payments SEC. 301. STATE OBLIGATION TO PROVIDE CHILD SUPPORT ENFORCE- MENT SERVICES. (a) STATE PLAN REQUIREMENTS.\u2014Section 454 (42 U.S.C. 654) is amended\u2014 (1) by striking paragraph (4) and inserting the following new paragraph: ”(4) provide that the State will\u2014 ”(A) provide services relating to the establishment of paternity or the establishment, modification, or enforcement of child support obligations, as appropriate, under the plan with respect to\u2014 ”(i) each child for whom (I) assistance is provided under the State program funded under part A of this title, (II) benefits or services for foster care maintenance are provided under the State program funded under part E of this title, or (III) medical assistance is pro- vided under the State plan approved under title XIX, unless, in accordance with paragraph (29), good cause or other exceptions exist; ”(ii) any other child, if an individual applies for such services with respect to the child; and ”(B) enforce any support obligation established with re- spect to\u2014 ”(i) a child with respect to whom the State provides services under the plan; or ”(ii) the custodial parent of such a child;”; and (2) in paragraph (6)\u2014 (A) by striking ”provide that” and inserting ”provide that\u2014”; (B) by striking subparagraph (A) and inserting the fol- lowing new subparagraph: ”(A) services under the plan shall be made available to residents of other States on the same terms as to residents of the State submitting the plan;”; (C) in subparagraph (B), by inserting ”on individuals not receiving assistance under any State program funded under part A” after ”such services shall be imposed”; (D) in each of subparagraphs (B), (C), (D), and (E)\u2014 (i) by indenting the subparagraph in the same manner as, and aligning the left margin of the sub- paragraph with the left margin of, the matter inserted by subparagraph (B) of this paragraph; and (ii) by striking the final comma and inserting a semicolon; and (E) in subparagraph (E), by indenting each of clauses (i) and (ii) 2 additional ems. (b) CONTINUATION OF SERVICES FOR FAMILIES CEASING TO RE- CEIVE ASSISTANCE UNDER THE STATE PROGRAM FUNDED UNDER PART A.\u2014Section 454 (42 U.S.C. 654) is amended\u2014 (1) by striking ”and” at the end of paragraph (23); 100 (2) by striking the period at the end of paragraph (24) and inserting ”; and”; and (3) by adding after paragraph (24) the following new para- graph: ”(25) provide that if a family with respect to which services are provided under the plan ceases to receive assistance under the State program funded under part A, the State shall provide appropriate notice to the family and continue to provide such services, subject to the same conditions and on the same basis as in the case of other individuals to whom services are fur- nished under the plan, except that an application or other re- quest to continue services shall not be required of such a family and paragraph (6)(B) shall not apply to the family.”. (c) CONFORMING AMENDMENTS.\u2014 (1) Section 452(b) (42 U.S.C. 652(b)) is amended by striking ”454(6)” and inserting ”454(4)”. (2) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended by striking ”454(6)” each place it appears and inserting ”454(4)(A)(ii)”. (3) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is amended by striking ”in the case of overdue support which a State has agreed to collect under section 454(6)” and inserting ”in any other case”. (4) Section 466(e) (42 U.S.C. 666(e)) is amended by striking ”paragraph (4) or (6) of section 454” and inserting ”section 454(4)”. SEC. 302. DISTRIBUTION OF CHILD SUPPORT COLLECTIONS. (a) IN GENERAL.\u2014Section 457 (42 U.S.C. 657) is amended to read as follows: ”SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT. ”(a) IN GENERAL.\u2014Subject to subsection (e), an amount col- lected on behalf of a family as support by a State pursuant to a plan approved under this part shall be distributed as follows: ”(1) FAMILIES RECEIVING ASSISTANCE.\u2014In the case of a family receiving assistance from the State, the State shall\u2014 ”(A) pay to the Federal Government the Federal share of the amount so collected; and ”(B) retain, or distribute to the family, the State share of the amount so collected. ”(2) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE.\u2014In the case of a family that formerly received assistance from the State: ”(A) CURRENT SUPPORT PAYMENTS.\u2014To the extent that the amount so collected does not exceed the amount re- quired to be paid to the family for the month in which col- lected, the State shall distribute the amount so collected to the family. ”(B) PAYMENTS OF ARREARAGES.\u2014To the extent that the amount so collected exceeds the amount required to be paid to the family for the month in which collected, the State shall distribute the amount so collected as follows: ”(i) DISTRIBUTION OF ARREARAGES THAT ACCRUED AFTER THE FAMILY CEASED TO RECEIVE ASSISTANCE.\u2014 101 ”(I) PRE-OCTOBER 1997.\u2014Except as provided in subclause (II), the provisions of this section (other than subsection (b)(1)) as in effect and applied on the day before the date of the enactment of section 302 of the Personal Responsibility and Work Op- portunity Act Reconciliation of 1996 shall apply with respect to the distribution of support arrear- ages that\u2014 ”(aa) accrued after the family ceased to re- ceive assistance, and ”(bb) are collected before October 1, 1997. ”(II) POST-SEPTEMBER 1997.\u2014With respect to the amount so collected on or after October 1, 1997 (or before such date, at the option of the State)\u2014 ”(aa) IN GENERAL.\u2014The State shall first distribute the amount so collected (other than any amount described in clause (iv)) to the family to the extent necessary to satisfy any support arrearages with respect to the family that accrued after the family ceased to receive assistance from the State. ”(bb) REIMBURSEMENT OF GOVERNMENTS FOR ASSISTANCE PROVIDED TO THE FAMILY.\u2014 After the application of division (aa) and clause (ii)(II)(aa) with respect to the amount so collected, the State shall retain the State share of the amount so collected, and pay to the Fed- eral Government the Federal share (as defined in subsection (c)(2)) of the amount so collected, but only to the extent necessary to reimburse amounts paid to the family as assistance by the State. ”(cc) DISTRIBUTION OF THE REMAINDER TO THE FAMILY.\u2014To the extent that neither divi- sion (aa) nor division (bb) applies to the amount so collected, the State shall distribute the amount to the family. ”(ii) DISTRIBUTION OF ARREARAGES THAT ACCRUED BEFORE THE FAMILY RECEIVED ASSISTANCE.\u2014 ”(I) PRE-OCTOBER 2000.\u2014Except as provided in subclause (II), the provisions of this section (other than subsection (b)(1)) as in effect and applied on the day before the date of the enactment of section 302 of the Personal Responsibility and Work Op- portunity Reconciliation Act of 1996 shall apply with respect to the distribution of support arrear- ages that\u2014 ”(aa) accrued before the family received assistance, and ”(bb) are collected before October 1, 2000. ”(II) POST-SEPTEMBER 2000.\u2014Unless, based on the report required by paragraph (4), the Congress determines otherwise, with respect to the amount 102 so collected on or after October 1, 2000 (or before such date, at the option of the State)\u2014 ”(aa) IN GENERAL.\u2014The State shall first distribute the amount so collected (other than any amount described in clause (iv)) to the family to the extent necessary to satisfy any support arrearages with respect to the family that accrued before the family received assist- ance from the State. ”(bb) REIMBURSEMENT OF GOVERNMENTS FOR ASSISTANCE PROVIDED TO THE FAMILY.\u2014 After the application of clause (i)(II)(aa) and division (aa) with respect to the amount so col- lected, the State shall retain the State share of the amount so collected, and pay to the Fed- eral Government the Federal share (as defined in subsection (c)(2)) of the amount so collected, but only to the extent necessary to reimburse amounts paid to the family as assistance by the State. ”(cc) DISTRIBUTION OF THE REMAINDER TO THE FAMILY.\u2014To the extent that neither divi- sion (aa) nor division (bb) applies to the amount so collected, the State shall distribute the amount to the family. ”(iii) DISTRIBUTION OF ARREARAGES THAT ACCRUED WHILE THE FAMILY RECEIVED ASSISTANCE.\u2014In the case of a family described in this subparagraph, the provi- sions of paragraph (1) shall apply with respect to the distribution of support arrearages that accrued while the family received assistance. ”(iv) AMOUNTS COLLECTED PURSUANT TO SECTION 464.\u2014Notwithstanding any other provision of this sec- tion, any amount of support collected pursuant to sec- tion 464 shall be retained by the State to the extent past-due support has been assigned to the State as a condition of receiving assistance from the State, up to the amount necessary to reimburse the State for amounts paid to the family as assistance by the State. The State shall pay to the Federal Government the Federal share of the amounts so retained. To the extent the amount collected pursuant to section 464 exceeds the amount so retained, the State shall distribute the excess to the family. ”(v) ORDERING RULES FOR DISTRIBUTIONS.\u2014For purposes of this subparagraph, unless an earlier effec- tive date is required by this section, effective October 1, 2000, the State shall treat any support arrearages col- lected, except for amounts collected pursuant to section 464, as accruing in the following order: ”(I) To the period after the family ceased to re- ceive assistance. ”(II) To the period before the family received assistance. 103 ”(III) To the period while the family was re- ceiving assistance. ”(3) FAMILIES THAT NEVER RECEIVED ASSISTANCE.\u2014In the case of any other family, the State shall distribute the amount so collected to the family. ”(4) FAMILIES UNDER CERTAIN AGREEMENTS.\u2014In the case of a family receiving assistance from an Indian tribe, distribute the amount so collected pursuant to an agreement entered into pursuant to a State plan under section 454(33). ”(5) STUDY AND REPORT.\u2014Not later than October 1, 1998, the Secretary shall report to the Congress the Secretary’s find- ings with respect to\u2014 ”(A) whether the distribution of post-assistance arrear- ages to families has been effective in moving people off of welfare and keeping them off of welfare; ”(B) whether early implementation of a pre-assistance arrearage program by some States has been effective in moving people off of welfare and keeping them off of wel- fare; ”(C) what the overall impact has been of the amend- ments made by the Personal Responsibility and Work Op- portunity Act of 1996 with respect to child support enforce- ment in moving people off of welfare and keeping them off of welfare; and ”(D) based on the information and data the Secretary has obtained, what changes, if any, should be made in the policies related to the distribution of child support arrear- ages. ”(b) CONTINUATION OF ASSIGNMENTS.\u2014Any rights to support obligations, which were assigned to a State as a condition of receiv- ing assistance from the State under part A and which were in effect on the day before the date of the enactment of the Personal Respon- sibility and Work Opportunity Act of 1996, shall remain assigned after such date. ”(c) DEFINITIONS.\u2014As used in subsection (a): ”(1) ASSISTANCE.\u2014The term ‘assistance from the State’ means\u2014 ”(A) assistance under the State program funded under part A or under the State plan approved under part A of this title (as in effect on the day before the date of the enact- ment of the Personal Responsibility and Work Opportunity Act of 1996); and ”(B) foster care maintenance payments under the State plan approved under part E of this title. ”(2) FEDERAL SHARE.\u2014The term ‘Federal share’ means that portion of the amount collected resulting from the application of the Federal medical assistance percentage in effect for the fis- cal year in which the amount is collected. ”(3) FEDERAL MEDICAL ASSISTANCE PERCENTAGE.\u2014The term ‘Federal medical assistance percentage’ means\u2014 ”(A) the Federal medical assistance percentage (as de- fined in section 1118), in the case of Puerto Rico, the Virgin Islands, Guam, and American Samoa; or 104 ”(B) the Federal medical assistance percentage (as de- fined in section 1905(b), as in effect on September 30, 1996) in the case of any other State. ”(4) STATE SHARE.\u2014The term ‘State share’ means 100 per- cent minus the Federal share. ”(d) HOLD HARMLESS PROVISION.\u2014If the amounts collected which could be retained by the State in the fiscal year (to the extent necessary to reimburse the State for amounts paid to families as as- sistance by the State) are less than the State share of the amounts collected in fiscal year 1995 (determined in accordance with section 457 as in effect on the day before the date of the enactment of the Personal Responsibility and Work Opportunity Act of 1996), the State share for the fiscal year shall be an amount equal to the State share in fiscal year 1995. ”(e) GAP PAYMENTS NOT SUBJECT TO DISTRIBUTION UNDER THIS SECTION.\u2014At State option, this section shall not apply to any amount collected on behalf of a family as support by the State (and paid to the family in addition to the amount of assistance otherwise payable to the family) pursuant to a plan approved under this part if such amount would have been paid to the family by the State under section 402(a)(28), as in effect and applied on the day before the date of the enactment of section 302 of the Personal Responsibil- ity and Work Opportunity Reconciliation Act of 1996. For purposes of subsection (d), the State share of such amount paid to the family shall be considered amounts which could be retained by the State if such payments were reported by the State as part of the State share of amounts collected in fiscal year 1995.”. (b) CONFORMING AMENDMENTS.\u2014 (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is amended by striking ”section 457(b)(4) or (d)(3)” and inserting ”section 457”. (2) Section 454 (42 U.S.C. 654) is amended\u2014 (A) in paragraph (11)\u2014 (i) by striking ”(11)” and inserting ”(11)(A)”; and (ii) by inserting after the semicolon ”and”; and (B) by redesignating paragraph (12) as subparagraph (B) of paragraph (11). (c) EFFECTIVE DATES.\u2014 (1) IN GENERAL.\u2014Except as provided in paragraph (2), the amendments made by this section shall be effective on October 1, 1996, or earlier at the State’s option. (2) CONFORMING AMENDMENTS.\u2014The amendments made by subsection (b)(2) shall become effective on the date of the enact- ment of this Act. SEC. 303. PRIVACY SAFEGUARDS. (a) STATE PLAN REQUIREMENT.\u2014Section 454 (42 U.S.C. 654), as amended by section 301(b) of this Act, is amended\u2014 (1) by striking ”and” at the end of paragraph (24); (2) by striking the period at the end of paragraph (25) and inserting ”; and”; and (3) by adding after paragraph (25) the following new para- graph: ”(26) will have in effect safeguards, applicable to all con- fidential information handled by the State agency, that are de- signed to protect the privacy rights of the parties, including\u2014 105 ”(A) safeguards against unauthorized use or disclosure of information relating to proceedings or actions to estab- lish paternity, or to establish or enforce support; ”(B) prohibitions against the release of information on the whereabouts of 1 party to another party against whom a protective order with respect to the former party has been entered; and ”(C) prohibitions against the release of information on the whereabouts of 1 party to another party if the State has reason to believe that the release of the information may re- sult in physical or emotional harm to the former party.”. (b) EFFECTIVE DATE.\u2014The amendment made by subsection (a) shall become effective on October 1, 1997. SEC. 304. RIGHTS TO NOTIFICATION OF HEARINGS. (a) IN GENERAL.\u2014Section 454 (42 U.S.C. 654), as amended by section 302(b)(2) of this Act, is amended by inserting after para- graph (11) the following new paragraph: ”(12) provide for the establishment of procedures to require the State to provide individuals who are applying for or receiv- ing services under the State plan, or who are parties to cases in which services are being provided under the State plan\u2014 ”(A) with notice of all proceedings in which support ob- ligations might be established or modified; and ”(B) with a copy of any order establishing or modifying a child support obligation, or (in the case of a petition for modification) a notice of determination that there should be no change in the amount of the child support award, with- in 14 days after issuance of such order or determination;”. (b) EFFECTIVE DATE.\u2014The amendment made by subsection (a) shall become effective on October 1, 1997. Subtitle B\u2014Locate and Case Tracking SEC. 311. STATE CASE REGISTRY. Section 454A, as added by section 344(a)(2) of this Act, is amended by adding at the end the following new subsections: ”(e) STATE CASE REGISTRY.\u2014 ”(1) CONTENTS.\u2014The automated system required by this section shall include a registry (which shall be known as the ‘State case registry’) that contains records with respect to\u2014 ”(A) each case in which services are being provided by the State agency under the State plan approved under this part; and ”(B) each support order established or modified in the State on or after October 1, 1998. ”(2) LINKING OF LOCAL REGISTRIES.\u2014The State case reg- istry may be established by linking local case registries of sup- port orders through an automated information network, subject to this section. ”(3) USE OF STANDARDIZED DATA ELEMENTS.\u2014Such records shall use standardized data elements for both parents (such as names, social security numbers and other uniform identification numbers, dates of birth, and case identification numbers), and 106 contain such other information (such as on case status) as the Secretary may require. ”(4) PAYMENT RECORDS.\u2014Each case record in the State case registry with respect to which services are being provided under the State plan approved under this part and with respect to which a support order has been established shall include a record of\u2014 ”(A) the amount of monthly (or other periodic) support owed under the order, and other amounts (including ar- rearages, interest or late payment penalties, and fees) due or overdue under the order; ”(B) any amount described in subparagraph (A) that has been collected; ”(C) the distribution of such collected amounts; ”(D) the birth date of any child for whom the order re- quires the provision of support; and ”(E) the amount of any lien imposed with respect to the order pursuant to section 466(a)(4). ”(5) UPDATING AND MONITORING.\u2014The State agency operat- ing the automated system required by this section shall prompt- ly establish and update, maintain, and regularly monitor, case records in the State case registry with respect to which services are being provided under the State plan approved under this part, on the basis of\u2014 ”(A) information on administrative actions and admin- istrative and judicial proceedings and orders relating to paternity and support; ”(B) information obtained from comparison with Fed- eral, State, or local sources of information; ”(C) information on support collections and distribu- tions; and ”(D) any other relevant information. ”(f) INFORMATION COMPARISONS AND OTHER DISCLOSURES OF INFORMATION.\u2014The State shall use the automated system required by this section to extract information from (at such times, and in such standardized format or formats, as may be required by the Secretary), to share and compare information with, and to receive information from, other data bases and information comparison services, in order to obtain (or provide) information necessary to en- able the State agency (or the Secretary or other State or Federal agencies) to carry out this part, subject to section 6103 of the Inter- nal Revenue Code of 1986. Such information comparison activities shall include the following: ”(1) FEDERAL CASE REGISTRY OF CHILD SUPPORT ORDERS.\u2014 Furnishing to the Federal Case Registry of Child Support Or- ders established under section 453(h) (and update as necessary, with information including notice of expiration of orders) the minimum amount of information on child support cases re- corded in the State case registry that is necessary to operate the registry (as specified by the Secretary in regulations). ”(2) FEDERAL PARENT LOCATOR SERVICE.\u2014Exchanging in- formation with the Federal Parent Locator Service for the pur- poses specified in section 453. 107 ”(3) TEMPORARY FAMILY ASSISTANCE AND MEDICAID AGEN- CIES.\u2014Exchanging information with State agencies (of the State and of other States) administering programs funded under part A, programs operated under a State plan approved under title XIX, and other programs designated by the Sec- retary, as necessary to perform State agency responsibilities under this part and under such programs. ”(4) INTRASTATE AND INTERSTATE INFORMATION COMPARI- SONS.\u2014Exchanging information with other agencies of the State, agencies of other States, and interstate information net- works, as necessary and appropriate to carry out (or assist other States to carry out) the purposes of this part.”. SEC. 312. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS. (a) STATE PLAN REQUIREMENT.\u2014Section 454 (42 U.S.C. 654), as amended by sections 301(b) and 303(a) of this Act, is amended\u2014 (1) by striking ”and” at the end of paragraph (25); (2) by striking the period at the end of paragraph (26) and inserting ”; and”; and (3) by adding after paragraph (26) the following new para- graph: ”(27) provide that, on and after October 1, 1998, the State agency will\u2014 ”(A) operate a State disbursement unit in accordance with section 454B; and ”(B) have sufficient State staff (consisting of State em- ployees) and (at State option) contractors reporting directly to the State agency to\u2014 ”(i) monitor and enforce support collections through the unit in cases being enforced by the State pursuant to section 454(4) (including carrying out the automated data processing responsibilities described in section 454A(g)); and ”(ii) take the actions described in section 466(c)(1) in appropriate cases.”. (b) ESTABLISHMENT OF STATE DISBURSEMENT UNIT.\u2014Part D of title IV (42 U.S.C. 651 669), as amended by section 344(a)(2) of this Act, is amended by inserting after section 454A the following new section: ”SEC. 454B. COLLECTION AND DISBURSEMENT OF SUPPORT PAY- MENTS. ”(a) STATE DISBURSEMENT UNIT.\u2014 ”(1) IN GENERAL.\u2014In order for a State to meet the require- ments of this section, the State agency must establish and oper- ate a unit (which shall be known as the ‘State disbursement unit’) for the collection and disbursement of payments under support orders\u2014 ”(A) in all cases being enforced by the State pursuant to section 454(4); and ”(B) in all cases not being enforced by the State under this part in which the support order is initially issued in the State on or after January 1, 1994, and in which the in- come of the noncustodial parent are subject to withholding pursuant to section 466(a)(8)(B). 108 ”(2) OPERATION.\u2014The State disbursement unit shall be op- erated\u2014 ”(A) directly by the State agency (or 2 or more State agencies under a regional cooperative agreement), or (to the extent appropriate) by a contractor responsible directly to the State agency; and ”(B) except in cases described in paragraph (1)(B), in coordination with the automated system established by the State pursuant to section 454A. ”(3) LINKING OF LOCAL DISBURSEMENT UNITS.\u2014The State disbursement unit may be established by linking local disburse- ment units through an automated information network, subject to this section, if the Secretary agrees that the system will not cost more nor take more time to establish or operate than a cen- tralized system. In addition, employers shall be given 1 location to which income withholding is sent. ”(b) REQUIRED PROCEDURES.\u2014The State disbursement unit shall use automated procedures, electronic processes, and computer- driven technology to the maximum extent feasible, efficient, and eco- nomical, for the collection and disbursement of support payments, including procedures\u2014 ”(1) for receipt of payments from parents, employers, and other States, and for disbursements to custodial parents and other obligees, the State agency, and the agencies of other States; ”(2) for accurate identification of payments; ”(3) to ensure prompt disbursement of the custodial parent’s share of any payment; and ”(4) to furnish to any parent, upon request, timely informa- tion on the current status of support payments under an order requiring payments to be made by or to the parent, except that in cases described in subsection (a)(1)(B), the State disburse- ment unit shall not be required to convert and maintain in automated form records of payments kept pursuant to section 466(a)(8)(B)(iii) before the effective date of this section. ”(c) TIMING OF DISBURSEMENTS.\u2014 ”(1) IN GENERAL.\u2014Except as provided in paragraph (2), the State disbursement unit shall distribute all amounts payable under section 457(a) within 2 business days after receipt from the employer or other source of periodic income, if sufficient in- formation identifying the payee is provided. ”(2) PERMISSIVE RETENTION OF ARREARAGES.\u2014The State disbursement unit may delay the distribution of collections to- ward arrearages until the resolution of any timely appeal with respect to such arrearages. ”(d) BUSINESS DAY DEFINED.\u2014As used in this section, the term ‘business day’ means a day on which State offices are open for regu- lar business.”. (c) USE OF AUTOMATED SYSTEM.\u2014Section 454A, as added by section 344(a)(2) and as amended by section 311 of this Act, is amended by adding at the end the following new subsection: ”(g) COLLECTION AND DISTRIBUTION OF SUPPORT PAYMENTS.\u2014 ”(1) IN GENERAL.\u2014The State shall use the automated sys- tem required by this section, to the maximum extent feasible, to 109 assist and facilitate the collection and disbursement of support payments through the State disbursement unit operated under section 454B, through the performance of functions, including, at a minimum\u2014 ”(A) transmission of orders and notices to employers (and other debtors) for the withholding of income\u2014 ”(i) within 2 business days after receipt of notice of, and the income source subject to, such withholding from a court, another State, an employer, the Federal Parent Locator Service, or another source recognized by the State; and ”(ii) using uniform formats prescribed by the Sec- retary; ”(B) ongoing monitoring to promptly identify failures to make timely payment of support; and ”(C) automatic use of enforcement procedures (includ- ing procedures authorized pursuant to section 466(c)) if payments are not timely made. ”(2) BUSINESS DAY DEFINED.\u2014As used in paragraph (1), the term ‘business day’ means a day on which State offices are open for regular business.”. (d) EFFECTIVE DATES.\u2014 (1) IN GENERAL.\u2014Except as provided in paragraph (2), the amendments made by this section shall become effective on Oc- tober 1, 1998. (2) LIMITED EXCEPTION TO UNIT HANDLING PAYMENTS.\u2014 Notwithstanding section 454B(b)(1) of the Social Security Act, as added by this section, any State which, as of the date of the enactment of this Act, processes the receipt of child support pay- ments through local courts may, at the option of the State, con- tinue to process through September 30, 1999, such payments through such courts as processed such payments on or before such date of enactment. SEC. 313. STATE DIRECTORY OF NEW HIRES. (a) STATE PLAN REQUIREMENT.\u2014Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a) and 312(a) of this Act, is amended\u2014 (1) by striking ”and” at the end of paragraph (26); (2) by striking the period at the end of paragraph (27) and inserting ”; and”; and (3) by adding after paragraph (27) the following new para- graph: ”(28) provide that, on and after October 1, 1997, the State will operate a State Directory of New Hires in accordance with section 453A.”. (b) STATE DIRECTORY OF NEW HIRES.\u2014Part D of title IV (42 U.S.C. 651 669) is amended by inserting after section 453 the fol- lowing new section: ”SEC. 453A. STATE DIRECTORY OF NEW HIRES. ”(a) ESTABLISHMENT.\u2014 ”(1) IN GENERAL.\u2014 ”(A) REQUIREMENT FOR STATES THAT HAVE NO DIREC- TORY.\u2014Except as provided in subparagraph (B), not later 110 than October 1, 1997, each State shall establish an auto- mated directory (to be known as the ‘State Directory of New Hires’) which shall contain information supplied in accord- ance with subsection (b) by employers on each newly hired employee. ”(B) STATES WITH NEW HIRE REPORTING IN EXIST- ENCE.\u2014A State which has a new hire reporting law in ex- istence on the date of the enactment of this section may con- tinue to operate under the State law, but the State must meet the requirements of subsection (g)(2) not later than October 1, 1997, and the requirements of this section (other than subsection (g)(2)) not later than October 1, 1998. ”(2) DEFINITIONS.\u2014As used in this section: ”(A) EMPLOYEE.\u2014The term ’employee’\u2014 ”(i) means an individual who is an employee with- in the meaning of chapter 24 of the Internal Revenue Code of 1986; and ”(ii) does not include an employee of a Federal or State agency performing intelligence or counterintel- ligence functions, if the head of such agency has deter- mined that reporting pursuant to paragraph (1) with respect to the employee could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission. ”(B) EMPLOYER.\u2014 ”(i) IN GENERAL.\u2014The term ’employer’ has the meaning given such term in section 3401(d) of the In- ternal Revenue Code of 1986 and includes any govern- mental entity and any labor organization. ”(ii) LABOR ORGANIZATION.\u2014The term ‘labor orga- nization’ shall have the meaning given such term in section 2(5) of the National Labor Relations Act, and includes any entity (also known as a ‘hiring hall’) which is used by the organization and an employer to carry out requirements described in section 8(f)(3) of such Act of an agreement between the organization and the employer. ”(b) EMPLOYER INFORMATION.\u2014 ”(1) REPORTING REQUIREMENT.\u2014 ”(A) IN GENERAL.\u2014Except as provided in subpara- graphs (B) and (C), each employer shall furnish to the Di- rectory of New Hires of the State in which a newly hired employee works, a report that contains the name, address, and social security number of the employee, and the name and address of, and identifying number assigned under section 6109 of the Internal Revenue Code of 1986 to, the employer. ”(B) MULTISTATE EMPLOYERS.\u2014An employer that has employees who are employed in 2 or more States and that transmits reports magnetically or electronically may comply with subparagraph (A) by designating 1 State in which such employer has employees to which the employer will transmit the report described in subparagraph (A), and transmitting such report to such State. Any employer that 111 transmits reports pursuant to this subparagraph shall no- tify the Secretary in writing as to which State such em- ployer designates for the purpose of sending reports. ”(C) FEDERAL GOVERNMENT EMPLOYERS.\u2014Any depart- ment, agency, or instrumentality of the United States shall comply with subparagraph (A) by transmitting the report described in subparagraph (A) to the National Directory of New Hires established pursuant to section 453. ”(2) TIMING OF REPORT.\u2014Each State may provide the time within which the report required by paragraph (1) shall be made with respect to an employee, but such report shall be made\u2014 ”(A) not later than 20 days after the date the employer hires the employee; or ”(B) in the case of an employer transmitting reports magnetically or electronically, by 2 monthly transmissions (if necessary) not less than 12 days nor more than 16 days apart. ”(c) REPORTING FORMAT AND METHOD.\u2014Each report required by subsection (b) shall be made on a W 4 form or, at the option of the employer, an equivalent form, and may be transmitted by 1st class mail, magnetically, or electronically. ”(d) CIVIL MONEY PENALTIES ON NONCOMPLYING EMPLOYERS.\u2014 The State shall have the option to set a State civil money penalty which shall be less than\u2014 ”(1) $25; or ”(2) $500 if, under State law, the failure is the result of a conspiracy between the employer and the employee to not supply the required report or to supply a false or incomplete report. ”(e) ENTRY OF EMPLOYER INFORMATION.\u2014Information shall be entered into the data base maintained by the State Directory of New Hires within 5 business days of receipt from an employer pursuant to subsection (b). ”(f) INFORMATION COMPARISONS.\u2014 ”(1) IN GENERAL.\u2014Not later than May 1, 1998, an agency designated by the State shall, directly or by contract, conduct automated comparisons of the social security numbers reported by employers pursuant to subsection (b) and the social security numbers appearing in the records of the State case registry for cases being enforced under the State plan. ”(2) NOTICE OF MATCH.\u2014When an information comparison conducted under paragraph (1) reveals a match with respect to the social security number of an individual required to provide support under a support order, the State Directory of New Hires shall provide the agency administering the State plan approved under this part of the appropriate State with the name, ad- dress, and social security number of the employee to whom the social security number is assigned, and the name and address of, and identifying number assigned under section 6109 of the Internal Revenue Code of 1986 to, the employer. ”(g) TRANSMISSION OF INFORMATION.\u2014 ”(1) TRANSMISSION OF WAGE WITHHOLDING NOTICES TO EM- PLOYERS.\u2014Within 2 business days after the date information regarding a newly hired employee is entered into the State Di- 112 rectory of New Hires, the State agency enforcing the employee’s child support obligation shall transmit a notice to the employer of the employee directing the employer to withhold from the in- come of the employee an amount equal to the monthly (or other periodic) child support obligation (including any past due sup- port obligation) of the employee, unless the employee’s income is not subject to withholding pursuant to section 466(b)(3). ”(2) TRANSMISSIONS TO THE NATIONAL DIRECTORY OF NEW HIRES.\u2014 ”(A) NEW HIRE INFORMATION.\u2014Within 3 business days after the date information regarding a newly hired em- ployee is entered into the State Directory of New Hires, the State Directory of New Hires shall furnish the information to the National Directory of New Hires. ”(B) WAGE AND UNEMPLOYMENT COMPENSATION INFOR- MATION.\u2014The State Directory of New Hires shall, on a quarterly basis, furnish to the National Directory of New Hires extracts of the reports required under section 303(a)(6) to be made to the Secretary of Labor concerning the wages and unemployment compensation paid to indi- viduals, by such dates, in such format, and containing such information as the Secretary of Health and Human Serv- ices shall specify in regulations. ”(3) BUSINESS DAY DEFINED.\u2014As used in this subsection, the term ‘business day’ means a day on which State offices are open for regular business. ”(h) OTHER USES OF NEW HIRE INFORMATION.\u2014 ”(1) LOCATION OF CHILD SUPPORT OBLIGORS.\u2014The agency administering the State plan approved under this part shall use information received pursuant to subsection (f)(2) to locate individuals for purposes of establishing paternity and establish- ing, modifying, and enforcing child support obligations, and may disclose such information to any agent of the agency that is under contract with the agency to carry out such purposes. ”(2) VERIFICATION OF ELIGIBILITY FOR CERTAIN PRO- GRAMS.\u2014A State agency responsible for administering a pro- gram specified in section 1137(b) shall have access to informa- tion reported by employers pursuant to subsection (b) of this section for purposes of verifying eligibility for the program. ”(3) ADMINISTRATION OF EMPLOYMENT SECURITY AND WORK- ERS’ COMPENSATION.\u2014State agencies operating employment se- curity and workers’ compensation programs shall have access to information reported by employers pursuant to subsection (b) for the purposes of administering such programs.”. (c) QUARTERLY WAGE REPORTING.\u2014Section 1137(a)(3) (42 U.S.C. 1320b 7(a)(3)) is amended\u2014 (1) by inserting ”(including State and local governmental entities and labor organizations (as defined in section 453A(a)(2)(B)(iii))” after ”employers”; and (2) by inserting ”, and except that no report shall be filed with respect to an employee of a State or local agency perform- ing intelligence or counterintelligence functions, if the head of such agency has determined that filing such a report could en- 113 danger the safety of the employee or compromise an ongoing in- vestigation or intelligence mission” after ”paragraph (2)”. (d) DISCLOSURE TO CERTAIN AGENTS.\u2014Section 303(e) (42 U.S.C. 503(e)) is amended by adding at the end the following: ”(5) A State or local child support enforcement agency may dis- close to any agent of the agency that is under contract with the agency to carry out the purposes described in paragraph (1)(B) wage information that is disclosed to an officer or employee of the agency under paragraph (1)(A). Any agent of a State or local child support agency that receives wage information under this paragraph shall comply with the safeguards established pursuant to paragraph (1)(B).”. SEC. 314. AMENDMENTS CONCERNING INCOME WITHHOLDING. (a) MANDATORY INCOME WITHHOLDING.\u2014 (1) IN GENERAL.\u2014Section 466(a)(1) (42 U.S.C. 666(a)(1)) is amended to read as follows: ”(1)(A) Procedures described in subsection (b) for the with- holding from income of amounts payable as support in cases subject to enforcement under the State plan. ”(B) Procedures under which the income of a person with a support obligation imposed by a support order issued (or modified) in the State before October 1, 1996, if not otherwise subject to withholding under subsection (b), shall become sub- ject to withholding as provided in subsection (b) if arrearages occur, without the need for a judicial or administrative hear- ing.”. (2) CONFORMING AMENDMENTS.\u2014 (A) Section 466(b) (42 U.S.C. 666(b)) is amended in the matter preceding paragraph (1), by striking ”subsection (a)(1)” and inserting ”subsection (a)(1)(A)”. (B) Section 466(b)(4) (42 U.S.C. 666(b)(4)) is amended to read as follows: ”(4)(A) Such withholding must be carried out in full com- pliance with all procedural due process requirements of the State, and the State must send notice to each noncustodial par- ent to whom paragraph (1) applies\u2014 ”(i) that the withholding has commenced; and ”(ii) of the procedures to follow if the noncustodial par- ent desires to contest such withholding on the grounds that the withholding or the amount withheld is improper due to a mistake of fact. ”(B) The notice under subparagraph (A) of this paragraph shall include the information provided to the employer under paragraph (6)(A).”. (C) Section 466(b)(5) (42 U.S.C. 666(b)(5)) is amended by striking all that follows ”administered by” and inserting ”the State through the State disbursement unit established pursuant to section 454B, in accordance with the require- ments of section 454B.”. (D) Section 466(b)(6)(A) (42 U.S.C. 666(b)(6)(A)) is amended\u2014 (i) in clause (i), by striking ”to the appropriate agency” and all that follows and inserting ”to the State disbursement unit within 7 business days after the 114 date the amount would (but for this subsection) have been paid or credited to the employee, for distribution in accordance with this part. The employer shall with- hold funds as directed in the notice, except that when an employer receives an income withholding order is- sued by another State, the employer shall apply the in- come withholding law of the state of the obligor’s prin- cipal place of employment in determining\u2014 ”(I) the employer’s fee for processing an income with- holding order; ”(II) the maximum amount permitted to be withheld from the obligor’s income; ”(III) the time periods within which the employer must implement the income withholding order and forward the child support payment; ”(IV) the priorities for withholding and allocating in- come withheld for multiple child support obligees; and ”(V) any withholding terms or conditions not specified in the order. An employer who complies with an income withholding notice that is regular on its face shall not be subject to civil liability to any individual or agency for conduct in compliance with the notice.”; (ii) in clause (ii), by inserting ”be in a standard format prescribed by the Secretary, and” after ”shall”; and (iii) by adding at the end the following new clause: ”(iii) As used in this subparagraph, the term ‘business day’ means a day on which State offices are open for regular busi- ness.”. (E) Section 466(b)(6)(D) (42 U.S.C. 666(b)(6)(D)) is amended by striking ”any employer” and all that follows and inserting ”any employer who\u2014 ”(i) discharges from employment, refuses to employ, or takes disciplinary action against any noncustodial parent subject to income withholding required by this subsection because of the existence of such withholding and the obliga- tions or additional obligations which it imposes upon the employer; or ”(ii) fails to withhold support from income or to pay such amounts to the State disbursement unit in accordance with this subsection.”. (F) Section 466(b) (42 U.S.C. 666(b)) is amended by adding at the end the following new paragraph: ”(11) Procedures under which the agency administering the State plan approved under this part may execute a withholding order without advance notice to the obligor, including issuing the withholding order through electronic means.”. (b) DEFINITION OF INCOME.\u2014 (1) IN GENERAL.\u2014Section 466(b)(8) (42 U.S.C. 666(b)(8)) is amended to read as follows: ”(8) For purposes of subsection (a) and this subsection, the term ‘income’ means any periodic form of payment due to an in- dividual, regardless of source, including wages, salaries, com- 115 missions, bonuses, worker’s compensation, disability, payments pursuant to a pension or retirement program, and interest.”. (2) CONFORMING AMENDMENTS.\u2014 (A) Subsections (a)(8)(A), (a)(8)(B)(i), (b)(3)(A), (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and (b)(7) of section 466 (42 U.S.C. 666(a)(8)(A), (a)(8)(B)(i), (b)(3)(A), (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and (b)(7)) are each amended by striking ”wages” each place such term appears and insert- ing ”income”. (B) Section 466(b)(1) (42 U.S.C. 666(b)(1)) is amended by striking ”wages (as defined by the State for purposes of this section)” and inserting ”income”. (c) CONFORMING AMENDMENT.\u2014Section 466(c) (42 U.S.C. 666(c)) is repealed. SEC. 315. LOCATOR INFORMATION FROM INTERSTATE NETWORKS. Section 466(a) (42 U.S.C. 666(a)) is amended by inserting after paragraph (11) the following new paragraph: ”(12) LOCATOR INFORMATION FROM INTERSTATE NET- WORKS.\u2014Procedures to ensure that all Federal and State agen- cies conducting activities under this part have access to any sys- tem used by the State to locate an individual for purposes relat- ing to motor vehicles or law enforcement.”. SEC. 316. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE. (a) EXPANDED AUTHORITY TO LOCATE INDIVIDUALS AND AS- SETS.\u2014Section 453 (42 U.S.C. 653) is amended\u2014 (1) in subsection (a), by striking all that follows ”subsection (c))” and inserting ”, for the purpose of establishing parentage, establishing, setting the amount of, modifying, or enforcing child support obligations, or enforcing child custody or visita- tion orders\u2014 ”(1) information on, or facilitating the discovery of, the lo- cation of any individual\u2014 ”(A) who is under an obligation to pay child support or provide child custody or visitation rights; ”(B) against whom such an obligation is sought; ”(C) to whom such an obligation is owed, including the individual’s social security number (or numbers), most recent address, and the name, address, and employer identification number of the individual’s employer; ”(2) information on the individual’s wages (or other income) from, and benefits of, employment (including rights to or enroll- ment in group health care coverage); and ”(3) information on the type, status, location, and amount of any assets of, or debts owed by or to, any such individual.”; and (2) in subsection (b)\u2014 (A) in the matter preceding paragraph (1), by striking ”social security” and all that follows through ”absent par- ent” and inserting ”information described in subsection (a)”; and (B) in the flush paragraph at the end, by adding the following: ”No information shall be disclosed to any person if the State has notified the Secretary that the State has 116 reasonable evidence of domestic violence or child abuse and the disclosure of such information could be harmful to the custodial parent or the child of such parent. Information received or transmitted pursuant to this section shall be subject to the safeguard provisions contained in section 454(26).”. (b) AUTHORIZED PERSON FOR INFORMATION REGARDING VISITA- TION RIGHTS.\u2014Section 453(c) (42 U.S.C. 653(c)) is amended\u2014 (1) in paragraph (1), by striking ”support” and inserting ”support or to seek to enforce orders providing child custody or visitation rights”; and (2) in paragraph (2), by striking ”, or any agent of such court; and” and inserting ”or to issue an order against a resi- dent parent for child custody or visitation rights, or any agent of such court;”. (c) REIMBURSEMENT FOR INFORMATION FROM FEDERAL AGEN- CIES.\u2014Section 453(e)(2) (42 U.S.C. 653(e)(2)) is amended in the 4th sentence by inserting ”in an amount which the Secretary determines to be reasonable payment for the information exchange (which amount shall not include payment for the costs of obtaining, compil- ing, or maintaining the information)” before the period. (d) REIMBURSEMENT FOR REPORTS BY STATE AGENCIES.\u2014Sec- tion 453 (42 U.S.C. 653) is amended by adding at the end the fol- lowing new subsection: ”(g) REIMBURSEMENT FOR REPORTS BY STATE AGENCIES.\u2014The Secretary may reimburse Federal and State agencies for the costs incurred by such entities in furnishing information requested by the Secretary under this section in an amount which the Secretary de- termines to be reasonable payment for the information exchange (which amount shall not include payment for the costs of obtaining, compiling, or maintaining the information).”. (e) CONFORMING AMENDMENTS.\u2014 (1) Sections 452(a)(9), 453(a), 453(b), 463(a), 463(e), and 463(f) (42 U.S.C. 652(a)(9), 653(a), 653(b), 663(a), 663(e), and 663(f)) are each amended by inserting ”Federal” before ”Parent” each place such term appears. (2) Section 453 (42 U.S.C. 653) is amended in the heading by adding ”FEDERAL” before ”PARENT”. (f) NEW COMPONENTS.\u2014Section 453 (42 U.S.C. 653), as amend- ed by subsection (d) of this section, is amended by adding at the end the following new subsections: ”(h) FEDERAL CASE REGISTRY OF CHILD SUPPORT ORDERS.\u2014 ”(1) IN GENERAL.\u2014Not later than October 1, 1998, in order to assist States in administering programs under State plans approved under this part and programs funded under part A, and for the other purposes specified in this section, the Sec- retary shall establish and maintain in the Federal Parent Loca- tor Service an automated registry (which shall be known as the ‘Federal Case Registry of Child Support Orders’), which shall contain abstracts of support orders and other information de- scribed in paragraph (2) with respect to each case in each State case registry maintained pursuant to section 454A(e), as fur- nished (and regularly updated), pursuant to section 454A(f), by State agencies administering programs under this part. 117 ”(2) CASE INFORMATION.\u2014The information referred to in paragraph (1) with respect to a case shall be such information as the Secretary may specify in regulations (including the names, social security numbers or other uniform identification numbers, and State case identification numbers) to identify the individuals who owe or are owed support (or with respect to or on behalf of whom support obligations are sought to be estab- lished), and the State or States which have the case. ”(i) NATIONAL DIRECTORY OF NEW HIRES.\u2014 ”(1) IN GENERAL.\u2014In order to assist States in administer- ing programs under State plans approved under this part and programs funded under part A, and for the other purposes spec- ified in this section, the Secretary shall, not later than October 1, 1997, establish and maintain in the Federal Parent Locator Service an automated directory to be known as the National Di- rectory of New Hires, which shall contain the information sup- plied pursuant to section 453A(g)(2). ”(2) ENTRY OF DATA.\u2014Information shall be entered into the data base maintained by the National Directory of New Hires within 2 business days of receipt pursuant to section 453A(g)(2). ”(3) ADMINISTRATION OF FEDERAL TAX LAWS.\u2014The Sec- retary of the Treasury shall have access to the information in the National Directory of New Hires for purposes of administer- ing section 32 of the Internal Revenue Code of 1986, or the ad- vance payment of the earned income tax credit under section 3507 of such Code, and verifying a claim with respect to em- ployment in a tax return. ”(4) LIST OF MULTISTATE EMPLOYERS.\u2014The Secretary shall maintain within the National Directory of New Hires a list of multistate employers that report information regarding newly hired employees pursuant to section 453A(b)(1)(B), and the State which each such employer has designated to receive such information. ”(j) INFORMATION COMPARISONS AND OTHER DISCLOSURES.\u2014 ”(1) VERIFICATION BY SOCIAL SECURITY ADMINISTRATION.\u2014 ”(A) IN GENERAL.\u2014The Secretary shall transmit infor- mation on individuals and employers maintained under this section to the Social Security Administration to the ex- tent necessary for verification in accordance with subpara- graph (B). ”(B) VERIFICATION BY SSA.\u2014The Social Security Ad- ministration shall verify the accuracy of, correct, or supply to the extent possible, and report to the Secretary, the fol- lowing information supplied by the Secretary pursuant to subparagraph (A): ”(i) The name, social security number, and birth date of each such individual. ”(ii) The employer identification number of each such employer. ”(2) INFORMATION COMPARISONS.\u2014For the purpose of locat- ing individuals in a paternity establishment case or a case in- volving the establishment, modification, or enforcement of a support order, the Secretary shall\u2014 118 ”(A) compare information in the National Directory of New Hires against information in the support case ab- stracts in the Federal Case Registry of Child Support Or- ders not less often than every 2 business days; and ”(B) within 2 business days after such a comparison re- veals a match with respect to an individual, report the in- formation to the State agency responsible for the case. ”(3) INFORMATION COMPARISONS AND DISCLOSURES OF IN- FORMATION IN ALL REGISTRIES FOR TITLE IV PROGRAM PUR- POSES.\u2014To the extent and with the frequency that the Secretary determines to be effective in assisting States to carry out their responsibilities under programs operated under this part and programs funded under part A, the Secretary shall\u2014 ”(A) compare the information in each component of the Federal Parent Locator Service maintained under this sec- tion against the information in each other such component (other than the comparison required by paragraph (2)), and report instances in which such a comparison reveals a match with respect to an individual to State agencies oper- ating such programs; and ”(B) disclose information in such registries to such State agencies. ”(4) PROVISION OF NEW HIRE INFORMATION TO THE SOCIAL SECURITY ADMINISTRATION.\u2014The National Directory of New Hires shall provide the Commissioner of Social Security with all information in the National Directory. ”(5) RESEARCH.\u2014The Secretary may provide access to infor- mation reported by employers pursuant to section 453A(b) for research purposes found by the Secretary to be likely to contrib- ute to achieving the purposes of part A or this part, but without personal identifiers. ”(k) FEES.\u2014 ”(1) FOR SSA VERIFICATION.\u2014The Secretary shall reimburse the Commissioner of Social Security, at a rate negotiated be- tween the Secretary and the Commissioner, for the costs in- curred by the Commissioner in performing the verification serv- ices described in subsection (j). ”(2) FOR INFORMATION FROM STATE DIRECTORIES OF NEW HIRES.\u2014The Secretary shall reimburse costs incurred by State directories of new hires in furnishing information as required by subsection (j)(3), at rates which the Secretary determines to be reasonable (which rates shall not include payment for the costs of obtaining, compiling, or maintaining such information). ”(3) FOR INFORMATION FURNISHED TO STATE AND FEDERAL AGENCIES.\u2014A State or Federal agency that receives information from the Secretary pursuant to this section shall reimburse the Secretary for costs incurred by the Secretary in furnishing the information, at rates which the Secretary determines to be rea- sonable (which rates shall include payment for the costs of ob- taining, verifying, maintaining, and comparing the informa- tion). ”(l) RESTRICTION ON DISCLOSURE AND USE.\u2014Information in the Federal Parent Locator Service, and information resulting from comparisons using such information, shall not be used or disclosed 119 except as expressly provided in this section, subject to section 6103 of the Internal Revenue Code of 1986. ”(m) INFORMATION INTEGRITY AND SECURITY.\u2014The Secretary shall establish and implement safeguards with respect to the enti- ties established under this section designed to\u2014 ”(1) ensure the accuracy and completeness of information in the Federal Parent Locator Service; and ”(2) restrict access to confidential information in the Fed- eral Parent Locator Service to authorized persons, and restrict use of such information to authorized purposes. ”(n) FEDERAL GOVERNMENT REPORTING.\u2014Each department, agency, and instrumentality of the United States shall on a quar- terly basis report to the Federal Parent Locator Service the name and social security number of each employee and the wages paid to the employee during the previous quarter, except that such a report shall not be filed with respect to an employee of a department, agen- cy, or instrumentality performing intelligence or counterintelligence functions, if the head of such department, agency, or instrumental- ity has determined that filing such a report could endanger the safe- ty of the employee or compromise an ongoing investigation or intel- ligence mission.”. (g) CONFORMING AMENDMENTS.\u2014 (1) TO PART D OF TITLE IV OF THE SOCIAL SECURITY ACT.\u2014 (A) Section 454(8)(B) (42 U.S.C. 654(8)(B)) is amended to read as follows: ”(B) the Federal Parent Locator Service established under section 453;”. (B) Section 454(13) (42 U.S.C. 654(13)) is amended by inserting ”and provide that information requests by parents who are residents of other States be treated with the same priority as requests by parents who are residents of the State submitting the plan” before the semicolon. (2) TO FEDERAL UNEMPLOYMENT TAX ACT.\u2014Section 3304(a)(16) of the Internal Revenue Code of 1986 is amended\u2014 (A) by striking ”Secretary of Health, Education, and Welfare” each place such term appears and inserting ”Sec- retary of Health and Human Services”; (B) in subparagraph (B), by striking ”such informa- tion” and all that follows and inserting ”information fur- nished under subparagraph (A) or (B) is used only for the purposes authorized under such subparagraph;”; (C) by striking ”and” at the end of subparagraph (A); (D) by redesignating subparagraph (B) as subpara- graph (C); and (E) by inserting after subparagraph (A) the following new subparagraph: ”(B) wage and unemployment compensation information contained in the records of such agency shall be furnished to the Secretary of Health and Human Services (in accordance with regulations promulgated by such Secretary) as necessary for the purposes of the National Directory of New Hires estab- lished under section 453(i) of the Social Security Act, and”. 120 (3) TO STATE GRANT PROGRAM UNDER TITLE III OF THE SO- CIAL SECURITY ACT.\u2014Subsection (h) of section 303 (42 U.S.C. 503) is amended to read as follows: ”(h)(1) The State agency charged with the administration of the State law shall, on a reimbursable basis\u2014 ”(A) disclose quarterly, to the Secretary of Health and Human Services, wage and claim information, as required pur- suant to section 453(i)(1), contained in the records of such agen- cy; ”(B) ensure that information provided pursuant to subpara- graph (A) meets such standards relating to correctness and ver- ification as the Secretary of Health and Human Services, with the concurrence of the Secretary of Labor, may find necessary; and ”(C) establish such safeguards as the Secretary of Labor de- termines are necessary to insure that information disclosed under subparagraph (A) is used only for purposes of section 453(i)(1) in carrying out the child support enforcement program under title IV. ”(2) Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that there is a failure to com- ply substantially with the requirements of paragraph (1), the Sec- retary of Labor shall notify such State agency that further payments will not be made to the State until the Secretary of Labor is satis- fied that there is no longer any such failure. Until the Secretary of Labor is so satisfied, the Secretary shall make no future certification to the Secretary of the Treasury with respect to the State. ”(3) For purposes of this subsection\u2014 ”(A) the term ‘wage information’ means information regard- ing wages paid to an individual, the social security account number of such individual, and the name, address, State, and the Federal employer identification number of the employer pay- ing such wages to such individual; and ”(B) the term ‘claim information’ means information re- garding whether an individual is receiving, has received, or has made application for, unemployment compensation, the amount of any such compensation being received (or to be received by such individual), and the individual’s current (or most recent) home address.”. (4) DISCLOSURE OF CERTAIN INFORMATION TO AGENTS OF CHILD SUPPORT ENFORCEMENT AGENCIES.\u2014 (A) IN GENERAL.\u2014Paragraph (6) of section 6103(l) of the Internal Revenue Code of 1986 (relating to disclosure of return information to Federal, State, and local child sup- port enforcement agencies) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph: ”(B) DISCLOSURE TO CERTAIN AGENTS.\u2014The following information disclosed to any child support enforcement agency under subparagraph (A) with respect to any individ- ual with respect to whom child support obligations are sought to be established or enforced may be disclosed by such agency to any agent of such agency which is under 121 contract with such agency to carry out the purposes de- scribed in subparagraph (C): ”(i) The address and social security account num- ber (or numbers) of such individual. ”(ii) The amount of any reduction under section 6402(c) (relating to offset of past-due support against overpayments) in any overpayment otherwise payable to such individual.” (B) CONFORMING AMENDMENTS.\u2014 (i) Paragraph (3) of section 6103(a) of such Code is amended by striking ”(l)(12)” and inserting ”para- graph (6) or (12) of subsection (l)”. (ii) Subparagraph (C) of section 6103(l)(6) of such Code, as redesignated by subsection (a), is amended to read as follows: ”(C) RESTRICTION ON DISCLOSURE.\u2014Information may be disclosed under this paragraph only for purposes of, and to the extent necessary in, establishing and collecting child support obligations from, and locating, individuals owing such obligations.” (iii) The material following subparagraph (F) of section 6103(p)(4) of such Code is amended by striking ”subsection (l)(12)(B)” and inserting ”paragraph (6)(A) or (12)(B) of subsection (l)”. (h) REQUIREMENT FOR COOPERATION.\u2014The Secretary of Labor and the Secretary of Health and Human Services shall work jointly to develop cost-effective and efficient methods of accessing the infor- mation in the various State directories of new hires and the Na- tional Directory of New Hires as established pursuant to the amend- ments made by this subtitle. In developing these methods the Sec- retaries shall take into account the impact, including costs, on the States, and shall also consider the need to insure the proper and au- thorized use of wage record information. SEC. 317. COLLECTION AND USE OF SOCIAL SECURITY NUMBERS FOR USE IN CHILD SUPPORT ENFORCEMENT. Section 466(a) (42 U.S.C. 666(a)), as amended by section 315 of this Act, is amended by inserting after paragraph (12) the following new paragraph: ”(13) RECORDING OF SOCIAL SECURITY NUMBERS IN CERTAIN FAMILY MATTERS.\u2014Procedures requiring that the social security number of\u2014 ”(A) any applicant for a professional license, commer- cial driver’s license, occupational license, or marriage li- cense be recorded on the application; ”(B) any individual who is subject to a divorce decree, support order, or paternity determination or acknowledg- ment be placed in the records relating to the matter; and ”(C) any individual who has died be placed in the records relating to the death and be recorded on the death certificate. For purposes of subparagraph (A), if a State allows the use of a number other than the social security number, the State shall so advise any applicants.”. 122 Subtitle C\u2014Streamlining and Uniformity of Procedures SEC. 321. ADOPTION OF UNIFORM STATE LAWS. Section 466 (42 U.S.C. 666) is amended by adding at the end the following new subsection: ”(f) UNIFORM INTERSTATE FAMILY SUPPORT ACT.\u2014In order to satisfy section 454(20)(A), on and after January 1, 1998, each State must have in effect the Uniform Interstate Family Support Act, as approved by the American Bar Association on February 9, 1993, to- gether with any amendments officially adopted before January 1, 1998 by the National Conference of Commissioners on Uniform State Laws.”. SEC. 322. IMPROVEMENTS TO FULL FAITH AND CREDIT FOR CHILD SUPPORT ORDERS. Section 1738B of title 28, United States Code, is amended\u2014 (1) in subsection (a)(2), by striking ”subsection (e)” and in- serting ”subsections (e), (f), and (i)”; (2) in subsection (b), by inserting after the 2nd undesig- nated paragraph the following: ” ‘child’s home State’ means the State in which a child lived with a parent or a person acting as parent for at least 6 consecutive months immediately preceding the time of filing of a petition or comparable pleading for support and, if a child is less than 6 months old, the State in which the child lived from birth with any of them. A period of temporary absence of any of them is counted as part of the 6-month period.”; (3) in subsection (c), by inserting ”by a court of a State” be- fore ”is made”; (4) in subsection (c)(1), by inserting ”and subsections (e), (f), and (g)” after ”located”; (5) in subsection (d)\u2014 (A) by inserting ”individual” before ”contestant”; and (B) by striking ”subsection (e)” and inserting ”sub- sections (e) and (f)”; (6) in subsection (e), by striking ”make a modification of a child support order with respect to a child that is made” and inserting ”modify a child support order issued”; (7) in subsection (e)(1), by inserting ”pursuant to subsection (i)” before the semicolon; (8) in subsection (e)(2)\u2014 (A) by inserting ”individual” before ”contestant” each place such term appears; and (B) by striking ”to that court’s making the modification and assuming” and inserting ”with the State of continuing, exclusive jurisdiction for a court of another State to modify the order and assume”; (9) by redesignating subsections (f) and (g) as subsections (g) and (h), respectively; (10) by inserting after subsection (e) the following new sub- section: ”(f) RECOGNITION OF CHILD SUPPORT ORDERS.\u2014If 1 or more child support orders have been issued with regard to an obligor and 123 a child, a court shall apply the following rules in determining which order to recognize for purposes of continuing, exclusive juris- diction and enforcement: ”(1) If only 1 court has issued a child support order, the order of that court must be recognized. ”(2) If 2 or more courts have issued child support orders for the same obligor and child, and only 1 of the courts would have continuing, exclusive jurisdiction under this section, the order of that court must be recognized. ”(3) If 2 or more courts have issued child support orders for the same obligor and child, and more than 1 of the courts would have continuing, exclusive jurisdiction under this section, an order issued by a court in the current home State of the child must be recognized, but if an order has not been issued in the current home State of the child, the order most recently issued must be recognized. ”(4) If 2 or more courts have issued child support orders for the same obligor and child, and none of the courts would have continuing, exclusive jurisdiction under this section, a court may issue a child support order, which must be recognized. ”(5) The court that has issued an order recognized under this subsection is the court having continuing, exclusive juris- diction.”; (11) in subsection (g) (as so redesignated)\u2014 (A) by striking ”PRIOR” and inserting ”MODIFIED”; and (B) by striking ”subsection (e)” and inserting ”sub- sections (e) and (f)”; (12) in subsection (h) (as so redesignated)\u2014 (A) in paragraph (2), by inserting ”including the dura- tion of current payments and other obligations of support” before the comma; and (B) in paragraph (3), by inserting ”arrears under” after ”enforce”; and (13) by adding at the end the following new subsection: ”(i) REGISTRATION FOR MODIFICATION.\u2014If there is no individ- ual contestant or child residing in the issuing State, the party or support enforcement agency seeking to modify, or to modify and en- force, a child support order issued in another State shall register that order in a State with jurisdiction over the nonmovant for the purpose of modification.”. SEC. 323. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES. Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315 and 317 of this Act, is amended by inserting after paragraph (13) the following new paragraph: ”(14) ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.\u2014Procedures under which\u2014 ”(A)(i) the State shall respond within 5 business days to a request made by another State to enforce a support order; and ”(ii) the term ‘business day’ means a day on which State offices are open for regular business; ”(B) the State may, by electronic or other means, trans- mit to another State a request for assistance in a case in- volving the enforcement of a support order, which request\u2014 124 ”(i) shall include such information as will enable the State to which the request is transmitted to com- pare the information about the case to the information in the data bases of the State; and ”(ii) shall constitute a certification by the request- ing State\u2014 ”(I) of the amount of support under the order the payment of which is in arrears; and ”(II) that the requesting State has complied with all procedural due process requirements ap- plicable to the case; ”(C) if the State provides assistance to another State pursuant to this paragraph with respect to a case, neither State shall consider the case to be transferred to the case- load of such other State; and ”(D) the State shall maintain records of\u2014 ”(i) the number of such requests for assistance re- ceived by the State; ”(ii) the number of cases for which the State col- lected support in response to such a request; and ”(iii) the amount of such collected support.”. SEC. 324. USE OF FORMS IN INTERSTATE ENFORCEMENT. (a) PROMULGATION.\u2014Section 452(a) (42 U.S.C. 652(a)) is amended\u2014 (1) by striking ”and” at the end of paragraph (9); (2) by striking the period at the end of paragraph (10) (as amended by section 346(a) of this Act) and inserting ”; and”; and (3) by adding at the end the following new paragraph: ”(11) not later than October 1, 1996, after consulting with the State directors of programs under this part, promulgate forms to be used by States in interstate cases for\u2014 ”(A) collection of child support through income with- holding; ”(B) imposition of liens; and ”(C) administrative subpoenas.”. (b) USE BY STATES.\u2014Section 454(9) (42 U.S.C. 654(9)) is amended\u2014 (1) by striking ”and” at the end of subparagraph (C); (2) by inserting ”and” at the end of subparagraph (D); and (3) by adding at the end the following new subparagraph: ”(E) not later than March 1, 1997, in using the forms promulgated pursuant to section 452(a)(11) for income withholding, imposition of liens, and issuance of adminis- trative subpoenas in interstate child support cases;”. SEC. 325. STATE LAWS PROVIDING EXPEDITED PROCEDURES. (a) STATE LAW REQUIREMENTS.\u2014Section 466 (42 U.S.C. 666), as amended by section 314 of this Act, is amended\u2014 (1) in subsection (a)(2), by striking the first sentence and in- serting the following: ”Expedited administrative and judicial procedures (including the procedures specified in subsection (c)) for establishing paternity and for establishing, modifying, and enforcing support obligations.”; and 125 (2) by inserting after subsection (b) the following new sub- section: ”(c) EXPEDITED PROCEDURES.\u2014The procedures specified in this subsection are the following: ”(1) ADMINISTRATIVE ACTION BY STATE AGENCY.\u2014Proce- dures which give the State agency the authority to take the fol- lowing actions relating to establishment of paternity or to estab- lishment, modification, or enforcement of support orders, with- out the necessity of obtaining an order from any other judicial or administrative tribunal, and to recognize and enforce the au- thority of State agencies of other States to take the following ac- tions: ”(A) GENETIC TESTING.\u2014To order genetic testing for the purpose of paternity establishment as provided in section 466(a)(5). ”(B) FINANCIAL OR OTHER INFORMATION.\u2014To subpoena any financial or other information needed to establish, modify, or enforce a support order, and to impose penalties for failure to respond to such a subpoena. ”(C) RESPONSE TO STATE AGENCY REQUEST.\u2014To re- quire all entities in the State (including for-profit, non- profit, and governmental employers) to provide promptly, in response to a request by the State agency of that or any other State administering a program under this part, infor- mation on the employment, compensation, and benefits of any individual employed by such entity as an employee or contractor, and to sanction failure to respond to any such request. ”(D) ACCESS TO INFORMATION CONTAINED IN CERTAIN RECORDS.\u2014To obtain access, subject to safeguards on pri- vacy and information security, and subject to the nonliabil- ity of entities that afford such access under this subpara- graph, to information contained in the following records (including automated access, in the case of records main- tained in automated data bases): ”(i) Records of other State and local government agencies, including\u2014 ”(I) vital statistics (including records of mar- riage, birth, and divorce); ”(II) State and local tax and revenue records (including information on residence address, em- ployer, income and assets); ”(III) records concerning real and titled per- sonal property; ”(IV) records of occupational and professional licenses, and records concerning the ownership and control of corporations, partnerships, and other business entities; ”(V) employment security records; ”(VI) records of agencies administering public assistance programs; ”(VII) records of the motor vehicle department; and ”(VIII) corrections records. 126 ”(ii) Certain records held by private entities with respect to individuals who owe or are owed support (or against or with respect to whom a support obligation is sought), consisting of\u2014 ”(I) the names and addresses of such individ- uals and the names and addresses of the employ- ers of such individuals, as appearing in customer records of public utilities and cable television com- panies, pursuant to an administrative subpoena authorized by subparagraph (B); and ”(II) information (including information on as- sets and liabilities) on such individuals held by fi- nancial institutions. ”(E) CHANGE IN PAYEE.\u2014In cases in which support is subject to an assignment in order to comply with a require- ment imposed pursuant to part A or section 1912, or to a requirement to pay through the State disbursement unit es- tablished pursuant to section 454B, upon providing notice to obligor and obligee, to direct the obligor or other payor to change the payee to the appropriate government entity. ”(F) INCOME WITHHOLDING.\u2014To order income with- holding in accordance with subsections (a)(1)(A) and (b) of section 466. ”(G) SECURING ASSETS.\u2014In cases in which there is a support arrearage, to secure assets to satisfy the arrearage by\u2014 ”(i) intercepting or seizing periodic or lump-sum payments from\u2014 ”(I) a State or local agency, including unem- ployment compensation, workers’ compensation, and other benefits; and ”(II) judgments, settlements, and lotteries; ”(ii) attaching and seizing assets of the obligor held in financial institutions; ”(iii) attaching public and private retirement funds; and ”(iv) imposing liens in accordance with subsection (a)(4) and, in appropriate cases, to force sale of prop- erty and distribution of proceeds. ”(H) INCREASE MONTHLY PAYMENTS.\u2014For the purpose of securing overdue support, to increase the amount of monthly support payments to include amounts for arrear- ages, subject to such conditions or limitations as the State may provide. Such procedures shall be subject to due process safeguards, in- cluding (as appropriate) requirements for notice, opportunity to contest the action, and opportunity for an appeal on the record to an independent administrative or judicial tribunal. ”(2) SUBSTANTIVE AND PROCEDURAL RULES.\u2014The expedited procedures required under subsection (a)(2) shall include the following rules and authority, applicable with respect to all pro- ceedings to establish paternity or to establish, modify, or enforce support orders: 127 ”(A) LOCATOR INFORMATION; PRESUMPTIONS CONCERN- ING NOTICE.\u2014Procedures under which\u2014 ”(i) each party to any paternity or child support proceeding is required (subject to privacy safeguards) to file with the tribunal and the State case registry upon entry of an order, and to update as appropriate, information on location and identity of the party, in- cluding social security number, residential and mail- ing addresses, telephone number, driver’s license num- ber, and name, address, and telephone number of em- ployer; and ”(ii) in any subsequent child support enforcement action between the parties, upon sufficient showing that diligent effort has been made to ascertain the loca- tion of such a party, the tribunal may deem State due process requirements for notice and service of process to be met with respect to the party, upon delivery of writ- ten notice to the most recent residential or employer ad- dress filed with the tribunal pursuant to clause (i). ”(B) STATEWIDE JURISDICTION.\u2014Procedures under which\u2014 ”(i) the State agency and any administrative or ju- dicial tribunal with authority to hear child support and paternity cases exerts statewide jurisdiction over the parties; and ”(ii) in a State in which orders are issued by courts or administrative tribunals, a case may be transferred between local jurisdictions in the State without need for any additional filing by the petitioner, or service of process upon the respondent, to retain jurisdiction over the parties. ”(3) COORDINATION WITH ERISA.\u2014Notwithstanding sub- section (d) of section 514 of the Employee Retirement Income Se- curity Act of 1974 (relating to effect on other laws), nothing in this subsection shall be construed to alter, amend, modify, in- validate, impair, or supersede subsections (a), (b), and (c) of such section 514 as it applies with respect to any procedure re- ferred to in paragraph (1) and any expedited procedure referred to in paragraph (2), except to the extent that such procedure would be consistent with the requirements of section 206(d)(3) of such Act (relating to qualified domestic relations orders) or the requirements of section 609(a) of such Act (relating to quali- fied medical child support orders) if the reference in such sec- tion 206(d)(3) to a domestic relations order and the reference in such section 609(a) to a medical child support order were a ref- erence to a support order referred to in paragraphs (1) and (2) relating to the same matters, respectively.”. (b) AUTOMATION OF STATE AGENCY FUNCTIONS.\u2014Section 454A, as added by section 344(a)(2) and as amended by sections 311 and 312(c) of this Act, is amended by adding at the end the following new subsection: ”(h) EXPEDITED ADMINISTRATIVE PROCEDURES.\u2014The automated system required by this section shall be used, to the maximum ex- 128 tent feasible, to implement the expedited administrative procedures required by section 466(c).”. Subtitle D\u2014Paternity Establishment SEC. 331. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT. (a) STATE LAWS REQUIRED.\u2014Section 466(a)(5) (42 U.S.C. 666(a)(5)) is amended to read as follows: ”(5) PROCEDURES CONCERNING PATERNITY ESTABLISH- MENT.\u2014 ”(A) ESTABLISHMENT PROCESS AVAILABLE FROM BIRTH UNTIL AGE 18.\u2014 ”(i) Procedures which permit the establishment of the paternity of a child at any time before the child at- tains 18 years of age. ”(ii) As of August 16, 1984, clause (i) shall also apply to a child for whom paternity has not been estab- lished or for whom a paternity action was brought but dismissed because a statute of limitations of less than 18 years was then in effect in the State. ”(B) PROCEDURES CONCERNING GENETIC TESTING.\u2014 ”(i) GENETIC TESTING REQUIRED IN CERTAIN CON- TESTED CASES.\u2014Procedures under which the State is required, in a contested paternity case (unless other- wise barred by State law) to require the child and all other parties (other than individuals found under sec- tion 454(29) to have good cause and other exceptions for refusing to cooperate) to submit to genetic tests upon the request of any such party, if the request is supported by a sworn statement by the party\u2014 ”(I) alleging paternity, and setting forth facts establishing a reasonable possibility of the req- uisite sexual contact between the parties; or ”(II) denying paternity, and setting forth facts establishing a reasonable possibility of the non- existence of sexual contact between the parties. ”(ii) OTHER REQUIREMENTS.\u2014Procedures which re- quire the State agency, in any case in which the agency orders genetic testing\u2014 ”(I) to pay costs of such tests, subject to recoupment (if the State so elects) from the alleged father if paternity is established; and ”(II) to obtain additional testing in any case if an original test result is contested, upon request and advance payment by the contestant. ”(C) VOLUNTARY PATERNITY ACKNOWLEDGMENT.\u2014 ”(i) SIMPLE CIVIL PROCESS.\u2014Procedures for a sim- ple civil process for voluntarily acknowledging pater- nity under which the State must provide that, before a mother and a putative father can sign an acknowledg- ment of paternity, the mother and the putative father must be given notice, orally and in writing, of the al- ternatives to, the legal consequences of, and the rights 129 (including, if 1 parent is a minor, any rights afforded due to minority status) and responsibilities that arise from, signing the acknowledgment. ”(ii) HOSPITAL-BASED PROGRAM.\u2014Such procedures must include a hospital-based program for the vol- untary acknowledgment of paternity focusing on the pe- riod immediately before or after the birth of a child. ”(iii) PATERNITY ESTABLISHMENT SERVICES.\u2014 ”(I) STATE-OFFERED SERVICES.\u2014Such proce- dures must require the State agency responsible for maintaining birth records to offer voluntary pater- nity establishment services. ”(II) REGULATIONS.\u2014 ”(aa) SERVICES OFFERED BY HOSPITALS AND BIRTH RECORD AGENCIES.\u2014The Secretary shall prescribe regulations governing vol- untary paternity establishment services offered by hospitals and birth record agencies. ”(bb) SERVICES OFFERED BY OTHER ENTI- TIES.\u2014The Secretary shall prescribe regula- tions specifying the types of other entities that may offer voluntary paternity establishment services, and governing the provision of such services, which shall include a requirement that such an entity must use the same notice provisions used by, use the same materials used by, provide the personnel providing such services with the same training provided by, and evaluate the provision of such services in the same manner as the provision of such serv- ices is evaluated by, voluntary paternity estab- lishment programs of hospitals and birth record agencies. ”(iv) USE OF PATERNITY ACKNOWLEDGMENT AFFIDA- VIT.\u2014Such procedures must require the State to de- velop and use an affidavit for the voluntary acknowl- edgment of paternity which includes the minimum re- quirements of the affidavit specified by the Secretary under section 452(a)(7) for the voluntary acknowledg- ment of paternity, and to give full faith and credit to such an affidavit signed in any other State according to its procedures. ”(D) STATUS OF SIGNED PATERNITY ACKNOWLEDG- MENT.\u2014 ”(i) INCLUSION IN BIRTH RECORDS.\u2014Procedures under which the name of the father shall be included on the record of birth of the child of unmarried parents only if\u2014 ”(I) the father and mother have signed a vol- untary acknowledgment of paternity; or ”(II) a court or an administrative agency of competent jurisdiction has issued an adjudication of paternity. 130 Nothing in this clause shall preclude a State agency from obtaining an admission of paternity from the fa- ther for submission in a judicial or administrative pro- ceeding, or prohibit the issuance of an order in a judi- cial or administrative proceeding which bases a legal finding of paternity on an admission of paternity by the father and any other additional showing required by State law. ”(ii) LEGAL FINDING OF PATERNITY.\u2014Procedures under which a signed voluntary acknowledgment of pa- ternity is considered a legal finding of paternity, sub- ject to the right of any signatory to rescind the ac- knowledgment within the earlier of\u2014 ”(I) 60 days; or ”(II) the date of an administrative or judicial proceeding relating to the child (including a pro- ceeding to establish a support order) in which the signatory is a party. ”(iii) CONTEST.\u2014Procedures under which, after the 60-day period referred to in clause (ii), a signed vol- untary acknowledgment of paternity may be challenged in court only on the basis of fraud, duress, or material mistake of fact, with the burden of proof upon the chal- lenger, and under which the legal responsibilities (in- cluding child support obligations) of any signatory arising from the acknowledgment may not be sus- pended during the challenge, except for good cause shown. ”(E) BAR ON ACKNOWLEDGMENT RATIFICATION PRO- CEEDINGS.\u2014Procedures under which judicial or adminis- trative proceedings are not required or permitted to ratify an unchallenged acknowledgment of paternity. ”(F) ADMISSIBILITY OF GENETIC TESTING RESULTS.\u2014 Procedures\u2014 ”(i) requiring the admission into evidence, for pur- poses of establishing paternity, of the results of any ge- netic test that is\u2014 ”(I) of a type generally acknowledged as reli- able by accreditation bodies designated by the Sec- retary; and ”(II) performed by a laboratory approved by such an accreditation body; ”(ii) requiring an objection to genetic testing results to be made in writing not later than a specified num- ber of days before any hearing at which the results may be introduced into evidence (or, at State option, not later than a specified number of days after receipt of the results); and ”(iii) making the test results admissible as evidence of paternity without the need for foundation testimony or other proof of authenticity or accuracy, unless objec- tion is made. ”(G) PRESUMPTION OF PATERNITY IN CERTAIN CASES.\u2014 Procedures which create a rebuttable or, at the option of the 131 State, conclusive presumption of paternity upon genetic testing results indicating a threshold probability that the alleged father is the father of the child. ”(H) DEFAULT ORDERS.\u2014Procedures requiring a default order to be entered in a paternity case upon a showing of service of process on the defendant and any additional showing required by State law. ”(I) NO RIGHT TO JURY TRIAL.\u2014Procedures providing that the parties to an action to establish paternity are not entitled to a trial by jury. ”(J) TEMPORARY SUPPORT ORDER BASED ON PROBABLE PATERNITY IN CONTESTED CASES.\u2014Procedures which re- quire that a temporary order be issued, upon motion by a party, requiring the provision of child support pending an administrative or judicial determination of parentage, if there is clear and convincing evidence of paternity (on the basis of genetic tests or other evidence). ”(K) PROOF OF CERTAIN SUPPORT AND PATERNITY ES- TABLISHMENT COSTS.\u2014Procedures under which bills for pregnancy, childbirth, and genetic testing are admissible as evidence without requiring third-party foundation testi- mony, and shall constitute prima facie evidence of amounts incurred for such services or for testing on behalf of the child. ”(L) STANDING OF PUTATIVE FATHERS.\u2014Procedures en- suring that the putative father has a reasonable oppor- tunity to initiate a paternity action. ”(M) FILING OF ACKNOWLEDGMENTS AND ADJUDICA- TIONS IN STATE REGISTRY OF BIRTH RECORDS.\u2014Procedures under which voluntary acknowledgments and adjudica- tions of paternity by judicial or administrative processes are filed with the State registry of birth records for com- parison with information in the State case registry.”. (b) NATIONAL PATERNITY ACKNOWLEDGMENT AFFIDAVIT.\u2014Sec- tion 452(a)(7) (42 U.S.C. 652(a)(7)) is amended by inserting ”, and specify the minimum requirements of an affidavit to be used for the voluntary acknowledgment of paternity which shall include the so- cial security number of each parent and, after consultation with the States, other common elements as determined by such designee” be- fore the semicolon. (c) CONFORMING AMENDMENT.\u2014Section 468 (42 U.S.C. 668) is amended by striking ”a simple civil process for voluntarily acknowl- edging paternity and”. SEC. 332. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT. Section 454(23) (42 U.S.C. 654(23)) is amended by inserting ”and will publicize the availability and encourage the use of proce- dures for voluntary establishment of paternity and child support by means the State deems appropriate” before the semicolon. SEC. 333. COOPERATION BY APPLICANTS FOR AND RECIPIENTS OF PART A ASSISTANCE. Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a), 312(a), and 313(a) of this Act, is amended\u2014 (1) by striking ”and” at the end of paragraph (27); 132 (2) by striking the period at the end of paragraph (28) and inserting ”; and”; and (3) by inserting after paragraph (28) the following new paragraph: ”(29) provide that the State agency responsible for admin- istering the State plan\u2014 ”(A) shall make the determination (and redetermina- tion at appropriate intervals) as to whether an individual who has applied for or is receiving assistance under the State program funded under part A of this title or the State program under title XIX is cooperating in good faith with the State in establishing the paternity of, or in establishing, modifying, or enforcing a support order for, any child of the individual by providing the State agency with the name of, and such other information as the State agency may re- quire with respect to, the noncustodial parent of the child, subject to good cause and other exceptions which\u2014 ”(i) shall be defined, taking into account the best interests of the child, and ”(ii) shall be applied in each case, by, at the option of the State, the State agency administer- ing the State program under part A, this part, or title XIX; ”(B) shall require the individual to supply additional necessary information and appear at interviews, hearings, and legal proceedings; ”(C) shall require the individual and the child to sub- mit to genetic tests pursuant to judicial or administrative order; ”(D) may request that the individual sign a voluntary acknowledgment of paternity, after notice of the rights and consequences of such an acknowledgment, but may not re- quire the individual to sign an acknowledgment or other- wise relinquish the right to genetic tests as a condition of cooperation and eligibility for assistance under the State program funded under part A, or the State program under title XIX; and ”(E) shall promptly notify the individual, the State agency administering the State program funded under part A, and the State agency administering the State program under title XIX, of each such determination, and if non- cooperation is determined, the basis therefor.”. Subtitle E\u2014Program Administration and Funding SEC. 341. PERFORMANCE-BASED INCENTIVES AND PENALTIES. (a) DEVELOPMENT OF NEW SYSTEM.\u2014The Secretary of Health and Human Services, in consultation with State directors of pro- grams under part D of title IV of the Social Security Act, shall de- velop a new incentive system to replace, in a revenue neutral man- ner, the system under section 458 of such Act. The new system shall provide additional payments to any State based on such State’s per- formance under such a program. Not later than March 1, 1997, the 133 Secretary shall report on the new system to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. (b) CONFORMING AMENDMENTS TO PRESENT SYSTEM.\u2014Section 458 (42 U.S.C. 658) is amended\u2014 (1) in subsection (a), by striking ”aid to families with de- pendent children under a State plan approved under part A of this title” and inserting ”assistance under a program funded under part A”; (2) in subsection (b)(1)(A), by striking ”section 402(a)(26)” and inserting ”section 408(a)(4)”; (3) in subsections (b) and (c)\u2014 (A) by striking ”AFDC collections” each place it ap- pears and inserting ”title IV A collections”, and (B) by striking ”non-AFDC collections” each place it ap- pears and inserting ”non-title IV A collections”; and (4) in subsection (c), by striking ”combined AFDC\/non- AFDC administrative costs” both places it appears and insert- ing ”combined title IV A\/non-title IV A administrative costs”. (c) CALCULATION OF PATERNITY ESTABLISHMENT PERCENT- AGE.\u2014 (1) Section 452(g)(1)(A) (42 U.S.C. 652(g)(1)(A)) is amended by striking ”75” and inserting ”90”. (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is amended\u2014 (A) by redesignating subparagraphs (B) through (E) as subparagraphs (C) through (F), respectively, and by insert- ing after subparagraph (A) the following new subpara- graph: ”(B) for a State with a paternity establishment percentage of not less than 75 percent but less than 90 percent for such fis- cal year, the paternity establishment percentage of the State for the immediately preceding fiscal year plus 2 percentage points;”; and (B) by adding at the end the following new flush sen- tence: ”In determining compliance under this section, a State may use as its paternity establishment percentage either the State’s IV D pater- nity establishment percentage (as defined in paragraph (2)(A)) or the State’s statewide paternity establishment percentage (as defined in paragraph (2)(B)).”. (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended\u2014 (A) in subparagraph (A)\u2014 (i) in the matter preceding clause (i)\u2014 (I) by striking ”paternity establishment per- centage” and inserting ”IV D paternity establish- ment percentage”; and (II) by striking ”(or all States, as the case may be)”; and (ii) by striking ”and” at the end; and (B) by redesignating subparagraph (B) as subpara- graph (C) and by inserting after subparagraph (A) the fol- lowing new subparagraph: ”(B) the term ‘statewide paternity establishment percentage’ means, with respect to a State for a fiscal year, the ratio (ex- 134 pressed as a percentage) that the total number of minor chil- dren\u2014 ”(i) who have been born out of wedlock, and ”(ii) the paternity of whom has been established or ac- knowledged during the fiscal year, bears to the total number of children born out of wedlock dur- ing the preceding fiscal year; and”. (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is amended\u2014 (A) by striking subparagraph (A) and redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively; and (B) in subparagraph (A) (as so redesignated), by strik- ing ”the percentage of children born out-of-wedlock in a State” and inserting ”the percentage of children in a State who are born out of wedlock or for whom support has not been established”. (d) EFFECTIVE DATES.\u2014 (1) INCENTIVE ADJUSTMENTS.\u2014 (A) IN GENERAL.\u2014The system developed under sub- section (a) and the amendments made by subsection (b) shall become effective on October 1, 1999, except to the ex- tent provided in subparagraph (B). (B) APPLICATION OF SECTION 458.\u2014Section 458 of the Social Security Act, as in effect on the day before the date of the enactment of this section, shall be effective for pur- poses of incentive payments to States for fiscal years before fiscal year 2000. (2) PENALTY REDUCTIONS.\u2014The amendments made by sub- section (c) shall become effective with respect to calendar quar- ters beginning on or after the date of the enactment of this Act. SEC. 342. FEDERAL AND STATE REVIEWS AND AUDITS. (a) STATE AGENCY ACTIVITIES.\u2014Section 454 (42 U.S.C. 654) is amended\u2014 (1) in paragraph (14), by striking ”(14)” and inserting ”(14)(A)”; (2) by redesignating paragraph (15) as subparagraph (B) of paragraph (14); and (3) by inserting after paragraph (14) the following new paragraph: ”(15) provide for\u2014 ”(A) a process for annual reviews of and reports to the Secretary on the State program operated under the State plan approved under this part, including such information as may be necessary to measure State compliance with Fed- eral requirements for expedited procedures, using such standards and procedures as are required by the Secretary, under which the State agency will determine the extent to which the program is operated in compliance with this part; and ”(B) a process of extracting from the automated data processing system required by paragraph (16) and trans- mitting to the Secretary data and calculations concerning the levels of accomplishment (and rates of improvement) 135 with respect to applicable performance indicators (includ- ing paternity establishment percentages) to the extent nec- essary for purposes of sections 452(g) and 458;”. (b) FEDERAL ACTIVITIES.\u2014Section 452(a)(4) (42 U.S.C. 652(a)(4)) is amended to read as follows: ”(4)(A) review data and calculations transmitted by State agencies pursuant to section 454(15)(B) on State program ac- complishments with respect to performance indicators for pur- poses of subsection (g) of this section and section 458; ”(B) review annual reports submitted pursuant to section 454(15)(A) and, as appropriate, provide to the State comments, recommendations for additional or alternative corrective ac- tions, and technical assistance; and ”(C) conduct audits, in accordance with the Government auditing standards of the Comptroller General of the United States\u2014 ”(i) at least once every 3 years (or more frequently, in the case of a State which fails to meet the requirements of this part concerning performance standards and reliability of program data) to assess the completeness, reliability, and security of the data and the accuracy of the reporting sys- tems used in calculating performance indicators under sub- section (g) of this section and section 458; ”(ii) of the adequacy of financial management of the State program operated under the State plan approved under this part, including assessments of\u2014 ”(I) whether Federal and other funds made avail- able to carry out the State program are being appro- priately expended, and are properly and fully ac- counted for; and ”(II) whether collections and disbursements of sup- port payments are carried out correctly and are fully accounted for; and ”(iii) for such other purposes as the Secretary may find necessary;”. (c) EFFECTIVE DATE.\u2014The amendments made by this section shall be effective with respect to calendar quarters beginning 12 months or more after the date of the enactment of this Act. SEC. 343. REQUIRED REPORTING PROCEDURES. (a) ESTABLISHMENT.\u2014Section 452(a)(5) (42 U.S.C. 652(a)(5)) is amended by inserting ”, and establish procedures to be followed by States for collecting and reporting information required to be pro- vided under this part, and establish uniform definitions (including those necessary to enable the measurement of State compliance with the requirements of this part relating to expedited processes) to be applied in following such procedures” before the semicolon. (b) STATE PLAN REQUIREMENT.\u2014Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a), 312(a), 313(a), and 333 of this Act, is amended\u2014 (1) by striking ”and” at the end of paragraph (28); (2) by striking the period at the end of paragraph (29) and inserting ”; and”; and (3) by adding after paragraph (29) the following new para- graph: 136 ”(30) provide that the State shall use the definitions estab- lished under section 452(a)(5) in collecting and reporting infor- mation as required under this part.”. SEC. 344. AUTOMATED DATA PROCESSING REQUIREMENTS. (a) REVISED REQUIREMENTS.\u2014 (1) IN GENERAL.\u2014Section 454(16) (42 U.S.C. 654(16)) is amended\u2014 (A) by striking ”, at the option of the State,”; (B) by inserting ”and operation by the State agency” after ”for the establishment”; (C) by inserting ”meeting the requirements of section 454A” after ”information retrieval system”; (D) by striking ”in the State and localities thereof, so as (A)” and inserting ”so as”; (E) by striking ”(i)”; and (F) by striking ”(including” and all that follows and in- serting a semicolon. (2) AUTOMATED DATA PROCESSING.\u2014Part D of title IV (42 U.S.C. 651 669) is amended by inserting after section 454 the following new section: ”SEC. 454A. AUTOMATED DATA PROCESSING. ”(a) IN GENERAL.\u2014In order for a State to meet the requirements of this section, the State agency administering the State program under this part shall have in operation a single statewide auto- mated data processing and information retrieval system which has the capability to perform the tasks specified in this section with the frequency and in the manner required by or under this part. ”(b) PROGRAM MANAGEMENT.\u2014The automated system required by this section shall perform such functions as the Secretary may specify relating to management of the State program under this part, including\u2014 ”(1) controlling and accounting for use of Federal, State, and local funds in carrying out the program; and ”(2) maintaining the data necessary to meet Federal report- ing requirements under this part on a timely basis. ”(c) CALCULATION OF PERFORMANCE INDICATORS.\u2014In order to enable the Secretary to determine the incentive payments and pen- alty adjustments required by sections 452(g) and 458, the State agency shall\u2014 ”(1) use the automated system\u2014 ”(A) to maintain the requisite data on State perform- ance with respect to paternity establishment and child sup- port enforcement in the State; and ”(B) to calculate the paternity establishment percentage for the State for each fiscal year; and ”(2) have in place systems controls to ensure the complete- ness and reliability of, and ready access to, the data described in paragraph (1)(A), and the accuracy of the calculations de- scribed in paragraph (1)(B). ”(d) INFORMATION INTEGRITY AND SECURITY.\u2014The State agency shall have in effect safeguards on the integrity, accuracy, and com- pleteness of, access to, and use of data in the automated system re- quired by this section, which shall include the following (in addi- 137 tion to such other safeguards as the Secretary may specify in regula- tions): ”(1) POLICIES RESTRICTING ACCESS.\u2014Written policies con- cerning access to data by State agency personnel, and sharing of data with other persons, which\u2014 ”(A) permit access to and use of data only to the extent necessary to carry out the State program under this part; and ”(B) specify the data which may be used for particular program purposes, and the personnel permitted access to such data. ”(2) SYSTEMS CONTROLS.\u2014Systems controls (such as pass- words or blocking of fields) to ensure strict adherence to the policies described in paragraph (1). ”(3) MONITORING OF ACCESS.\u2014Routine monitoring of access to and use of the automated system, through methods such as audit trails and feedback mechanisms, to guard against and promptly identify unauthorized access or use. ”(4) TRAINING AND INFORMATION.\u2014Procedures to ensure that all personnel (including State and local agency staff and contractors) who may have access to or be required to use con- fidential program data are informed of applicable requirements and penalties (including those in section 6103 of the Internal Revenue Code of 1986), and are adequately trained in security procedures. ”(5) PENALTIES.\u2014Administrative penalties (up to and in- cluding dismissal from employment) for unauthorized access to, or disclosure or use of, confidential data.”. (3) REGULATIONS.\u2014The Secretary of Health and Human Services shall prescribe final regulations for implementation of section 454A of the Social Security Act not later than 2 years after the date of the enactment of this Act. (4) IMPLEMENTATION TIMETABLE.\u2014Section 454(24) (42 U.S.C. 654(24)), as amended by section 303(a)(1) of this Act, is amended to read as follows: ”(24) provide that the State will have in effect an auto- mated data processing and information retrieval system\u2014 ”(A) by October 1, 1997, which meets all requirements of this part which were enacted on or before the date of en- actment of the Family Support Act of 1988, and ”(B) by October 1, 2000, which meets all requirements of this part enacted on or before the date of the enactment of the Personal Responsibility and Work Opportunity Act of 1996, except that such deadline shall be extended by 1 day for each day (if any) by which the Secretary fails to meet the deadline imposed by section 344(a)(3) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996;”. (b) SPECIAL FEDERAL MATCHING RATE FOR DEVELOPMENT COSTS OF AUTOMATED SYSTEMS.\u2014 (1) IN GENERAL.\u2014Section 455(a) (42 U.S.C. 655(a)) is amended\u2014 (A) in paragraph (1)(B)\u2014 138 (i) by striking ”90 percent” and inserting ”the per- cent specified in paragraph (3)”; (ii) by striking ”so much of”; and (iii) by striking ”which the Secretary” and all that follows and inserting ”, and”; and (B) by adding at the end the following new paragraph: ”(3)(A) The Secretary shall pay to each State, for each quarter in fiscal years 1996 and 1997, 90 percent of so much of the State expenditures described in paragraph (1)(B) as the Secretary finds are for a system meeting the requirements specified in section 454(16) (as in effect on September 30, 1995) but limited to the amount approved for States in the advance planning documents of such States submitted on or before September 30, 1995. ”(B)(i) The Secretary shall pay to each State, for each quarter in fiscal years 1996 through 2001, the percentage specified in clause (ii) of so much of the State expenditures described in paragraph (1)(B) as the Secretary finds are for a system meeting the require- ments of sections 454(16) and 454A. ”(ii) The percentage specified in this clause is 80 percent.”. (2) TEMPORARY LIMITATION ON PAYMENTS UNDER SPECIAL FEDERAL MATCHING RATE.\u2014 (A) IN GENERAL.\u2014The Secretary of Health and Human Services may not pay more than $400,000,000 in the aggre- gate under section 455(a)(3)(B) of the Social Security Act for fiscal years 1996 through 2001. (B) ALLOCATION OF LIMITATION AMONG STATES.\u2014The total amount payable to a State under section 455(a)(3)(B) of such Act for fiscal years 1996 through 2001 shall not ex- ceed the limitation determined for the State by the Sec- retary of Health and Human Services in regulations. (C) ALLOCATION FORMULA.\u2014The regulations referred to in subparagraph (B) shall prescribe a formula for allocat- ing the amount specified in subparagraph (A) among States with plans approved under part D of title IV of the Social Security Act, which shall take into account\u2014 (i) the relative size of State caseloads under such part; and (ii) the level of automation needed to meet the automated data processing requirements of such part. (c) CONFORMING AMENDMENT.\u2014Section 123(c) of the Family Support Act of 1988 (102 Stat. 2352; Public Law 100 485) is re- pealed. SEC. 345. TECHNICAL ASSISTANCE. (a) FOR TRAINING OF FEDERAL AND STATE STAFF, RESEARCH AND DEMONSTRATION PROGRAMS, AND SPECIAL PROJECTS OF RE- GIONAL OR NATIONAL SIGNIFICANCE.\u2014Section 452 (42 U.S.C. 652) is amended by adding at the end the following new subsection: ”(j) Out of any money in the Treasury of the United States not otherwise appropriated, there is hereby appropriated to the Sec- retary for each fiscal year an amount equal to 1 percent of the total amount paid to the Federal Government pursuant to section 457(a) during the immediately preceding fiscal year (as determined on the basis of the most recent reliable data available to the Secretary as 139 of the end of the 3rd calendar quarter following the end of such pre- ceding fiscal year), to cover costs incurred by the Secretary for\u2014 ”(1) information dissemination and technical assistance to States, training of State and Federal staff, staffing studies, and related activities needed to improve programs under this part (including technical assistance concerning State automated sys- tems required by this part); and ”(2) research, demonstration, and special projects of re- gional or national significance relating to the operation of State programs under this part. The amount appropriated under this subsection shall remain avail- able until expended.”. (b) OPERATION OF FEDERAL PARENT LOCATOR SERVICE.\u2014Sec- tion 453 (42 U.S.C. 653), as amended by section 316 of this Act, is amended by adding at the end the following new subsection: ”(o) RECOVERY OF COSTS.\u2014Out of any money in the Treasury of the United States not otherwise appropriated, there is hereby ap- propriated to the Secretary for each fiscal year an amount equal to 2 percent of the total amount paid to the Federal Government pur- suant to section 457(a) during the immediately preceding fiscal year (as determined on the basis of the most recent reliable data avail- able to the Secretary as of the end of the 3rd calendar quarter fol- lowing the end of such preceding fiscal year), to cover costs incurred by the Secretary for operation of the Federal Parent Locator Service under this section, to the extent such costs are not recovered through user fees.”. SEC. 346. REPORTS AND DATA COLLECTION BY THE SECRETARY. (a) ANNUAL REPORT TO CONGRESS.\u2014 (1) Section 452(a)(10)(A) (42 U.S.C. 652(a)(10)(A)) is amended\u2014 (A) by striking ”this part;” and inserting ”this part, in- cluding\u2014”; and (B) by adding at the end the following new clauses: ”(i) the total amount of child support payments col- lected as a result of services furnished during the fiscal year to individuals receiving services under this part; ”(ii) the cost to the States and to the Federal Gov- ernment of so furnishing the services; and ”(iii) the number of cases involving families\u2014 ”(I) who became ineligible for assistance under State programs funded under part A during a month in the fiscal year; and ”(II) with respect to whom a child support pay- ment was received in the month;”. (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is amended\u2014 (A) in the matter preceding clause (i)\u2014 (i) by striking ”with the data required under each clause being separately stated for cases” and inserting ”separately stated for cases”; (ii) by striking ”cases where the child was formerly receiving” and inserting ”or formerly received”; (iii) by inserting ”or 1912” after ”471(a)(17)”; and 140 (iv) by inserting ”for” before ”all other”; (B) in each of clauses (i) and (ii), by striking ”, and the total amount of such obligations”; (C) in clause (iii), by striking ”described in” and all that follows and inserting ”in which support was collected during the fiscal year;”; (D) by striking clause (iv); and (E) by redesignating clause (v) as clause (vii), and in- serting after clause (iii) the following new clauses: ”(iv) the total amount of support collected during such fiscal year and distributed as current support; ”(v) the total amount of support collected during such fiscal year and distributed as arrearages; ”(vi) the total amount of support due and unpaid for all fiscal years; and”. (3) Section 452(a)(10)(G) (42 U.S.C. 652(a)(10)(G)) is amended by striking ”on the use of Federal courts and”. (4) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended\u2014 (A) in subparagraph (H), by striking ”and”; (B) in subparagraph (I), by striking the period and in- serting ”; and”; and (C) by inserting after subparagraph (I) the following new subparagraph: ”(J) compliance, by State, with the standards estab- lished pursuant to subsections (h) and (i).”. (5) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended by striking all that follows subparagraph (J), as added by para- graph (4). (b) EFFECTIVE DATE.\u2014The amendments made by subsection (a) shall be effective with respect to fiscal year 1997 and succeeding fis- cal years. Subtitle F\u2014Establishment and Modification of Support Orders SEC. 351. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS. Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amended to read as follows: ”(10) REVIEW AND ADJUSTMENT OF SUPPORT ORDERS UPON REQUEST.\u2014 ”(A) 3-YEAR CYCLE.\u2014 ”(i) IN GENERAL.\u2014Procedures under which every 3 years (or such shorter cycle as the State may deter- mine), upon the request of either parent, or, if there is an assignment under part A, upon the request of the State agency under the State plan or of either parent, the State shall with respect to a support order being enforced under this part, taking into account the best interests of the child involved\u2014 ”(I) review and, if appropriate, adjust the order in accordance with the guidelines established pursuant to section 467(a) if the amount of the 141 child support award under the order differs from the amount that would be awarded in accordance with the guidelines; ”(II) apply a cost-of-living adjustment to the order in accordance with a formula developed by the State; or ”(III) use automated methods (including auto- mated comparisons with wage or State income tax data) to identify orders eligible for review, conduct the review, identify orders eligible for adjustment, and apply the appropriate adjustment to the orders eligible for adjustment under any threshold that may be established by the State. ”(ii) OPPORTUNITY TO REQUEST REVIEW OF ADJUST- MENT.\u2014If the State elects to conduct the review under subclause (II) or (III) of clause (i), procedures which permit either party to contest the adjustment, within 30 days after the date of the notice of the adjustment, by making a request for review and, if appropriate, ad- justment of the order in accordance with the child sup- port guidelines established pursuant to section 467(a). ”(iii) NO PROOF OF CHANGE IN CIRCUMSTANCES NECESSARY IN 3-YEAR CYCLE REVIEW.\u2014Procedures which provide that any adjustment under clause (i) shall be made without a requirement for proof or show- ing of a change in circumstances. ”(B) PROOF OF SUBSTANTIAL CHANGE IN CIR- CUMSTANCES NECESSARY IN REQUEST FOR REVIEW OUTSIDE 3-YEAR CYCLE.\u2014Procedures under which, in the case of a request for a review, and if appropriate, an adjustment out- side the 3-year cycle (or such shorter cycle as the State may determine) under clause (i), the State shall review and, if the requesting party demonstrates a substantial change in circumstances, adjust the order in accordance with the guidelines established pursuant to section 467(a). ”(C) NOTICE OF RIGHT TO REVIEW.\u2014Procedures which require the State to provide notice not less than once every 3 years to the parents subject to the order informing the parents of their right to request the State to review and, if appropriate, adjust the order pursuant to this paragraph. The notice may be included in the order.”. SEC. 352. FURNISHING CONSUMER REPORTS FOR CERTAIN PURPOSES RELATING TO CHILD SUPPORT. Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is amended by adding at the end the following new paragraphs: ”(4) In response to a request by the head of a State or local child support enforcement agency (or a State or local government of- ficial authorized by the head of such an agency), if the person mak- ing the request certifies to the consumer reporting agency that\u2014 ”(A) the consumer report is needed for the purpose of estab- lishing an individual’s capacity to make child support pay- ments or determining the appropriate level of such payments; ”(B) the paternity of the consumer for the child to which the obligation relates has been established or acknowledged by the 142 consumer in accordance with State laws under which the obli- gation arises (if required by those laws); ”(C) the person has provided at least 10 days’ prior notice to the consumer whose report is requested, by certified or reg- istered mail to the last known address of the consumer, that the report will be requested; and ”(D) the consumer report will be kept confidential, will be used solely for a purpose described in subparagraph (A), and will not be used in connection with any other civil, administra- tive, or criminal proceeding, or for any other purpose. ”(5) To an agency administering a State plan under section 454 of the Social Security Act (42 U.S.C. 654) for use to set an initial or modified child support award.”. SEC. 353. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL RECORDS TO STATE CHILD SUPPORT EN- FORCEMENT AGENCIES IN CHILD SUPPORT CASES. Part D of title IV (42 U.S.C. 651 669) is amended by adding at the end the following: ”SEC. 469A. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL RECORDS TO STATE CHILD SUPPORT EN- FORCEMENT AGENCIES IN CHILD SUPPORT CASES. ”(a) IN GENERAL.\u2014Notwithstanding any other provision of Fed- eral or State law, a financial institution shall not be liable under any Federal or State law to any person for disclosing any financial record of an individual to a State child support enforcement agency attempting to establish, modify, or enforce a child support obliga- tion of such individual. ”(b) PROHIBITION OF DISCLOSURE OF FINANCIAL RECORD OB- TAINED BY STATE CHILD SUPPORT ENFORCEMENT AGENCY.\u2014A State child support enforcement agency which obtains a financial record of an individual from a financial institution pursuant to subsection (a) may disclose such financial record only for the purpose of, and to the extent necessary in, establishing, modifying, or enforcing a child support obligation of such individual. ”(c) CIVIL DAMAGES FOR UNAUTHORIZED DISCLOSURE.\u2014 ”(1) DISCLOSURE BY STATE OFFICER OR EMPLOYEE.\u2014If any person knowingly, or by reason of negligence, discloses a finan- cial record of an individual in violation of subsection (b), such individual may bring a civil action for damages against such person in a district court of the United States. ”(2) NO LIABILITY FOR GOOD FAITH BUT ERRONEOUS INTER- PRETATION.\u2014No liability shall arise under this subsection with respect to any disclosure which results from a good faith, but erroneous, interpretation of subsection (b). ”(3) DAMAGES.\u2014In any action brought under paragraph (1), upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the sum of\u2014 ”(A) the greater of\u2014 ”(i) $1,000 for each act of unauthorized disclosure of a financial record with respect to which such defend- ant is found liable; or ”(ii) the sum of\u2014 143 ”(I) the actual damages sustained by the plain- tiff as a result of such unauthorized disclosure; plus ”(II) in the case of a willful disclosure or a dis- closure which is the result of gross negligence, pu- nitive damages; plus ”(B) the costs (including attorney’s fees) of the action. ”(d) DEFINITIONS.\u2014For purposes of this section\u2014 ”(1) FINANCIAL INSTITUTION.\u2014The term ‘financial institu- tion’ means\u2014 ”(A) a depository institution, as defined in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)); ”(B) an institution-affiliated party, as defined in sec- tion 3(u) of such Act (12 U.S.C. 1813(u)); ”(C) any Federal credit union or State credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752), including an institution-affiliated party of such a credit union, as defined in section 206(r) of such Act (12 U.S.C. 1786(r)); and ”(D) any benefit association, insurance company, safe deposit company, money-market mutual fund, or similar entity authorized to do business in the State. ”(2) FINANCIAL RECORD.\u2014The term ‘financial record’ has the meaning given such term in section 1101 of the Right to Fi- nancial Privacy Act of 1978 (12 U.S.C. 3401).”. Subtitle G\u2014Enforcement of Support Orders SEC. 361. INTERNAL REVENUE SERVICE COLLECTION OF ARREAR- AGES. (a) COLLECTION OF FEES.\u2014Section 6305(a) of the Internal Reve- nue Code of 1986 (relating to collection of certain liability) is amended\u2014 (1) by striking ”and” at the end of paragraph (3); (2) by striking the period at the end of paragraph (4) and inserting ”, and”; (3) by adding at the end the following new paragraph: ”(5) no additional fee may be assessed for adjustments to an amount previously certified pursuant to such section 452(b) with respect to the same obligor.”; and (4) by striking ”Secretary of Health, Education, and Wel- fare” each place it appears and inserting ”Secretary of Health and Human Services”. (b) EFFECTIVE DATE.\u2014The amendments made by this section shall become effective October 1, 1997. SEC. 362. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL EMPLOY- EES. (a) CONSOLIDATION AND STREAMLINING OF AUTHORITIES.\u2014Sec- tion 459 (42 U.S.C. 659) is amended to read as follows: 144 ”SEC. 459. CONSENT BY THE UNITED STATES TO INCOME WITHHOLD- ING, GARNISHMENT, AND SIMILAR PROCEEDINGS FOR EN- FORCEMENT OF CHILD SUPPORT AND ALIMONY OBLIGA- TIONS. ”(a) CONSENT TO SUPPORT ENFORCEMENT.\u2014Notwithstanding any other provision of law (including section 207 of this Act and section 5301 of title 38, United States Code), effective January 1, 1975, moneys (the entitlement to which is based upon remuneration for employment) due from, or payable by, the United States or the District of Columbia (including any agency, subdivision, or instru- mentality thereof) to any individual, including members of the Armed Forces of the United States, shall be subject, in like manner and to the same extent as if the United States or the District of Co- lumbia were a private person, to withholding in accordance with State law enacted pursuant to subsections (a)(1) and (b) of section 466 and regulations of the Secretary under such subsections, and to any other legal process brought, by a State agency administering a program under a State plan approved under this part or by an indi- vidual obligee, to enforce the legal obligation of the individual to provide child support or alimony. ”(b) CONSENT TO REQUIREMENTS APPLICABLE TO PRIVATE PER- SON.\u2014With respect to notice to withhold income pursuant to sub- section (a)(1) or (b) of section 466, or any other order or process to enforce support obligations against an individual (if the order or process contains or is accompanied by sufficient data to permit prompt identification of the individual and the moneys involved), each governmental entity specified in subsection (a) shall be subject to the same requirements as would apply if the entity were a private person, except as otherwise provided in this section. ”(c) DESIGNATION OF AGENT; RESPONSE TO NOTICE OR PROC- ESS\u2014 ”(1) DESIGNATION OF AGENT.\u2014The head of each agency subject to this section shall\u2014 ”(A) designate an agent or agents to receive orders and accept service of process in matters relating to child support or alimony; and ”(B) annually publish in the Federal Register the des- ignation of the agent or agents, identified by title or posi- tion, mailing address, and telephone number. ”(2) RESPONSE TO NOTICE OR PROCESS.\u2014If an agent des- ignated pursuant to paragraph (1) of this subsection receives notice pursuant to State procedures in effect pursuant to sub- section (a)(1) or (b) of section 466, or is effectively served with any order, process, or interrogatory, with respect to an individ- ual’s child support or alimony payment obligations, the agent shall\u2014 ”(A) as soon as possible (but not later than 15 days) thereafter, send written notice of the notice or service (to- gether with a copy of the notice or service) to the individual at the duty station or last-known home address of the indi- vidual; ”(B) within 30 days (or such longer period as may be prescribed by applicable State law) after receipt of a notice pursuant to such State procedures, comply with all applica- ble provisions of section 466; and 145 ”(C) within 30 days (or such longer period as may be prescribed by applicable State law) after effective service of any other such order, process, or interrogatory, respond to the order, process, or interrogatory. ”(d) PRIORITY OF CLAIMS.\u2014If a governmental entity specified in subsection (a) receives notice or is served with process, as provided in this section, concerning amounts owed by an individual to more than 1 person\u2014 ”(1) support collection under section 466(b) must be given priority over any other process, as provided in section 466(b)(7); ”(2) allocation of moneys due or payable to an individual among claimants under section 466(b) shall be governed by sec- tion 466(b) and the regulations prescribed under such section; and ”(3) such moneys as remain after compliance with para- graphs (1) and (2) shall be available to satisfy any other such processes on a first-come, first-served basis, with any such proc- ess being satisfied out of such moneys as remain after the satis- faction of all such processes which have been previously served. ”(e) NO REQUIREMENT TO VARY PAY CYCLES.\u2014A governmental entity that is affected by legal process served for the enforcement of an individual’s child support or alimony payment obligations shall not be required to vary its normal pay and disbursement cycle in order to comply with the legal process. ”(f) RELIEF FROM LIABILITY.\u2014 ”(1) Neither the United States, nor the government of the District of Columbia, nor any disbursing officer shall be liable with respect to any payment made from moneys due or payable from the United States to any individual pursuant to legal process regular on its face, if the payment is made in accord- ance with this section and the regulations issued to carry out this section. ”(2) No Federal employee whose duties include taking ac- tions necessary to comply with the requirements of subsection (a) with regard to any individual shall be subject under any law to any disciplinary action or civil or criminal liability or penalty for, or on account of, any disclosure of information made by the employee in connection with the carrying out of such actions. ”(g) REGULATIONS.\u2014Authority to promulgate regulations for the implementation of this section shall, insofar as this section applies to moneys due from (or payable by)\u2014 ”(1) the United States (other than the legislative or judicial branches of the Federal Government) or the government of the District of Columbia, be vested in the President (or the designee of the President); ”(2) the legislative branch of the Federal Government, be vested jointly in the President pro tempore of the Senate and the Speaker of the House of Representatives (or their designees), and ”(3) the judicial branch of the Federal Government, be vest- ed in the Chief Justice of the United States (or the designee of the Chief Justice). ”(h) MONEYS SUBJECT TO PROCESS.\u2014 146 ”(1) IN GENERAL.\u2014Subject to paragraph (2), moneys paid or payable to an individual which are considered to be based upon remuneration for employment, for purposes of this section\u2014 ”(A) consist of\u2014 ”(i) compensation paid or payable for personal services of the individual, whether the compensation is denominated as wages, salary, commission, bonus, pay, allowances, or otherwise (including severance pay, sick pay, and incentive pay); ”(ii) periodic benefits (including a periodic benefit as defined in section 228(h)(3)) or other payments\u2014 ”(I) under the insurance system established by title II; ”(II) under any other system or fund estab- lished by the United States which provides for the payment of pensions, retirement or retired pay, an- nuities, dependents’ or survivors’ benefits, or simi- lar amounts payable on account of personal serv- ices performed by the individual or any other indi- vidual; ”(III) as compensation for death under any Federal program; ”(IV) under any Federal program established to provide ‘black lung’ benefits; or ”(V) by the Secretary of Veterans Affairs as compensation for a service-connected disability paid by the Secretary to a former member of the Armed Forces who is in receipt of retired or re- tainer pay if the former member has waived a por- tion of the retired or retainer pay in order to re- ceive such compensation; and ”(iii) worker’s compensation benefits paid under Federal or State law but ”(B) do not include any payment\u2014 ”(i) by way of reimbursement or otherwise, to de- fray expenses incurred by the individual in carrying out duties associated with the employment of the indi- vidual; or ”(ii) as allowances for members of the uniformed services payable pursuant to chapter 7 of title 37, Unit- ed States Code, as prescribed by the Secretaries con- cerned (defined by section 101(5) of such title) as nec- essary for the efficient performance of duty. ”(2) CERTAIN AMOUNTS EXCLUDED.\u2014In determining the amount of any moneys due from, or payable by, the United States to any individual, there shall be excluded amounts which\u2014 ”(A) are owed by the individual to the United States; ”(B) are required by law to be, and are, deducted from the remuneration or other payment involved, including Federal employment taxes, and fines and forfeitures or- dered by court-martial; ”(C) are properly withheld for Federal, State, or local income tax purposes, if the withholding of the amounts is 147 authorized or required by law and if amounts withheld are not greater than would be the case if the individual claimed all dependents to which he was entitled (the with- holding of additional amounts pursuant to section 3402(i) of the Internal Revenue Code of 1986 may be permitted only when the individual presents evidence of a tax obliga- tion which supports the additional withholding); ”(D) are deducted as health insurance premiums; ”(E) are deducted as normal retirement contributions (not including amounts deducted for supplementary cov- erage); or ”(F) are deducted as normal life insurance premiums from salary or other remuneration for employment (not in- cluding amounts deducted for supplementary coverage). ”(i) DEFINITIONS.\u2014For purposes of this section\u2014 ”(1) UNITED STATES.\u2014The term ‘United States’ includes any department, agency, or instrumentality of the legislative, judicial, or executive branch of the Federal Government, the United States Postal Service, the Postal Rate Commission, any Federal corporation created by an Act of Congress that is whol- ly owned by the Federal Government, and the governments of the territories and possessions of the United States. ”(2) CHILD SUPPORT.\u2014The term ‘child support’, when used in reference to the legal obligations of an individual to provide such support, means amounts required to be paid under a judg- ment, decree, or order, whether temporary, final, or subject to modification, issued by a court or an administrative agency of competent jurisdiction, for the support and maintenance of a child, including a child who has attained the age of majority under the law of the issuing State, or a child and the parent with whom the child is living, which provides for monetary support, health care, arrearages or reimbursement, and which may include other related costs and fees, interest and penalties, income withholding, attorney’s fees, and other relief. ”(3) ALIMONY.\u2014 ”(A) IN GENERAL.\u2014The term ‘alimony’, when used in reference to the legal obligations of an individual to provide the same, means periodic payments of funds for the support and maintenance of the spouse (or former spouse) of the in- dividual, and (subject to and in accordance with State law) includes separate maintenance, alimony pendente lite, maintenance, and spousal support, and includes attorney’s fees, interest, and court costs when and to the extent that the same are expressly made recoverable as such pursuant to a decree, order, or judgment issued in accordance with applicable State law by a court of competent jurisdiction. ”(B) EXCEPTIONS.\u2014Such term does not include\u2014 ”(i) any child support; or ”(ii) any payment or transfer of property or its value by an individual to the spouse or a former spouse of the individual in compliance with any community property settlement, equitable distribution of property, or other division of property between spouses or former spouses. 148 ”(4) PRIVATE PERSON.\u2014The term ‘private person’ means a person who does not have sovereign or other special immunity or privilege which causes the person not to be subject to legal process. ”(5) LEGAL PROCESS.\u2014The term ‘legal process’ means any writ, order, summons, or other similar process in the nature of garnishment\u2014 ”(A) which is issued by\u2014 ”(i) a court or an administrative agency of com- petent jurisdiction in any State, territory, or possession of the United States; ”(ii) a court or an administrative agency of com- petent jurisdiction in any foreign country with which the United States has entered into an agreement which requires the United States to honor the process; or ”(iii) an authorized official pursuant to an order of such a court or an administrative agency of competent jurisdiction or pursuant to State or local law; and ”(B) which is directed to, and the purpose of which is to compel, a governmental entity which holds moneys which are otherwise payable to an individual to make a payment from the moneys to another party in order to sat- isfy a legal obligation of the individual to provide child support or make alimony payments.”. (b) CONFORMING AMENDMENTS.\u2014 (1) TO PART D OF TITLE IV.\u2014Sections 461 and 462 (42 U.S.C. 661 and 662) are repealed. (2) TO TITLE 5, UNITED STATES CODE.\u2014Section 5520a of title 5, United States Code, is amended, in subsections (h)(2) and (i), by striking ”sections 459, 461, and 462 of the Social Se- curity Act (42 U.S.C. 659, 661, and 662)” and inserting ”section 459 of the Social Security Act (42 U.S.C. 659)”. (c) MILITARY RETIRED AND RETAINER PAY.\u2014 (1) DEFINITION OF COURT.\u2014Section 1408(a)(1) of title 10, United States Code, is amended\u2014 (A) by striking ”and” at the end of subparagraph (B); (B) by striking the period at the end of subparagraph (C) and inserting ”; and”; and (C) by adding after subparagraph (C) the following new subparagraph: ”(D) any administrative or judicial tribunal of a State competent to enter orders for support or maintenance (in- cluding a State agency administering a program under a State plan approved under part D of title IV of the Social Security Act), and, for purposes of this subparagraph, the term ‘State’ includes the District of Columbia, the Common- wealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.”. (2) DEFINITION OF COURT ORDER.\u2014Section 1408(a)(2) of such title is amended\u2014 (A) by inserting ”or a support order, as defined in sec- tion 453(p) of the Social Security Act (42 U.S.C. 653(p)),” before ”which\u2014”; 149 (B) in subparagraph (B)(i), by striking ”(as defined in section 462(b) of the Social Security Act (42 U.S.C. 662(b)))” and inserting ”(as defined in section 459(i)(2) of the Social Security Act (42 U.S.C. 659(i)(2)))”; and (C) in subparagraph (B)(ii), by striking ”(as defined in section 462(c) of the Social Security Act (42 U.S.C. 662(c)))” and inserting ”(as defined in section 459(i)(3) of the Social Security Act (42 U.S.C. 659(i)(3)))”. (3) PUBLIC PAYEE.\u2014Section 1408(d) of such title is amend- ed\u2014 (A) in the heading, by inserting ”(OR FOR BENEFIT OF)” before ”SPOUSE OR”; and (B) in paragraph (1), in the 1st sentence, by inserting ”(or for the benefit of such spouse or former spouse to a State disbursement unit established pursuant to section 454B of the Social Security Act or other public payee des- ignated by a State, in accordance with part D of title IV of the Social Security Act, as directed by court order, or as otherwise directed in accordance with such part D)” before ”in an amount sufficient”. (4) RELATIONSHIP TO PART D OF TITLE IV.\u2014Section 1408 of such title is amended by adding at the end the following new subsection: ”(j) RELATIONSHIP TO OTHER LAWS.\u2014In any case involving an order providing for payment of child support (as defined in section 459(i)(2) of the Social Security Act) by a member who has never been married to the other parent of the child, the provisions of this section shall not apply, and the case shall be subject to the provi- sions of section 459 of such Act.”. (d) EFFECTIVE DATE.\u2014The amendments made by this section shall become effective 6 months after the date of the enactment of this Act. SEC. 363. ENFORCEMENT OF CHILD SUPPORT OBLIGATIONS OF MEM- BERS OF THE ARMED FORCES. (a) AVAILABILITY OF LOCATOR INFORMATION.\u2014 (1) MAINTENANCE OF ADDRESS INFORMATION.\u2014The Sec- retary of Defense shall establish a centralized personnel locator service that includes the address of each member of the Armed Forces under the jurisdiction of the Secretary. Upon request of the Secretary of Transportation, addresses for members of the Coast Guard shall be included in the centralized personnel lo- cator service. (2) TYPE OF ADDRESS.\u2014 (A) RESIDENTIAL ADDRESS.\u2014Except as provided in sub- paragraph (B), the address for a member of the Armed Forces shown in the locator service shall be the residential address of that member. (B) DUTY ADDRESS.\u2014The address for a member of the Armed Forces shown in the locator service shall be the duty address of that member in the case of a member\u2014 (i) who is permanently assigned overseas, to a ves- sel, or to a routinely deployable unit; or (ii) with respect to whom the Secretary concerned makes a determination that the member’s residential 150 address should not be disclosed due to national secu- rity or safety concerns. (3) UPDATING OF LOCATOR INFORMATION.\u2014Within 30 days after a member listed in the locator service establishes a new residential address (or a new duty address, in the case of a member covered by paragraph (2)(B)), the Secretary concerned shall update the locator service to indicate the new address of the member. (4) AVAILABILITY OF INFORMATION.\u2014The Secretary of De- fense shall make information regarding the address of a mem- ber of the Armed Forces listed in the locator service available, on request, to the Federal Parent Locator Service established under section 453 of the Social Security Act. (b) FACILITATING GRANTING OF LEAVE FOR ATTENDANCE AT HEARINGS.\u2014 (1) REGULATIONS.\u2014The Secretary of each military depart- ment, and the Secretary of Transportation with respect to the Coast Guard when it is not operating as a service in the Navy, shall prescribe regulations to facilitate the granting of leave to a member of the Armed Forces under the jurisdiction of that Secretary in a case in which\u2014 (A) the leave is needed for the member to attend a hear- ing described in paragraph (2); (B) the member is not serving in or with a unit de- ployed in a contingency operation (as defined in section 101 of title 10, United States Code); and (C) the exigencies of military service (as determined by the Secretary concerned) do not otherwise require that such leave not be granted. (2) COVERED HEARINGS.\u2014Paragraph (1) applies to a hear- ing that is conducted by a court or pursuant to an administra- tive process established under State law, in connection with a civil action\u2014 (A) to determine whether a member of the Armed Forces is a natural parent of a child; or (B) to determine an obligation of a member of the Armed Forces to provide child support. (3) DEFINITIONS.\u2014For purposes of this subsection\u2014 (A) The term ”court” has the meaning given that term in section 1408(a) of title 10, United States Code. (B) The term ”child support” has the meaning given such term in section 459(i) of the Social Security Act (42 U.S.C. 659(i)). (c) PAYMENT OF MILITARY RETIRED PAY IN COMPLIANCE WITH CHILD SUPPORT ORDERS.\u2014 (1) DATE OF CERTIFICATION OF COURT ORDER.\u2014Section 1408 of title 10, United States Code, as amended by section 362(c)(4) of this Act, is amended\u2014 (A) by redesignating subsections (i) and (j) as sub- sections (j) and (k), respectively; and (B) by inserting after subsection (h) the following new subsection: ”(i) CERTIFICATION DATE.\u2014It is not necessary that the date of a certification of the authenticity or completeness of a copy of a 151 court order for child support received by the Secretary concerned for the purposes of this section be recent in relation to the date of re- ceipt by the Secretary.”. (2) PAYMENTS CONSISTENT WITH ASSIGNMENTS OF RIGHTS TO STATES.\u2014Section 1408(d)(1) of such title is amended by in- serting after the 1st sentence the following new sentence: ”In the case of a spouse or former spouse who, pursuant to section 408(a)(4) of the Social Security Act (42 U.S.C. 608(a)(4)), as- signs to a State the rights of the spouse or former spouse to re- ceive support, the Secretary concerned may make the child sup- port payments referred to in the preceding sentence to that State in amounts consistent with that assignment of rights.”. (3) ARREARAGES OWED BY MEMBERS OF THE UNIFORMED SERVICES.\u2014Section 1408(d) of such title is amended by adding at the end the following new paragraph: ”(6) In the case of a court order for which effective service is made on the Secretary concerned on or after the date of the enact- ment of this paragraph and which provides for payments from the disposable retired pay of a member to satisfy the amount of child support set forth in the order, the authority provided in paragraph (1) to make payments from the disposable retired pay of a member to satisfy the amount of child support set forth in a court order shall apply to payment of any amount of child support arrearages set forth in that order as well as to amounts of child support that currently become due.”. (4) PAYROLL DEDUCTIONS.\u2014The Secretary of Defense shall begin payroll deductions within 30 days after receiving notice of withholding, or for the 1st pay period that begins after such 30-day period. SEC. 364. VOIDING OF FRAUDULENT TRANSFERS. Section 466 (42 U.S.C. 666), as amended by section 321 of this Act, is amended by adding at the end the following new subsection: ”(g) LAWS VOIDING FRAUDULENT TRANSFERS.\u2014In order to sat- isfy section 454(20)(A), each State must have in effect\u2014 ”(1)(A) the Uniform Fraudulent Conveyance Act of 1981; ”(B) the Uniform Fraudulent Transfer Act of 1984; or ”(C) another law, specifying indicia of fraud which create a prima facie case that a debtor transferred income or property to avoid payment to a child support creditor, which the Sec- retary finds affords comparable rights to child support credi- tors; and ”(2) procedures under which, in any case in which the State knows of a transfer by a child support debtor with respect to which such a prima facie case is established, the State must\u2014 ”(A) seek to void such transfer; or ”(B) obtain a settlement in the best interests of the child support creditor.”. SEC. 365. WORK REQUIREMENT FOR PERSONS OWING PAST-DUE CHILD SUPPORT. (a) IN GENERAL.\u2014Section 466(a) (42 U.S.C. 666(a)), as amend- ed by sections 315, 317, and 323 of this Act, is amended by insert- ing after paragraph (14) the following new paragraph: 152 ”(15) PROCEDURES TO ENSURE THAT PERSONS OWING PAST- DUE SUPPORT WORK OR HAVE A PLAN FOR PAYMENT OF SUCH SUPPORT.\u2014 ”(A) IN GENERAL.\u2014Procedures under which the State has the authority, in any case in which an individual owes past-due support with respect to a child receiving assist- ance under a State program funded under part A, to issue an order or to request that a court or an administrative process established pursuant to State law issue an order that requires the individual to\u2014 ”(i) pay such support in accordance with a plan approved by the court, or, at the option of the State, a plan approved by the State agency administering the State program under this part; or ”(ii) if the individual is subject to such a plan and is not incapacitated, participate in such work activities (as defined in section 407(d)) as the court, or, at the op- tion of the State, the State agency administering the State program under this part, deems appropriate. ”(B) PAST-DUE SUPPORT DEFINED.\u2014For purposes of subparagraph (A), the term ‘past-due support’ means the amount of a delinquency, determined under a court order, or an order of an administrative process established under State law, for support and maintenance of a child, or of a child and the parent with whom the child is living.”. (b) CONFORMING AMENDMENT.\u2014The flush paragraph at the end of section 466(a) (42 U.S.C. 666(a)) is amended by striking ”and (7)” and inserting ”(7), and (15)”. SEC. 366. DEFINITION OF SUPPORT ORDER. Section 453 (42 U.S.C. 653) as amended by sections 316 and 345(b) of this Act, is amended by adding at the end the following new subsection: ”(p) SUPPORT ORDER DEFINED.\u2014As used in this part, the term ‘support order’ means a judgment, decree, or order, whether tem- porary, final, or subject to modification, issued by a court or an ad- ministrative agency of competent jurisdiction, for the support and maintenance of a child, including a child who has attained the age of majority under the law of the issuing State, or a child and the parent with whom the child is living, which provides for monetary support, health care, arrearages, or reimbursement, and which may include related costs and fees, interest and penalties, income with- holding, attorneys’ fees, and other relief.”. SEC. 367. REPORTING ARREARAGES TO CREDIT BUREAUS. Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended to read as follows: ”(7) REPORTING ARREARAGES TO CREDIT BUREAUS.\u2014 ”(A) IN GENERAL.\u2014Procedures (subject to safeguards pursuant to subparagraph (B)) requiring the State to report periodically to consumer reporting agencies (as defined in section 603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)) the name of any noncustodial parent who is delin- quent in the payment of support, and the amount of over- due support owed by such parent. 153 ”(B) SAFEGUARDS.\u2014Procedures ensuring that, in carry- ing out subparagraph (A), information with respect to a noncustodial parent is reported\u2014 ”(i) only after such parent has been afforded all due process required under State law, including notice and a reasonable opportunity to contest the accuracy of such information; and ”(ii) only to an entity that has furnished evidence satisfactory to the State that the entity is a consumer reporting agency (as so defined).”. SEC. 368. LIENS. Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended to read as follows: ”(4) LIENS.\u2014Procedures under which\u2014 ”(A) liens arise by operation of law against real and personal property for amounts of overdue support owed by a noncustodial parent who resides or owns property in the State; and ”(B) the State accords full faith and credit to liens de- scribed in subparagraph (A) arising in another State, when the State agency, party, or other entity seeking to enforce such a lien complies with the procedural rules relating to recording or serving liens that arise within the State, except that such rules may not require judicial notice or hearing prior to the enforcement of such a lien.”. SEC. 369. STATE LAW AUTHORIZING SUSPENSION OF LICENSES. Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 323, and 365 of this Act, is amended by inserting after para- graph (15) the following: ”(16) AUTHORITY TO WITHHOLD OR SUSPEND LICENSES.\u2014 Procedures under which the State has (and uses in appropriate cases) authority to withhold or suspend, or to restrict the use of driver’s licenses, professional and occupational licenses, and recreational licenses of individuals owing overdue support or failing, after receiving appropriate notice, to comply with sub- poenas or warrants relating to paternity or child support pro- ceedings.”. SEC. 370. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD SUP- PORT. (a) HHS CERTIFICATION PROCEDURE.\u2014 (1) SECRETARIAL RESPONSIBILITY.\u2014Section 452 (42 U.S.C. 652), as amended by section 345 of this Act, is amended by add- ing at the end the following new subsection: ”(k)(1) If the Secretary receives a certification by a State agency in accordance with the requirements of section 454(31) that an indi- vidual owes arrearages of child support in an amount exceeding $5,000, the Secretary shall transmit such certification to the Sec- retary of State for action (with respect to denial, revocation, or limi- tation of passports) pursuant to paragraph (2). ”(2) The Secretary of State shall, upon certification by the Sec- retary transmitted under paragraph (1), refuse to issue a passport to such individual, and may revoke, restrict, or limit a passport is- sued previously to such individual. 154 ”(3) The Secretary and the Secretary of State shall not be liable to an individual for any action with respect to a certification by a State agency under this section.”. (2) STATE AGENCY RESPONSIBILITY.\u2014Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a), 312(b), 313(a), 333, and 343(b) of this Act, is amended\u2014 (A) by striking ”and” at the end of paragraph (29); (B) by striking the period at the end of paragraph (30) and inserting ”; and”; and (C) by adding after paragraph (30) the following new paragraph: ”(31) provide that the State agency will have in effect a pro- cedure for certifying to the Secretary, for purposes of the proce- dure under section 452(k), determinations that individuals owe arrearages of child support in an amount exceeding $5,000, under which procedure\u2014 ”(A) each individual concerned is afforded notice of such determination and the consequences thereof, and an opportunity to contest the determination; and ”(B) the certification by the State agency is furnished to the Secretary in such format, and accompanied by such supporting documentation, as the Secretary may require.”. (b) EFFECTIVE DATE.\u2014This section and the amendments made by this section shall become effective October 1, 1997. SEC. 371. INTERNATIONAL SUPPORT ENFORCEMENT. (a) AUTHORITY FOR INTERNATIONAL AGREEMENTS.\u2014Part D of title IV, as amended by section 362(a) of this Act, is amended by adding after section 459 the following new section: ”SEC. 459A. INTERNATIONAL SUPPORT ENFORCEMENT. ”(a) AUTHORITY FOR DECLARATIONS.\u2014 ”(1) DECLARATION.\u2014The Secretary of State, with the con- currence of the Secretary of Health and Human Services, is au- thorized to declare any foreign country (or a political subdivi- sion thereof) to be a foreign reciprocating country if the foreign country has established, or undertakes to establish, procedures for the establishment and enforcement of duties of support owed to obligees who are residents of the United States, and such procedures are substantially in conformity with the standards prescribed under subsection (b). ”(2) REVOCATION.\u2014A declaration with respect to a foreign country made pursuant to paragraph (1) may be revoked if the Secretaries of State and Health and Human Services determine that\u2014 ”(A) the procedures established by the foreign country regarding the establishment and enforcement of duties of support have been so changed, or the foreign country’s im- plementation of such procedures is so unsatisfactory, that such procedures do not meet the criteria for such a declara- tion; or ”(B) continued operation of the declaration is not con- sistent with the purposes of this part. ”(3) FORM OF DECLARATION.\u2014A declaration under para- graph (1) may be made in the form of an international agree- 155 ment, in connection with an international agreement or cor- responding foreign declaration, or on a unilateral basis. ”(b) STANDARDS FOR FOREIGN SUPPORT ENFORCEMENT PROCE- DURES.\u2014 ”(1) MANDATORY ELEMENTS.\u2014Support enforcement proce- dures of a foreign country which may be the subject of a dec- laration pursuant to subsection (a)(1) shall include the follow- ing elements: ”(A) The foreign country (or political subdivision there- of) has in effect procedures, available to residents of the United States\u2014 ”(i) for establishment of paternity, and for estab- lishment of orders of support for children and custo- dial parents; and ”(ii) for enforcement of orders to provide support to children and custodial parents, including procedures for collection and appropriate distribution of support payments under such orders. ”(B) The procedures described in subparagraph (A), in- cluding legal and administrative assistance, are provided to residents of the United States at no cost. ”(C) An agency of the foreign country is designated as a Central Authority responsible for\u2014 ”(i) facilitating support enforcement in cases in- volving residents of the foreign country and residents of the United States; and ”(ii) ensuring compliance with the standards estab- lished pursuant to this subsection. ”(2) ADDITIONAL ELEMENTS.\u2014The Secretary of Health and Human Services and the Secretary of State, in consultation with the States, may establish such additional standards as may be considered necessary to further the purposes of this sec- tion. ”(c) DESIGNATION OF UNITED STATES CENTRAL AUTHORITY.\u2014It shall be the responsibility of the Secretary of Health and Human Services to facilitate support enforcement in cases involving resi- dents of the United States and residents of foreign countries that are the subject of a declaration under this section, by activities in- cluding\u2014 ”(1) development of uniform forms and procedures for use in such cases; ”(2) notification of foreign reciprocating countries of the State of residence of individuals sought for support enforcement purposes, on the basis of information provided by the Federal Parent Locator Service; and ”(3) such other oversight, assistance, and coordination ac- tivities as the Secretary may find necessary and appropriate. ”(d) EFFECT ON OTHER LAWS.\u2014States may enter into reciprocal arrangements for the establishment and enforcement of support obli- gations with foreign countries that are not the subject of a declara- tion pursuant to subsection (a), to the extent consistent with Federal law.”. 156 (b) STATE PLAN REQUIREMENT.\u2014Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a), 312(b), 313(a), 333, 343(b), and 370(a)(2) of this Act, is amended\u2014 (1) by striking ”and” at the end of paragraph (30); (2) by striking the period at the end of paragraph (31) and inserting ”; and”; and (3) by adding after paragraph (31) the following new para- graph: ”(32)(A) provide that any request for services under this part by a foreign reciprocating country or a foreign country with which the State has an arrangement described in section 459A(d)(2) shall be treated as a request by a State; ”(B) provide, at State option, notwithstanding paragraph (4) or any other provision of this part, for services under the plan for enforcement of a spousal support order not described in paragraph (4)(B) entered by such a country (or subdivision); and ”(C) provide that no applications will be required from, and no costs will be assessed for such services against, the foreign reciprocating country or foreign obligee (but costs may at State option be assessed against the obligor).”. SEC. 372. FINANCIAL INSTITUTION DATA MATCHES. Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 323, 365, and 369 of this Act, is amended by inserting after paragraph (16) the following new paragraph: ”(17) FINANCIAL INSTITUTION DATA MATCHES.\u2014 ”(A) IN GENERAL.\u2014Procedures under which the State agency shall enter into agreements with financial institu- tions doing business in the State\u2014 ”(i) to develop and operate, in coordination with such financial institutions, a data match system, using automated data exchanges to the maximum extent fea- sible, in which each such financial institution is re- quired to provide for each calendar quarter the name, record address, social security number or other tax- payer identification number, and other identifying in- formation for each noncustodial parent who maintains an account at such institution and who owes past-due support, as identified by the State by name and social security number or other taxpayer identification num- ber; and ”(ii) in response to a notice of lien or levy, encum- ber or surrender, as the case may be, assets held by such institution on behalf of any noncustodial parent who is subject to a child support lien pursuant to para- graph (4). ”(B) REASONABLE FEES.\u2014The State agency may pay a reasonable fee to a financial institution for conducting the data match provided for in subparagraph (A)(i), not to ex- ceed the actual costs incurred by such financial institution. ”(C) LIABILITY.\u2014A financial institution shall not be liable under any Federal or State law to any person\u2014 ”(i) for any disclosure of information to the State agency under subparagraph (A)(i); 157 ”(ii) for encumbering or surrendering any assets held by such financial institution in response to a no- tice of lien or levy issued by the State agency as pro- vided for in subparagraph (A)(ii); or ”(iii) for any other action taken in good faith to comply with the requirements of subparagraph (A). ”(D) DEFINITIONS.\u2014For purposes of this paragraph\u2014 ”(i) FINANCIAL INSTITUTION.\u2014The term ‘financial institution’ has the meaning given to such term by sec- tion 469A(d)(1). ”(ii) ACCOUNT.\u2014The term ‘account’ means a de- mand deposit account, checking or negotiable with- drawal order account, savings account, time deposit ac- count, or money-market mutual fund account.”. SEC. 373. ENFORCEMENT OF ORDERS AGAINST PATERNAL OR MATER- NAL GRANDPARENTS IN CASES OF MINOR PARENTS. Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 323, 365, 369, and 372 of this Act, is amended by inserting after paragraph (17) the following new paragraph: ”(18) ENFORCEMENT OF ORDERS AGAINST PATERNAL OR MA- TERNAL GRANDPARENTS.\u2014Procedures under which, at the State’s option, any child support order enforced under this part with respect to a child of minor parents, if the custodial parent of such child is receiving assistance under the State program under part A, shall be enforceable, jointly and severally, against the parents of the noncustodial parent of such child.”. SEC. 374. NONDISCHARGEABILITY IN BANKRUPTCY OF CERTAIN DEBTS FOR THE SUPPORT OF A CHILD. (a) AMENDMENT TO TITLE 11 OF THE UNITED STATES CODE.\u2014 Section 523(a) of title 11, United States Code, is amended\u2014 (1) by striking ”or” at the end of paragraph (16); (2) by striking the period at the end of paragraph (17) and inserting ”; or”; (3) by adding at the end the following: ”(18) owed under State law to a State or municipality that is\u2014 ”(A) in the nature of support, and ”(B) enforceable under part D of title IV of the Social Security Act (42 U.S.C. 601 et seq.).”; and (4) in paragraph (5), by striking ”section 402(a)(26)” and inserting ”section 408(a)(4)”. (b) AMENDMENT TO THE SOCIAL SECURITY ACT.\u2014Section 456(b) (42 U.S.C. 656(b)) is amended to read as follows: ”(b) NONDISCHARGEABILITY.\u2014A debt (as defined in section 101 of title 11 of the United States Code) owed under State law to a State (as defined in such section) or municipality (as defined in such section) that is in the nature of support and that is enforceable under this part is not released by a discharge in bankruptcy under title 11 of the United States Code.”. (c) APPLICATION OF AMENDMENTS.\u2014The amendments made by this section shall apply only with respect to cases commenced under title 11 of the United States Code after the date of the enactment of this Act. 158 SEC. 375. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES. (a) CHILD SUPPORT ENFORCEMENT AGREEMENTS.\u2014Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a), 312(b), 313(a), 333, 343(b), 370(a)(2), and 371(b) of this Act is amended\u2014 (1) by striking ”and” at the end of paragraph (31); (2) by striking the period at the end of paragraph (32) and inserting ”; and”; (3) by adding after paragraph (32) the following new para- graph: ”(33) provide that a State that receives funding pursuant to section 428 and that has within its borders Indian country (as defined in section 1151 of title 18, United States Code) may enter into cooperative agreements with an Indian tribe or tribal organization (as defined in subsections (e) and (l) of section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), if the Indian tribe or tribal organization demonstrates that such tribe or organization has an established tribal court system or a Court of Indian Offenses with the au- thority to establish paternity, establish, modify, and enforce support orders, and to enter support orders in accordance with child support guidelines established by such tribe or organiza- tion, under which the State and tribe or organization shall pro- vide for the cooperative delivery of child support enforcement services in Indian country and for the forwarding of all funding collected pursuant to the functions performed by the tribe or or- ganization to the State agency, or conversely, by the State agen- cy to the tribe or organization, which shall distribute such funding in accordance with such agreement; and (4) by adding at the end the following new sentence: ”Noth- ing in paragraph (33) shall void any provision of any coopera- tive agreement entered into before the date of the enactment of such paragraph, nor shall such paragraph deprive any State of jurisdiction over Indian country (as so defined) that is lawfully exercised under section 402 of the Act entitled ‘An Act to pre- scribe penalties for certain acts of violence or intimidation, and for other purposes’, approved April 11, 1968 (25 U.S.C. 1322).”. (b) DIRECT FEDERAL FUNDING TO INDIAN TRIBES AND TRIBAL ORGANIZATIONS.\u2014Section 455 (42 U.S.C. 655) is amended by add- ing at the end the following new subsection: ”(b) The Secretary may, in appropriate cases, make direct pay- ments under this part to an Indian tribe or tribal organization which has an approved child support enforcement plan under this title. In determining whether such payments are appropriate, the Secretary shall, at a minimum, consider whether services are being provided to eligible Indian recipients by the State agency through an agreement entered into pursuant to section 454(34).”. (c) COOPERATIVE ENFORCEMENT AGREEMENTS.\u2014Paragraph (7) of section 454 (42 U.S.C. 654) is amended by inserting ”and Indian tribes or tribal organizations (as defined in subsections (e) and (l) of section 4 of the Indian Self-Determination and Education Assist- ance Act (25 U.S.C. 450b))” after ”law enforcement officials”. (d) CONFORMING AMENDMENT.\u2014Subsection (c) of section 428 (42 U.S.C. 628) is amended to read as follows: 159 ”(c) For purposes of this section, the terms ‘Indian tribe’ and ‘tribal organization’ shall have the meanings given such terms by subsections (e) and (l) of section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), respectively.”. Subtitle H\u2014Medical Support SEC. 381. CORRECTION TO ERISA DEFINITION OF MEDICAL CHILD SUP- PORT ORDER. (a) IN GENERAL.\u2014Section 609(a)(2)(B) of the Employee Retire- ment Income Security Act of 1974 (29 U.S.C. 1169(a)(2)(B)) is amended\u2014 (1) by striking ”issued by a court of competent jurisdiction”; (2) by striking the period at the end of clause (ii) and in- serting a comma; and (3) by adding, after and below clause (ii), the following: ”if such judgment, decree, or order (I) is issued by a court of competent jurisdiction or (II) is issued through an ad- ministrative process established under State law and has the force and effect of law under applicable State law.”. (b) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014The amendments made by this section shall take effect on the date of the enactment of this Act. (2) PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1997.\u2014Any amendment to a plan required to be made by an amendment made by this section shall not be required to be made before the 1st plan year beginning on or after January 1, 1997, if\u2014 (A) during the period after the date before the date of the enactment of this Act and before such 1st plan year, the plan is operated in accordance with the requirements of the amendments made by this section; and (B) such plan amendment applies retroactively to the period after the date before the date of the enactment of this Act and before such 1st plan year. A plan shall not be treated as failing to be operated in accord- ance with the provisions of the plan merely because it operates in accordance with this paragraph. SEC. 382. ENFORCEMENT OF ORDERS FOR HEALTH CARE COVERAGE. Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, 323, 365, 369, 372, and 373 of this Act, is amended by insert- ing after paragraph (18) the following new paragraph: ”(19) HEALTH CARE COVERAGE.\u2014Procedures under which all child support orders enforced pursuant to this part shall in- clude a provision for the health care coverage of the child, and in the case in which a noncustodial parent provides such cov- erage and changes employment, and the new employer provides health care coverage, the State agency shall transfer notice of the provision to the employer, which notice shall operate to en- roll the child in the noncustodial parent’s health plan, unless the noncustodial parent contests the notice.”. 160 Subtitle I\u2014Enhancing Responsibility and Opportunity for Non-Residential Parents SEC. 391. GRANTS TO STATES FOR ACCESS AND VISITATION PRO- GRAMS. Part D of title IV (42 U.S.C. 651 669), as amended by section 353 of this Act, is amended by adding at the end the following new section: ”SEC. 469B. GRANTS TO STATES FOR ACCESS AND VISITATION PRO- GRAMS. ”(a) IN GENERAL.\u2014The Administration for Children and Fami- lies shall make grants under this section to enable States to estab- lish and administer programs to support and facilitate noncustodial parents’ access to and visitation of their children, by means of ac- tivities including mediation (both voluntary and mandatory), coun- seling, education, development of parenting plans, visitation enforce- ment (including monitoring, supervision and neutral drop-off and pickup), and development of guidelines for visitation and alternative custody arrangements. ”(b) AMOUNT OF GRANT.\u2014The amount of the grant to be made to a State under this section for a fiscal year shall be an amount equal to the lesser of\u2014 ”(1) 90 percent of State expenditures during the fiscal year for activities described in subsection (a); or ”(2) the allotment of the State under subsection (c) for the fiscal year. ”(c) ALLOTMENTS TO STATES.\u2014 ”(1) IN GENERAL.\u2014The allotment of a State for a fiscal year is the amount that bears the same ratio to $10,000,000 for grants under this section for the fiscal year as the number of children in the State living with only 1 biological parent bears to the total number of such children in all States. ”(2) MINIMUM ALLOTMENT.\u2014The Administration for Chil- dren and Families shall adjust allotments to States under paragraph (1) as necessary to ensure that no State is allotted less than\u2014 ”(A) $50,000 for fiscal year 1997 or 1998; or ”(B) $100,000 for any succeeding fiscal year. ”(d) NO SUPPLANTATION OF STATE EXPENDITURES FOR SIMILAR ACTIVITIES.\u2014A State to which a grant is made under this section may not use the grant to supplant expenditures by the State for ac- tivities specified in subsection (a), but shall use the grant to supple- ment such expenditures at a level at least equal to the level of such expenditures for fiscal year 1995. ”(e) STATE ADMINISTRATION.\u2014Each State to which a grant is made under this section\u2014 ”(1) may administer State programs funded with the grant, directly or through grants to or contracts with courts, local pub- lic agencies, or nonprofit private entities; ”(2) shall not be required to operate such programs on a statewide basis; and ”(3) shall monitor, evaluate, and report on such programs in accordance with regulations prescribed by the Secretary.”. 161 Subtitle J\u2014Effective Dates and Conforming Amendments SEC. 395. EFFECTIVE DATES AND CONFORMING AMENDMENTS. (a) IN GENERAL.\u2014Except as otherwise specifically provided (but subject to subsections (b) and (c))\u2014 (1) the provisions of this title requiring the enactment or amendment of State laws under section 466 of the Social Secu- rity Act, or revision of State plans under section 454 of such Act, shall be effective with respect to periods beginning on and after October 1, 1996; and (2) all other provisions of this title shall become effective upon the date of the enactment of this Act. (b) GRACE PERIOD FOR STATE LAW CHANGES.\u2014The provisions of this title shall become effective with respect to a State on the later of\u2014 (1) the date specified in this title, or (2) the effective date of laws enacted by the legislature of such State implementing such provisions, but in no event later than the 1st day of the 1st calendar quarter beginning after the close of the 1st regular session of the State legis- lature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature. (c) GRACE PERIOD FOR STATE CONSTITUTIONAL AMENDMENT.\u2014 A State shall not be found out of compliance with any requirement enacted by this title if the State is unable to so comply without amending the State constitution until the earlier of\u2014 (1) 1 year after the effective date of the necessary State con- stitutional amendment; or (2) 5 years after the date of the enactment of this Act. (d) CONFORMING AMENDMENTS.\u2014 (1) The following provisions are amended by striking ”ab- sent” each place it appears and inserting ”noncustodial”: (A) Section 451 (42 U.S.C. 651). (B) Subsections (a)(1), (a)(8), (a)(10)(E), (a)(10)(F), (f), and (h) of section 452 (42 U.S.C. 652). (C) Section 453(f) (42 U.S.C. 653(f)). (D) Paragraphs (8), (13), and (21)(A) of section 454 (42 U.S.C. 654). (E) Section 455(e)(1) (42 U.S.C. 655(e)(1)). (F) Section 458(a) (42 U.S.C. 658(a)). (G) Subsections (a), (b), and (c) of section 463 (42 U.S.C. 663). (H) Subsections (a)(3)(A), (a)(3)(C), (a)(6), and (a)(8)(B)(ii), the last sentence of subsection (a), and sub- sections (b)(1), (b)(3)(B), (b)(3)(B)(i), (b)(6)(A)(i), (b)(9), and (e) of section 466 (42 U.S.C. 666). (2) The following provisions are amended by striking ”an absent” each place it appears and inserting ”a noncustodial”: (A) Paragraphs (2) and (3) of section 453(c) (42 U.S.C. 653(c)). 162 (B) Subparagraphs (B) and (C) of section 454(9) (42 U.S.C. 654(9)). (C) Section 456(a)(3) (42 U.S.C. 656(a)(3)). (D) Subsections (a)(3)(A), (a)(6), (a)(8)(B)(i), (b)(3)(A), and (b)(3)(B) of section 466 (42 U.S.C. 666). (E) Paragraphs (2) and (4) of section 469(b) (42 U.S.C. 669(b)). TITLE IV\u2014RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS SEC. 400. STATEMENTS OF NATIONAL POLICY CONCERNING WELFARE AND IMMIGRATION. The Congress makes the following statements concerning na- tional policy with respect to welfare and immigration: (1) Self-sufficiency has been a basic principle of United States immigration law since this country’s earliest immigra- tion statutes. (2) It continues to be the immigration policy of the United States that\u2014 (A) aliens within the Nation’s borders not depend on public resources to meet their needs, but rather rely on their own capabilities and the resources of their families, their sponsors, and private organizations, and (B) the availability of public benefits not constitute an incentive for immigration to the United States. (3) Despite the principle of self-sufficiency, aliens have been applying for and receiving public benefits from Federal, State, and local governments at increasing rates. (4) Current eligibility rules for public assistance and unen- forceable financial support agreements have proved wholly in- capable of assuring that individual aliens not burden the public benefits system. (5) It is a compelling government interest to enact new rules for eligibility and sponsorship agreements in order to assure that aliens be self-reliant in accordance with national immigra- tion policy. (6) It is a compelling government interest to remove the in- centive for illegal immigration provided by the availability of public benefits. (7) With respect to the State authority to make determina- tions concerning the eligibility of qualified aliens for public ben- efits in this title, a State that chooses to follow the Federal clas- sification in determining the eligibility of such aliens for public assistance shall be considered to have chosen the least restric- tive means available for achieving the compelling governmental interest of assuring that aliens be self-reliant in accordance with national immigration policy. 163 Subtitle A\u2014Eligibility for Federal Benefits SEC. 401. ALIENS WHO ARE NOT QUALIFIED ALIENS INELIGIBLE FOR FEDERAL PUBLIC BENEFITS. (a) IN GENERAL.\u2014Notwithstanding any other provision of law and except as provided in subsection (b), an alien who is not a qualified alien (as defined in section 431) is not eligible for any Fed- eral public benefit (as defined in subsection (c)). (b) EXCEPTIONS.\u2014 (1) Subsection (a) shall not apply with respect to the follow- ing Federal public benefits: (A) Medical assistance under title XIX of the Social Se- curity Act (or any successor program to such title) for care and services that are necessary for the treatment of an emergency medical condition (as defined in section 1903(v)(3) of such Act) of the alien involved and are not re- lated to an organ transplant procedure, if the alien in- volved otherwise meets the eligibility requirements for med- ical assistance under the State plan approved under such title (other than the requirement of the receipt of aid or as- sistance under title IV of such Act, supplemental security income benefits under title XVI of such Act, or a State sup- plementary payment). (B) Short-term, non-cash, in-kind emergency disaster relief. (C) Public health assistance (not including any assist- ance under title XIX of the Social Security Act) for immuni- zations with respect to immunizable diseases and for test- ing and treatment of symptoms of communicable diseases whether or not such symptoms are caused by a commu- nicable disease. (D) Programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter) specified by the Attorney General, in the Attorney General’s sole and unreviewable discretion after consulta- tion with appropriate Federal agencies and departments, which (i) deliver in-kind services at the community level, including through public or private nonprofit agencies; (ii) do not condition the provision of assistance, the amount of assistance provided, or the cost of assistance provided on the individual recipient’s income or resources; and (iii) are necessary for the protection of life or safety. (E) Programs for housing or community development assistance or financial assistance administered by the Sec- retary of Housing and Urban Development, any program under title V of the Housing Act of 1949, or any assistance under section 306C of the Consolidated Farm and Rural Development Act, to the extent that the alien is receiving such a benefit on the date of the enactment of this Act. (2) Subsection (a) shall not apply to any benefit payable under title II of the Social Security Act to an alien who is law- fully present in the United States as determined by the Attorney General, to any benefit if nonpayment of such benefit would contravene an international agreement described in section 233 164 of the Social Security Act, to any benefit if nonpayment would be contrary to section 202(t) of the Social Security Act, or to any benefit payable under title II of the Social Security Act to which entitlement is based on an application filed in or before the month in which this Act becomes law. (c) FEDERAL PUBLIC BENEFIT DEFINED.\u2014 (1) Except as provided in paragraph (2), for purposes of this title the term ”Federal public benefit” means\u2014 (A) any grant, contract, loan, professional license, or commercial license provided by an agency of the United States or by appropriated funds of the United States; and (B) any retirement, welfare, health, disability, public or assisted housing, postsecondary education, food assistance, unemployment benefit, or any other similar benefit for which payments or assistance are provided to an individ- ual, household, or family eligibility unit by an agency of the United States or by appropriated funds of the United States. (2) Such term shall not apply\u2014 (A) to any contract, professional license, or commercial license for a nonimmigrant whose visa for entry is related to such employment in the United States; or (B) with respect to benefits for an alien who as a work authorized nonimmigrant or as an alien lawfully admitted for permanent residence under the Immigration and Na- tionality Act qualified for such benefits and for whom the United States under reciprocal treaty agreements is re- quired to pay benefits, as determined by the Attorney Gen- eral, after consultation with the Secretary of State. SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN FEDERAL PROGRAMS. (a) LIMITED ELIGIBILITY FOR SPECIFIED FEDERAL PROGRAMS.\u2014 (1) IN GENERAL.\u2014Notwithstanding any other provision of law and except as provided in paragraph (2), an alien who is a qualified alien (as defined in section 431) is not eligible for any specified Federal program (as defined in paragraph (3)). (2) EXCEPTIONS.\u2014 (A) TIME-LIMITED EXCEPTION FOR REFUGEES AND ASYLEES.\u2014Paragraph (1) shall not apply to an alien until 5 years after the date\u2014 (i) an alien is admitted to the United States as a refugee under section 207 of the Immigration and Na- tionality Act; (ii) an alien is granted asylum under section 208 of such Act; or (iii) an alien’s deportation is withheld under sec- tion 243(h) of such Act. (B) CERTAIN PERMANENT RESIDENT ALIENS.\u2014Para- graph (1) shall not apply to an alien who\u2014 (i) is lawfully admitted to the United States for permanent residence under the Immigration and Na- tionality Act; and (ii)(I) has worked 40 qualifying quarters of cov- erage as defined under title II of the Social Security 165 Act or can be credited with such qualifying quarters as provided under section 435, and (II) in the case of any such qualifying quarter creditable for any period begin- ning after December 31, 1996, did not receive any Fed- eral means-tested public benefit (as provided under sec- tion 403) during any such period. (C) VETERAN AND ACTIVE DUTY EXCEPTION.\u2014Para- graph (1) shall not apply to an alien who is lawfully resid- ing in any State and is\u2014 (i) a veteran (as defined in section 101 of title 38, United States Code) with a discharge characterized as an honorable discharge and not on account of alienage, (ii) on active duty (other than active duty for train- ing) in the Armed Forces of the United States, or (iii) the spouse or unmarried dependent child of an individual described in clause (i) or (ii). (D) TRANSITION FOR ALIENS CURRENTLY RECEIVING BENEFITS.\u2014 (i) SSI.\u2014 (I) IN GENERAL.\u2014With respect to the specified Federal program described in paragraph (3)(A), during the period beginning on the date of the en- actment of this Act and ending on the date which is 1 year after such date of enactment, the Com- missioner of Social Security shall redetermine the eligibility of any individual who is receiving bene- fits under such program as of the date of the enact- ment of this Act and whose eligibility for such ben- efits may terminate by reason of the provisions of this subsection. (II) REDETERMINATION CRITERIA.\u2014 With re- spect to any redetermination under subclause (I), the Commissioner of Social Security shall apply the eligibility criteria for new applicants for bene- fits under such program. (III) GRANDFATHER PROVISION.\u2014The provi- sions of this subsection and the redetermination under subclause (I), shall only apply with respect to the benefits of an individual described in sub- clause (I) for months beginning on or after the date of the redetermination with respect to such individ- ual. (IV) NOTICE.\u2014Not later than March 31, 1997, the Commissioner of Social Security shall notify an individual described in subclause (I) of the pro- visions of this clause. (ii) FOOD STAMPS.\u2014 (I) IN GENERAL.\u2014With respect to the specified Federal program described in paragraph (3)(B), during the period beginning on the date of enact- ment of this Act and ending on the date which is 1 year after the date of enactment, the State agency shall, at the time of the recertification, recertify the eligibility of any individual who is receiving bene- 166 fits under such program as of the date of enact- ment of this Act and whose eligibility for such ben- efits may terminate by reason of the provisions of this subsection. (II) RECERTIFICATION CRITERIA.\u2014With respect to any recertification under subclause (I), the State agency shall apply the eligibility criteria for appli- cants for benefits under such program. (III) GRANDFATHER PROVISION.\u2014The provi- sions of this subsection and the recertification under subclause (I) shall only apply with respect to the eligibility of an alien for a program for months beginning on or after the date of recertification, if on the date of enactment of this Act the alien is lawfully residing in any State and is receiving benefits under such program on such date of enact- ment. (3) SPECIFIED FEDERAL PROGRAM DEFINED.\u2014For purposes of this title, the term ”specified Federal program” means any of the following: (A) SSI.\u2014The supplemental security income program under title XVI of the Social Security Act, including supple- mentary payments pursuant to an agreement for Federal administration under section 1616(a) of the Social Security Act and payments pursuant to an agreement entered into under section 212(b) of Public Law 93 66. (B) FOOD STAMPS.\u2014The food stamp program as de- fined in section 3(h) of the Food Stamp Act of 1977. (b) LIMITED ELIGIBILITY FOR DESIGNATED FEDERAL PRO- GRAMS.\u2014 (1) IN GENERAL.\u2014Notwithstanding any other provision of law and except as provided in section 403 and paragraph (2), a State is authorized to determine the eligibility of an alien who is a qualified alien (as defined in section 431) for any des- ignated Federal program (as defined in paragraph (3)). (2) EXCEPTIONS.\u2014Qualified aliens under this paragraph shall be eligible for any designated Federal program. (A) TIME-LIMITED EXCEPTION FOR REFUGEES AND ASYLEES.\u2014 (i) An alien who is admitted to the United States as a refugee under section 207 of the Immigration and Nationality Act until 5 years after the date of an alien’s entry into the United States. (ii) An alien who is granted asylum under section 208 of such Act until 5 years after the date of such grant of asylum. (iii) An alien whose deportation is being withheld under section 243(h) of such Act until 5 years after such withholding. (B) CERTAIN PERMANENT RESIDENT ALIENS.\u2014An alien who\u2014 (i) is lawfully admitted to the United States for permanent residence under the Immigration and Na- tionality Act; and 167 (ii)(I) has worked 40 qualifying quarters of cov- erage as defined under title II of the Social Security Act or can be credited with such qualifying quarters as provided under section 435, and (II) in the case of any such qualifying quarter creditable for any period begin- ning after December 31, 1996, did not receive any Fed- eral means-tested public benefit (as provided under sec- tion 403) during any such period. (C) VETERAN AND ACTIVE DUTY EXCEPTION.\u2014An alien who is lawfully residing in any State and is\u2014 (i) a veteran (as defined in section 101 of title 38, United States Code) with a discharge characterized as an honorable discharge and not on account of alienage, (ii) on active duty (other than active duty for train- ing) in the Armed Forces of the United States, or (iii) the spouse or unmarried dependent child of an individual described in clause (i) or (ii). (D) TRANSITION FOR THOSE CURRENTLY RECEIVING BENEFITS.\u2014An alien who on the date of the enactment of this Act is lawfully residing in any State and is receiving benefits under such program on the date of the enactment of this Act shall continue to be eligible to receive such bene- fits until January 1, 1997. (3) DESIGNATED FEDERAL PROGRAM DEFINED.\u2014For purposes of this title, the term ”designated Federal program” means any of the following: (A) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES.\u2014The program of block grants to States for temporary assistance for needy families under part A of title IV of the Social Se- curity Act. (B) SOCIAL SERVICES BLOCK GRANT.\u2014The program of block grants to States for social services under title XX of the Social Security Act. (C) MEDICAID.\u2014A State plan approved under title XIX of the Social Security Act, other than medical assistance described in section 401(b)(1)(A). SEC. 403. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR FEDERAL MEANS-TESTED PUBLIC BENEFIT. (a) IN GENERAL.\u2014Notwithstanding any other provision of law and except as provided in subsections (b), (c), and (d), an alien who is a qualified alien (as defined in section 431) and who enters the United States on or after the date of the enactment of this Act is not eligible for any Federal means-tested public benefit for a period of five years beginning on the date of the alien’s entry into the Unit- ed States with a status within the meaning of the term ”qualified alien”. (b) EXCEPTIONS.\u2014The limitation under subsection (a) shall not apply to the following aliens: (1) EXCEPTION FOR REFUGEES AND ASYLEES.\u2014 (A) An alien who is admitted to the United States as a refugee under section 207 of the Immigration and Nation- ality Act. (B) An alien who is granted asylum under section 208 of such Act. 168 (C) An alien whose deportation is being withheld under section 243(h) of such Act. (2) VETERAN AND ACTIVE DUTY EXCEPTION.\u2014An alien who is lawfully residing in any State and is\u2014 (A) a veteran (as defined in section 101 of title 38, United States Code) with a discharge characterized as an honorable discharge and not on account of alienage, (B) on active duty (other than active duty for training) in the Armed Forces of the United States, or (C) the spouse or unmarried dependent child of an in- dividual described in subparagraph (A) or (B). (c) APPLICATION OF TERM FEDERAL MEANS-TESTED PUBLIC BENEFIT.\u2014 (1) The limitation under subsection (a) shall not apply to assistance or benefits under paragraph (2). (2) Assistance and benefits under this paragraph are as fol- lows: (A) Medical assistance described in section 401(b)(1)(A). (B) Short-term, non-cash, in-kind emergency disaster relief. (C) Assistance or benefits under the National School Lunch Act. (D) Assistance or benefits under the Child Nutrition Act of 1966. (E) Public health assistance (not including any assist- ance under title XIX of the Social Security Act) for immuni- zations with respect to immunizable diseases and for test- ing and treatment of symptoms of communicable diseases whether or not such symptoms are caused by a commu- nicable disease. (F) Payments for foster care and adoption assistance under parts B and E of title IV of the Social Security Act for a parent or a child who would, in the absence of sub- section (a), be eligible to have such payments made on the child’s behalf under such part, but only if the foster or adoptive parent (or parents) of such child is a qualified alien (as defined in section 431). (G) Programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter) specified by the Attorney General, in the Attorney General’s sole and unreviewable discretion after consulta- tion with appropriate Federal agencies and departments, which (i) deliver in-kind services at the community level, including through public or private nonprofit agencies; (ii) do not condition the provision of assistance, the amount of assistance provided, or the cost of assistance provided on the individual recipient’s income or resources; and (iii) are necessary for the protection of life or safety. (H) Programs of student assistance under titles IV, V, IX, and X of the Higher Education Act of 1965, and titles III, VII, and VIII of the Public Health Service Act. (I) Means-tested programs under the Elementary and Secondary Education Act of 1965. 169 (J) Benefits under the Head Start Act. (K) Benefits under the Job Training Partnership Act. (d) SPECIAL RULE FOR REFUGEE AND ENTRANT ASSISTANCE FOR CUBAN AND HAITIAN ENTRANTS.\u2014The limitation under subsection (a) shall not apply to refugee and entrant assistance activities, au- thorized by title IV of the Immigration and Nationality Act and sec- tion 501 of the Refugee Education Assistance Act of 1980, for Cuban and Haitian entrants as defined in section 501(e)(2) of the Refugee Education Assistance Act of 1980. SEC. 404. NOTIFICATION AND INFORMATION REPORTING. (a) NOTIFICATION.\u2014Each Federal agency that administers a program to which section 401, 402, or 403 applies shall, directly or through the States, post information and provide general notifica- tion to the public and to program recipients of the changes regard- ing eligibility for any such program pursuant to this subtitle. (b) INFORMATION REPORTING UNDER TITLE IV OF THE SOCIAL SECURITY ACT.\u2014Part A of title IV of the Social Security Act is amended by inserting the following new section after section 411: ”SEC. 411A. STATE REQUIRED TO PROVIDE CERTAIN INFORMATION. ”Each State to which a grant is made under section 403 shall, at least 4 times annually and upon request of the Immigration and Naturalization Service, furnish the Immigration and Naturalization Service with the name and address of, and other identifying infor- mation on, any individual who the State knows is unlawfully in the United States.”. (c) SSI.\u2014Section 1631(e) of such Act (42 U.S.C. 1383(e)) is amended\u2014 (1) by redesignating the paragraphs (6) and (7) inserted by sections 206(d)(2) and 206(f)(1) of the Social Security Independ- ence and Programs Improvement Act of 1994 (Public Law 103 296; 108 Stat. 1514, 1515) as paragraphs (7) and (8), respec- tively; and (2) by adding at the end the following new paragraph: ”(9) Notwithstanding any other provision of law, the Commis- sioner shall, at least 4 times annually and upon request of the Im- migration and Naturalization Service (hereafter in this paragraph referred to as the ‘Service’), furnish the Service with the name and address of, and other identifying information on, any individual who the Commissioner knows is unlawfully in the United States, and shall ensure that each agreement entered into under section 1616(a) with a State provides that the State shall furnish such in- formation at such times with respect to any individual who the State knows is unlawfully in the United States.”. (d) INFORMATION REPORTING FOR HOUSING PROGRAMS.\u2014Title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended by adding at the end the following new section: ”SEC. 27. PROVISION OF INFORMATION TO LAW ENFORCEMENT AND OTHER AGENCIES. ”Notwithstanding any other provision of law, the Secretary shall, at least 4 times annually and upon request of the Immigra- tion and Naturalization Service (hereafter in this section referred to as the ‘Service’), furnish the Service with the name and address of, and other identifying information on, any individual who the Sec- 170 retary knows is unlawfully in the United States, and shall ensure that each contract for assistance entered into under section 6 or 8 of this Act with a public housing agency provides that the public housing agency shall furnish such information at such times with respect to any individual who the public housing agency knows is unlawfully in the United States.”. Subtitle B\u2014Eligibility for State and Local Public Benefits Programs SEC. 411. ALIENS WHO ARE NOT QUALIFIED ALIENS OR NON- IMMIGRANTS INELIGIBLE FOR STATE AND LOCAL PUBLIC BENEFITS. (a) IN GENERAL.\u2014Notwithstanding any other provision of law and except as provided in subsections (b) and (d), an alien who is not\u2014 (1) a qualified alien (as defined in section 431), (2) a nonimmigrant under the Immigration and National- ity Act, or (3) an alien who is paroled into the United States under section 212(d)(5) of such Act for less than one year, is not eligible for any State or local public benefit (as defined in subsection (c)). (b) EXCEPTIONS.\u2014Subsection (a) shall not apply with respect to the following State or local public benefits: (1) Assistance for health care items and services that are necessary for the treatment of an emergency medical condition (as defined in section 1903(v)(3) of the Social Security Act) of the alien involved and are not related to an organ transplant procedure. (2) Short-term, non-cash, in-kind emergency disaster relief. (3) Public health assistance for immunizations with respect to immunizable diseases and for testing and treatment of symp- toms of communicable diseases whether or not such symptoms are caused by a communicable disease. (4) Programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter) spec- ified by the Attorney General, in the Attorney General’s sole and unreviewable discretion after consultation with appropriate Federal agencies and departments, which (A) deliver in-kind services at the community level, including through public or private nonprofit agencies; (B) do not condition the provision of assistance, the amount of assistance provided, or the cost of as- sistance provided on the individual recipient’s income or re- sources; and (C) are necessary for the protection of life or safety. (c) STATE OR LOCAL PUBLIC BENEFIT DEFINED.\u2014 (1) Except as provided in paragraphs (2) and (3), for pur- poses of this subtitle the term ”State or local public benefit” means\u2014 (A) any grant, contract, loan, professional license, or commercial license provided by an agency of a State or local government or by appropriated funds of a State or local government; and 171 (B) any retirement, welfare, health, disability, public or assisted housing, postsecondary education, food assistance, unemployment benefit, or any other similar benefit for which payments or assistance are provided to an individ- ual, household, or family eligibility unit by an agency of a State or local government or by appropriated funds of a State or local government. (2) Such term shall not apply\u2014 (A) to any contract, professional license, or commercial license for a nonimmigrant whose visa for entry is related to such employment in the United States; or (B) with respect to benefits for an alien who as a work authorized nonimmigrant or as an alien lawfully admitted for permanent residence under the Immigration and Na- tionality Act qualified for such benefits and for whom the United States under reciprocal treaty agreements is re- quired to pay benefits, as determined by the Secretary of State, after consultation with the Attorney General. (3) Such term does not include any Federal public benefit under section 4001(c). (d) STATE AUTHORITY TO PROVIDE FOR ELIGIBILITY OF ILLEGAL ALIENS FOR STATE AND LOCAL PUBLIC BENEFITS.\u2014A State may pro- vide that an alien who is not lawfully present in the United States is eligible for any State or local public benefit for which such alien would otherwise be ineligible under subsection (a) only through the enactment of a State law after the date of the enactment of this Act which affirmatively provides for such eligibility. SEC. 412. STATE AUTHORITY TO LIMIT ELIGIBILITY OF QUALIFIED ALIENS FOR STATE PUBLIC BENEFITS. (a) IN GENERAL.\u2014Notwithstanding any other provision of law and except as provided in subsection (b), a State is authorized to de- termine the eligibility for any State public benefits of an alien who is a qualified alien (as defined in section 431), a nonimmigrant under the Immigration and Nationality Act, or an alien who is pa- roled into the United States under section 212(d)(5) of such Act for less than one year. (b) EXCEPTIONS.\u2014Qualified aliens under this subsection shall be eligible for any State public benefits. (1) TIME-LIMITED EXCEPTION FOR REFUGEES AND ASYLEES.\u2014 (A) An alien who is admitted to the United States as a refugee under section 207 of the Immigration and Nation- ality Act until 5 years after the date of an alien’s entry into the United States. (B) An alien who is granted asylum under section 208 of such Act until 5 years after the date of such grant of asy- lum. (C) An alien whose deportation is being withheld under section 243(h) of such Act until 5 years after such withhold- ing. (2) CERTAIN PERMANENT RESIDENT ALIENS.\u2014An alien who\u2014 172 (A) is lawfully admitted to the United States for per- manent residence under the Immigration and Nationality Act; and (B)(i) has worked 40 qualifying quarters of coverage as defined under title II of the Social Security Act or can be credited with such qualifying quarters as provided under section 435, and (ii) in the case of any such qualifying quarter creditable for any period beginning after December 31, 1996, did not receive any Federal means-tested public benefit (as provided under section 403) during any such pe- riod. (3) VETERAN AND ACTIVE DUTY EXCEPTION.\u2014An alien who is lawfully residing in any State and is\u2014 (A) a veteran (as defined in section 101 of title 38, United States Code) with a discharge characterized as an honorable discharge and not on account of alienage, (B) on active duty (other than active duty for training) in the Armed Forces of the United States, or (C) the spouse or unmarried dependent child of an in- dividual described in subparagraph (A) or (B). (4) TRANSITION FOR THOSE CURRENTLY RECEIVING BENE- FITS.\u2014An alien who on the date of the enactment of this Act is lawfully residing in any State and is receiving benefits on the date of the enactment of this Act shall continue to be eligible to receive such benefits until January 1, 1997. Subtitle C\u2014Attribution of Income and Affidavits of Support SEC. 421. FEDERAL ATTRIBUTION OF SPONSOR’S INCOME AND RE- SOURCES TO ALIEN. (a) IN GENERAL.\u2014Notwithstanding any other provision of law, in determining the eligibility and the amount of benefits of an alien for any Federal means-tested public benefits program (as provided under section 403), the income and resources of the alien shall be deemed to include the following: (1) The income and resources of any person who executed an affidavit of support pursuant to section 213A of the Immi- gration and Nationality Act (as added by section 423) on behalf of such alien. (2) The income and resources of the spouse (if any) of the person. (b) DURATION OF ATTRIBUTION PERIOD.\u2014Subsection (a) shall apply with respect to an alien until such time as the alien\u2014 (1) achieves United States citizenship through naturaliza- tion pursuant to chapter 2 of title III of the Immigration and Nationality Act; or (2)(A) has worked 40 qualifying quarters of coverage as de- fined under title II of the Social Security Act or can be credited with such qualifying quarters as provided under section 435, and (B) in the case of any such qualifying quarter creditable for any period beginning after December 31, 1996, did not receive 173 any Federal means-tested public benefit (as provided under sec- tion 403) during any such period. (c) REVIEW OF INCOME AND RESOURCES OF ALIEN UPON RE- APPLICATION.\u2014Whenever an alien is required to reapply for benefits under any Federal means-tested public benefits program, the appli- cable agency shall review the income and resources attributed to the alien under subsection (a). (d) APPLICATION.\u2014 (1) If on the date of the enactment of this Act, a Federal means-tested public benefits program attributes a sponsor’s in- come and resources to an alien in determining the alien’s eligi- bility and the amount of benefits for an alien, this section shall apply to any such determination beginning on the day after the date of the enactment of this Act. (2) If on the date of the enactment of this Act, a Federal means-tested public benefits program does not attribute a spon- sor’s income and resources to an alien in determining the alien’s eligibility and the amount of benefits for an alien, this section shall apply to any such determination beginning 180 days after the date of the enactment of this Act. SEC. 422. AUTHORITY FOR STATES TO PROVIDE FOR ATTRIBUTION OF SPONSORS INCOME AND RESOURCES TO THE ALIEN WITH RESPECT TO STATE PROGRAMS. (a) OPTIONAL APPLICATION TO STATE PROGRAMS.\u2014Except as provided in subsection (b), in determining the eligibility and the amount of benefits of an alien for any State public benefits (as de- fined in section 412(c)), the State or political subdivision that offers the benefits is authorized to provide that the income and resources of the alien shall be deemed to include\u2014 (1) the income and resources of any individual who exe- cuted an affidavit of support pursuant to section 213A of the Immigration and Nationality Act (as added by section 423) on behalf of such alien, and (2) the income and resources of the spouse (if any) of the individual. (b) EXCEPTIONS.\u2014Subsection (a) shall not apply with respect to the following State public benefits: (1) Assistance described in section 411(b)(1). (2) Short-term, non-cash, in-kind emergency disaster relief. (3) Programs comparable to assistance or benefits under the National School Lunch Act. (4) Programs comparable to assistance or benefits under the Child Nutrition Act of 1966. (5) Public health assistance for immunizations with respect to immunizable diseases and for testing and treatment of symp- toms of communicable diseases whether or not such symptoms are caused by a communicable disease. (6) Payments for foster care and adoption assistance. (7) Programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter) spec- ified by the Attorney General of a State, after consultation with appropriate agencies and departments, which (A) deliver in- kind services at the community level, including through public or private nonprofit agencies; (B) do not condition the provision 174 of assistance, the amount of assistance provided, or the cost of assistance provided on the individual recipient’s income or re- sources; and (C) are necessary for the protection of life or safety. SEC. 423. REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF SUPPORT. (a) IN GENERAL.\u2014Title II of the Immigration and Nationality Act is amended by inserting after section 213 the following new sec- tion: ”REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF SUPPORT ”SEC. 213A. (a) ENFORCEABILITY.\u2014(1) No affidavit of support may be accepted by the Attorney General or by any consular officer to establish that an alien is not excludable as a public charge under section 212(a)(4) unless such affidavit is executed as a contract\u2014 ”(A) which is legally enforceable against the sponsor by the sponsored alien, the Federal Government, and by any State (or any political subdivision of such State) which provides any means-tested public benefits program, but not later than 10 years after the alien last receives any such benefit; ”(B) in which the sponsor agrees to financially support the alien, so that the alien will not become a public charge; and ”(C) in which the sponsor agrees to submit to the jurisdic- tion of any Federal or State court for the purpose of actions brought under subsection (e)(2). ”(2) A contract under paragraph (1) shall be enforceable with respect to benefits provided to the alien until such time as the alien achieves United States citizenship through naturalization pursuant to chapter 2 of title III. ”(b) FORMS.\u2014Not later than 90 days after the date of enactment of this section, the Attorney General, in consultation with the Sec- retary of State and the Secretary of Health and Human Services, shall formulate an affidavit of support consistent with the provi- sions of this section. ”(c) REMEDIES.\u2014Remedies available to enforce an affidavit of support under this section include any or all of the remedies de- scribed in section 3201, 3203, 3204, or 3205 of title 28, United States Code, as well as an order for specific performance and pay- ment of legal fees and other costs of collection, and include cor- responding remedies available under State law. A Federal agency may seek to collect amounts owed under this section in accordance with the provisions of subchapter II of chapter 37 of title 31, United States Code. ”(d) NOTIFICATION OF CHANGE OF ADDRESS.\u2014 ”(1) IN GENERAL.\u2014The sponsor shall notify the Attorney General and the State in which the sponsored alien is currently resident within 30 days of any change of address of the sponsor during the period specified in subsection (a)(2). ”(2) PENALTY.\u2014Any person subject to the requirement of paragraph (1) who fails to satisfy such requirement shall be subject to a civil penalty of\u2014 ”(A) not less than $250 or more than $2,000, or ”(B) if such failure occurs with knowledge that the alien has received any means-tested public benefit, not less than $2,000 or more than $5,000. 175 ”(e) REIMBURSEMENT OF GOVERNMENT EXPENSES.\u2014(1)(A) Upon notification that a sponsored alien has received any benefit under any means-tested public benefits program, the appropriate Federal, State, or local official shall request reimbursement by the sponsor in the amount of such assistance. ”(B) The Attorney General, in consultation with the Secretary of Health and Human Services, shall prescribe such regulations as may be necessary to carry out subparagraph (A). ”(2) If within 45 days after requesting reimbursement, the ap- propriate Federal, State, or local agency has not received a response from the sponsor indicating a willingness to commence payments, an action may be brought against the sponsor pursuant to the affi- davit of support. ”(3) If the sponsor fails to abide by the repayment terms estab- lished by such agency, the agency may, within 60 days of such fail- ure, bring an action against the sponsor pursuant to the affidavit of support. ”(4) No cause of action may be brought under this subsection later than 10 years after the alien last received any benefit under any means-tested public benefits program. ”(5) If, pursuant to the terms of this subsection, a Federal, State, or local agency requests reimbursement from the sponsor in the amount of assistance provided, or brings an action against the sponsor pursuant to the affidavit of support, the appropriate agency may appoint or hire an individual or other person to act on behalf of such agency acting under the authority of law for purposes of col- lecting any moneys owed. Nothing in this subsection shall preclude any appropriate Federal, State, or local agency from directly re- questing reimbursement from a sponsor for the amount of assistance provided, or from bringing an action against a sponsor pursuant to an affidavit of support. ”(f) DEFINITIONS.\u2014For the purposes of this section\u2014 ”(1) SPONSOR.\u2014The term ‘sponsor’ means an individual who\u2014 ”(A) is a citizen or national of the United States or an alien who is lawfully admitted to the United States for per- manent residence; ”(B) is 18 years of age or over; ”(C) is domiciled in any of the 50 States or the District of Columbia; and ”(D) is the person petitioning for the admission of the alien under section 204.”. (b) CLERICAL AMENDMENT.\u2014The table of contents of such Act is amended by inserting after the item relating to section 213 the fol- lowing: ”Sec. 213A. Requirements for sponsor’s affidavit of support.”. (c) EFFECTIVE DATE.\u2014Subsection (a) of section 213A of the Im- migration and Nationality Act, as inserted by subsection (a) of this section, shall apply to affidavits of support executed on or after a date specified by the Attorney General, which date shall be not ear- lier than 60 days (and not later than 90 days) after the date the Attorney General formulates the form for such affidavits under subsection (b) of such section. 176 (d) BENEFITS NOT SUBJECT TO REIMBURSEMENT.\u2014Require- ments for reimbursement by a sponsor for benefits provided to a sponsored alien pursuant to an affidavit of support under section 213A of the Immigration and Nationality Act shall not apply with respect to the following: (1) Medical assistance described in section 401(b)(1)(A) or assistance described in section 411(b)(1). (2) Short-term, non-cash, in-kind emergency disaster relief. (3) Assistance or benefits under the National School Lunch Act. (4) Assistance or benefits under the Child Nutrition Act of 1966. (5) Public health assistance for immunizations (not includ- ing any assistance under title XIX of the Social Security Act) with respect to immunizable diseases and for testing and treat- ment of symptoms of communicable diseases whether or not such symptoms are caused by a communicable disease. (6) Payments for foster care and adoption assistance under parts B and E of title IV of the Social Security Act for a parent or a child, but only if the foster or adoptive parent (or parents) of such child is a qualified alien (as defined in section 431). (7) Programs, services, or assistance (such as soup kitch- ens, crisis counseling and intervention, and short-term shelter) specified by the Attorney General, in the Attorney General’s sole and unreviewable discretion after consultation with appro- priate Federal agencies and departments, which (A) deliver in- kind services at the community level, including through public or private nonprofit agencies; (B) do not condition the provision of assistance, the amount of assistance provided, or the cost of assistance provided on the individual recipient’s income or re- sources; and (C) are necessary for the protection of life or safe- ty. (8) Programs of student assistance under titles IV, V, IX, and X of the Higher Education Act of 1965, and titles III, VII, and VIII of the Public Health Service Act. (9) Benefits under the Head Start Act. (10) Means-tested programs under the Elementary and Secondary Education Act of 1965. (11) Benefits under the Job Training Partnership Act. Subtitle D\u2014General Provisions SEC. 431. DEFINITIONS. (a) IN GENERAL.\u2014Except as otherwise provided in this title, the terms used in this title have the same meaning given such terms in section 101(a) of the Immigration and Nationality Act. (b) QUALIFIED ALIEN.\u2014For purposes of this title, the term ”qualified alien” means an alien who, at the time the alien applies for, receives, or attempts to receive a Federal public benefit, is\u2014 (1) an alien who is lawfully admitted for permanent resi- dence under the Immigration and Nationality Act, (2) an alien who is granted asylum under section 208 of such Act, (3) a refugee who is admitted to the United States under section 207 of such Act, 177 (4) an alien who is paroled into the United States under section 212(d)(5) of such Act for a period of at least 1 year, (5) an alien whose deportation is being withheld under sec- tion 243(h) of such Act, or (6) an alien who is granted conditional entry pursuant to section 203(a)(7) of such Act as in effect prior to April 1, 1980. SEC. 432. VERIFICATION OF ELIGIBILITY FOR FEDERAL PUBLIC BENE- FITS. (a) IN GENERAL.\u2014Not later than 18 months after the date of the enactment of this Act, the Attorney General of the United States, after consultation with the Secretary of Health and Human Serv- ices, shall promulgate regulations requiring verification that a per- son applying for a Federal public benefit (as defined in section 401(c)), to which the limitation under section 401 applies, is a qualified alien and is eligible to receive such benefit. Such regula- tions shall, to the extent feasible, require that information requested and exchanged be similar in form and manner to information re- quested and exchanged under section 1137 of the Social Security Act. (b) STATE COMPLIANCE.\u2014Not later than 24 months after the date the regulations described in subsection (a) are adopted, a State that administers a program that provides a Federal public benefit shall have in effect a verification system that complies with the reg- ulations. (c) AUTHORIZATION OF APPROPRIATIONS.\u2014There are authorized to be appropriated such sums as may be necessary to carry out the purpose of this section. SEC. 433. STATUTORY CONSTRUCTION. (a) LIMITATION.\u2014 (1) Nothing in this title may be construed as an entitlement or a determination of an individual’s eligibility or fulfillment of the requisite requirements for any Federal, State, or local gov- ernmental program, assistance, or benefits. For purposes of this title, eligibility relates only to the general issue of eligibility or ineligibility on the basis of alienage. (2) Nothing in this title may be construed as addressing alien eligibility for a basic public education as determined by the Supreme Court of the United States under Plyler v. Doe (457 U.S. 202) (1982). (b) NOT APPLICABLE TO FOREIGN ASSISTANCE.\u2014This title does not apply to any Federal, State, or local governmental program, as- sistance, or benefits provided to an alien under any program of for- eign assistance as determined by the Secretary of State in consulta- tion with the Attorney General. (c) SEVERABILITY.\u2014If any provision of this title or the applica- tion of such provision to any person or circumstance is held to be unconstitutional, the remainder of this title and the application of the provisions of such to any person or circumstance shall not be af- fected thereby. 178 SEC. 434. COMMUNICATION BETWEEN STATE AND LOCAL GOVERN- MENT AGENCIES AND THE IMMIGRATION AND NATU- RALIZATION SERVICE. Notwithstanding any other provision of Federal, State, or local law, no State or local government entity may be prohibited, or in any way restricted, from sending to or receiving from the Immigra- tion and Naturalization Service information regarding the immi- gration status, lawful or unlawful, of an alien in the United States. SEC. 435. QUALIFYING QUARTERS. For purposes of this title, in determining the number of qualify- ing quarters of coverage under title II of the Social Security Act an alien shall be credited with\u2014 (1) all of the qualifying quarters of coverage as defined under title II of the Social Security Act worked by a parent of such alien while the alien was under age 18, and (2) all of the qualifying quarters worked by a spouse of such alien during their marriage and the alien remains mar- ried to such spouse or such spouse is deceased. No such qualifying quarter of coverage that is creditable under title II of the Social Security Act for any period beginning after Decem- ber 31, 1996, may be credited to an alien under paragraph (1) or (2) if the parent or spouse (as the case may be) of such alien received any Federal means-tested public benefit (as provided under section 403) during the period for which such qualifying quarter of cov- erage is so credited. Subtitle E\u2014Conforming Amendments Relating to Assisted Housing SEC. 441. CONFORMING AMENDMENTS RELATING TO ASSISTED HOUS- ING. (a) LIMITATIONS ON ASSISTANCE.\u2014Section 214 of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a) is amended\u2014 (1) by striking ”Secretary of Housing and Urban Develop- ment” each place it appears and inserting ”applicable Sec- retary”; (2) in subsection (b), by inserting after ”National Housing Act,” the following: ”the direct loan program under section 502 of the Housing Act of 1949 or section 502(c)(5)(D), 504, 521(a)(2)(A), or 542 of such Act, subtitle A of title III of the Cranston-Gonzalez National Affordable Housing Act,”; (3) in paragraphs (2) through (6) of subsection (d), by strik- ing ”Secretary” each place it appears and inserting ”applicable Secretary”; (4) in subsection (d), in the matter following paragraph (6), by striking ”the term ‘Secretary’ ” and inserting ”the term ‘appli- cable Secretary’ ”; and (5) by adding at the end the following new subsection: ”(h) For purposes of this section, the term ‘applicable Secretary’ means\u2014 ”(1) the Secretary of Housing and Urban Development, with respect to financial assistance administered by such Secretary 179 and financial assistance under subtitle A of title III of the Cranston-Gonzalez National Affordable Housing Act; and ”(2) the Secretary of Agriculture, with respect to financial assistance administered by such Secretary.”. (b) CONFORMING AMENDMENTS.\u2014Section 501(h) of the Housing Act of 1949 (42 U.S.C. 1471(h)) is amended\u2014 (1) by striking ”(1)”; (2) by striking ”by the Secretary of Housing and Urban De- velopment”; and (3) by striking paragraph (2). Subtitle F\u2014Earned Income Credit Denied to Unauthorized Employees SEC. 451. EARNED INCOME CREDIT DENIED TO INDIVIDUALS NOT AU- THORIZED TO BE EMPLOYED IN THE UNITED STATES. (a) IN GENERAL.\u2014Section 32(c)(1) of the Internal Revenue Code of 1986 (relating to individuals eligible to claim the earned income credit) is amended by adding at the end the following new subpara- graph: ”(F) IDENTIFICATION NUMBER REQUIREMENT.\u2014The term ‘eligible individual’ does not include any individual who does not include on the return of tax for the taxable year\u2014 ”(i) such individual’s taxpayer identification num- ber, and ”(ii) if the individual is married (within the mean- ing of section 7703), the taxpayer identification number of such individual’s spouse.”. (b) SPECIAL IDENTIFICATION NUMBER.\u2014Section 32 of such Code is amended by adding at the end the following new subsection: ”(l) IDENTIFICATION NUMBERS.\u2014Solely for purposes of sub- sections (c)(1)(F) and (c)(3)(D), a taxpayer identification number means a social security number issued to an individual by the So- cial Security Administration (other than a social security number issued pursuant to clause (II) (or that portion of clause (III) that re- lates to clause (II)) of section 205(c)(2)(B)(i) of the Social Security Act).”. (c) EXTENSION OF PROCEDURES APPLICABLE TO MATHEMATICAL OR CLERICAL ERRORS.\u2014Section 6213(g)(2) of such Code (relating to the definition of mathematical or clerical errors) is amended by striking ”and’ at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting a comma, and by in- serting after subparagraph (E) the following new subparagraphs: ”(F) an omission of a correct taxpayer identification number required under section 32 (relating to the earned income credit) to be included on a return, and ”(G) an entry on a return claiming the credit under sec- tion 32 with respect to net earnings from self-employment described in section 32(c)(2)(A) to the extent the tax imposed by section 1401 (relating to self-employment tax) on such net earnings has not been paid.”. (d) EFFECTIVE DATE.\u2014The amendments made by this section shall apply with respect to returns the due date for which (without regard to extensions) is more than 30 days after the date of the en- actment of this Act. 180 TITLE V\u2014CHILD PROTECTION SEC. 501. AUTHORITY OF STATES TO MAKE FOSTER CARE MAINTE- NANCE PAYMENTS ON BEHALF OF CHILDREN IN ANY PRI- VATE CHILD CARE INSTITUTION. Section 472(c)(2) of the Social Security Act (42 U.S.C. 672(c)(2)) is amended by striking ”nonprofit”. SEC. 502. EXTENSION OF ENHANCED MATCH FOR IMPLEMENTATION OF STATEWIDE AUTOMATED CHILD WELFARE INFORMA- TION SYSTEMS. Section 13713(b)(2) of the Omnibus Budget Reconciliation Act of 1993 (42 U.S.C. 674 note; 107 Stat. 657) is amended by striking ”1996” and inserting ”1997”. SEC. 503. NATIONAL RANDOM SAMPLE STUDY OF CHILD WELFARE. Part B of title IV of the Social Security Act (42 U.S.C. 620 628a) is amended by adding at the end the following: ”SEC. 429A. NATIONAL RANDOM SAMPLE STUDY OF CHILD WELFARE. ”(a) IN GENERAL.\u2014The Secretary shall conduct a national study based on random samples of children who are at risk of child abuse or neglect, or are determined by States to have been abused or ne- glected. ”(b) REQUIREMENTS.\u2014The study required by subsection (a) shall\u2014 ”(1) have a longitudinal component; and ”(2) yield data reliable at the State level for as many States as the Secretary determines is feasible. ”(c) PREFERRED CONTENTS.\u2014In conducting the study required by subsection (a), the Secretary should\u2014 ”(1) carefully consider selecting the sample from cases of confirmed abuse or neglect; and ”(2) follow each case for several years while obtaining infor- mation on, among other things\u2014 ”(A) the type of abuse or neglect involved; ”(B) the frequency of contact with State or local agen- cies; ”(C) whether the child involved has been separated from the family, and, if so, under what circumstances; ”(D) the number, type, and characteristics of out-of- home placements of the child; and ”(E) the average duration of each placement. ”(d) REPORTS.\u2014 ”(1) IN GENERAL.\u2014From time to time, the Secretary shall prepare reports summarizing the results of the study required by subsection (a). ”(2) AVAILABILITY.\u2014The Secretary shall make available to the public any report prepared under paragraph (1), in writing or in the form of an electronic data tape. ”(3) AUTHORITY TO CHARGE FEE.\u2014The Secretary may charge and collect a fee for the furnishing of reports under paragraph (2). ”(e) APPROPRIATION.\u2014Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated to 181 the Secretary for each of fiscal years 1996 through 2002 $6,000,000 to carry out this section.”. SEC. 504. REDESIGNATION OF SECTION 1123. The Social Security Act is amended by redesignating section 1123, the second place it appears (42 U.S.C. 1320a 1a), as section 1123A. SEC. 505. KINSHIP CARE. Section 471(a) of the Social Security Act (42 U.S.C. 671(a)) is amended\u2014 (1) by striking ”and” at the end of paragraph (16); (2) by striking the period at the end of paragraph (17) and inserting ”; and”; and (3) by adding at the end the following: ”(18) provides that the State shall consider giving pref- erence to an adult relative over a non-related caregiver when determining a placement for a child, provided that the relative caregiver meets all relevant State child protection standards.”. TITLE VI\u2014CHILD CARE SEC. 601. SHORT TITLE AND REFERENCES. (a) SHORT TITLE.\u2014This title may be cited as the ”Child Care and Development Block Grant Amendments of 1996”. (b) REFERENCES.\u2014Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provi- sion of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.). SEC. 602. GOALS. Section 658A (42 U.S.C. 9801 note) is amended\u2014 (1) in the section heading by inserting ”AND GOALS” after ”TITLE”; (2) by inserting ”(a) SHORT TITLE.\u2014” before ”This”; and (3) by adding at the end the following: ”(b) GOALS.\u2014The goals of this subchapter are\u2014 ”(1) to allow each State maximum flexibility in developing child care programs and policies that best suit the needs of chil- dren and parents within such State; ”(2) to promote parental choice to empower working parents to make their own decisions on the child care that best suits their family’s needs; ”(3) to encourage States to provide consumer education in- formation to help parents make informed choices about child care; ”(4) to assist States to provide child care to parents trying to achieve independence from public assistance; and ”(5) to assist States in implementing the health, safety, li- censing, and registration standards established in State regula- tions.”. 182 SEC. 603. AUTHORIZATION OF APPROPRIATIONS AND ENTITLEMENT AUTHORITY. (a) IN GENERAL.\u2014Section 658B (42 U.S.C. 9858) is amended to read as follows: ”SEC. 658B. AUTHORIZATION OF APPROPRIATIONS. ”There is authorized to be appropriated to carry out this sub- chapter $1,000,000,000 for each of the fiscal years 1996 through 2002.”. (b) SOCIAL SECURITY ACT.\u2014Part A of title IV of the Social Se- curity Act (42 U.S.C. 601 617) is amended by adding at the end the following new section: ”SEC. 418. FUNDING FOR CHILD CARE. ”(a) GENERAL CHILD CARE ENTITLEMENT.\u2014 ”(1) GENERAL ENTITLEMENT.\u2014Subject to the amount appro- priated under paragraph (3), each State shall, for the purpose of providing child care assistance, be entitled to payments under a grant under this subsection for a fiscal year in an amount equal to\u2014 ”(A) the sum of the total amount required to be paid to the State under section 403 for fiscal year 1994 or 1995 (whichever is greater) with respect to amounts expended for child care under section\u2014 ”(i) 402(g) of this Act (as such section was in effect before October 1, 1995); and ”(ii) 402(i) of this Act (as so in effect); or ”(B) the average of the total amounts required to be paid to the State for fiscal years 1992 through 1994 under the sections referred to in subparagraph (A); whichever is greater. ”(2) REMAINDER.\u2014 ”(A) GRANTS.\u2014The Secretary shall use any amounts appropriated for a fiscal year under paragraph (3), and re- maining after the reservation described in paragraph (4) and after grants are awarded under paragraph (1), to make grants to States under this paragraph. ”(B) AMOUNT.\u2014Subject to subparagraph (C), the amount of a grant awarded to a State for a fiscal year under this paragraph shall be based on the formula used for determining the amount of Federal payments to the State under section 403(n) (as such section was in effect be- fore October 1, 1995). ”(C) MATCHING REQUIREMENT.\u2014The Secretary shall pay to each eligible State in a fiscal year an amount, under a grant under subparagraph (A), equal to the Federal med- ical assistance percentage for such State for fiscal year 1995 (as defined in section 1905(b)) of so much of the ex- penditures by the State for child care in such year as exceed the State set-aside for such State under paragraph (1)(A) for such year and the amount of State expenditures in fis- cal year 1994 or 1995 (whichever is greater) that equal the non-Federal share for the programs described in subpara- graph (A) of paragraph (1). ”(D) REDISTRIBUTION.\u2014 183 ”(i) IN GENERAL.\u2014With respect to any fiscal year, if the Secretary determines (in accordance with clause (ii)) that amounts under any grant awarded to a State under this paragraph for such fiscal year will not be used by such State during such fiscal year for carrying out the purpose for which the grant is made, the Sec- retary shall make such amounts available in the subse- quent fiscal year for carrying out such purpose to 1 or more States which apply for such funds to the extent the Secretary determines that such States will be able to use such additional amounts for carrying out such purpose. Such available amounts shall be redistributed to a State pursuant to section 403(n) (as such section was in effect before October 1, 1995) by substituting ‘the number of children residing in all States applying for such funds’ for ‘the number of children residing in the United States in the second preceding fiscal year’. ”(ii) TIME OF DETERMINATION AND DISTRIBUTION.\u2014 The determination of the Secretary under clause (i) for a fiscal year shall be made not later than the end of the first quarter of the subsequent fiscal year. The re- distribution of amounts under clause (i) shall be made as close as practicable to the date on which such deter- mination is made. Any amount made available to a State from an appropriation for a fiscal year in accord- ance with this subparagraph shall, for purposes of this part, be regarded as part of such State’s payment (as determined under this subsection) for the fiscal year in which the redistribution is made. ”(3) APPROPRIATION.\u2014For grants under this section, there are appropriated\u2014 ”(A) $1,967,000,000 for fiscal year 1997; ”(B) $2,067,000,000 for fiscal year 1998; ”(C) $2,167,000,000 for fiscal year 1999; ”(D) $2,367,000,000 for fiscal year 2000; ”(E) $2,567,000,000 for fiscal year 2001; and ”(F) $2,717,000,000 for fiscal year 2002. ”(4) INDIAN TRIBES.\u2014The Secretary shall reserve not less than 1 percent, and not more than 2 percent, of the aggregate amount appropriated to carry out this section in each fiscal year for payments to Indian tribes and tribal organizations. ”(b) USE OF FUNDS.\u2014 ”(1) IN GENERAL.\u2014Amounts received by a State under this section shall only be used to provide child care assistance. Amounts received by a State under a grant under subsection (a)(1) shall be available for use by the State without fiscal year limitation. ”(2) USE FOR CERTAIN POPULATIONS.\u2014A State shall ensure that not less than 70 percent of the total amount of funds re- ceived by the State in a fiscal year under this section are used to provide child care assistance to families who are receiving assistance under a State program under this part, families who are attempting through work activities to transition off of such 184 assistance program, and families who are at risk of becoming dependent on such assistance program. ”(c) APPLICATION OF CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT of 1990.\u2014Notwithstanding any other provision of law, amounts provided to a State under this section shall be transferred to the lead agency under the Child Care and Development Block Grant Act of 1990, integrated by the State into the programs estab- lished by the State under such Act, and be subject to requirements and limitations of such Act. ”(d) DEFINITION.\u2014As used in this section, the term ‘State’ means each of the 50 States or the District of Columbia.”. SEC. 604. LEAD AGENCY. Section 658D(b) (42 U.S.C. 9858b(b)) is amended\u2014 (1) in paragraph (1)\u2014 (A) in subparagraph (A), by striking ”State” the first place that such appears and inserting ”governmental or nongovernmental”; and (B) in subparagraph (C), by inserting ”with sufficient time and Statewide distribution of the notice of such hear- ing,” after ”hearing in the State”; and (2) in paragraph (2), by striking the second sentence. SEC. 605. APPLICATION AND PLAN. Section 658E (42 U.S.C. 9858c) is amended\u2014 (1) in subsection (b)\u2014 (A) by striking ”implemented\u2014” and all that follows through ”(2)” and inserting ”implemented”; and (B) by striking ”for subsequent State plans”; (2) in subsection (c)\u2014 (A) in paragraph (2)\u2014 (i) in subparagraph (A)\u2014 (I) in clause (i) by striking ”, other than through assistance provided under paragraph (3)(C),”; and (II) by striking ”except” and all that follows through ”1992”, and inserting ”and provide a de- tailed description of the procedures the State will implement to carry out the requirements of this subparagraph”; (ii) in subparagraph (B)\u2014 (I) by striking ”Provide assurances” and in- serting ”Certify”; and (II) by inserting before the period at the end ”and provide a detailed description of such proce- dures”; (iii) in subparagraph (C)\u2014 (I) by striking ”Provide assurances” and in- serting ”Certify”; and (II) by inserting before the period at the end ”and provide a detailed description of how such record is maintained and is made available”; (iv) by amending subparagraph (D) to read as fol- lows: 185 ”(D) CONSUMER EDUCATION INFORMATION.\u2014Certify that the State will collect and disseminate to parents of eli- gible children and the general public, consumer education information that will promote informed child care choices.”; (v) in subparagraph (E), to read as follows: ”(E) COMPLIANCE WITH STATE LICENSING REQUIRE- MENTS.\u2014 ”(i) IN GENERAL.\u2014Certify that the State has in ef- fect licensing requirements applicable to child care services provided within the State, and provide a de- tailed description of such requirements and of how such requirements are effectively enforced. Nothing in the preceding sentence shall be construed to require that licensing requirements be applied to specific types of providers of child care services. ”(ii) INDIAN TRIBES AND TRIBAL ORGANIZATIONS.\u2014 In lieu of any licensing and regulatory requirements applicable under State and local law, the Secretary, in consultation with Indian tribes and tribal organiza- tions, shall develop minimum child care standards (that appropriately reflect tribal needs and available resources) that shall be applicable to Indian tribes and tribal organization receiving assistance under this sub- chapter.”; (vi) in subparagraph (F) by striking ”Provide as- surances” and inserting ”Certify”; (vii) in subparagraph (G) by striking ”Provide as- surances” and inserting ”Certify”; and (viii) by striking subparagraphs (H), (I), and (J) and inserting the following: ”(H) MEETING THE NEEDS OF CERTAIN POPULATIONS.\u2014 Demonstrate the manner in which the State will meet the specific child care needs of families who are receiving as- sistance under a State program under part A of title IV of the Social Security Act, families who are attempting through work activities to transition off of such assistance program, and families that are at risk of becoming depend- ent on such assistance program.”; (B) in paragraph (3)\u2014 (i) in subparagraph (A), by striking ”(B) and (C)” and inserting ”(B) through (D)”; (ii) in subparagraph (B)\u2014 (I) by striking ”.\u2014Subject to the reservation contained in subparagraph (C), the” and inserting ”AND RELATED ACTIVITIES.\u2014The”; (II) in clause (i) by striking ”; and” at the end and inserting a period; (III) by striking ”for\u2014” and all that follows through ”section 658E(c)(2)(A)” and inserting ”for child care services on a sliding fee scale basis, ac- tivities that improve the quality or availability of such services, and any other activity that the State deems appropriate to realize any of the goals speci- 186 fied in paragraphs (2) through (5) of section 658A(b)”; and (IV) by striking clause (ii); (iii) by amending subparagraph (C) to read as fol- lows: ”(C) LIMITATION ON ADMINISTRATIVE COSTS.\u2014Not more than 5 percent of the aggregate amount of funds available to the State to carry out this subchapter by a State in each fiscal year may be expended for administrative costs in- curred by such State to carry out all of its functions and duties under this subchapter. As used in the preceding sen- tence, the term ‘administrative costs’ shall not include the costs of providing direct services.”; and (iv) by adding at the end thereof the following: ”(D) ASSISTANCE FOR CERTAIN FAMILIES.\u2014A State shall ensure that a substantial portion of the amounts available (after the State has complied with the requirement of sec- tion 418(b)(2) of the Social Security Act with respect to each of the fiscal years 1997 through 2002) to the State to carry out activities under this subchapter in each fiscal year is used to provide assistance to low-income working families other than families described in paragraph (2)(H).”; and (C) in paragraph (4)(A)\u2014 (i) by striking ”provide assurances” and inserting ”certify”; (ii) in the first sentence by inserting ”and shall provide a summary of the facts relied on by the State to determine that such rates are sufficient to ensure such access” before the period; and (iii) by striking the last sentence. SEC. 606. LIMITATION ON STATE ALLOTMENTS. Section 658F(b)(1) (42 U.S.C. 9858d(b)(1)) is amended by strik- ing ”No” and inserting ”Except as provided for in section 658O(c)(6), no”. SEC. 607. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE. Section 658G (42 U.S.C. 9858e) is amended to read as follows: ”SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE. ”A State that receives funds to carry out this subchapter for a fiscal year, shall use not less than 4 percent of the amount of such funds for activities that are designed to provide comprehensive consumer education to parents and the public, activities that in- crease parental choice, and activities designed to improve the qual- ity and availability of child care (such as resource and referral serv- ices).”. SEC. 608. REPEAL OF EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-SCHOOL CARE REQUIREMENT. Section 658H (42 U.S.C. 9858f) is repealed. SEC. 609. ADMINISTRATION AND ENFORCEMENT. Section 658I(b) (42 U.S.C. 9858g(b)) is amended\u2014 (1) in paragraph (1), by striking ”, and shall have” and all that follows through ”(2)”; and 187 (2) in the matter following clause (ii) of paragraph (2)(A), by striking ”finding and that” and all that follows through the period and inserting ”finding and shall require that the State reimburse the Secretary for any funds that were improperly ex- pended for purposes prohibited or not authorized by this sub- chapter, that the Secretary deduct from the administrative por- tion of the State allotment for the following fiscal year an amount that is less than or equal to any improperly expended funds, or a combination of such options.”. SEC. 610. PAYMENTS. Section 658J(c) (42 U.S.C. 9858h(c)) is amended\u2014 (1) by striking ”expended” and inserting ”obligated”; and (2) by striking ”3 fiscal years” and inserting ”fiscal year”. SEC. 611. ANNUAL REPORT AND AUDITS. Section 658K (42 U.S.C. 9858i) is amended\u2014 (1) in the section heading by striking ”ANNUAL REPORT” and inserting ”REPORTS”; (2) in subsection (a), to read as follows: ”(a) REPORTS.\u2014 ”(1) COLLECTION OF INFORMATION BY STATES.\u2014 ”(A) IN GENERAL.\u2014A State that receives funds to carry out this subchapter shall collect the information described in subparagraph (B) on a monthly basis. ”(B) REQUIRED INFORMATION.\u2014The information re- quired under this subparagraph shall include, with respect to a family unit receiving assistance under this subchapter information concerning\u2014 ”(i) family income; ”(ii) county of residence; ”(iii) the gender, race, and age of children receiving such assistance; ”(iv) whether the family includes only 1 parent; ”(v) the sources of family income, including the amount obtained from (and separately identified)\u2014 ”(I) employment, including self-employment; ”(II) cash or other assistance under part A of title IV of the Social Security Act; ”(III) housing assistance; ”(IV) assistance under the Food Stamp Act of 1977; and ”(V) other assistance programs; ”(vi) the number of months the family has received benefits; ”(vii) the type of child care in which the child was enrolled (such as family child care, home care, or cen- ter-based child care); ”(viii) whether the child care provider involved was a relative; ”(ix) the cost of child care for such families; and ”(x) the average hours per week of such care; during the period for which such information is required to be submitted. 188 ”(C) SUBMISSION TO SECRETARY.\u2014A State described in subparagraph (A) shall, on a quarterly basis, submit the information required to be collected under subparagraph (B) to the Secretary. ”(D) SAMPLING.\u2014The Secretary may disapprove the in- formation collected by a State under this paragraph if the State uses sampling methods to collect such information. ”(2) BIANNUAL REPORTS.\u2014Not later than December 31, 1997, and every 6 months thereafter, a State described in para- graph (1)(A) shall prepare and submit to the Secretary a report that includes aggregate data concerning\u2014 ”(A) the number of child care providers that received funding under this subchapter as separately identified based on the types of providers listed in section 658P(5); ”(B) the monthly cost of child care services, and the portion of such cost that is paid for with assistance pro- vided under this subchapter, listed by the type of child care services provided; ”(C) the number of payments made by the State through vouchers, contracts, cash, and disregards under public benefit programs, listed by the type of child care services provided; ”(D) the manner in which consumer education informa- tion was provided to parents and the number of parents to whom such information was provided; and ”(E) the total number (without duplication) of children and families served under this subchapter; during the period for which such report is required to be sub- mitted.”; and (2) in subsection (b)\u2014 (A) in paragraph (1) by striking ”a application” and in- serting ”an application”; (B) in paragraph (2) by striking ”any agency admin- istering activities that receive” and inserting ”the State that receives”; and (C) in paragraph (4) by striking ”entitles” and inserting ”entitled”. SEC. 612. REPORT BY THE SECRETARY. Section 658L (42 U.S.C. 9858j) is amended\u2014 (1) by striking ”1993” and inserting ”1997”; (2) by striking ”annually” and inserting ”biennially”; and (3) by striking ”Education and Labor” and inserting ”Eco- nomic and Educational Opportunities”. SEC. 613. ALLOTMENTS. Section 658O (42 U.S.C. 9858m) is amended\u2014 (1) in subsection (a)\u2014 (A) in paragraph (1) (i) by striking ”POSSESSIONS” and inserting ”POS- SESSIONS”; (ii) by inserting ”and” after ”States,”; and (iii) by striking ”, and the Trust Territory of the Pacific Islands”; and 189 (B) in paragraph (2), by striking ”more than 3 percent” and inserting ”less than 1 percent, and not more than 2 percent,”; (2) in subsection (c)\u2014 (A) in paragraph (5) by striking ”our” and inserting ”out”; and (B) by adding at the end thereof the following new paragraph: ”(6) CONSTRUCTION OR RENOVATION OF FACILITIES.\u2014 ”(A) REQUEST FOR USE OF FUNDS.\u2014An Indian tribe or tribal organization may submit to the Secretary a request to use amounts provided under this subsection for construc- tion or renovation purposes. ”(B) DETERMINATION.\u2014With respect to a request sub- mitted under subparagraph (A), and except as provided in subparagraph (C), upon a determination by the Secretary that adequate facilities are not otherwise available to an Indian tribe or tribal organization to enable such tribe or organization to carry out child care programs in accord- ance with this subchapter, and that the lack of such facili- ties will inhibit the operation of such programs in the fu- ture, the Secretary may permit the tribe or organization to use assistance provided under this subsection to make pay- ments for the construction or renovation of facilities that will be used to carry out such programs. ”(C) LIMITATION.\u2014The Secretary may not permit an In- dian tribe or tribal organization to use amounts provided under this subsection for construction or renovation if such use will result in a decrease in the level of child care serv- ices provided by the tribe or organization as compared to the level of such services provided by the tribe or organiza- tion in the fiscal year preceding the year for which the de- termination under subparagraph (A) is being made. ”(D) UNIFORM PROCEDURES.\u2014The Secretary shall de- velop and implement uniform procedures for the solicita- tion and consideration of requests under this paragraph.”; and (3) in subsection (e), by adding at the end thereof the fol- lowing new paragraph: ”(4) INDIAN TRIBES OR TRIBAL ORGANIZATIONS.\u2014Any por- tion of a grant or contract made to an Indian tribe or tribal or- ganization under subsection (c) that the Secretary determines is not being used in a manner consistent with the provision of this subchapter in the period for which the grant or contract is made available, shall be allotted by the Secretary to other tribes or organizations that have submitted applications under sub- section (c) in accordance with their respective needs.”. SEC. 614. DEFINITIONS. Section 658P (42 U.S.C. 9858n) is amended\u2014 (1) in paragraph (2), in the first sentence by inserting ”or as a deposit for child care services if such a deposit is required of other children being cared for by the provider” after ”child care services”; and (2) by striking paragraph (3); 190 (3) in paragraph (4)(B), by striking ”75 percent” and insert- ing ”85 percent”; (4) in paragraph (5)(B)\u2014 (A) by inserting ”great grandchild, sibling (if such pro- vider lives in a separate residence),” after ”grandchild,”; (B) by striking ”is registered and”; and (C) by striking ”State” and inserting ”applicable”. (5) by striking paragraph (10); (6) in paragraph (13)\u2014 (A) by inserting ”or” after ”Samoa,”; and (B) by striking ”, and the Trust Territory of the Pacific Islands”; (7) in paragraph (14)\u2014 (A) by striking ”The term” and inserting the following: ”(A) IN GENERAL.\u2014The term”; and (B) by adding at the end thereof the following new sub- paragraph: ”(B) OTHER ORGANIZATIONS.\u2014Such term includes a Native Hawaiian Organization, as defined in section 4009(4) of the Augustus F. Hawkins-Robert T. Stafford Ele- mentary and Secondary School Improvement Amendments of 1988 (20 U.S.C. 4909(4)) and a private nonprofit organi- zation established for the purpose of serving youth who are Indians or Native Hawaiians.”. SEC. 615. EFFECTIVE DATE. (a) IN GENERAL.\u2014Except as provided in subsection (b), this title and the amendments made by this title shall take effect on October 1, 1996. (b) EXCEPTION.\u2014The amendment made by section 603(a) shall take effect on the date of enactment of this Act. TITLE VII\u2014CHILD NUTRITION PROGRAMS Subtitle A\u2014National School Lunch Act SEC. 701. STATE DISBURSEMENT TO SCHOOLS. (a) IN GENERAL.\u2014Section 8 of the National School Lunch Act (42 U.S.C. 1757) is amended\u2014 (1) in the third sentence, by striking ”Nothing” and all that follows through ”educational agency to” and inserting ”The State educational agency may”; (2) by striking the fourth and fifth sentences; (3) by redesignating the first through seventh sentences, as amended by paragraph (2), as subsections (a) through (g), re- spectively; (4) in subsection (b), as redesignated by paragraph (3), by striking ”the preceding sentence” and inserting ”subsection (a)”; and (5) in subsection (d), as redesignated by paragraph (3), by striking ”Such food costs” and inserting ”Use of funds paid to States”. 191 (b) DEFINITION OF CHILD.\u2014Section 12(d) of the National School Lunch Act (42 U.S.C. 1760(d)) is amended by adding at the end the following: ”(9) CHILD.\u2014 ”(A) IN GENERAL.\u2014The term ‘child’ includes an indi- vidual, regardless of age, who\u2014 ”(i) is determined by a State educational agency, in accordance with regulations prescribed by the Sec- retary, to have 1 or more mental or physical disabil- ities; and ”(ii) is attending any institution, as defined in sec- tion 17(a), or any nonresidential public or nonprofit private school of high school grade or under, for the purpose of participating in a school program estab- lished for individuals with mental or physical disabil- ities. ”(B) RELATIONSHIP TO CHILD AND ADULT CARE FOOD PROGRAM.\u2014No institution that is not otherwise eligible to participate in the program under section 17 shall be con- sidered eligible because of this paragraph.”. SEC. 702. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS. (a) NUTRITIONAL STANDARDS.\u2014Section 9(a) of the National School Lunch Act (42 U.S.C. 1758(a)) is amended\u2014 (1) in paragraph (2)\u2014 (A) by striking ”(2)(A) Lunches” and inserting ”(2) Lunches”; (B) by striking subparagraph (B); and (C) by redesignating clauses (i) and (ii) as subpara- graphs (A) and (B), respectively; (2) by striking paragraph (3); and (3) by redesignating paragraph (4) as paragraph (3). (b) UTILIZATION OF AGRICULTURAL COMMODITIES.\u2014Section 9(c) of the National School Lunch Act (42 U.S.C. 1758(c)) is amended\u2014 (1) in the fifth sentence, by striking ”of the provisions of law referred to in the preceding sentence” and inserting ”provision of law”; and (2) by striking the second, fourth, and sixth sentences. (c) NUTRITIONAL INFORMATION.\u2014Section 9(f) of the National School Lunch Act (42 U.S.C. 1758(f)) is amended\u2014 (1) by striking paragraph (1); (2) by striking ”(2)”; (3) by redesignating subparagraphs (A) through (D) as paragraphs (1) through (4), respectively; (4) by striking paragraph (1), as redesignated by paragraph (3), and inserting the following: ”(1) NUTRITIONAL REQUIREMENTS.\u2014Except as provided in paragraph (2), not later than the first day of the 1996 1997 school year, schools that are participating in the school lunch or school breakfast program shall serve lunches and breakfasts under the program that\u2014 ”(A) are consistent with the goals of the most recent Di- etary Guidelines for Americans published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 5341); and 192 ”(B) provide, on the average over each week, at least\u2014 ”(i) with respect to school lunches, 1\u20443 of the daily recommended dietary allowance established by the Food and Nutrition Board of the National Research Council of the National Academy of Sciences; and ”(ii) with respect to school breakfasts, 1\u20444 of the daily recommended dietary allowance established by the Food and Nutrition Board of the National Research Council of the National Academy of Sciences.”; (5) in paragraph (3), as redesignated by paragraph (3)\u2014 (A) by redesignating clauses (i) and (ii) as subpara- graphs (A) and (B), respectively; and (B) in subparagraph (A), as so redesignated, by redes- ignating subclauses (I) and (II) as clauses (i) and (ii), re- spectively; and (6) in paragraph (4), as redesignated by paragraph (3)\u2014 (A) by redesignating clauses (i) and (ii) as subpara- graphs (A) and (B), respectively; (B) in subparagraph (A), as redesignated by subpara- graph (A), by redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively; and (C) in subparagraph (A)(ii), as redesignated by sub- paragraph (B), by striking ”subparagraph (C)” and insert- ing ”paragraph (3)”. (d) USE OF RESOURCES.\u2014Section 9 of the National School Lunch Act (42 U.S.C. 1758) is amended by striking subsection (h). SEC. 703. FREE AND REDUCED PRICE POLICY STATEMENT. Section 9(b)(2) of the National School Lunch Act (42 U.S.C. 1758(b)(2)) is amended by adding at the end the following: ”(D) FREE AND REDUCED PRICE POLICY STATEMENT.\u2014 After the initial submission, a school food authority shall not be required to submit a free and reduced price policy statement to a State educational agency under this Act un- less there is a substantive change in the free and reduced price policy of the school food authority. A routine change in the policy of a school food authority, such as an annual adjustment of the income eligibility guidelines for free and reduced price meals, shall not be sufficient cause for requir- ing the school food authority to submit a policy statement.”. SEC. 704. SPECIAL ASSISTANCE. (a) EXTENSION OF PAYMENT PERIOD.\u2014Section 11(a)(1)(D)(i) of the National School Lunch Act (42 U.S.C. 1759a(a)(1)(D)(i)) is amended by striking ”, on the date of enactment of this subpara- graph,”. (b) ROUNDING RULE FOR LUNCH, BREAKFAST, AND SUPPLEMENT RATES.\u2014 (1) IN GENERAL.\u2014The third sentence of section 11(a)(3)(B) of the National School Lunch Act (42 U.S.C. 1759a(a)(3)(B)) is amended by adding before the period at the end the following: ”, except that adjustments to payment rates for meals and sup- plements served to individuals not determined to be eligible for free or reduced price meals and supplements shall be computed 193 to the nearest lower cent increment and based on the unrounded amount for the preceding 12-month period”. (2) EFFECTIVE DATE.\u2014The amendment made by paragraph (1) shall become effective on July 1, 1997. (c) APPLICABILITY OF OTHER PROVISIONS.\u2014Section 11 of the National School Lunch Act (42 U.S.C. 1759a) is amended\u2014 (1) by striking subsection (d); (2) in subsection (e)(2)\u2014 (A) by striking ”The” and inserting ”On request of the Secretary, the”; and (B) by striking ”each month”; and (3) by redesignating subsections (e) and (f), as so amended, as subsections (d) and (e), respectively. SEC. 705. MISCELLANEOUS PROVISIONS AND DEFINITIONS. (a) ACCOUNTS AND RECORDS.\u2014The second sentence of section 12(a) of the National School Lunch Act (42 U.S.C. 1760(a)) is amended by striking ”at all times be available” and inserting ”be available at any reasonable time”. (b) RESTRICTION ON REQUIREMENTS.\u2014Section 12(c) of the Na- tional School Lunch Act (42 U.S.C. 1760(c)) is amended by striking ”neither the Secretary nor the State shall” and inserting ”the Sec- retary shall not”. (c) DEFINITIONS.\u2014Section 12(d) of the National School Lunch Act (42 U.S.C. 1760(d)), as amended by section 701(b), is amend- ed\u2014 (1) in paragraph (1), by striking ”the Trust Territory of the Pacific Islands” and inserting ”the Commonwealth of the Northern Mariana Islands”; (2) by striking paragraphs (3) and (4); and (3) by redesignating paragraphs (1), (2), and (5) through (9) as paragraphs (6), (7), (3), (4), (2), (5), and (1), respectively, and rearranging the paragraphs so as to appear in numerical order. (d) ADJUSTMENTS TO NATIONAL AVERAGE PAYMENT RATES.\u2014 Section 12(f) of the National School Lunch Act (42 U.S.C. 1760(f)) is amended by striking ”the Trust Territory of the Pacific Islands,”. (e) EXPEDITED RULEMAKING.\u2014Section 12(k) of the National School Lunch Act (42 U.S.C. 1760(k)) is amended\u2014 (1) by striking paragraphs (1), (2), and (5); (2) by redesignating paragraphs (3) and (4) as paragraphs (1) and (2), respectively; and (3) in paragraph (1), as redesignated by paragraph (2), by striking ”Guidelines” and inserting ”guidelines contained in the most recent ‘Dietary Guidelines for Americans’ that is published under section 301 of the National Nutrition Monitoring and Re- lated Research Act of 1990 (7 U.S.C. 5341)”. (f) WAIVER.\u2014Section 12(l) of the National School Lunch Act (42 U.S.C. 1760(l)) is amended\u2014 (1) in paragraph (2)(A)\u2014 (A) in clause (iii), by adding ”and” at the end; (B) in clause (iv), by striking the semicolon at the end and inserting a period; and (C) by striking clauses (v) through (vii); (2) in paragraph (3)\u2014 (A) in subparagraph (A), by striking ”(A)”; and 194 (B) by striking subparagraphs (B) through (D); (3) in paragraph (4)\u2014 (A) in the matter preceding subparagraph (A), by strik- ing ”of any requirement relating” and inserting ”that in- creases Federal costs or that relates”; (B) by striking subparagraph (D); (C) by redesignating subparagraphs (E) through (N) as subparagraphs (D) through (M), respectively; and (D) in subparagraph (L), as redesignated by subpara- graph (C), by striking ”and” at the end and inserting ”or”; and (4) in paragraph (6)\u2014 (A) by striking ”(A)(i)” and all that follows through ”(B)”; and (B) by redesignating clauses (i) through (iv) as sub- paragraphs (A) through (D), respectively. SEC. 706. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN. (a) ESTABLISHMENT OF PROGRAM.\u2014Section 13(a) of the Na- tional School Lunch Act (42 U.S.C. 1761(a)) is amended\u2014 (1) in paragraph (1)\u2014 (A) in the first sentence, by striking ”initiate, maintain, and expand” and inserting ”initiate and maintain”; and (B) in subparagraph (E) of the second sentence, by striking ”the Trust Territory of the Pacific Islands,”; and (2) in paragraph (7)(A), by striking ”Except as provided in subparagraph (C), private” and inserting ”Private”. (b) SERVICE INSTITUTIONS.\u2014Section 13(b) of the National School Lunch Act (42 U.S.C. 1761(b)) is amended by striking ”(b)(1)” and all that follows through the end of paragraph (1) and inserting the following: ”(b) SERVICE INSTITUTIONS.\u2014 ”(1) PAYMENTS.\u2014 ”(A) IN GENERAL.\u2014Except as otherwise provided in this paragraph, payments to service institutions shall equal the full cost of food service operations (which cost shall include the costs of obtaining, preparing, and serving food, but shall not include administrative costs). ”(B) MAXIMUM AMOUNTS.\u2014Subject to subparagraph (C), payments to any institution under subparagraph (A) shall not exceed\u2014 ”(i) $1.97 for each lunch and supper served; ”(ii) $1.13 for each breakfast served; and ”(iii) 46 cents for each meal supplement served. ”(C) ADJUSTMENTS.\u2014Amounts specified in subpara- graph (B) shall be adjusted on January 1, 1997, and each January 1 thereafter, to the nearest lower cent increment to reflect changes for the 12-month period ending the preced- ing November 30 in the series for food away from home of the Consumer Price Index for All Urban Consumers pub- lished by the Bureau of Labor Statistics of the Department of Labor. Each adjustment shall be based on the unrounded adjustment for the prior 12-month period.”. 195 (c) ADMINISTRATION OF SERVICE INSTITUTIONS.\u2014Section 13(b)(2) of the National School Lunch Act (42 U.S.C. 1761(b)(2)) is amended\u2014 (1) in the first sentence, by striking ”four meals” and insert- ing ”3 meals, or 2 meals and 1 supplement,”; and (2) by striking the second sentence. (d) REIMBURSEMENTS.\u2014Section 13(c)(2) of the National School Lunch Act (42 U.S.C. 1761(c)(2)) is amended\u2014 (1) by striking subparagraphs (A), (C), (D), and (E); (2) by striking ”(B)”; (3) by striking ”, and such higher education institutions,”; and (4) by striking ”without application” and inserting ”on showing residence in areas in which poor economic conditions exist or on the basis of income eligibility statements for children enrolled in the program”. (e) ADVANCE PROGRAM PAYMENTS.\u2014Section 13(e)(1) of the Na- tional School Lunch Act (42 U.S.C. 1761(e)(1)) is amended\u2014 (1) by striking ”institution: Provided, That (A) the” and in- serting ”institution. The”; (2) by inserting ”(excluding a school)” after ”any service in- stitution”; and (3) by striking ”responsibilities, and (B) no” and inserting ”responsibilities. No”. (f) FOOD REQUIREMENTS.\u2014Section 13(f) of the National School Lunch Act (42 U.S.C. 1761(f)) is amended\u2014 (1) by redesignating the first through seventh sentences as paragraphs (1) through (7), respectively; (2) by striking paragraph (3), as redesignated by paragraph (1); (3) in paragraph (4), as redesignated by paragraph (1), by striking ”the first sentence” and inserting ”paragraph (1)”; (4) in subparagraph (B) of paragraph (6), as redesignated by paragraph (1), by striking ”that bacteria levels” and all that follows through the period at the end and inserting ”conform- ance with standards set by local health authorities.”; and (5) by redesignating paragraphs (4) through (7), as redesig- nated by paragraph (1), as paragraphs (3) through (6), respec- tively. (g) PERMITTING OFFER VERSUS SERVE.\u2014Section 13(f) of the Na- tional School Lunch Act (42 U.S.C. 1761(f)), as amended by sub- section (f), is amended by adding at the end the following: ”(7) OFFER VERSUS SERVE.\u2014A school food authority partici- pating as a service institution may permit a child attending a site on school premises operated directly by the authority to refuse 1 or more items of a meal that the child does not intend to consume, under rules that the school uses for school meals programs. A refusal of an offered food item shall not affect the amount of payments made under this section to a school for the meal.”. (h) RECORDS.\u2014The second sentence of section 13(m) of the Na- tional School Lunch Act (42 U.S.C. 1761(m)) is amended by striking ”at all times be available” and inserting ”be available at any rea- sonable time”. 196 (i) REMOVING MANDATORY NOTICE TO INSTITUTIONS.\u2014Section 13(n)(2) of the National School Lunch Act (42 U.S.C. 1761(n)(2)) is amended by striking ”, and its plans and schedule for informing service institutions of the availability of the program”. (j) PLAN.\u2014Section 13(n) of the National School Lunch Act (42 U.S.C. 1761(n)), as amended by subsection (i), is amended\u2014 (1) in paragraph (2), by striking ”, including the State’s methods of assessing need”; (2) by striking paragraph (3); (3) in paragraph (4), by striking ”and schedule”; and (4) by redesignating paragraphs (4) through (7) as para- graphs (3) through (6), respectively. (k) MONITORING AND TRAINING.\u2014Section 13(q) of the National School Lunch Act (42 U.S.C. 1761(q)) is amended\u2014 (1) by striking paragraphs (2) and (4); (2) in paragraph (3), by striking ”paragraphs (1) and (2) of this subsection” and inserting ”paragraph (1)”; and (3) by redesignating paragraph (3) as paragraph (2). (l) EXPIRED PROGRAM.\u2014Section 13 of the National School Lunch Act (42 U.S.C. 1761) is amended\u2014 (1) by striking subsection (p); and (2) by redesignating subsections (q) and (r) as subsections (p) and (q), respectively. (m) EFFECTIVE DATE.\u2014The amendments made by subsection (b) shall become effective on January 1, 1997. SEC. 707. COMMODITY DISTRIBUTION. (a) CEREAL AND SHORTENING IN COMMODITY DONATIONS.\u2014Sec- tion 14(b) of the National School Lunch Act (42 U.S.C. 1762a(b)) is amended\u2014 (1) by striking paragraph (1); and (2) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively. (b) STATE ADVISORY COUNCIL.\u2014Section 14(e) of the National School Lunch Act (42 U.S.C. 1762a(e)) is amended to read as fol- lows: ”(e) Each State agency that receives food assistance payments under this section for any school year shall consult with representa- tives of schools in the State that participate in the school lunch pro- gram with respect to the needs of such schools relating to the man- ner of selection and distribution of commodity assistance for such program.”. (c) CASH COMPENSATION FOR PILOT PROJECT SCHOOLS.\u2014Sec- tion 14(g) of the National School Lunch Act (42 U.S.C. 1762a(g)) is amended by striking paragraph (3). SEC. 708. CHILD AND ADULT CARE FOOD PROGRAM. (a) ESTABLISHMENT OF PROGRAM.\u2014Section 17 of the National School Lunch Act (42 U.S.C. 1766) is amended in the first sentence of subsection (a), by striking ”initiate, maintain, and expand” and inserting ”initiate and maintain”. (b) PAYMENTS TO SPONSOR EMPLOYEES.\u2014Paragraph (2) of the last sentence of section 17(a) of the National School Lunch Act (42 U.S.C. 1766(a)) is amended\u2014 (1) in subparagraph (B), by striking ”and” at the end; 197 (2) in subparagraph (C), by striking the period at the end and inserting ”; and”; and (3) by adding at the end the following: ”(D) in the case of a family or group day care home sponsoring organization that employs more than 1 em- ployee, the organization does not base payments to an em- ployee of the organization on the number of family or group day care homes recruited.”. (c) TECHNICAL ASSISTANCE.\u2014The last sentence of section 17(d)(1) of the National School Lunch Act (42 U.S.C. 1766(d)(1)) is amended by striking ”, and shall provide technical assistance” and all that follows through ”its application”. (d) REIMBURSEMENT OF CHILD CARE INSTITUTIONS.\u2014Section 17(f)(2)(B) of the National School Lunch Act (42 U.S.C. 1766(f)(2)(B)) is amended by striking ”two meals and two supple- ments or three meals and one supplement” and inserting ”2 meals and 1 supplement”. (e) IMPROVED TARGETING OF DAY CARE HOME REIMBURSE- MENTS.\u2014 (1) RESTRUCTURED DAY CARE HOME REIMBURSEMENTS.\u2014 Section 17(f)(3) of the National School Lunch Act (42 U.S.C. 1766(f)(3)) is amended by striking ”(3)(A) Institutions” and all that follows through the end of subparagraph (A) and inserting the following: ”(3) REIMBURSEMENT OF FAMILY OR GROUP DAY CARE HOME SPONSORING ORGANIZATIONS.\u2014 ”(A) REIMBURSEMENT FACTOR.\u2014 ”(i) IN GENERAL.\u2014An institution that participates in the program under this section as a family or group day care home sponsoring organization shall be pro- vided, for payment to a home sponsored by the organi- zation, reimbursement factors in accordance with this subparagraph for the cost of obtaining and preparing food and prescribed labor costs involved in providing meals under this section. ”(ii) TIER I FAMILY OR GROUP DAY CARE HOMES.\u2014 ”(I) DEFINITION OF TIER I FAMILY OR GROUP DAY CARE HOME.\u2014In this paragraph, the term ‘tier I family or group day care home’ means\u2014 ”(aa) a family or group day care home that is located in a geographic area, as defined by the Secretary based on census data, in which at least 50 percent of the children resid- ing in the area are members of households whose incomes meet the income eligibility guidelines for free or reduced price meals under section 9; ”(bb) a family or group day care home that is located in an area served by a school enrolling elementary students in which at least 50 percent of the total number of children enrolled are certified eligible to receive free or reduced price school meals under this Act or 198 the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.); or ”(cc) a family or group day care home that is operated by a provider whose household meets the income eligibility guidelines for free or reduced price meals under section 9 and whose income is verified by the sponsoring or organization of the home under regulations es- tablished by the Secretary. ”(II) REIMBURSEMENT.\u2014Except as provided in subclause (III), a tier I family or group day care home shall be provided reimbursement factors under this clause without a requirement for docu- mentation of the costs described in clause (i), ex- cept that reimbursement shall not be provided under this subclause for meals or supplements served to the children of a person acting as a fam- ily or group day care home provider unless the children meet the income eligibility guidelines for free or reduced price meals under section 9. ”(III) FACTORS.\u2014Except as provided in sub- clause (IV), the reimbursement factors applied to a home referred to in subclause (II) shall be the fac- tors in effect on July 1, 1996. ”(IV) ADJUSTMENTS.\u2014The reimbursement fac- tors under this subparagraph shall be adjusted on July 1, 1997, and each July 1 thereafter, to reflect changes in the Consumer Price Index for food at home for the most recent 12-month period for which the data are available. The reimbursement factors under this subparagraph shall be rounded to the nearest lower cent increment and based on the unrounded adjustment in effect on June 30 of the preceding school year. ”(iii) TIER II FAMILY OR GROUP DAY CARE HOMES.\u2014 ”(I) IN GENERAL.\u2014 ”(aa) FACTORS.\u2014Except as provided in subclause (II), with respect to meals or supple- ments served under this clause by a family or group day care home that does not meet the criteria set forth in clause (ii)(I), the reim- bursement factors shall be 95 cents for lunches and suppers, 27 cents for breakfasts, and 13 cents for supplements. ”(bb) ADJUSTMENTS.\u2014The factors shall be adjusted on July 1, 1997, and each July 1 thereafter, to reflect changes in the Consumer Price Index for food at home for the most re- cent 12-month period for which the data are available. The reimbursement factors under this item shall be rounded down to the nearest lower cent increment and based on the unrounded adjustment for the preceding 12- month period. 199 ”(cc) REIMBURSEMENT.\u2014A family or group day care home shall be provided reimburse- ment factors under this subclause without a requirement for documentation of the costs de- scribed in clause (i), except that reimburse- ment shall not be provided under this sub- clause for meals or supplements served to the children of a person acting as a family or group day care home provider unless the chil- dren meet the income eligibility guidelines for free or reduced price meals under section 9. ”(II) OTHER FACTORS.\u2014A family or group day care home that does not meet the criteria set forth in clause (ii)(I) may elect to be provided reimburse- ment factors determined in accordance with the following requirements: ”(aa) CHILDREN ELIGIBLE FOR FREE OR RE- DUCED PRICE MEALS.\u2014In the case of meals or supplements served under this subsection to children who are members of households whose incomes meet the income eligibility guidelines for free or reduced price meals under section 9, the family or group day care home shall be provided reimbursement factors set by the Secretary in accordance with clause (ii)(III). ”(bb) INELIGIBLE CHILDREN.\u2014In the case of meals or supplements served under this sub- section to children who are members of house- holds whose incomes do not meet the income eligibility guidelines, the family or group day care home shall be provided reimbursement factors in accordance with subclause (I). ”(III) INFORMATION AND DETERMINATIONS.\u2014 ”(aa) IN GENERAL.\u2014If a family or group day care home elects to claim the factors de- scribed in subclause (II), the family or group day care home sponsoring organization serv- ing the home shall collect the necessary income information, as determined by the Secretary, from any parent or other caretaker to make the determinations specified in subclause (II) and shall make the determinations in accordance with rules prescribed by the Secretary. ”(bb) CATEGORICAL ELIGIBILITY.\u2014In mak- ing a determination under item (aa), a family or group day care home sponsoring organiza- tion may consider a child participating in or subsidized under, or a child with a parent participating in or subsidized under, a feder- ally or State supported child care or other ben- efit program with an income eligibility limit that does not exceed the eligibility standard for free or reduced price meals under section 9 200 to be a child who is a member of a household whose income meets the income eligibility guidelines under section 9. ”(cc) FACTORS FOR CHILDREN ONLY.\u2014A family or group day care home may elect to re- ceive the reimbursement factors prescribed under clause (ii)(III) solely for the children participating in a program referred to in item (bb) if the home elects not to have income statements collected from parents or other caretakers. ”(IV) SIMPLIFIED MEAL COUNTING AND REPORT- ING PROCEDURES.\u2014The Secretary shall prescribe simplified meal counting and reporting procedures for use by a family or group day care home that elects to claim the factors under subclause (II) and by a family or group day care home sponsoring or- ganization that sponsors the home. The procedures the Secretary prescribes may include 1 or more of the following: ”(aa) Setting an annual percentage for each home of the number of meals served that are to be reimbursed in accordance with the reimbursement factors prescribed under clause (ii)(III) and an annual percentage of the num- ber of meals served that are to be reimbursed in accordance with the reimbursement factors prescribed under subclause (I), based on the family income of children enrolled in the home in a specified month or other period. ”(bb) Placing a home into 1 of 2 or more reimbursement categories annually based on the percentage of children in the home whose households have incomes that meet the income eligibility guidelines under section 9, with each such reimbursement category carrying a set of reimbursement factors such as the fac- tors prescribed under clause (ii)(III) or sub- clause (I) or factors established within the range of factors prescribed under clause (ii)(III) and subclause (I). ”(cc) Such other simplified procedures as the Secretary may prescribe. ”(V) MINIMUM VERIFICATION REQUIREMENTS.\u2014 The Secretary may establish any minimum ver- ification requirements that are necessary to carry out this clause.”. (2) GRANTS TO STATES TO PROVIDE ASSISTANCE TO FAMILY OR GROUP DAY CARE HOMES.\u2014Section 17(f)(3) of the National School Lunch Act (42 U.S.C. 1766(f)(3)) is amended by adding at the end the following: ”(D) GRANTS TO STATES TO PROVIDE ASSISTANCE TO FAMILY OR GROUP DAY CARE HOMES.\u2014 ”(i) IN GENERAL.\u2014 201 ”(I) RESERVATION.\u2014From amounts made available to carry out this section, the Secretary shall reserve $5,000,000 of the amount made avail- able for fiscal year 1997. ”(II) PURPOSE.\u2014The Secretary shall use the funds made available under subclause (I) to pro- vide grants to States for the purpose of providing\u2014 ”(aa) assistance, including grants, to fam- ily and day care home sponsoring organiza- tions and other appropriate organizations, in securing and providing training, materials, automated data processing assistance, and other assistance for the staff of the sponsoring organizations; and ”(bb) training and other assistance to fam- ily and group day care homes in the imple- mentation of the amendment to subparagraph (A) made by section 708(e)(1) of the Personal Responsibility and Work Opportunity Rec- onciliation Act of 1996. ”(ii) ALLOCATION.\u2014The Secretary shall allocate from the funds reserved under clause (i)(I)\u2014 ”(I) $30,000 in base funding to each State; and ”(II) any remaining amount among the States, based on the number of family day care homes participating in the program in a State during fis- cal year 1995 as a percentage of the number of all family day care homes participating in the pro- gram during fiscal year 1995. ”(iii) RETENTION OF FUNDS.\u2014Of the amount of funds made available to a State for fiscal year 1997 under clause (i), the State may retain not to exceed 30 percent of the amount to carry out this subparagraph. ”(iv) ADDITIONAL PAYMENTS.\u2014Any payments re- ceived under this subparagraph shall be in addition to payments that a State receives under subparagraph (A).”. (3) PROVISION OF DATA.\u2014Section 17(f)(3) of the National School Lunch Act (42 U.S.C. 1766(f)(3)), as amended by para- graph (2), is amended by adding at the end the following: ”(E) PROVISION OF DATA TO FAMILY OR GROUP DAY CARE HOME SPONSORING ORGANIZATIONS.\u2014 ”(i) CENSUS DATA.\u2014The Secretary shall provide to each State agency administering a child and adult care food program under this section data from the most recent decennial census survey or other appro- priate census survey for which the data are available showing which areas in the State meet the require- ments of subparagraph (A)(ii)(I)(aa). The State agency shall provide the data to family or group day care home sponsoring organizations located in the State. ”(ii) SCHOOL DATA.\u2014 ”(I) IN GENERAL.\u2014A State agency administer- ing the school lunch program under this Act or the 202 school breakfast program under the Child Nutri- tion Act of 1966 (42 U.S.C. 1771 et seq.) shall pro- vide to approved family or group day care home sponsoring organizations a list of schools serving elementary school children in the State in which not less than 1\u20442 of the children enrolled are cer- tified to receive free or reduced price meals. The State agency shall collect the data necessary to cre- ate the list annually and provide the list on a timely basis to any approved family or group day care home sponsoring organization that requests the list. ”(II) USE OF DATA FROM PRECEDING SCHOOL YEAR.\u2014In determining for a fiscal year or other annual period whether a home qualifies as a tier I family or group day care home under subpara- graph (A)(ii)(I), the State agency administering the program under this section, and a family or group day care home sponsoring organization, shall use the most current available data at the time of the determination. ”(iii) DURATION OF DETERMINATION.\u2014For purposes of this section, a determination that a family or group day care home is located in an area that qualifies the home as a tier I family or group day care home (as the term is defined in subparagraph (A)(ii)(I)), shall be in effect for 3 years (unless the determination is made on the basis of census data, in which case the determina- tion shall remain in effect until more recent census data are available) unless the State agency determines that the area in which the home is located no longer qualifies the home as a tier I family or group day care home.”. (4) CONFORMING AMENDMENTS.\u2014Section 17(c) of the Na- tional School Lunch Act (42 U.S.C. 1766(c)) is amended by in- serting ”except as provided in subsection (f)(3),” after ”For pur- poses of this section,” each place it appears in paragraphs (1), (2), and (3). (f) REIMBURSEMENT.\u2014Section 17(f) of the National School Lunch Act (42 U.S.C. 1766(f)) is amended\u2014 (1) in paragraph (3)\u2014 (A) in subparagraph (B), by striking the third and fourth sentences; and (B) in subparagraph (C)(ii), by striking ”conduct out- reach” and all that follows through ”may become” and in- serting ”assist unlicensed family or group day care homes in becoming”; and (2) in the first sentence of paragraph (4), by striking ”shall” and inserting ”may”. (g) NUTRITIONAL REQUIREMENTS.\u2014Section 17(g)(1) of the Na- tional School Lunch Act (42 U.S.C. 1766(g)(1)) is amended\u2014 (1) in subparagraph (A), by striking the second sentence; and (2) in subparagraph (B), by striking the second sentence. 203 (h) ELIMINATION OF STATE PAPERWORK AND OUTREACH BUR- DEN.\u2014Section 17 of the National School Lunch Act (42 U.S.C. 1766) is amended by striking subsection (k) and inserting the following: ”(k) TRAINING AND TECHNICAL ASSISTANCE.\u2014A State partici- pating in the program established under this section shall provide sufficient training, technical assistance, and monitoring to facilitate effective operation of the program. The Secretary shall assist the State in developing plans to fulfill the requirements of this sub- section.”. (i) RECORDS.\u2014The second sentence of section 17(m) of the Na- tional School Lunch Act (42 U.S.C. 1766(m)) is amended by striking ”at all times” and inserting ”at any reasonable time”. (j) UNNEEDED PROVISION.\u2014Section 17 of the National School Lunch Act is amended by striking subsection (q). (k) EFFECTIVE DATE.\u2014 (1) IN GENERAL.\u2014Except as provided in paragraph (2), the amendments made by this section shall become effective on the date of enactment of this Act. (2) IMPROVED TARGETING OF DAY CARE HOME REIMBURSE- MENTS.\u2014The amendments made by paragraphs (1) and (4) of subsection (e) shall become effective on July 1, 1997. (3) REGULATIONS.\u2014 (A) INTERIM REGULATIONS.\u2014Not later than January 1, 1997, the Secretary of Agriculture shall issue interim regu- lations to implement\u2014 (i) the amendments made by paragraphs (1), (3), and (4) of subsection (e); and (ii) section 17(f)(3)(C) of the National School Lunch Act (42 U.S.C. 1766(f)(3)(C)). (B) FINAL REGULATIONS.\u2014Not later than July 1, 1997, the Secretary of Agriculture shall issue final regulations to implement the provisions of law referred to in subpara- graph (A). (l) STUDY OF IMPACT OF AMENDMENTS ON PROGRAM PARTICIPA- TION AND FAMILY DAY CARE LICENSING.\u2014 (1) IN GENERAL.\u2014The Secretary of Agriculture, in conjunc- tion with the Secretary of Health and Human Services, shall study the impact of the amendments made by this section on\u2014 (A) the number of family day care homes participating in the child and adult care food program established under section 17 of the National School Lunch Act (42 U.S.C. 1766); (B) the number of day care home sponsoring organiza- tions participating in the program; (C) the number of day care homes that are licensed, certified, registered, or approved by each State in accord- ance with regulations issued by the Secretary; (D) the rate of growth of the numbers referred to in subparagraphs (A) through (C); (E) the nutritional adequacy and quality of meals served in family day care homes that\u2014 (i) received reimbursement under the program prior to the amendments made by this section but do 204 not receive reimbursement after the amendments made by this section; or (ii) received full reimbursement under the program prior to the amendments made by this section but do not receive full reimbursement after the amendments made by this section; and (F) the proportion of low-income children participating in the program prior to the amendments made by this sec- tion and the proportion of low-income children participat- ing in the program after the amendments made by this sec- tion. (2) REQUIRED DATA.\u2014Each State agency participating in the child and adult care food program under section 17 of the National School Lunch Act (42 U.S.C. 1766) shall submit to the Secretary of Agriculture data on\u2014 (A) the number of family day care homes participating in the program on June 30, 1997, and June 30, 1998; (B) the number of family day care homes licensed, cer- tified, registered, or approved for service on June 30, 1997, and June 30, 1998; and (C) such other data as the Secretary may require to carry out this subsection. (3) SUBMISSION OF REPORT.\u2014Not later than 2 years after the date of enactment of this section, the Secretary of Agri- culture shall submit the study required under this subsection to the Committee on Economic and Educational Opportunities of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate. SEC. 709. PILOT PROJECTS. (a) UNIVERSAL FREE PILOT.\u2014Section 18(d) of the National School Lunch Act (42 U.S.C. 1769(d)) is amended\u2014 (1) by striking paragraph (3); and (2) by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively. (b) DEMONSTRATION PROJECT OUTSIDE SCHOOL HOURS.\u2014Sec- tion 18(e) of the National School Lunch Act (42 U.S.C. 1769(e)) is amended\u2014 (1) in paragraph (1)\u2014 (A) in subparagraph (A)\u2014 (i) by striking ”(A)”; and (ii) by striking ”shall” and inserting ”may”; and (B) by striking subparagraph (B); and (2) by striking paragraph (5) and inserting the following: ”(5) AUTHORIZATION OF APPROPRIATIONS.\u2014There are au- thorized to be appropriated to carry out this subsection such sums as are necessary for each of fiscal years 1997 and 1998.”. SEC. 710. REDUCTION OF PAPERWORK. Section 19 of the National School Lunch Act (42 U.S.C. 1769a) is repealed. SEC. 711. INFORMATION ON INCOME ELIGIBILITY. Section 23 of the National School Lunch Act (42 U.S.C. 1769d) is repealed. 205 SEC. 712. NUTRITION GUIDANCE FOR CHILD NUTRITION PROGRAMS. Section 24 of the National School Lunch Act (42 U.S.C. 1769e) is repealed. Subtitle B\u2014Child Nutrition Act of 1966 SEC. 721. SPECIAL MILK PROGRAM. Section 3(a)(3) of the Child Nutrition Act of 1966 (42 U.S.C. 1772(a)(3)) is amended by striking ”the Trust Territory of the Pa- cific Islands” and inserting ”the Commonwealth of the Northern Mariana Islands”. SEC. 722. FREE AND REDUCED PRICE POLICY STATEMENT. Section 4(b)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 1773(b)(1)) is amended by adding at the end the following: ”(E) FREE AND REDUCED PRICE POLICY STATEMENT.\u2014 After the initial submission, a school food authority shall not be required to submit a free and reduced price policy statement to a State educational agency under this Act un- less there is a substantive change in the free and reduced price policy of the school food authority. A routine change in the policy of a school food authority, such as an annual adjustment of the income eligibility guidelines for free and reduced price meals, shall not be sufficient cause for requir- ing the school food authority to submit a policy statement.”. SEC. 723. SCHOOL BREAKFAST PROGRAM AUTHORIZATION. (a) TRAINING AND TECHNICAL ASSISTANCE IN FOOD PREPARA- TION.\u2014Section 4(e)(1)(B) of the Child Nutrition Act of 1966 (42 U.S.C. 1773(e)(1)(B)) is amended by striking the second sentence. (b) EXPANSION OF PROGRAM; STARTUP AND EXPANSION COSTS.\u2014 (1) IN GENERAL.\u2014Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) is amended by striking subsections (f) and (g). (2) EFFECTIVE DATE.\u2014The amendments made by para- graph (1) shall become effective on October 1, 1996. SEC. 724. STATE ADMINISTRATIVE EXPENSES. (a) USE OF FUNDS FOR COMMODITY DISTRIBUTION ADMINISTRA- TION; STUDIES.\u2014Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 1776) is amended\u2014 (1) by striking subsections (e) and (h); and (2) by redesignating subsections (f), (g), and (i) as sub- sections (e), (f), and (g), respectively. (b) APPROVAL OF CHANGES.\u2014Section 7(e) of the Child Nutrition Act of 1966 (42 U.S.C. 1776(e)), as so redesignated, is amended\u2014 (1) by striking ”each year an annual plan” and inserting ”the initial fiscal year a plan”; and (2) by adding at the end the following: ”After submitting the initial plan, a State shall be required to submit to the Sec- retary for approval only a substantive change in the plan.”. SEC. 725. REGULATIONS. Section 10(b) of the Child Nutrition Act of 1966 (42 U.S.C. 1779(b)) is amended\u2014 206 (1) in paragraph (1), by striking ”(1)”; and (2) by striking paragraphs (2) through (4). SEC. 726. PROHIBITIONS. Section 11(a) of the Child Nutrition Act of 1966 (42 U.S.C. 1780(a)) is amended by striking ”neither the Secretary nor the State shall” and inserting ”the Secretary shall not”. SEC. 727. MISCELLANEOUS PROVISIONS AND DEFINITIONS. Section 15 of the Child Nutrition Act of 1966 (42 U.S.C. 1784) is amended\u2014 (1) in paragraph (1), by striking ”the Trust Territory of the Pacific Islands” and inserting ”the Commonwealth of the Northern Mariana Islands”; and (2) in the first sentence of paragraph (3)\u2014 (A) in subparagraph (A), by inserting ”and” at the end; and (B) by striking ”, and (C)” and all that follows through ”Governor of Puerto Rico”. SEC. 728. ACCOUNTS AND RECORDS. The second sentence of section 16(a) of the Child Nutrition Act of 1966 (42 U.S.C. 1785(a)) is amended by striking ”at all times be available” and inserting ”be available at any reasonable time”. SEC. 729. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN. (a) DEFINITIONS.\u2014Section 17(b) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(b)) is amended\u2014 (1) in paragraph (15)(B)(iii), by inserting ”of not more than 365 days” after ”accommodation”; and (2) in paragraph (16)\u2014 (A) in subparagraph (A), by adding ”and” at the end; and (B) in subparagraph (B), by striking ”; and” and insert- ing a period; and (C) by striking subparagraph (C). (b) SECRETARY’S PROMOTION OF WIC.\u2014Section 17(c) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(c)) is amended by strik- ing paragraph (5). (c) ELIGIBLE PARTICIPANTS.\u2014Section 17(d) of the Child Nutri- tion Act of 1966 (42 U.S.C. 1786(d)) is amended by striking para- graph (4). (d) NUTRITION EDUCATION.\u2014Section 17(e) of the Child Nutri- tion Act of 1966 (42 U.S.C. 1786(e)) is amended\u2014 (1) in paragraph (2), by striking the third sentence; (2) in paragraph (4)\u2014 (A) in the matter preceding subparagraph (A), by strik- ing ”shall”; (B) by striking subparagraph (A); (C) by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively; (D) in subparagraph (A), as so redesignated\u2014 (i) by inserting ”shall” before ”provide”; and (ii) by striking ”and” at the end; (E) in subparagraph (B), as so redesignated\u2014 (i) by inserting ”shall” before ”provide”; and 207 (ii) by striking the period at the end and inserting ”; and”; and (F) by adding at the end the following: ”(C) may provide a local agency with materials describing other programs for which a participant in the program may be eligible.”; (3) in paragraph (5), by striking ”The State agency shall ensure that each” and inserting ”Each”; and (4) by striking paragraph (6). (e) STATE PLAN.\u2014Section 17(f) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(f)) is amended\u2014 (1) in paragraph (1)\u2014 (A) in subparagraph (A)\u2014 (i) by striking ”annually to the Secretary, by a date specified by the Secretary, a” and inserting ”to the Sec- retary, by a date specified by the Secretary, an initial”; and (ii) by adding at the end the following: ”After sub- mitting the initial plan, a State shall be required to submit to the Secretary for approval only a substantive change in the plan.”; (B) in subparagraph (C)\u2014 (i) by striking clause (iii) and inserting the follow- ing: ”(iii) a plan to coordinate operations under the program with other services or programs that may benefit participants in, and applicants for, the program;”; (ii) in clause (vi), by inserting after ”in the State” the following: ”(including a plan to improve access to the program for participants and prospective appli- cants who are employed, or who reside in rural areas)”; (iii) in clause (vii), by striking ”to provide program benefits” and all that follows through ”emphasis on” and inserting ”for”; (iv) by striking clauses (ix), (x), and (xii); (v) in clause (xiii), by striking ”may require” and inserting ”may reasonably require”; (vi) by redesignating clauses (xi) and (xiii), as so amended, as clauses (ix) and (x), respectively; and (vii) in clause (ix), as so redesignated, by adding ”and” at the end; (C) by striking subparagraph (D); and (D) by redesignating subparagraph (E) as subpara- graph (D); (2) by striking paragraphs (6) and (22); (3) in the second sentence of paragraph (5), by striking ”at all times be available” and inserting ”be available at any rea- sonable time”; (4) in paragraph (9)(B), by striking the second sentence; (5) in the first sentence of paragraph (11), by striking ”, in- cluding standards that will ensure sufficient State agency staff”; (6) in paragraph (12), by striking the third sentence; 208 (7) in paragraph (14), by striking ”shall” and inserting ”may”; (8) in paragraph (17), by striking ”and to accommodate” and all that follows through ”facilities”; (9) in paragraph (19), by striking ”shall” and inserting ”may”; and (10) by redesignating paragraphs (7) through (21) as para- graphs (6) through (20), and paragraphs (23) and (24) as para- graphs (21) and (22), respectively. (f) INFORMATION.\u2014Section 17(g) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(g)) is amended\u2014 (1) in paragraph (5), by striking ”the report required under subsection (d)(4)” and inserting ”reports on program participant characteristics”; and (2) by striking paragraph (6). (g) PROCUREMENT OF INFANT FORMULA.\u2014 (1) IN GENERAL.\u2014Section 17(h) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(h)) is amended\u2014 (A) in paragraph (4)(E), by striking ”and, on” and all that follows through ”(d)(4)”; and (B) in paragraph (8)\u2014 (i) by striking subparagraphs (A), (C), and (M); (ii) in subparagraph (G)\u2014 (I) in clause (i), by striking ”(i)”; and (II) by striking clauses (ii) through (ix); (iii) in subparagraph (I), by striking ”Secretary\u2014” and all that follows through ”(v) may” and inserting ”Secretary may”; (iv) by redesignating subparagraphs (B) and (D) through (L) as subparagraphs (A) and (B) through (J), respectively; (v) in subparagraph (A)(i), as so redesignated, by striking ”subparagraphs (C), (D), and (E)(iii), in carry- ing out subparagraph (A),” and inserting ”subpara- graphs (B) and (C)(iii),”; (vi) in subparagraph (B)(i), as so redesignated, by striking ”subparagraph (B)” each place it appears and inserting ”subparagraph (A)”; and (vii) in subparagraph (C)(iii), as so redesignated, by striking ”subparagraph (B)” and inserting ”subpara- graph (A)”. (2) APPLICATION.\u2014The amendments made by paragraph (1) shall not apply to a contract for the procurement of infant for- mula under section 17(h)(8) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(h)(8)) that is in effect on the date of enactment of this subsection. (h) NATIONAL ADVISORY COUNCIL ON MATERNAL, INFANT, AND FETAL NUTRITION.\u2014Section 17(k)(3) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(k)(3)) is amended by striking ”Secretary shall designate” and inserting ”Council shall elect”. (i) COMPLETED STUDY; COMMUNITY COLLEGE DEMONSTRATION; GRANTS FOR INFORMATION AND DATA SYSTEM.\u2014Section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) is amended by strik- ing subsections (n), (o), and (p). 209 (j) DISQUALIFICATION OF VENDORS WHO ARE DISQUALIFIED UNDER THE FOOD STAMP PROGRAM.\u2014Section 17 of the Child Nutri- tion Act of 1966 (42 U.S.C. 1786), as amended by subsection (i), is amended by adding at the end the following: ”(n) DISQUALIFICATION OF VENDORS WHO ARE DISQUALIFIED UNDER THE FOOD STAMP PROGRAM.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall issue regulations providing criteria for the disqualification under this section of an approved vendor that is disqualified from accepting benefits under the food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.). ”(2) TERMS.\u2014A disqualification under paragraph (1)\u2014 ”(A) shall be for the same period as the disqualification from the program referred to in paragraph (1); ”(B) may begin at a later date than the disqualification from the program referred to in paragraph (1); and ”(C) shall not be subject to judicial or administrative review.”. SEC. 730. CASH GRANTS FOR NUTRITION EDUCATION. Section 18 of the Child Nutrition Act of 1966 (42 U.S.C. 1787) is repealed. SEC. 731. NUTRITION EDUCATION AND TRAINING. (a) FINDINGS.\u2014Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788) is amended\u2014 (1) in subsection (a), by striking ”that\u2014” and all that fol- lows through the period at the end and inserting ”that effective dissemination of scientifically valid information to children participating or eligible to participate in the school lunch and related child nutrition programs should be encouraged.”; and (2) in subsection (b), by striking ”encourage” and all that follows through ”establishing” and inserting ”establish”. (b) USE OF FUNDS.\u2014Section 19(f) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(f)) is amended\u2014 (1) in paragraph (1)\u2014 (A) by striking subparagraph (B); and (B) in subparagraph (A)\u2014 (i) by striking ”(A)”; (ii) by striking clauses (ix) through (xix); (iii) by redesignating clauses (i) through (viii) and (xx) as subparagraphs (A) through (H) and (I), respec- tively; (iv) in subparagraph (I), as so redesignated, by striking the period at the end and inserting ”; and”; and (v) by adding at the end the following: ”(J) other appropriate related activities, as determined by the State.”; (2) by striking paragraphs (2) and (4); and (3) by redesignating paragraph (3) as paragraph (2). (c) ACCOUNTS, RECORDS, AND REPORTS.\u2014The second sentence of section 19(g)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(g)(1)) is amended by striking ”at all times be available” and inserting ”be available at any reasonable time”. 210 (d) STATE COORDINATORS FOR NUTRITION; STATE PLAN.\u2014Sec- tion 19(h) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(h)) is amended\u2014 (1) in the second sentence of paragraph (1)\u2014 (A) by striking ”as provided in paragraph (2) of this subsection”; and (B) by striking ”as provided in paragraph (3) of this subsection”; (2) in paragraph (2), by striking the second and third sen- tences; and (3) by striking paragraph (3). (e) AUTHORIZATION OF APPROPRIATIONS.\u2014Section 19(i) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(i)) is amended\u2014 (1) in the first sentence of paragraph (2)(A), by striking ”and each succeeding fiscal year”; (2) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; and (3) by inserting after paragraph (2) the following: ”(3) FISCAL YEARS 1997 THROUGH 2002.\u2014 ”(A) IN GENERAL.\u2014There are authorized to be appro- priated to carry out this section $10,000,000 for each of fis- cal years 1997 through 2002. ”(B) GRANTS.\u2014 ”(i) IN GENERAL.\u2014Grants to each State from the amounts made available under subparagraph (A) shall be based on a rate of 50 cents for each child enrolled in schools or institutions within the State, except that no State shall receive an amount less than $75,000 per fiscal year. ”(ii) INSUFFICIENT FUNDS.\u2014If the amount made available for any fiscal year is insufficient to pay the amount to which each State is entitled under clause (i), the amount of each grant shall be ratably reduced.”. (f) ASSESSMENT.\u2014Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788) is amended by striking subsection (j). (g) EFFECTIVE DATE.\u2014The amendments made by subsection (e) shall become effective on October 1, 1996. Subtitle C\u2014Miscellaneous Provisions SEC. 741. COORDINATION OF SCHOOL LUNCH, SCHOOL BREAKFAST, AND SUMMER FOOD SERVICE PROGRAMS. (a) COORDINATION.\u2014 (1) IN GENERAL.\u2014The Secretary of Agriculture shall de- velop proposed changes to the regulations under the school lunch program under the National School Lunch Act (42 U.S.C. 1751 et seq.), the summer food service program under section 13 of that Act (42 U.S.C. 1761), and the school breakfast program under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773), for the purpose of simplifying and coordinating those programs into a comprehensive meal program. (2) CONSULTATION.\u2014In developing proposed changes to the regulations under paragraph (1), the Secretary of Agriculture 211 shall consult with local, State, and regional administrators of the programs described in such paragraph. (b) REPORT.\u2014Not later than November 1, 1997, the Secretary of Agriculture shall submit to the Committee on Agriculture, Nutri- tion, and Forestry of the Senate and the Committee on Economic and Educational Opportunities of the House of Representatives a re- port containing the proposed changes developed under subsection (a). SEC. 742. REQUIREMENTS RELATING TO PROVISION OF BENEFITS BASED ON CITIZENSHIP, ALIENAGE, OR IMMIGRATION STATUS UNDER THE NATIONAL SCHOOL LUNCH ACT, THE CHILD NUTRITION ACT OF 1966, AND CERTAIN OTHER ACTS. (a) SCHOOL LUNCH AND BREAKFAST PROGRAMS.\u2014Notwithstand- ing any other provision of this Act, an individual who is eligible to receive free public education benefits under State or local law shall not be ineligible to receive benefits provided under the school lunch program under the National School Lunch Act (42 U.S.C. 1751 et seq.) or the school breakfast program under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) on the basis of citizenship, alienage, or immigration status. (b) OTHER PROGRAMS.\u2014 (1) IN GENERAL.\u2014Nothing in this Act shall prohibit or re- quire a State to provide to an individual who is not a citizen or a qualified alien, as defined in section 431(b), benefits under programs established under the provisions of law described in paragraph (2). (2) PROVISIONS OF LAW DESCRIBED.\u2014The provisions of law described in this paragraph are the following: (A) Programs (other than the school lunch program and the school breakfast program) under the National School Lunch Act (42 U.S.C. 1751 et seq.) and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.). (B) Section 4 of the Agriculture and Consumer Protec- tion Act of 1973 (7 U.S.C. 612c note). (C) The Emergency Food Assistance Act of 1983 (7 U.S.C 612c note). (D) The food distribution program on Indian reserva- tions established under section 4(b) of the Food Stamp Act of 1977 (7 U.S.C 2013(b)). TITLE VIII\u2014FOOD STAMPS AND COMMODITY DISTRIBUTION Subtitle A\u2014Food Stamp Program SEC. 801. DEFINITION OF CERTIFICATION PERIOD. Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended by striking ”Except as provided” and all that follows and inserting the following: ”The certification period shall not ex- ceed 12 months, except that the certification period may be up to 24 months if all adult household members are elderly or disabled. A 212 State agency shall have at least 1 contact with each certified house- hold every 12 months.”. SEC. 802. DEFINITION OF COUPON. Section 3(d) of the Food Stamp Act of 1977 (7 U.S.C. 2012(d)) is amended by striking ”or type of certificate” and inserting ”type of certificate, authorization card, cash or check issued in lieu of a cou- pon, or access device, including an electronic benefit transfer card or personal identification number,”. SEC. 803. TREATMENT OF CHILDREN LIVING AT HOME. The second sentence of section 3(i) of the Food Stamp Act of 1977 (7 U.S.C. 2012(i)) is amended by striking ”(who are not them- selves parents living with their children or married and living with their spouses)”. SEC. 804. ADJUSTMENT OF THRIFTY FOOD PLAN. The second sentence of section 3(o) of the Food Stamp Act of 1977 (7 U.S.C. 2012(o)) is amended\u2014 (1) by striking ”shall (1) make” and inserting the following: ”shall\u2014 ”(1) make”; (2) by striking ”scale, (2) make” and inserting the following: ”scale; ”(2) make”; (3) by striking ”Alaska, (3) make” and inserting the follow- ing: ”Alaska; ”(3) make”; and (4) by striking ”Columbia, (4) through” and all that follows through the end of the subsection and inserting the following: ”Columbia; and ”(4) on October 1, 1996, and each October 1 thereafter, ad- just the cost of the diet to reflect the cost of the diet in the pre- ceding June, and round the result to the nearest lower dollar increment for each household size, except that on October 1, 1996, the Secretary may not reduce the cost of the diet in effect on September 30, 1996.”. SEC. 805. DEFINITION OF HOMELESS INDIVIDUAL. Section 3(s)(2)(C) of the Food Stamp Act of 1977 (7 U.S.C. 2012(s)(2)(C)) is amended by inserting ”for not more than 90 days” after ”temporary accommodation”. SEC. 806. STATE OPTION FOR ELIGIBILITY STANDARDS. Section 5(b) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is amended by striking ”(b) The Secretary” and inserting the follow- ing: ”(b) ELIGIBILITY STANDARDS.\u2014Except as otherwise provided in this Act, the Secretary”. SEC. 807. EARNINGS OF STUDENTS. Section 5(d)(7) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(7)) is amended by striking ”21” and inserting ”17”. SEC. 808. ENERGY ASSISTANCE. (a) IN GENERAL.\u2014Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is amended by striking paragraph (11) and in- serting the following: ”(11)(A) any payments or allowances made for 213 the purpose of providing energy assistance under any Federal law (other than part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)), or (B) a 1-time payment or allowance made under a Federal or State law for the costs of weatherization or emergency re- pair or replacement of an unsafe or inoperative furnace or other heating or cooling device,”. (b) CONFORMING AMENDMENTS.\u2014Section 5(k) of the Food Stamp Act of 1977 (7 U.S.C. 2014(k)) is amended\u2014 (1) in paragraph (1)\u2014 (A) in subparagraph (A), by striking ”plan for aid to families with dependent children approved” and inserting ”program funded”; and (B) in subparagraph (B), by striking ”, not including energy or utility-cost assistance,”; (2) in paragraph (2), by striking subparagraph (C) and in- serting the following: ”(C) a payment or allowance described in subsection (d)(11);”; and (3) by adding at the end the following: ”(4) THIRD PARTY ENERGY ASSISTANCE PAYMENTS.\u2014 ”(A) ENERGY ASSISTANCE PAYMENTS.\u2014For purposes of subsection (d)(1), a payment made under a State law (other than a law referred to in paragraph (2)(H)) to provide en- ergy assistance to a household shall be considered money payable directly to the household. ”(B) ENERGY ASSISTANCE EXPENSES.\u2014For purposes of subsection (e)(7), an expense paid on behalf of a household under a State law to provide energy assistance shall be con- sidered an out-of-pocket expense incurred and paid by the household.”. SEC. 809. DEDUCTIONS FROM INCOME. (a) IN GENERAL.\u2014Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended by striking subsection (e) and inserting the following: ”(e) DEDUCTIONS FROM INCOME.\u2014 ”(1) STANDARD DEDUCTION.\u2014The Secretary shall allow a standard deduction for each household in the 48 contiguous States and the District of Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the United States of $134, $229, $189, $269, and $118, respectively. ”(2) EARNED INCOME DEDUCTION.\u2014 ”(A) DEFINITION OF EARNED INCOME.\u2014In this para- graph, the term ‘earned income’ does not include\u2014 ”(i) income excluded by subsection (d); or ”(ii) any portion of income earned under a work supplementation or support program, as defined under section 16(b), that is attributable to public assistance. ”(B) DEDUCTION.\u2014Except as provided in subparagraph (C), a household with earned income shall be allowed a de- duction of 20 percent of all earned income to compensate for taxes, other mandatory deductions from salary, and work expenses. ”(C) EXCEPTION.\u2014The deduction described in subpara- graph (B) shall not be allowed with respect to determining 214 an overissuance due to the failure of a household to report earned income in a timely manner. ”(3) DEPENDENT CARE DEDUCTION.\u2014 ”(A) IN GENERAL.\u2014A household shall be entitled, with respect to expenses (other than excluded expenses described in subparagraph (B)) for dependent care, to a dependent care deduction, the maximum allowable level of which shall be $200 per month for each dependent child under 2 years of age and $175 per month for each other dependent, for the actual cost of payments necessary for the care of a dependent if the care enables a household member to accept or continue employment, or training or education that is preparatory for employment. ”(B) EXCLUDED EXPENSES.\u2014The excluded expenses re- ferred to in subparagraph (A) are\u2014 ”(i) expenses paid on behalf of the household by a third party; ”(ii) amounts made available and excluded, for the expenses referred to in subparagraph (A), under sub- section (d)(3); and ”(iii) expenses that are paid under section 6(d)(4). ”(4) DEDUCTION FOR CHILD SUPPORT PAYMENTS.\u2014 ”(A) IN GENERAL.\u2014A household shall be entitled to a deduction for child support payments made by a household member to or for an individual who is not a member of the household if the household member is legally obligated to make the payments. ”(B) METHODS FOR DETERMINING AMOUNT.\u2014The Sec- retary may prescribe by regulation the methods, including calculation on a retrospective basis, that a State agency shall use to determine the amount of the deduction for child support payments. ”(5) HOMELESS SHELTER ALLOWANCE.\u2014Under rules pre- scribed by the Secretary, a State agency may develop a stand- ard homeless shelter allowance, which shall not exceed $143 per month, for such expenses as may reasonably be expected to be incurred by households in which all members are homeless in- dividuals but are not receiving free shelter throughout the month. A State agency that develops the allowance may use the allowance in determining eligibility and allotments for the households. The State agency may make a household with ex- tremely low shelter costs ineligible for the allowance. ”(6) EXCESS MEDICAL EXPENSE DEDUCTION.\u2014 ”(A) IN GENERAL.\u2014A household containing an elderly or disabled member shall be entitled, with respect to ex- penses other than expenses paid on behalf of the household by a third party, to an excess medical expense deduction for the portion of the actual costs of allowable medical ex- penses, incurred by the elderly or disabled member, exclu- sive of special diets, that exceeds $35 per month. ”(B) METHOD OF CLAIMING DEDUCTION.\u2014 ”(i) IN GENERAL.\u2014A State agency shall offer an eli- gible household under subparagraph (A) a method of claiming a deduction for recurring medical expenses 215 that are initially verified under the excess medical ex- pense deduction in lieu of submitting information on, or verification of, actual expenses on a monthly basis. ”(ii) METHOD.\u2014The method described in clause (i) shall\u2014 ”(I) be designed to minimize the burden for the eligible elderly or disabled household member choosing to deduct the recurrent medical expenses of the member pursuant to the method; ”(II) rely on reasonable estimates of the ex- pected medical expenses of the member for the cer- tification period (including changes that can be reasonably anticipated based on available infor- mation about the medical condition of the member, public or private medical insurance coverage, and the current verified medical expenses incurred by the member); and ”(III) not require further reporting or verifica- tion of a change in medical expenses if such a change has been anticipated for the certification period. ”(7) EXCESS SHELTER EXPENSE DEDUCTION.\u2014 ”(A) IN GENERAL.\u2014A household shall be entitled, with respect to expenses other than expenses paid on behalf of the household by a third party, to an excess shelter expense deduction to the extent that the monthly amount expended by a household for shelter exceeds an amount equal to 50 percent of monthly household income after all other appli- cable deductions have been allowed. ”(B) MAXIMUM AMOUNT OF DEDUCTION.\u2014In the case of a household that does not contain an elderly or disabled in- dividual, in the 48 contiguous States and the District of Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the United States, the excess shelter expense deduction shall not exceed\u2014 ”(i) for the period beginning on the date of enact- ment of this subparagraph and ending on December 31, 1996, $247, $429, $353, $300, and $182 per month, respectively; ”(ii) for the period beginning on January 1, 1997, and ending on September 30, 1998, $250, $434, $357, $304, and $184 per month, respectively; ”(iii) for fiscal years 1999 and 2000, $275, $478, $393, $334, and $203 per month, respectively; and ”(iv) for fiscal year 2001 and each subsequent fis- cal year, $300, $521, $429, $364, and $221 per month, respectively. ”(C) STANDARD UTILITY ALLOWANCE.\u2014 ”(i) IN GENERAL.\u2014In computing the excess shelter expense deduction, a State agency may use a standard utility allowance in accordance with regulations pro- mulgated by the Secretary, except that a State agency may use an allowance that does not fluctuate within a year to reflect seasonal variations. 216 ”(ii) RESTRICTIONS ON HEATING AND COOLING EX- PENSES.\u2014An allowance for a heating or cooling ex- pense may not be used in the case of a household that\u2014 ”(I) does not incur a heating or cooling ex- pense, as the case may be; ”(II) does incur a heating or cooling expense but is located in a public housing unit that has central utility meters and charges households, with regard to the expense, only for excess utility costs; or ”(III) shares the expense with, and lives with, another individual not participating in the food stamp program, another household participating in the food stamp program, or both, unless the al- lowance is prorated between the household and the other individual, household, or both. ”(iii) MANDATORY ALLOWANCE.\u2014 ”(I) IN GENERAL.\u2014A State agency may make the use of a standard utility allowance mandatory for all households with qualifying utility costs if\u2014 ”(aa) the State agency has developed 1 or more standards that include the cost of heat- ing and cooling and 1 or more standards that do not include the cost of heating and cooling; and ”(bb) the Secretary finds that the stand- ards will not result in an increased cost to the Secretary. ”(II) HOUSEHOLD ELECTION.\u2014A State agency that has not made the use of a standard utility al- lowance mandatory under subclause (I) shall allow a household to switch, at the end of a certification period, between the standard utility allowance and a deduction based on the actual utility costs of the household. ”(iv) AVAILABILITY OF ALLOWANCE TO RECIPIENTS OF ENERGY ASSISTANCE.\u2014 ”(I) IN GENERAL.\u2014Subject to subclause (II), if a State agency elects to use a standard utility al- lowance that reflects heating or cooling costs, the standard utility allowance shall be made available to households receiving a payment, or on behalf of which a payment is made, under the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.) or other similar energy assistance program, if the household still incurs out-of-pocket heating or cooling expenses in excess of any assist- ance paid on behalf of the household to an energy provider. ”(II) SEPARATE ALLOWANCE.\u2014A State agency may use a separate standard utility allowance for households on behalf of which a payment de- 217 scribed in subclause (I) is made, but may not be re- quired to do so. ”(III) STATES NOT ELECTING TO USE SEPARATE ALLOWANCE.\u2014A State agency that does not elect to use a separate allowance but makes a single stand- ard utility allowance available to households in- curring heating or cooling expenses (other than a household described in subclause (I) or (II) of clause (ii)) may not be required to reduce the al- lowance due to the provision (directly or indirectly) of assistance under the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.). ”(IV) PRORATION OF ASSISTANCE.\u2014For the purpose of the food stamp program, assistance pro- vided under the Low-Income Home Energy Assist- ance Act of 1981 (42 U.S.C. 8621 et seq.) shall be considered to be prorated over the entire heating or cooling season for which the assistance was pro- vided.”. (b) CONFORMING AMENDMENT.\u2014Section 11(e)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(3)) is amended by striking ”. Under rules prescribed” and all that follows through ”verifies high- er expenses”. SEC. 810. VEHICLE ALLOWANCE. Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is amended by striking paragraph (2) and inserting the following: ”(2) INCLUDED ASSETS.\u2014 ”(A) IN GENERAL.\u2014Subject to the other provisions of this paragraph, the Secretary shall, in prescribing inclu- sions in, and exclusions from, financial resources, follow the regulations in force as of June 1, 1982 (other than those relating to licensed vehicles and inaccessible resources). ”(B) ADDITIONAL INCLUDED ASSETS.\u2014The Secretary shall include in financial resources\u2014 ”(i) any boat, snowmobile, or airplane used for rec- reational purposes; ”(ii) any vacation home; ”(iii) any mobile home used primarily for vacation purposes; ”(iv) subject to subparagraph (C), any licensed ve- hicle that is used for household transportation or to ob- tain or continue employment to the extent that the fair market value of the vehicle exceeds $4,600 through September 30, 1996, and $4,650 beginning October 1, 1996; and ”(v) any savings or retirement account (including an individual account), regardless of whether there is a penalty for early withdrawal. ”(C) EXCLUDED VEHICLES.\u2014A vehicle (and any other property, real or personal, to the extent the property is di- rectly related to the maintenance or use of the vehicle) shall not be included in financial resources under this paragraph if the vehicle is\u2014 ”(i) used to produce earned income; 218 ”(ii) necessary for the transportation of a physically disabled household member; or ”(iii) depended on by a household to carry fuel for heating or water for home use and provides the pri- mary source of fuel or water, respectively, for the household.”. SEC. 811. VENDOR PAYMENTS FOR TRANSITIONAL HOUSING COUNTED AS INCOME. Section 5(k)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2014(k)(2)) is amended\u2014 (1) by striking subparagraph (F); and (2) by redesignating subparagraphs (G) and (H) as sub- paragraphs (F) and (G), respectively. SEC. 812. SIMPLIFIED CALCULATION OF INCOME FOR THE SELF-EM- PLOYED. Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014), as amended by title I, is amended by adding at the end the following: ”(m) SIMPLIFIED CALCULATION OF INCOME FOR THE SELF-EM- PLOYED.\u2014 ”(1) IN GENERAL.\u2014Not later than 1 year after the date of enactment of this subsection, the Secretary shall establish a procedure by which a State may submit a method, designed to not increase Federal costs, for the approval of the Secretary, that the Secretary determines will produce a reasonable esti- mate of income excluded under subsection (d)(9) in lieu of cal- culating the actual cost of producing self-employment income. ”(2) INCLUSIVE OF ALL TYPES OF INCOME OR LIMITED TYPES OF INCOME.\u2014The method submitted by a State under para- graph (1) may allow a State to estimate income for all types of self-employment income or may be limited to 1 or more types of self-employment income. ”(3) DIFFERENCES FOR DIFFERENT TYPES OF INCOME.\u2014The method submitted by a State under paragraph (1) may differ for different types of self-employment income.”. SEC. 813. DOUBLED PENALTIES FOR VIOLATING FOOD STAMP PRO- GRAM REQUIREMENTS. Section 6(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2015(b)(1)) is amended\u2014 (1) in clause (i), by striking ”six months” and inserting ”1 year”; and (2) in clause (ii), by striking ”1 year” and inserting ”2 years”. SEC. 814. DISQUALIFICATION OF CONVICTED INDIVIDUALS. Section 6(b)(1)(iii) of the Food Stamp Act of 1977 (7 U.S.C. 2015(b)(1)(iii)) is amended\u2014 (1) in subclause (II), by striking ”or” at the end; (2) in subclause (III), by striking the period at the end and inserting ”; or”; and (3) by inserting after subclause (III) the following: ”(IV) a conviction of an offense under subsection (b) or (c) of section 15 involving an item covered by subsection (b) or (c) of section 15 having a value of $500 or more.”. 219 SEC. 815. DISQUALIFICATION. (a) IN GENERAL.\u2014Section 6(d) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)) is amended by striking ”(d)(1) Unless otherwise exempted by the provisions” and all that follows through the end of paragraph (1) and inserting the following: ”(d) CONDITIONS OF PARTICIPATION.\u2014 ”(1) WORK REQUIREMENTS.\u2014 ”(A) IN GENERAL.\u2014No physically and mentally fit indi- vidual over the age of 15 and under the age of 60 shall be eligible to participate in the food stamp program if the in- dividual\u2014 ”(i) refuses, at the time of application and every 12 months thereafter, to register for employment in a man- ner prescribed by the Secretary; ”(ii) refuses without good cause to participate in an employment and training program established under paragraph (4), to the extent required by the State agen- cy; ”(iii) refuses without good cause to accept an offer of employment, at a site or plant not subject to a strike or lockout at the time of the refusal, at a wage not less than the higher of\u2014 ”(I) the applicable Federal or State minimum wage; or ”(II) 80 percent of the wage that would have governed had the minimum hourly rate under sec- tion 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) been applicable to the offer of employment; ”(iv) refuses without good cause to provide a State agency with sufficient information to allow the State agency to determine the employment status or the job availability of the individual; ”(v) voluntarily and without good cause\u2014 ”(I) quits a job; or ”(II) reduces work effort and, after the reduc- tion, the individual is working less than 30 hours per week; or ”(vi) fails to comply with section 20. ”(B) HOUSEHOLD INELIGIBILITY.\u2014If an individual who is the head of a household becomes ineligible to participate in the food stamp program under subparagraph (A), the household shall, at the option of the State agency, become ineligible to participate in the food stamp program for a pe- riod, determined by the State agency, that does not exceed the lesser of\u2014 ”(i) the duration of the ineligibility of the individ- ual determined under subparagraph (C); or ”(ii) 180 days. ”(C) DURATION OF INELIGIBILITY.\u2014 ”(i) FIRST VIOLATION.\u2014The first time that an indi- vidual becomes ineligible to participate in the food stamp program under subparagraph (A), the individ- ual shall remain ineligible until the later of\u2014 220 ”(I) the date the individual becomes eligible under subparagraph (A); ”(II) the date that is 1 month after the date the individual became ineligible; or ”(III) a date determined by the State agency that is not later than 3 months after the date the individual became ineligible. ”(ii) SECOND VIOLATION.\u2014The second time that an individual becomes ineligible to participate in the food stamp program under subparagraph (A), the individ- ual shall remain ineligible until the later of\u2014 ”(I) the date the individual becomes eligible under subparagraph (A); ”(II) the date that is 3 months after the date the individual became ineligible; or ”(III) a date determined by the State agency that is not later than 6 months after the date the individual became ineligible. ”(iii) THIRD OR SUBSEQUENT VIOLATION.\u2014The third or subsequent time that an individual becomes ineligible to participate in the food stamp program under subparagraph (A), the individual shall remain ineligible until the later of\u2014 ”(I) the date the individual becomes eligible under subparagraph (A); ”(II) the date that is 6 months after the date the individual became ineligible; ”(III) a date determined by the State agency; or ”(IV) at the option of the State agency, perma- nently. ”(D) ADMINISTRATION.\u2014 ”(i) GOOD CAUSE.\u2014The Secretary shall determine the meaning of good cause for the purpose of this para- graph. ”(ii) VOLUNTARY QUIT.\u2014The Secretary shall deter- mine the meaning of voluntarily quitting and reducing work effort for the purpose of this paragraph. ”(iii) DETERMINATION BY STATE AGENCY.\u2014 ”(I) IN GENERAL.\u2014Subject to subclause (II) and clauses (i) and (ii), a State agency shall deter- mine\u2014 ”(aa) the meaning of any term used in subparagraph (A); ”(bb) the procedures for determining whether an individual is in compliance with a requirement under subparagraph (A); and ”(cc) whether an individual is in compli- ance with a requirement under subparagraph (A). ”(II) NOT LESS RESTRICTIVE.\u2014A State agency may not use a meaning, procedure, or determina- tion under subclause (I) that is less restrictive on individuals receiving benefits under this Act than 221 a comparable meaning, procedure, or determina- tion under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.). ”(iv) STRIKE AGAINST THE GOVERNMENT.\u2014For the purpose of subparagraph (A)(v), an employee of the Federal Government, a State, or a political subdivision of a State, who is dismissed for participating in a strike against the Federal Government, the State, or the political subdivision of the State shall be consid- ered to have voluntarily quit without good cause. ”(v) SELECTING A HEAD OF HOUSEHOLD.\u2014 ”(I) IN GENERAL.\u2014For purposes of this para- graph, the State agency shall allow the household to select any adult parent of a child in the house- hold as the head of the household if all adult household members making application under the food stamp program agree to the selection. ”(II) TIME FOR MAKING DESIGNATION.\u2014A household may designate the head of the house- hold under subclause (I) each time the household is certified for participation in the food stamp pro- gram, but may not change the designation during a certification period unless there is a change in the composition of the household. ”(vi) CHANGE IN HEAD OF HOUSEHOLD.\u2014If the head of a household leaves the household during a period in which the household is ineligible to participate in the food stamp program under subparagraph (B)\u2014 ”(I) the household shall, if otherwise eligible, become eligible to participate in the food stamp program; and ”(II) if the head of the household becomes the head of another household, the household that be- comes headed by the individual shall become ineli- gible to participate in the food stamp program for the remaining period of ineligibility.”. (b) CONFORMING AMENDMENT.\u2014 (1) The second sentence of section 17(b)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(2)) is amended by striking ”6(d)(1)(i)” and inserting ”6(d)(1)(A)(i)”. (2) Section 20 of the Food Stamp Act of 1977 (7 U.S.C. 2029) is amended by striking subsection (f) and inserting the following: ”(f) DISQUALIFICATION.\u2014An individual or a household may be- come ineligible under section 6(d)(1) to participate in the food stamp program for failing to comply with this section.”. SEC. 816. CARETAKER EXEMPTION. Section 6(d)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(2)) is amended by adding at the end the following: ”A State that requested a waiver to lower the age specified in subparagraph (B) and had the waiver denied by the Secretary as of August 1, 1996, may, for a period of not more than 3 years, lower the age of a dependent child that qualifies a parent or other member of a 222 household for an exemption under subparagraph (B) to between 1 and 6 years of age.”. SEC. 817. EMPLOYMENT AND TRAINING. (a) IN GENERAL.\u2014Section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)) is amended\u2014 (1) by striking ”(4)(A) Not later than April 1, 1987, each” and inserting the following: ”(4) EMPLOYMENT AND TRAINING.\u2014 ”(A) IN GENERAL.\u2014 ”(i) IMPLEMENTATION.\u2014Each”; (2) in subparagraph (A)\u2014 (A) by inserting ”work,” after ”skills, training,”; and (B) by adding at the end the following: ”(ii) STATEWIDE WORKFORCE DEVELOPMENT SYS- TEM.\u2014Each component of an employment and training program carried out under this paragraph shall be de- livered through a statewide workforce development sys- tem, unless the component is not available locally through such a system.”; (3) in subparagraph (B)\u2014 (A) in the matter preceding clause (i), by striking the colon at the end and inserting the following: ”, except that the State agency shall retain the option to apply employ- ment requirements prescribed under this subparagraph to a program applicant at the time of application:”; (B) in clause (i), by striking ”with terms and condi- tions” and all that follows through ”time of application”; and (C) in clause (iv)\u2014 (i) by striking subclauses (I) and (II); and (ii) by redesignating subclauses (III) and (IV) as subclauses (I) and (II), respectively; (4) in subparagraph (D)\u2014 (A) in clause (i), by striking ”to which the application” and all that follows through ”30 days or less”; (B) in clause (ii), by striking ”but with respect” and all that follows through ”child care”; and (C) in clause (iii), by striking ”, on the basis of” and all that follows through ”clause (ii)” and inserting ”the ex- emption continues to be valid”; (5) in subparagraph (E), by striking the third sentence; (6) in subparagraph (G)\u2014 (A) by striking ”(G)(i) The State” and inserting ”(G) The State”; and (B) by striking clause (ii); (7) in subparagraph (H), by striking ”(H)(i) The Secretary” and all that follows through ”(ii) Federal funds” and inserting ”(H) Federal funds”; (8) in subparagraph (I)(i)(II), by striking ”, or was in oper- ation,” and all that follows through ”Social Security Act” and inserting the following: ”), except that no such payment or reim- bursement shall exceed the applicable local market rate”; (9)(A) by striking subparagraphs (K) and (L) and inserting the following: 223 ”(K) LIMITATION ON FUNDING.\u2014Notwithstanding any other provision of this paragraph, the amount of funds a State agency uses to carry out this paragraph (including funds used to carry out subparagraph (I)) for participants who are receiving benefits under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) shall not exceed the amount of funds the State agency used in fiscal year 1995 to carry out this para- graph for participants who were receiving benefits in fiscal year 1995 under a State program funded under part A of title IV of the Act (42 U.S.C. 601 et seq.).”; and (B) by redesignating subparagraphs (M) and (N) as sub- paragraphs (L) and (M), respectively; and (10) in subparagraph (L), as so redesignated\u2014 (A) by striking ”(L)(i) The Secretary” and inserting ”(L) The Secretary”; and (B) by striking clause (ii). (b) FUNDING.\u2014Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)) is amended by striking ”(h)(1)(A) The Secretary” and all that follows through the end of paragraph (1) and inserting the following: ”(h) FUNDING OF EMPLOYMENT AND TRAINING PROGRAMS.\u2014 ”(1) IN GENERAL.\u2014 ”(A) AMOUNTS.\u2014To carry out employment and training programs, the Secretary shall reserve for allocation to State agencies from funds made available for each fiscal year under section 18(a)(1) the amount of\u2014 ”(i) for fiscal year 1996, $75,000,000; ”(ii) for fiscal year 1997, $79,000,000; ”(iii) for fiscal year 1998, $81,000,000; ”(iv) for fiscal year 1999, $84,000,000; ”(v) for fiscal year 2000, $86,000,000; ”(vi) for fiscal year 2001, $88,000,000; and ”(vii) for fiscal year 2002, $90,000,000. ”(B) ALLOCATION.\u2014The Secretary shall allocate the amounts reserved under subparagraph (A) among the State agencies using a reasonable formula (as determined by the Secretary) that gives consideration to the population in each State affected by section 6(o). ”(C) REALLOCATION.\u2014 ”(i) NOTIFICATION.\u2014A State agency shall promptly notify the Secretary if the State agency determines that the State agency will not expend all of the funds allo- cated to the State agency under subparagraph (B). ”(ii) REALLOCATION.\u2014On notification under clause (i), the Secretary shall reallocate the funds that the State agency will not expend as the Secretary considers appropriate and equitable. ”(D) MINIMUM ALLOCATION.\u2014Notwithstanding sub- paragraphs (A) through (C), the Secretary shall ensure that each State agency operating an employment and training program shall receive not less than $50,000 for each fiscal year.”. 224 (c) ADDITIONAL MATCHING FUNDS.\u2014Section 16(h)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)(2)) is amended by inserting be- fore the period at the end the following: ”, including the costs for case management and casework to facilitate the transition from eco- nomic dependency to self-sufficiency through work”. (d) REPORTS.\u2014Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)) is amended\u2014 (1) in paragraph (5)\u2014 (A) by striking ”(5)(A) The Secretary” and inserting ”(5) The Secretary”; and (B) by striking subparagraph (B); and (2) by striking paragraph (6). SEC. 818. FOOD STAMP ELIGIBILITY. The third sentence of section 6(f) of the Food Stamp Act of 1977 (7 U.S.C. 2015(f)) is amended by inserting ”, at State option,” after ”less”. SEC. 819. COMPARABLE TREATMENT FOR DISQUALIFICATION. (a) IN GENERAL.\u2014Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) is amended by adding at the end the following: ”(i) COMPARABLE TREATMENT FOR DISQUALIFICATION.\u2014 ”(1) IN GENERAL.\u2014If a disqualification is imposed on a member of a household for a failure of the member to perform an action required under a Federal, State, or local law relating to a means-tested public assistance program, the State agency may impose the same disqualification on the member of the household under the food stamp program. ”(2) RULES AND PROCEDURES.\u2014If a disqualification is im- posed under paragraph (1) for a failure of an individual to per- form an action required under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), the State agency may use the rules and procedures that apply under part A of title IV of the Act to impose the same disqualification under the food stamp program. ”(3) APPLICATION AFTER DISQUALIFICATION PERIOD.\u2014A member of a household disqualified under paragraph (1) may, after the disqualification period has expired, apply for benefits under this Act and shall be treated as a new applicant, except that a prior disqualification under subsection (d) shall be con- sidered in determining eligibility.”. (b) STATE PLAN PROVISIONS.\u2014Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)) is amended\u2014 (1) in paragraph (24), by striking ”and” at the end; (2) in paragraph (25), by striking the period at the end and inserting a semicolon; and (3) by adding at the end the following: ”(26) the guidelines the State agency uses in carrying out section 6(i); and”. (c) CONFORMING AMENDMENT.\u2014Section 6(d)(2)(A) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(2)(A)) is amended by striking ”that is comparable to a requirement of paragraph (1)”. 225 SEC. 820. DISQUALIFICATION FOR RECEIPT OF MULTIPLE FOOD STAMP BENEFITS. Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended by section 819, is amended by adding at the end the fol- lowing: ”(j) DISQUALIFICATION FOR RECEIPT OF MULTIPLE FOOD STAMP BENEFITS.\u2014An individual shall be ineligible to participate in the food stamp program as a member of any household for a 10-year period if the individual is found by a State agency to have made, or is convicted in a Federal or State court of having made, a fraud- ulent statement or representation with respect to the identity or place of residence of the individual in order to receive multiple bene- fits simultaneously under the food stamp program.”. SEC. 821. DISQUALIFICATION OF FLEEING FELONS. Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended by section 820, is amended by adding at the end the fol- lowing: ”(k) DISQUALIFICATION OF FLEEING FELONS.\u2014No member of a household who is otherwise eligible to participate in the food stamp program shall be eligible to participate in the program as a member of that or any other household during any period during which the individual is\u2014 ”(1) fleeing to avoid prosecution, or custody or confinement after conviction, under the law of the place from which the indi- vidual is fleeing, for a crime, or attempt to commit a crime, that is a felony under the law of the place from which the individual is fleeing or that, in the case of New Jersey, is a high mis- demeanor under the law of New Jersey; or ”(2) violating a condition of probation or parole imposed under a Federal or State law.”. SEC. 822. COOPERATION WITH CHILD SUPPORT AGENCIES. Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended by section 821, is amended by adding at the end the fol- lowing: ”(l) CUSTODIAL PARENT’S COOPERATION WITH CHILD SUPPORT AGENCIES.\u2014 ”(1) IN GENERAL.\u2014At the option of a State agency, subject to paragraphs (2) and (3), no natural or adoptive parent or other individual (collectively referred to in this subsection as ‘the individual’) who is living with and exercising parental con- trol over a child under the age of 18 who has an absent parent shall be eligible to participate in the food stamp program unless the individual cooperates with the State agency administering the program established under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.)\u2014 ”(A) in establishing the paternity of the child (if the child is born out of wedlock); and ”(B) in obtaining support for\u2014 ”(i) the child; or ”(ii) the individual and the child. ”(2) GOOD CAUSE FOR NONCOOPERATION.\u2014Paragraph (1) shall not apply to the individual if good cause is found for re- fusing to cooperate, as determined by the State agency in ac- cordance with standards prescribed by the Secretary in con- 226 sultation with the Secretary of Health and Human Services. The standards shall take into consideration circumstances under which cooperation may be against the best interests of the child. ”(3) FEES.\u2014Paragraph (1) shall not require the payment of a fee or other cost for services provided under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.). ”(m) NONCUSTODIAL PARENT’S COOPERATION WITH CHILD SUP- PORT AGENCIES.\u2014 ”(1) IN GENERAL.\u2014At the option of a State agency, subject to paragraphs (2) and (3), a putative or identified noncustodial parent of a child under the age of 18 (referred to in this sub- section as ‘the individual’) shall not be eligible to participate in the food stamp program if the individual refuses to cooperate with the State agency administering the program established under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.)\u2014 ”(A) in establishing the paternity of the child (if the child is born out of wedlock); and ”(B) in providing support for the child. ”(2) REFUSAL TO COOPERATE.\u2014 ”(A) GUIDELINES.\u2014The Secretary, in consultation with the Secretary of Health and Human Services, shall develop guidelines on what constitutes a refusal to cooperate under paragraph (1). ”(B) PROCEDURES.\u2014The State agency shall develop procedures, using guidelines developed under subpara- graph (A), for determining whether an individual is refus- ing to cooperate under paragraph (1). ”(3) FEES.\u2014Paragraph (1) shall not require the payment of a fee or other cost for services provided under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.). ”(4) PRIVACY.\u2014The State agency shall provide safeguards to restrict the use of information collected by a State agency ad- ministering the program established under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.) to purposes for which the information is collected.”. SEC. 823. DISQUALIFICATION RELATING TO CHILD SUPPORT ARREARS. Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended by section 822, is amended by adding at the end the fol- lowing: ”(n) DISQUALIFICATION FOR CHILD SUPPORT ARREARS.\u2014 ”(1) IN GENERAL.\u2014At the option of a State agency, no indi- vidual shall be eligible to participate in the food stamp pro- gram as a member of any household during any month that the individual is delinquent in any payment due under a court order for the support of a child of the individual. ”(2) EXCEPTIONS.\u2014Paragraph (1) shall not apply if\u2014 ”(A) a court is allowing the individual to delay pay- ment; or ”(B) the individual is complying with a payment plan approved by a court or the State agency designated under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.) to provide support for the child of the individual.”. 227 SEC. 824. WORK REQUIREMENT. (a) IN GENERAL.\u2014Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended by section 823, is amended by adding at the end the following: ”(o) WORK REQUIREMENT.\u2014 ”(1) DEFINITION OF WORK PROGRAM.\u2014In this subsection, the term ‘work program’ means\u2014 ”(A) a program under the Job Training Partnership Act (29 U.S.C. 1501 et seq.); ”(B) a program under section 236 of the Trade Act of 1974 (19 U.S.C. 2296); and ”(C) a program of employment and training operated or supervised by a State or political subdivision of a State that meets standards approved by the Governor of the State, including a program under subsection (d)(4), other than a job search program or a job search training pro- gram. ”(2) WORK REQUIREMENT.\u2014Subject to the other provisions of this subsection, no individual shall be eligible to participate in the food stamp program as a member of any household if, during the preceding 36-month period, the individual received food stamp benefits for not less than 3 months (consecutive or otherwise) during which the individual did not\u2014 ”(A) work 20 hours or more per week, averaged month- ly; ”(B) participate in and comply with the requirements of a work program for 20 hours or more per week, as deter- mined by the State agency; ”(C) participate in and comply with the requirements of a program under section 20 or a comparable program es- tablished by a State or political subdivision of a State; or ”(D) receive benefits pursuant to paragraph (3), (4), or (5). ”(3) EXCEPTION.\u2014Paragraph (2) shall not apply to an indi- vidual if the individual is\u2014 ”(A) under 18 or over 50 years of age; ”(B) medically certified as physically or mentally unfit for employment; ”(C) a parent or other member of a household with re- sponsibility for a dependent child; ”(D) otherwise exempt under subsection (d)(2); or ”(E) a pregnant woman. ”(4) WAIVER.\u2014 ”(A) IN GENERAL.\u2014On the request of a State agency, the Secretary may waive the applicability of paragraph (2) to any group of individuals in the State if the Secretary makes a determination that the area in which the individ- uals reside\u2014 ”(i) has an unemployment rate of over 10 percent; or ”(ii) does not have a sufficient number of jobs to provide employment for the individuals. ”(B) REPORT.\u2014The Secretary shall report the basis for a waiver under subparagraph (A) to the Committee on Ag- 228 riculture of the House of Representatives and the Commit- tee on Agriculture, Nutrition, and Forestry of the Senate. ”(5) SUBSEQUENT ELIGIBILITY.\u2014 ”(A) REGAINING ELIGIBILITY.\u2014An individual denied eli- gibility under paragraph (2) shall regain eligibility to par- ticipate in the food stamp program if, during a 30-day pe- riod, the individual\u2014 ”(i) works 80 or more hours; ”(ii) participates in and complies with the require- ments of a work program for 80 or more hours, as de- termined by a State agency; or ”(iii) participates in and complies with the require- ments of a program under section 20 or a comparable program established by a State or political subdivision of a State. ”(B) MAINTAINING ELIGIBILITY.\u2014An individual who re- gains eligibility under subparagraph (A) shall remain eligi- ble as long as the individual meets the requirements of sub- paragraph (A), (B), or (C) of paragraph (2). ”(C) LOSS OF EMPLOYMENT.\u2014 ”(i) IN GENERAL.\u2014An individual who regained eli- gibility under subparagraph (A) and who no longer meets the requirements of subparagraph (A), (B), or (C) of paragraph (2) shall remain eligible for a consecutive 3-month period, beginning on the date the individual first notifies the State agency that the individual no longer meets the requirements of subparagraph (A), (B), or (C) of paragraph (2). ”(ii) LIMITATION.\u2014An individual shall not receive any benefits pursuant to clause (i) for more than a sin- gle 3-month period in any 36-month period. ”(6) OTHER PROGRAM RULES.\u2014Nothing in this subsection shall make an individual eligible for benefits under this Act if the individual is not otherwise eligible for benefits under the other provisions of this Act.”. (b) TRANSITION PROVISION.\u2014The term ”preceding 36-month pe- riod” in section 6(o) of the Food Stamp Act of 1977, as added by subsection (a), does not include, with respect to a State, any period before the earlier of\u2014 (1) the date the State notifies recipients of food stamp bene- fits of the application of section 6(o); or (2) the date that is 3 months after the date of enactment of this Act. SEC. 825. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER SYS- TEMS. (a) IN GENERAL.\u2014Section 7(i) of the Food Stamp Act of 1977 (7 U.S.C. 2016(i)) is amended\u2014 (1) by striking ”(i)(1)(A) Any State” and all that follows through the end of paragraph (1) and inserting the following: ”(i) ELECTRONIC BENEFIT TRANSFERS.\u2014 ”(1) IN GENERAL.\u2014 ”(A) IMPLEMENTATION.\u2014Not later than October 1, 2002, each State agency shall implement an electronic bene- fit transfer system under which household benefits deter- 229 mined under section 8(a) or 26 are issued from and stored in a central databank, unless the Secretary provides a waiver for a State agency that faces unusual barriers to im- plementing an electronic benefit transfer system. ”(B) TIMELY IMPLEMENTATION.\u2014Each State agency is encouraged to implement an electronic benefit transfer sys- tem under subparagraph (A) as soon as practicable. ”(C) STATE FLEXIBILITY.\u2014Subject to paragraph (2), a State agency may procure and implement an electronic ben- efit transfer system under the terms, conditions, and design that the State agency considers appropriate. ”(D) OPERATION.\u2014An electronic benefit transfer system should take into account generally accepted standard oper- ating rules based on\u2014 ”(i) commercial electronic funds transfer tech- nology; ”(ii) the need to permit interstate operation and law enforcement monitoring; and ”(iii) the need to permit monitoring and investiga- tions by authorized law enforcement agencies.”; (2) in paragraph (2)\u2014 (A) by striking ”effective no later than April 1, 1992,”; (B) in subparagraph (A)\u2014 (i) by striking ”, in any 1 year,”; and (ii) by striking ”on-line”; (C) by striking subparagraph (D) and inserting the fol- lowing: ”(D)(i) measures to maximize the security of a system using the most recent technology available that the State agency considers appropriate and cost effective and which may include personal identification numbers, photographic identification on electronic benefit transfer cards, and other measures to protect against fraud and abuse; and ”(ii) effective not later than 2 years after the date of en- actment of this clause, to the extent practicable, measures that permit a system to differentiate items of food that may be acquired with an allotment from items of food that may not be acquired with an allotment;”; (D) in subparagraph (G), by striking ”and” at the end; (E) in subparagraph (H), by striking the period at the end and inserting ”; and”; and (F) by adding at the end the following: ”(I) procurement standards.”; and (3) by adding at the end the following: ”(7) REPLACEMENT OF BENEFITS.\u2014Regulations issued by the Secretary regarding the replacement of benefits and liability for replacement of benefits under an electronic benefit transfer system shall be similar to the regulations in effect for a paper- based food stamp issuance system. ”(8) REPLACEMENT CARD FEE.\u2014A State agency may collect a charge for replacement of an electronic benefit transfer card by reducing the monthly allotment of the household receiving the replacement card. ”(9) OPTIONAL PHOTOGRAPHIC IDENTIFICATION.\u2014 230 ”(A) IN GENERAL.\u2014A State agency may require that an electronic benefit card contain a photograph of 1 or more members of a household. ”(B) OTHER AUTHORIZED USERS.\u2014If a State agency re- quires a photograph on an electronic benefit card under subparagraph (A), the State agency shall establish proce- dures to ensure that any other appropriate member of the household or any authorized representative of the house- hold may utilize the card. ”(10) APPLICABLE LAW.\u2014Disclosures, protections, respon- sibilities, and remedies established by the Federal Reserve Board under section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) shall not apply to benefits under this Act de- livered through any electronic benefit transfer system. ”(11) APPLICATION OF ANTI-TYING RESTRICTIONS TO ELEC- TRONIC BENEFIT TRANSFER SYSTEMS.\u2014 ”(A) DEFINITIONS.\u2014In this paragraph: ”(i) AFFILIATE.\u2014The term ‘affiliate’ has the mean- ing provided the term in section 2(k) of the Bank Hold- ing Company Act of 1956 (12 U.S.C. 1841(k)). ”(ii) COMPANY.\u2014The term ‘company’ has the mean- ing provided the term in section 106(a) of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1971), but shall not include a bank, a bank holding company, or any subsidiary of a bank holding com- pany. ”(iii) ELECTRONIC BENEFIT TRANSFER SERVICE.\u2014 The term ‘electronic benefit transfer service’ means the processing of electronic transfers of household benefits, determined under section 8(a) or 26, if the benefits are\u2014 ”(I) issued from and stored in a central databank; ”(II) electronically accessed by household mem- bers at the point of sale; and ”(III) provided by a Federal or State govern- ment. ”(iv) POINT-OF-SALE SERVICE.\u2014The term ‘point-of- sale service’ means any product or service related to the electronic authorization and processing of payments for merchandise at a retail food store, including credit or debit card services, automated teller machines, point- of-sale terminals, or access to on-line systems. ”(B) RESTRICTIONS.\u2014A company may not sell or pro- vide electronic benefit transfer services, or fix or vary the consideration for electronic benefit transfer services, on the condition or requirement that the customer\u2014 ”(i) obtain some additional point-of-sale service from the company or an affiliate of the company; or ”(ii) not obtain some additional point-of-sale serv- ice from a competitor of the company or competitor of any affiliate of the company. ”(C) CONSULTATION WITH THE FEDERAL RESERVE BOARD.\u2014Before promulgating regulations or interpretations 231 of regulations to carry out this paragraph, the Secretary shall consult with the Board of Governors of the Federal Reserve System.”. (b) SENSE OF CONGRESS.\u2014It is the sense of Congress that a State that operates an electronic benefit transfer system under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) should operate the system in a manner that is compatible with electronic benefit trans- fer systems operated by other States. SEC. 826. VALUE OF MINIMUM ALLOTMENT. The proviso in section 8(a) of the Food Stamp Act of 1977 (7 U.S.C. 2017(a)) is amended by striking ”, and shall be adjusted” and all that follows through ”$5”. SEC. 827. BENEFITS ON RECERTIFICATION. Section 8(c)(2)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2017(c)(2)(B)) is amended by striking ”of more than one month”. SEC. 828. OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED HOUSE- HOLDS. Section 8(c) of the Food Stamp Act of 1977 (7 U.S.C. 2017(c)) is amended by striking paragraph (3) and inserting the following: ”(3) OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED HOUSEHOLDS.\u2014A State agency may provide to an eligible household applying after the 15th day of a month, in lieu of the initial allotment of the household and the regular allotment of the household for the following month, an allotment that is equal to the total amount of the initial allotment and the first regular allotment. The allotment shall be provided in accord- ance with section 11(e)(3) in the case of a household that is not entitled to expedited service and in accordance with paragraphs (3) and (9) of section 11(e) in the case of a household that is entitled to expedited service.”. SEC. 829. FAILURE TO COMPLY WITH OTHER MEANS-TESTED PUBLIC ASSISTANCE PROGRAMS. Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended by striking subsection (d) and inserting the following: ”(d) REDUCTION OF PUBLIC ASSISTANCE BENEFITS.\u2014 ”(1) IN GENERAL.\u2014If the benefits of a household are re- duced under a Federal, State, or local law relating to a means- tested public assistance program for the failure of a member of the household to perform an action required under the law or program, for the duration of the reduction\u2014 ”(A) the household may not receive an increased allot- ment as the result of a decrease in the income of the house- hold to the extent that the decrease is the result of the re- duction; and ”(B) the State agency may reduce the allotment of the household by not more than 25 percent. ”(2) RULES AND PROCEDURES.\u2014If the allotment of a house- hold is reduced under this subsection for a failure to perform an action required under part A of title IV of the Social Secu- rity Act (42 U.S.C. 601 et seq.), the State agency may use the rules and procedures that apply under part A of title IV of the Act to reduce the allotment under the food stamp program.”. 232 SEC. 830. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN CENTERS. Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended by adding at the end the following: ”(f) ALLOTMENTS FOR HOUSEHOLDS RESIDING IN CENTERS.\u2014 ”(1) IN GENERAL.\u2014In the case of an individual who resides in a center for the purpose of a drug or alcoholic treatment pro- gram described in the last sentence of section 3(i), a State agen- cy may provide an allotment for the individual to\u2014 ”(A) the center as an authorized representative of the individual for a period that is less than 1 month; and ”(B) the individual, if the individual leaves the center. ”(2) DIRECT PAYMENT.\u2014A State agency may require an in- dividual referred to in paragraph (1) to designate the center in which the individual resides as the authorized representative of the individual for the purpose of receiving an allotment.”. SEC. 831. CONDITION PRECEDENT FOR APPROVAL OF RETAIL FOOD STORES AND WHOLESALE FOOD CONCERNS. Section 9(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)(1)) is amended by adding at the end the following: ”No re- tail food store or wholesale food concern of a type determined by the Secretary, based on factors that include size, location, and type of items sold, shall be approved to be authorized or reauthorized for participation in the food stamp program unless an authorized em- ployee of the Department of Agriculture, a designee of the Secretary, or, if practicable, an official of the State or local government des- ignated by the Secretary has visited the store or concern for the pur- pose of determining whether the store or concern should be approved or reauthorized, as appropriate.”. SEC. 832. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS. Section 9(a) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)) is amended by adding at the end the following: ”(3) AUTHORIZATION PERIODS.\u2014The Secretary shall estab- lish specific time periods during which authorization to accept and redeem coupons, or to redeem benefits through an electronic benefit transfer system, shall be valid under the food stamp pro- gram.”. SEC. 833. INFORMATION FOR VERIFYING ELIGIBILITY FOR AUTHOR- IZATION. Section 9(c) of the Food Stamp Act of 1977 (7 U.S.C. 2018(c)) is amended\u2014 (1) in the first sentence, by inserting ”, which may include relevant income and sales tax filing documents,” after ”submit information”; and (2) by inserting after the first sentence the following: ”The regulations may require retail food stores and wholesale food concerns to provide written authorization for the Secretary to verify all relevant tax filings with appropriate agencies and to obtain corroborating documentation from other sources so that the accuracy of information provided by the stores and concerns may be verified.”. 233 SEC. 834. WAITING PERIOD FOR STORES THAT FAIL TO MEET AUTHOR- IZATION CRITERIA. Section 9(d) of the Food Stamp Act of 1977 (7 U.S.C. 2018(d)) is amended by adding at the end the following: ”A retail food store or wholesale food concern that is denied approval to accept and re- deem coupons because the store or concern does not meet criteria for approval established by the Secretary may not, for at least 6 months, submit a new application to participate in the program. The Secretary may establish a longer time period under the preced- ing sentence, including permanent disqualification, that reflects the severity of the basis of the denial.”. SEC. 835. OPERATION OF FOOD STAMP OFFICES. Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020), as amended by sections 809(b) and 819(b), is amended\u2014 (1) in subsection (e)\u2014 (A) by striking paragraph (2) and inserting the follow- ing: ”(2)(A) that the State agency shall establish procedures gov- erning the operation of food stamp offices that the State agency determines best serve households in the State, including house- holds with special needs, such as households with elderly or disabled members, households in rural areas with low-income members, homeless individuals, households residing on reserva- tions, and households in areas in which a substantial number of members of low-income households speak a language other than English. ”(B) In carrying out subparagraph (A), a State agency\u2014 ”(i) shall provide timely, accurate, and fair service to applicants for, and participants in, the food stamp pro- gram; ”(ii) shall develop an application containing the infor- mation necessary to comply with this Act; ”(iii) shall permit an applicant household to apply to participate in the program on the same day that the house- hold first contacts a food stamp office in person during of- fice hours; ”(iv) shall consider an application that contains the name, address, and signature of the applicant to be filed on the date the applicant submits the application; ”(v) shall require that an adult representative of each applicant household certify in writing, under penalty of perjury, that\u2014 ”(I) the information contained in the application is true; and ”(II) all members of the household are citizens or are aliens eligible to receive food stamps under section 6(f); ”(vi) shall provide a method of certifying and issuing coupons to eligible homeless individuals, to ensure that participation in the food stamp program is limited to eligi- ble households; and ”(vii) may establish operating procedures that vary for local food stamp offices to reflect regional and local dif- ferences within the State. 234 ”(C) Nothing in this Act shall prohibit the use of signatures provided and maintained electronically, storage of records using automated retrieval systems only, or any other feature of a State agency’s application system that does not rely exclu- sively on the collection and retention of paper applications or other records. ”(D) The signature of any adult under this paragraph shall be considered sufficient to comply with any provision of Federal law requiring a household member to sign an application or statement;”; (B) in paragraph (3)\u2014 (i) by striking ”shall\u2014” and all that follows through ”provide each” and inserting ”shall provide each”; and (ii) by striking ”(B) assist” and all that follows through ”representative of the State agency;”; (C) by striking paragraphs (14) and (25); (D)(i) by redesignating paragraphs (15) through (24) as paragraphs (14) through (23), respectively; and (ii) by redesignating paragraph (26), as paragraph (24); and (2) in subsection (i)\u2014 (A) by striking ”(i) Notwithstanding” and all that fol- lows through ”(2)” and inserting the following: ”(i) APPLICATION AND DENIAL PROCEDURES.\u2014 ”(1) APPLICATION PROCEDURES.\u2014Notwithstanding any other provision of law,”; and (B) by striking ”; (3) households” and all that follows through ”title IV of the Social Security Act. No” and insert- ing a period and the following: ”(2) DENIAL AND TERMINATION.\u2014Except in a case of dis- qualification as a penalty for failure to comply with a public as- sistance program rule or regulation, no”. SEC. 836. STATE EMPLOYEE AND TRAINING STANDARDS. Section 11(e)(6) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(6)) is amended\u2014 (1) by striking ”that (A) the” and inserting ”that\u2014 ”(A) the”; (2) by striking ”Act; (B) the” and inserting ”Act; and ”(B) the”; (3) in subparagraph (B), by striking ”United States Civil Service Commission” and inserting ”Office of Personnel Man- agement”; and (4) by striking subparagraphs (C) through (E). SEC. 837. EXCHANGE OF LAW ENFORCEMENT INFORMATION. Section 11(e)(8) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(8)) is amended\u2014 (1) by striking ”that (A) such” and inserting the following: ”that\u2014 ”(A) the”; (2) by striking ”law, (B) notwithstanding” and inserting the following: ”law; ”(B) notwithstanding”; 235 (3) by striking ”Act, and (C) such” and inserting the follow- ing: ”Act; ”(C) the”; and (4) by adding at the end the following: ”(D) notwithstanding any other provision of law, the address, social security number, and, if available, photo- graph of any member of a household shall be made avail- able, on request, to any Federal, State, or local law enforce- ment officer if the officer furnishes the State agency with the name of the member and notifies the agency that\u2014 ”(i) the member\u2014 ”(I) is fleeing to avoid prosecution, or custody or confinement after conviction, for a crime (or at- tempt to commit a crime) that, under the law of the place the member is fleeing, is a felony (or, in the case of New Jersey, a high misdemeanor), or is violating a condition of probation or parole im- posed under Federal or State law; or ”(II) has information that is necessary for the officer to conduct an official duty related to sub- clause (I); ”(ii) locating or apprehending the member is an of- ficial duty; and ”(iii) the request is being made in the proper exer- cise of an official duty; and ”(E) the safeguards shall not prevent compliance with paragraph (16);”. SEC. 838. EXPEDITED COUPON SERVICE. Section 11(e)(9) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(9)) is amended\u2014 (1) in subparagraph (A), by striking ”five days” and insert- ing ”7 days”; (2) by striking subparagraph (B); (3) by redesignating subparagraphs (C) and (D) as sub- paragraphs (B) and (C); (4) in subparagraph (B), as redesignated by paragraph (3), by striking ”five days” and inserting ”7 days”; and (5) in subparagraph (C), as redesignated by paragraph (3), by striking ”, (B), or (C)” and inserting ”or (B)”. SEC. 839. WITHDRAWING FAIR HEARING REQUESTS. Section 11(e)(10) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(10)) is amended by inserting before the semicolon at the end a period and the following: ”At the option of a State, at any time prior to a fair hearing determination under this paragraph, a household may withdraw, orally or in writing, a request by the household for the fair hearing. If the withdrawal request is an oral request, the State agency shall provide a written notice to the house- hold confirming the withdrawal request and providing the house- hold with an opportunity to request a hearing”. SEC. 840. INCOME, ELIGIBILITY, AND IMMIGRATION STATUS VERIFICA- TION SYSTEMS. Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is amended\u2014 236 (1) in subsection (e)(18), as redesignated by section 835(1)(D)\u2014 (A) by striking ”that information is” and inserting ”at the option of the State agency, that information may be”; and (B) by striking ”shall be requested” and inserting ”may be requested”; and (2) by adding at the end the following: ”(p) STATE VERIFICATION OPTION.\u2014Notwithstanding any other provision of law, in carrying out the food stamp program, a State agency shall not be required to use an income and eligibility or an immigration status verification system established under section 1137 of the Social Security Act (42 U.S.C. 1320b 7).”. SEC. 841. INVESTIGATIONS. Section 12(a) of the Food Stamp Act of 1977 (7 U.S.C. 2021(a)) is amended by adding at the end the following: ”Regulations issued pursuant to this Act shall provide criteria for the finding of a viola- tion and the suspension or disqualification of a retail food store or wholesale food concern on the basis of evidence that may include facts established through on-site investigations, inconsistent re- demption data, or evidence obtained through a transaction report under an electronic benefit transfer system.”. SEC. 842. DISQUALIFICATION OF RETAILERS WHO INTENTIONALLY SUBMIT FALSIFIED APPLICATIONS. Section 12(b) of the Food Stamp Act of 1977 (7 U.S.C. 2021(b)) is amended\u2014 (1) in paragraph (2), by striking ”and” at the end; (2) in paragraph (3), by striking the period at the end and inserting ”; and”; and (3) by adding at the end the following: ”(4) for a reasonable period of time to be determined by the Secretary, including permanent disqualification, on the know- ing submission of an application for the approval or reauthor- ization to accept and redeem coupons that contains false infor- mation about a substantive matter that was a part of the appli- cation.”. SEC. 843. DISQUALIFICATION OF RETAILERS WHO ARE DISQUALIFIED UNDER THE WIC PROGRAM. Section 12 of the Food Stamp Act of 1977 (7 U.S.C. 2021) is amended by adding at the end the following: ”(g) DISQUALIFICATION OF RETAILERS WHO ARE DISQUALIFIED UNDER THE WIC PROGRAM.\u2014 ”(1) IN GENERAL.\u2014The Secretary shall issue regulations providing criteria for the disqualification under this Act of an approved retail food store or a wholesale food concern that is disqualified from accepting benefits under the special supple- mental nutrition program for women, infants, and children es- tablished under section 17 of the Child Nutrition Act of 1966 (7 U.S.C. 1786). ”(2) TERMS.\u2014A disqualification under paragraph (1)\u2014 ”(A) shall be for the same length of time as the dis- qualification from the program referred to in paragraph (1); 237 ”(B) may begin at a later date than the disqualification from the program referred to in paragraph (1); and ”(C) notwithstanding section 14, shall not be subject to judicial or administrative review.”. SEC. 844. COLLECTION OF OVERISSUANCES. (a) COLLECTION OF OVERISSUANCES.\u2014Section 13 of the Food Stamp Act of 1977 (7 U.S.C. 2022) is amended\u2014 (1) by striking subsection (b) and inserting the following: ”(b) COLLECTION OF OVERISSUANCES.\u2014 ”(1) IN GENERAL.\u2014Except as otherwise provided in this sub- section, a State agency shall collect any overissuance of coupons issued to a household by\u2014 ”(A) reducing the allotment of the household; ”(B) withholding amounts from unemployment com- pensation from a member of the household under sub- section (c); ”(C) recovering from Federal pay or a Federal income tax refund under subsection (d); or ”(D) any other means. ”(2) COST EFFECTIVENESS.\u2014Paragraph (1) shall not apply if the State agency demonstrates to the satisfaction of the Sec- retary that all of the means referred to in paragraph (1) are not cost effective. ”(3) MAXIMUM REDUCTION ABSENT FRAUD.\u2014If a household received an overissuance of coupons without any member of the household being found ineligible to participate in the program under section 6(b)(1) and a State agency elects to reduce the al- lotment of the household under paragraph (1)(A), the State agency shall not reduce the monthly allotment of the household under paragraph (1)(A) by an amount in excess of the greater of\u2014 ”(A) 10 percent of the monthly allotment of the house- hold; or ”(B) $10. ”(4) PROCEDURES.\u2014A State agency shall collect an over- issuance of coupons issued to a household under paragraph (1) in accordance with the requirements established by the State agency for providing notice, electing a means of payment, and establishing a time schedule for payment.”; and (2) in subsection (d)\u2014 (A) by striking ”as determined under subsection (b) and except for claims arising from an error of the State agency,” and inserting ”, as determined under subsection (b)(1),”; and (B) by inserting before the period at the end the follow- ing: ”or a Federal income tax refund as authorized by sec- tion 3720A of title 31, United States Code”. (b) CONFORMING AMENDMENTS.\u2014Section 11(e)(8)(C) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(8)(C)) is amended\u2014 (1) by striking ”and excluding claims” and all that follows through ”such section”; and (2) by inserting before the semicolon at the end the follow- ing: ”or a Federal income tax refund as authorized by section 3720A of title 31, United States Code”. 238 (c) RETENTION RATE.\u2014The proviso of the first sentence of sec- tion 16(a) of the Food Stamp Act of 1977 (7 U.S.C. 2025(a)) is amended by striking ”25 percent during the period beginning Octo- ber 1, 1990” and all that follows through ”section 13(b)(2) which arise” and inserting ”35 percent of the value of all funds or allot- ments recovered or collected pursuant to sections 6(b) and 13(c) and 20 percent of the value of any other funds or allotments recovered or collected, except the value of funds or allotments recovered or col- lected that arise”. SEC. 845. AUTHORITY TO SUSPEND STORES VIOLATING PROGRAM RE- QUIREMENTS PENDING ADMINISTRATIVE AND JUDICIAL REVIEW. Section 14(a) of the Food Stamp Act of 1977 (7 U.S.C. 2023(a)) is amended\u2014 (1) by redesignating the first through seventeenth sentences as paragraphs (1) through (17), respectively; and (2) by adding at the end the following: ”(18) SUSPENSION OF STORES PENDING REVIEW.\u2014Notwith- standing any other provision of this subsection, any permanent disqualification of a retail food store or wholesale food concern under paragraph (3) or (4) of section 12(b) shall be effective from the date of receipt of the notice of disqualification. If the disqualification is reversed through administrative or judicial review, the Secretary shall not be liable for the value of any sales lost during the disqualification period.”. SEC. 846. EXPANDED CRIMINAL FORFEITURE FOR VIOLATIONS. (a) FORFEITURE OF ITEMS EXCHANGED IN FOOD STAMP TRAF- FICKING.\u2014The first sentence of section 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 2024(g)) is amended by striking ”or intended to be furnished”. (b) CRIMINAL FORFEITURE.\u2014Section 15 of the Food Stamp Act of 1977 (7 U.S.C. 2024) is amended by adding at the end the follow- ing: ”(h) CRIMINAL FORFEITURE.\u2014 ”(1) IN GENERAL.\u2014In imposing a sentence on a person con- victed of an offense in violation of subsection (b) or (c), a court shall order, in addition to any other sentence imposed under this section, that the person forfeit to the United States all prop- erty described in paragraph (2). ”(2) PROPERTY SUBJECT TO FORFEITURE.\u2014All property, real and personal, used in a transaction or attempted transaction, to commit, or to facilitate the commission of, a violation (other than a misdemeanor) of subsection (b) or (c), or proceeds trace- able to a violation of subsection (b) or (c), shall be subject to for- feiture to the United States under paragraph (1). ”(3) INTEREST OF OWNER.\u2014No interest in property shall be forfeited under this subsection as the result of any act or omis- sion established by the owner of the interest to have been com- mitted or omitted without the knowledge or consent of the owner. ”(4) PROCEEDS.\u2014The proceeds from any sale of forfeited property and any monies forfeited under this subsection shall be used\u2014 239 ”(A) first, to reimburse the Department of Justice for the costs incurred by the Department to initiate and com- plete the forfeiture proceeding; ”(B) second, to reimburse the Department of Agri- culture Office of Inspector General for any costs the Office incurred in the law enforcement effort resulting in the for- feiture; ”(C) third, to reimburse any Federal or State law en- forcement agency for any costs incurred in the law enforce- ment effort resulting in the forfeiture; and ”(D) fourth, by the Secretary to carry out the approval, reauthorization, and compliance investigations of retail stores and wholesale food concerns under section 9.”. SEC. 847. LIMITATION ON FEDERAL MATCH. Section 16(a)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2025(a)(4)) is amended by inserting after the comma at the end the following: ”but not including recruitment activities,”. SEC. 848. STANDARDS FOR ADMINISTRATION. (a) IN GENERAL.\u2014Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025) is amended by striking subsection (b). (b) CONFORMING AMENDMENTS.\u2014 (1) The first sentence of section 11(g) of the Food Stamp Act of 1977 (7 U.S.C. 2020(g)) is amended by striking ”the Sec- retary’s standards for the efficient and effective administration of the program established under section 16(b)(1) or”. (2) Section 16(c)(1)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2025(c)(1)(B)) is amended by striking ”pursuant to sub- section (b)”. SEC. 849. WORK SUPPLEMENTATION OR SUPPORT PROGRAM. Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025), as amended by section 848(a), is amended by inserting after subsection (a) the following: ”(b) WORK SUPPLEMENTATION OR SUPPORT PROGRAM.\u2014 ”(1) DEFINITION OF WORK SUPPLEMENTATION OR SUPPORT PROGRAM.\u2014In this subsection, the term ‘work supplementation or support program’ means a program under which, as deter- mined by the Secretary, public assistance (including any bene- fits provided under a program established by the State and the food stamp program) is provided to an employer to be used for hiring and employing a public assistance recipient who was not employed by the employer at the time the public assistance re- cipient entered the program. ”(2) PROGRAM.\u2014A State agency may elect to use an amount equal to the allotment that would otherwise be issued to a household under the food stamp program, but for the operation of this subsection, for the purpose of subsidizing or supporting a job under a work supplementation or support program estab- lished by the State. ”(3) PROCEDURE.\u2014If a State agency makes an election under paragraph (2) and identifies each household that partici- pates in the food stamp program that contains an individual who is participating in the work supplementation or support program\u2014 240 ”(A) the Secretary shall pay to the State agency an amount equal to the value of the allotment that the house- hold would be eligible to receive but for the operation of this subsection; ”(B) the State agency shall expend the amount received under subparagraph (A) in accordance with the work supplementation or support program in lieu of providing the allotment that the household would receive but for the operation of this subsection; ”(C) for purposes of\u2014 ”(i) sections 5 and 8(a), the amount received under this subsection shall be excluded from household in- come and resources; and ”(ii) section 8(b), the amount received under this subsection shall be considered to be the value of an al- lotment provided to the household; and ”(D) the household shall not receive an allotment from the State agency for the period during which the member continues to participate in the work supplementation or support program. ”(4) OTHER WORK REQUIREMENTS.\u2014No individual shall be excused, by reason of the fact that a State has a work supplementation or support program, from any work require- ment under section 6(d), except during the periods in which the individual is employed under the work supplementation or sup- port program. ”(5) LENGTH OF PARTICIPATION.\u2014A State agency shall pro- vide a description of how the public assistance recipients in the program shall, within a specific period of time, be moved from supplemented or supported employment to employment that is not supplemented or supported. ”(6) DISPLACEMENT.\u2014A work supplementation or support program shall not displace the employment of individuals who are not supplemented or supported.”. SEC. 850. WAIVER AUTHORITY. Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)) is amended\u2014 (1) by redesignating subparagraph (B) as subparagraph (C); and (2) in subparagraph (A)\u2014 (A) in the first sentence, by striking ”benefits to eligible households, including” and inserting the following: ”bene- fits to eligible households, and may waive any requirement of this Act to the extent necessary for the project to be con- ducted. ”(B) PROJECT REQUIREMENTS.\u2014 ”(i) PROGRAM GOAL.\u2014The Secretary may not con- duct a project under subparagraph (A) unless\u2014 ”(I) the project is consistent with the goal of the food stamp program of providing food assist- ance to raise levels of nutrition among low-income individuals; andn ”(II) the project includes an evaluation to de- termine the effects of the project. 241 ”(ii) PERMISSIBLE PROJECTS.\u2014The Secretary may conduct a project under subparagraph (A) to\u2014 ”(I) improve program administration; ”(II) increase the self-sufficiency of food stamp recipients; ”(III) test innovative welfare reform strategies; or ”(IV) allow greater conformity with the rules of other programs than would be allowed but for this paragraph. ”(iii) RESTRICTIONS ON PERMISSIBLE PROJECTS.\u2014If the Secretary finds that a project under subparagraph (A) would reduce benefits by more than 20 percent for more than 5 percent of households in the area subject to the project (not including any household whose bene- fits are reduced due to a failure to comply with work or other conduct requirements), the project\u2014 ”(I) may not include more than 15 percent of the State’s food stamp households; and ”(II) shall continue for not more than 5 years after the date of implementation, unless the Sec- retary approves an extension requested by the State agency at any time. ”(iv) IMPERMISSIBLE PROJECTS.\u2014The Secretary may not conduct a project under subparagraph (A) that\u2014 ”(I) involves the payment of the value of an al- lotment in the form of cash, unless the project was approved prior to the date of enactment of this subparagraph; ”(II) has the effect of substantially transferring funds made available under this Act to services or benefits provided primarily through another public assistance program, or using the funds for any purpose other than the purchase of food, program administration, or an employment or training pro- gram; ”(III) is inconsistent with\u2014 ”(aa) the last 2 sentences of section 3(i); ”(bb) the last sentence of section 5(a), inso- far as a waiver denies assistance to an other- wise eligible household or individual if the household or individual has not failed to com- ply with any work, behavioral, or other con- duct requirement under this or another pro- gram; ”(cc) section 5(c)(2); ”(dd) paragraph (2)(B), (4)(F)(i), or (4)(K) of section 6(d); ”(ee) section 8(b); ”(ff) section 11(e)(2)(B); ”(gg) the time standard under section 11(e)(3); 242 ”(hh) subsection (a), (c), (g), (h)(2), or (h)(3) of section 16; ”(ii) this paragraph; or ”(jj) subsection (a)(1) or (g)(1) of section 20; ”(IV) modifies the operation of section 5 so as to have the effect of\u2014 ”(aa) increasing the shelter deduction to households with no out-of-pocket housing costs or housing costs that consume a low percent- age of the household’s income; or ”(bb) absolving a State from acting with reasonable promptness on substantial reported changes in income or household size (except that this subclause shall not apply with re- gard to changes related to food stamp deduc- tions); ”(V) is not limited to a specific time period; or ”(VI) waives a provision of section 26. ”(v) ADDITIONAL INCLUDED PROJECTS.\u2014A pilot or experimental project may include”; (B) by striking ”to aid to families with dependent chil- dren under part A of title IV of the Social Security Act” and inserting ”are receiving assistance under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)”; and (C) by striking ”coupons. The Secretary” and all that follows through ”Any pilot” and inserting the following: ”coupons. ”(vi) CASH PAYMENT PILOT PROJECTS.\u2014Any pilot”. SEC. 851. RESPONSE TO WAIVERS. Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)), as amended by section 850, is amended by adding at the end the following: ”(D) RESPONSE TO WAIVERS.\u2014 ”(i) RESPONSE.\u2014Not later than 60 days after the date of receiving a request for a waiver under subpara- graph (A), the Secretary shall provide a response that\u2014 ”(I) approves the waiver request; ”(II) denies the waiver request and describes any modification needed for approval of the waiver request; ”(III) denies the waiver request and describes the grounds for the denial; or ”(IV) requests clarification of the waiver re- quest. ”(ii) FAILURE TO RESPOND.\u2014If the Secretary does not provide a response in accordance with clause (i), the waiver shall be considered approved, unless the ap- proval is specifically prohibited by this Act. ”(iii) NOTICE OF DENIAL.\u2014On denial of a waiver request under clause (i)(III), the Secretary shall provide a copy of the waiver request and a description of the 243 reasons for the denial to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate.”. SEC. 852. EMPLOYMENT INITIATIVES PROGRAM. Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended by striking subsection (d) and inserting the following: ”(d) EMPLOYMENT INITIATIVES PROGRAM.\u2014 ”(1) ELECTION TO PARTICIPATE.\u2014 ”(A) IN GENERAL.\u2014Subject to the other provisions of this subsection, a State may elect to carry out an employ- ment initiatives program under this subsection. ”(B) REQUIREMENT.\u2014A State shall be eligible to carry out an employment initiatives program under this sub- section only if not less than 50 percent of the households in the State that received food stamp benefits during the sum- mer of 1993 also received benefits under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) during the summer of 1993. ”(2) PROCEDURE.\u2014 ”(A) IN GENERAL.\u2014A State that has elected to carry out an employment initiatives program under paragraph (1) may use amounts equal to the food stamp allotments that would otherwise be issued to a household under the food stamp program, but for the operation of this subsection, to provide cash benefits in lieu of the food stamp allotments to the household if the household is eligible under para- graph (3). ”(B) PAYMENT.\u2014The Secretary shall pay to each State that has elected to carry out an employment initiatives pro- gram under paragraph (1) an amount equal to the value of the allotment that each household participating in the pro- gram in the State would be eligible to receive under this Act but for the operation of this subsection. ”(C) OTHER PROVISIONS.\u2014For purposes of the food stamp program (other than this subsection)\u2014 ”(i) cash assistance under this subsection shall be considered to be an allotment; and ”(ii) each household receiving cash benefits under this subsection shall not receive any other food stamp benefit during the period for which the cash assistance is provided. ”(D) ADDITIONAL PAYMENTS.\u2014Each State that has elected to carry out an employment initiatives program under paragraph (1) shall\u2014 ”(i) increase the cash benefits provided to each household participating in the program in the State under this subsection to compensate for any State or local sales tax that may be collected on purchases of food by the household, unless the Secretary determines on the basis of information provided by the State that the increase is unnecessary on the basis of the limited nature of the items subject to the State or local sales tax; and 244 ”(ii) pay the cost of any increase in cash benefits required by clause (i). ”(3) ELIGIBILITY.\u2014A household shall be eligible to receive cash benefits under paragraph (2) if an adult member of the household\u2014 ”(A) has worked in unsubsidized employment for not less than the preceding 90 days; ”(B) has earned not less than $350 per month from the employment referred to in subparagraph (A) for not less than the preceding 90 days; ”(C)(i) is receiving benefits under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.); or ”(ii) was receiving benefits under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) at the time the member first received cash benefits under this subsection and is no longer eligible for the State program because of earned income; ”(D) is continuing to earn not less than $350 per month from the employment referred to in subparagraph (A); and ”(E) elects to receive cash benefits in lieu of food stamp benefits under this subsection. ”(4) EVALUATION.\u2014A State that operates a program under this subsection for 2 years shall provide to the Secretary a writ- ten evaluation of the impact of cash assistance under this sub- section. The State agency, with the concurrence of the Secretary, shall determine the content of the evaluation.”. SEC. 853. REAUTHORIZATION. The first sentence of section 18(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended by striking ”1991 through 1997” and inserting ”1996 through 2002”. SEC. 854. SIMPLIFIED FOOD STAMP PROGRAM. (a) IN GENERAL.\u2014The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is amended by adding at the end the following: ”SEC. 26. SIMPLIFIED FOOD STAMP PROGRAM. ”(a) DEFINITION OF FEDERAL COSTS.\u2014In this section, the term ‘Federal costs’ does not include any Federal costs incurred under section 17. ”(b) ELECTION.\u2014Subject to subsection (d), a State may elect to carry out a Simplified Food Stamp Program (referred to in this sec- tion as a ‘Program’), statewide or in a political subdivision of the State, in accordance with this section. ”(c) OPERATION OF PROGRAM.\u2014If a State elects to carry out a Program, within the State or a political subdivision of the State\u2014 ”(1) a household in which no members receive assistance under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) may not participate in the Program; ”(2) a household in which all members receive assistance under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) shall automatically be eligible to participate in the Program; 245 ”(3) if approved by the Secretary, a household in which 1 or more members but not all members receive assistance under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) may be eligible to partici- pate in the Program; and ”(4) subject to subsection (f), benefits under the Program shall be determined under rules and procedures established by the State under\u2014 ”(A) a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.); ”(B) the food stamp program; or ”(C) a combination of a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) and the food stamp program. ”(d) APPROVAL OF PROGRAM.\u2014 ”(1) STATE PLAN.\u2014A State agency may not operate a Pro- gram unless the Secretary approves a State plan for the oper- ation of the Program under paragraph (2). ”(2) APPROVAL OF PLAN.\u2014The Secretary shall approve any State plan to carry out a Program if the Secretary determines that the plan\u2014 ”(A) complies with this section; and ”(B) contains sufficient documentation that the plan will not increase Federal costs for any fiscal year. ”(e) INCREASED FEDERAL COSTS.\u2014 ”(1) DETERMINATION.\u2014 ”(A) IN GENERAL.\u2014The Secretary shall determine whether a Program being carried out by a State agency is increasing Federal costs under this Act. ”(B) NO EXCLUDED HOUSEHOLDS.\u2014In making a deter- mination under subparagraph (A), the Secretary shall not require the State agency to collect or report any information on households not included in the Program. ”(C) ALTERNATIVE ACCOUNTING PERIODS.\u2014The Sec- retary may approve the request of a State agency to apply alternative accounting periods to determine if Federal costs do not exceed the Federal costs had the State agency not elected to carry out the Program. ”(2) NOTIFICATION.\u2014If the Secretary determines that the Program has increased Federal costs under this Act for any fis- cal year or any portion of any fiscal year, the Secretary shall notify the State not later than 30 days after the Secretary makes the determination under paragraph (1). ”(3) ENFORCEMENT.\u2014 ”(A) CORRECTIVE ACTION.\u2014Not later than 90 days after the date of a notification under paragraph (2), the State shall submit a plan for approval by the Secretary for prompt corrective action that is designed to prevent the Pro- gram from increasing Federal costs under this Act. ”(B) TERMINATION.\u2014If the State does not submit a plan under subparagraph (A) or carry out a plan approved by the Secretary, the Secretary shall terminate the approval of the State agency operating the Program and the State agency shall be ineligible to operate a future Program. 246 ”(f) RULES AND PROCEDURES.\u2014 ”(1) IN GENERAL.\u2014In operating a Program, a State or polit- ical subdivision of a State may follow the rules and procedures established by the State or political subdivision under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) or under the food stamp program. ”(2) STANDARDIZED DEDUCTIONS.\u2014In operating a Program, a State or political subdivision of a State may standardize the deductions provided under section 5(e). In developing the stand- ardized deduction, the State shall consider the work expenses, dependent care costs, and shelter costs of participating house- holds. ”(3) REQUIREMENTS.\u2014In operating a Program, a State or political subdivision shall comply with the requirements of\u2014 ”(A) subsections (a) through (g) of section 7; ”(B) section 8(a) (except that the income of a household may be determined under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)); ”(C) subsection (b) and (d) of section 8; ”(D) subsections (a), (c), (d), and (n) of section 11; ”(E) paragraphs (8), (12), (16), (18), (20), (24), and (25) of section 11(e); ”(F) section 11(e)(10) (or a comparable requirement es- tablished by the State under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)); and ”(G) section 16. ”(4) LIMITATION ON ELIGIBILITY.\u2014Notwithstanding any other provision of this section, a household may not receive ben- efits under this section as a result of the eligibility of the house- hold under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), unless the Sec- retary determines that any household with income above 130 percent of the poverty guidelines is not eligible for the pro- gram.”. (b) STATE PLAN PROVISIONS.\u2014Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)), as amended by sections 819(b) and 835, is amended by adding at the end the following: ”(25) if a State elects to carry out a Simplified Food Stamp Program under section 26, the plans of the State agency for op- erating the program, including\u2014 ”(A) the rules and procedures to be followed by the State agency to determine food stamp benefits; ”(B) how the State agency will address the needs of households that experience high shelter costs in relation to the incomes of the households; and ”(C) a description of the method by which the State agency will carry out a quality control system under section 16(c).”. (c) CONFORMING AMENDMENTS.\u2014 (1) Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017), as amended by section 830, is amended\u2014 (A) by striking subsection (e); and 247 (B) by redesignating subsection (f) as subsection (e). (2) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended\u2014 (A) by striking subsection (i); and (B) by redesignating subsections (j) through (l) as sub- sections (i) through (k), respectively. SEC. 855. STUDY OF THE USE OF FOOD STAMPS TO PURCHASE VITA- MINS AND MINERALS. (a) IN GENERAL.\u2014The Secretary of Agriculture, in consultation with the National Academy of Sciences and the Center for Disease Control and Prevention, shall conduct a study on the use of food stamps provided under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) to purchase vitamins and minerals. (b) ANALYSIS.\u2014The study shall include\u2014 (1) an analysis of scientific findings on the efficacy of and need for vitamins and minerals, including\u2014 (A) the adequacy of vitamin and mineral intakes in low-income populations, as shown by research and surveys conducted prior to the study; and (B) the potential value of nutritional supplements in filling nutrient gaps that may exist in the United States population as a whole or in vulnerable subgroups in the population; (2) the impact of nutritional improvements (including vita- min or mineral supplementation) on the health status and health care costs of women of childbearing age, pregnant or lac- tating women, and the elderly; (3) the cost of commercially available vitamin and mineral supplements; (4) the purchasing habits of low-income populations with regard to vitamins and minerals; (5) the impact of using food stamps to purchase vitamins and minerals on the food purchases of low-income households; and (6) the economic impact on the production of agricultural commodities of using food stamps to purchase vitamins and minerals. (c) REPORT.\u2014Not later than December 15, 1998, the Secretary shall report the results of the study to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate. SEC. 856. DEFICIT REDUCTION. It is the sense of the Committee on Agriculture of the House of Representatives that reductions in outlays resulting from this title shall not be taken into account for purposes of section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 902). 248 Subtitle B\u2014Commodity Distribution Programs SEC. 871. EMERGENCY FOOD ASSISTANCE PROGRAM. (a) DEFINITIONS.\u2014Section 201A of the Emergency Food Assist- ance Act of 1983 (Public Law 98 8; 7 U.S.C. 612c note) is amended to read as follows: ”SEC. 201A. DEFINITIONS. ”In this Act: ”(1) ADDITIONAL COMMODITIES.\u2014The term ‘additional com- modities’ means commodities made available under section 214 in addition to the commodities made available under sections 202 and 203D. ”(2) AVERAGE MONTHLY NUMBER OF UNEMPLOYED PER- SONS.\u2014The term ‘average monthly number of unemployed per- sons’ means the average monthly number of unemployed per- sons in each State during the most recent fiscal year for which information concerning the number of unemployed persons is available, as determined by the Bureau of Labor Statistics of the Department of Labor. ”(3) ELIGIBLE RECIPIENT AGENCY.\u2014The term ‘eligible recipi- ent agency’ means a public or nonprofit organization that\u2014 ”(A) administers\u2014 ”(i) an emergency feeding organization; ”(ii) a charitable institution (including a hospital and a retirement home, but excluding a penal institu- tion) to the extent that the institution serves needy per- sons; ”(iii) a summer camp for children, or a child nutri- tion program providing food service; ”(iv) a nutrition project operating under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.), includ- ing a project that operates a congregate nutrition site and a project that provides home-delivered meals; or ”(v) a disaster relief program; ”(B) has been designated by the appropriate State agency, or by the Secretary; and ”(C) has been approved by the Secretary for participa- tion in the program established under this Act. ”(4) EMERGENCY FEEDING ORGANIZATION.\u2014The term ’emer- gency feeding organization’ means a public or nonprofit organi- zation that administers activities and projects (including the ac- tivities and projects of a charitable institution, a food bank, a food pantry, a hunger relief center, a soup kitchen, or a similar public or private nonprofit eligible recipient agency) providing nutrition assistance to relieve situations of emergency and dis- tress through the provision of food to needy persons, including low-income and unemployed persons. ”(5) FOOD BANK.\u2014The term ‘food bank’ means a public or charitable institution that maintains an established operation involving the provision of food or edible commodities, or the products of food or edible commodities, to food pantries, soup kitchens, hunger relief centers, or other food or feeding centers 249 that, as an integral part of their normal activities, provide meals or food to feed needy persons on a regular basis. ”(6) FOOD PANTRY.\u2014The term ‘food pantry’ means a public or private nonprofit organization that distributes food to low-in- come and unemployed households, including food from sources other than the Department of Agriculture, to relieve situations of emergency and distress. ”(7) POVERTY LINE.\u2014The term ‘poverty line’ has the mean- ing provided in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)). ”(8) SOUP KITCHEN.\u2014The term ‘soup kitchen’ means a pub- lic or charitable institution that, as an integral part of the nor- mal activities of the institution, maintains an established feed- ing operation to provide food to needy homeless persons on a regular basis. ”(9) TOTAL VALUE OF ADDITIONAL COMMODITIES.\u2014The term ‘total value of additional commodities’ means the actual cost of all additional commodities that are paid by the Secretary (in- cluding the distribution and processing costs incurred by the Secretary). ”(10) VALUE OF ADDITIONAL COMMODITIES ALLOCATED TO EACH STATE.\u2014The term ‘value of additional commodities allo- cated to each State’ means the actual cost of additional com- modities allocated to each State that are paid by the Secretary (including the distribution and processing costs incurred by the Secretary).”. (b) STATE PLAN.\u2014Section 202A of the Emergency Food Assist- ance Act of 1983 (Public Law 98 8; 7 U.S.C. 612c note) is amended to read as follows: ”SEC. 202A. STATE PLAN. ”(a) IN GENERAL.\u2014To receive commodities under this Act, a State shall submit a plan of operation and administration every 4 years to the Secretary for approval. The plan may be amended at any time, with the approval of the Secretary. ”(b) REQUIREMENTS.\u2014Each plan shall\u2014 ”(1) designate the State agency responsible for distributing the commodities received under this Act; ”(2) set forth a plan of operation and administration to ex- peditiously distribute commodities under this Act; ”(3) set forth the standards of eligibility for recipient agen- cies; and ”(4) set forth the standards of eligibility for individual or household recipients of commodities, which shall require\u2014 ”(A) individuals or households to be comprised of needy persons; and ”(B) individual or household members to be residing in the geographic location served by the distributing agency at the time of applying for assistance. ”(c) STATE ADVISORY BOARD.\u2014The Secretary shall encourage each State receiving commodities under this Act to establish a State advisory board consisting of representatives of all entities in the State, both public and private, interested in the distribution of com- modities received under this Act.”. 250 (c) AUTHORIZATION OF APPROPRIATIONS FOR ADMINISTRATIVE FUNDS.\u2014Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (Public Law 98 8; 7 U.S.C. 612c note) is amended\u2014 (1) in the first sentence, by striking ”for State and local” and all that follows through ”under this title” and inserting ”to pay for the direct and indirect administrative costs of the States related to the processing, transporting, and distributing to eligi- ble recipient agencies of commodities provided by the Secretary under this Act and commodities secured from other sources”; and (2) by striking the fourth sentence. (d) DELIVERY OF COMMODITIES.\u2014Section 214 of the Emergency Food Assistance Act of 1983 (Public Law 98 8; 7 U.S.C. 612c note) is amended\u2014 (1) by striking subsections (a) through (e) and (j); (2) by redesignating subsections (f) through (i) as sub- sections (a) through (d), respectively; (3) in subsection (b), as redesignated by paragraph (2)\u2014 (A) in the first sentence, by striking ”subsection (f) or subsection (j) if applicable,” and inserting ”subsection (a),”; and (B) in the second sentence, by striking ”subsection (f)” and inserting ”subsection (a)”; (4) by striking subsection (c), as redesignated by paragraph (2), and inserting the following: ”(c) ADMINISTRATION.\u2014 ”(1) IN GENERAL.\u2014Commodities made available for each fiscal year under this section shall be delivered at reasonable intervals to States based on the grants calculated under sub- section (a), or reallocated under subsection (b), before December 31 of the following fiscal year. ”(2) ENTITLEMENT.\u2014Each State shall be entitled to receive the value of additional commodities determined under sub- section (a).”; and (5) in subsection (d), as redesignated by paragraph (2), by striking ”or reduce” and all that follows through ”each fiscal year”. (e) TECHNICAL AMENDMENTS.\u2014The Emergency Food Assistance Act of 1983 (Public Law 98 8; 7 U.S.C. 612c note) is amended\u2014 (1) in the first sentence of section 203B(a), by striking ”203 and 203A of this Act” and inserting ”203A”; (2) in section 204(a), by striking ”title” each place it ap- pears and inserting ”Act”; (3) in the first sentence of section 210(e), by striking ”(except as otherwise provided for in section 214(j))”; and (4) by striking section 212. (f) REPORT ON EFAP.\u2014Section 1571 of the Food Security Act of 1985 (Public Law 99 198; 7 U.S.C. 612c note) is repealed. (g) AVAILABILITY OF COMMODITIES UNDER THE FOOD STAMP PROGRAM.\u2014The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), as amended by section 854(a), is amended by adding at the end the fol- lowing: 251 ”SEC. 27. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE PROGRAM. ”(a) PURCHASE OF COMMODITIES.\u2014From amounts made avail- able to carry out this Act, for each of fiscal years 1997 through 2002, the Secretary shall purchase $100,000,000 of a variety of nu- tritious and useful commodities of the types that the Secretary has the authority to acquire through the Commodity Credit Corporation or under section 32 of the Act entitled ‘An Act to amend the Agricul- tural Adjustment Act, and for other purposes’, approved August 24, 1935 (7 U.S.C. 612c), and distribute the commodities to States for distribution in accordance with section 214 of the Emergency Food Assistance Act of 1983 (Public Law 98 8; 7 U.S.C. 612c note). ”(b) BASIS FOR COMMODITY PURCHASES.\u2014In purchasing com- modities under subsection (a), the Secretary shall, to the extent prac- ticable and appropriate, make purchases based on\u2014 ”(1) agricultural market conditions; ”(2) preferences and needs of States and distributing agen- cies; and ”(3) preferences of recipients.”. (h) EFFECTIVE DATE.\u2014The amendments made by subsection (d) shall become effective on October 1, 1996. SEC. 872. FOOD BANK DEMONSTRATION PROJECT. Section 3 of the Charitable Assistance and Food Bank Act of 1987 (Public Law 100 232; 7 U.S.C. 612c note) is repealed. SEC. 873. HUNGER PREVENTION PROGRAMS. The Hunger Prevention Act of 1988 (Public Law 100 435; 7 U.S.C. 612c note) is amended\u2014 (1) by striking section 110; (2) by striking subtitle C of title II; and (3) by striking section 502. SEC. 874. REPORT ON ENTITLEMENT COMMODITY PROCESSING. Section 1773 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101 624; 7 U.S.C. 612c note) is amended by striking subsection (f). Subtitle C\u2014Electronic Benefit Transfer Systems SEC. 891. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANS- FER SYSTEMS. Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) is amended\u2014 (1) by striking ”(d) In the event that” and inserting ”(d) AP- PLICABILITY TO SERVICE PROVIDERS OTHER THAN CERTAIN FI- NANCIAL INSTITUTIONS.\u2014 ”(1) IN GENERAL.\u2014If”; and (2) by adding at the end the following: ”(2) STATE AND LOCAL GOVERNMENT ELECTRONIC BENEFIT TRANSFER SYSTEMS.\u2014 ”(A) DEFINITION OF ELECTRONIC BENEFIT TRANSFER SYSTEM.\u2014In this paragraph, the term ‘electronic benefit transfer system’\u2014 252 ”(i) means a system under which a government agency distributes needs-tested benefits by establishing accounts that may be accessed by recipients electroni- cally, such as through automated teller machines or point-of-sale terminals; and ”(ii) does not include employment-related pay- ments, including salaries and pension, retirement, or unemployment benefits established by a Federal, State, or local government agency. ”(B) EXEMPTION GENERALLY.\u2014The disclosures, protec- tions, responsibilities, and remedies established under this title, and any regulation prescribed or order issued by the Board in accordance with this title, shall not apply to any electronic benefit transfer system established under State or local law or administered by a State or local government. ”(C) EXCEPTION FOR DIRECT DEPOSIT INTO RECIPIENT’S ACCOUNT.\u2014Subparagraph (B) shall not apply with respect to any electronic funds transfer under an electronic benefit transfer system for a deposit directly into a consumer ac- count held by the recipient of the benefit. ”(D) RULE OF CONSTRUCTION.\u2014No provision of this paragraph\u2014 ”(i) affects or alters the protections otherwise appli- cable with respect to benefits established by any other provision Federal, State, or local law; or ”(ii) otherwise supersedes the application of any State or local law.”. TITLE IX\u2014MISCELLANEOUS SEC. 901. APPROPRIATION BY STATE LEGISLATURES. (a) IN GENERAL.\u2014Any funds received by a State under the pro- visions of law specified in subsection (b) shall be subject to appro- priation by the State legislature, consistent with the terms and con- ditions required under such provisions of law. (b) PROVISIONS OF LAW.\u2014The provisions of law specified in this subsection are the following: (1) Part A of title IV of the Social Security Act (relating to block grants for temporary assistance for needy families). (2) The Child Care and Development Block Grant Act of 1990 (relating to block grants for child care). SEC. 902. SANCTIONING FOR TESTING POSITIVE FOR CONTROLLED SUBSTANCES. Notwithstanding any other provision of law, States shall not be prohibited by the Federal Government from testing welfare recipi- ents for use of controlled substances nor from sanctioning welfare recipients who test positive for use of controlled substances. SEC. 903. ELIMINATION OF HOUSING ASSISTANCE WITH RESPECT TO FUGITIVE FELONS AND PROBATION AND PAROLE VIOLA- TORS. (a) ELIGIBILITY FOR ASSISTANCE.\u2014The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended\u2014 (1) in section 6(l)\u2014 253 (A) in paragraph (5), by striking ”and” at the end; (B) in paragraph (6), by striking the period at the end and inserting ”; and”; and (C) by inserting immediately after paragraph (6) the following new paragraph: ”(7) provide that it shall be cause for immediate termi- nation of the tenancy of a public housing tenant if such ten- ant\u2014 ”(A) is fleeing to avoid prosecution, or custody or con- finement after conviction, under the laws of the place from which the individual flees, for a crime, or attempt to com- mit a crime, which is a felony under the laws of the place from which the individual flees, or which, in the case of the State of New Jersey, is a high misdemeanor under the laws of such State; or ”(B) is violating a condition of probation or parole im- posed under Federal or State law.”; and (2) in section 8(d)(1)(B)\u2014 (A) in clause (iii), by striking ”and” at the end; (B) in clause (iv), by striking the period at the end and inserting ”; and”; and (C) by adding after clause (iv) the following new clause: ”(v) it shall be cause for termination of the tenancy of a tenant if such tenant\u2014 ”(I) is fleeing to avoid prosecution, or custody or confinement after conviction, under the laws of the place from which the individual flees, for a crime, or attempt to commit a crime, which is a felony under the laws of the place from which the individual flees, or which, in the case of the State of New Jersey, is a high misdemeanor under the laws of such State; or ”(II) is violating a condition of probation or parole imposed under Federal or State law;”. (b) PROVISION OF INFORMATION TO LAW ENFORCEMENT AGEN- CIES.\u2014Title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended by adding at the end the following: ”SEC. 27. EXCHANGE OF INFORMATION WITH LAW ENFORCEMENT AGENCIES. ”Notwithstanding any other provision of law, each public hous- ing agency that enters into a contract for assistance under section 6 or 8 of this Act with the Secretary shall furnish any Federal, State, or local law enforcement officer, upon the request of the offi- cer, with the current address, Social Security number, and photo- graph (if applicable) of any recipient of assistance under this Act, if the officer\u2014 ”(1) furnishes the public housing agency with the name of the recipient; and ”(2) notifies the agency that\u2014 ”(A) such recipient\u2014 ”(i) is fleeing to avoid prosecution, or custody or confinement after conviction, under the laws of the place from which the individual flees, for a crime, or 254 attempt to commit a crime, which is a felony under the laws of the place from which the individual flees, or which, in the case of the State of New Jersey, is a high misdemeanor under the laws of such State; or ”(ii) is violating a condition of probation or parole imposed under Federal or State law; or ”(iii) has information that is necessary for the offi- cer to conduct the officer’s official duties; ”(B) the location or apprehension of the recipient is within such officer’s official duties; and ”(C) the request is made in the proper exercise of the of- ficer’s official duties.”. SEC. 904. SENSE OF THE SENATE REGARDING THE INABILITY OF THE NONCUSTODIAL PARENT TO PAY CHILD SUPPORT. It is the sense of the Senate that\u2014 (a) States should diligently continue their efforts to enforce child support payments by the non-custodial parent to the cus- todial parent, regardless of the employment status or location of the non-custodial parent; and (b) States are encouraged to pursue pilot programs in which the parents of a non-adult, non-custodial parent who re- fuses to or is unable to pay child support must\u2014 (1) pay or contribute to the child support owed by the non-custodial parent; or (2) otherwise fulfill all financial obligations and meet all conditions imposed on the non-custodial parent, such as participation in a work program or other related activity. SEC. 905. ESTABLISHING NATIONAL GOALS TO PREVENT TEENAGE PREGNANCIES. (a) IN GENERAL.\u2014Not later than January 1, 1997, the Secretary of Health and Human Services shall establish and implement a strategy for\u2014 (1) preventing out-of-wedlock teenage pregnancies, and (2) assuring that at least 25 percent of the communities in the United States have teenage pregnancy prevention programs in place. (b) REPORT.\u2014Not later than June 30, 1998, and annually there- after, the Secretary shall report to the Congress with respect to the progress that has been made in meeting the goals described in para- graphs (1) and (2) of subsection (a). SEC. 906. SENSE OF THE SENATE REGARDING ENFORCEMENT OF STATUTORY RAPE LAWS. (a) SENSE OF THE SENATE.\u2014It is the sense of the Senate that States and local jurisdictions should aggressively enforce statutory rape laws. (b) JUSTICE DEPARTMENT PROGRAM ON STATUTORY RAPE.\u2014Not later than January 1, 1997, the Attorney General shall establish and implement a program that\u2014 (1) studies the linkage between statutory rape and teenage pregnancy, particularly by predatory older men committing re- peat offenses; and (2) educates State and local criminal law enforcement offi- cials on the prevention and prosecution of statutory rape, focus- 255 ing in particular on the commission of statutory rape by preda- tory older men committing repeat offenses, and any links to teenage pregnancy. (c) VIOLENCE AGAINST WOMEN INITIATIVE.\u2014The Attorney Gen- eral shall ensure that the Department of Justice’s Violence Against Women initiative addresses the issue of statutory rape, particularly the commission of statutory rape by predatory older men committing repeat offenses. SEC. 907. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANS- FER SYSTEMS. Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) is amended\u2014 (1) by striking ”(d) In the event” and inserting ”(d) APPLICA- BILITY TO SERVICE PROVIDERS OTHER THAN CERTAIN FINAN- CIAL INSTITUTIONS.\u2014 ”(1) IN GENERAL.\u2014In the event”; and (2) by adding at the end the following new paragraph: ”(2) STATE AND LOCAL GOVERNMENT ELECTRONIC BENEFIT TRANSFER PROGRAMS.\u2014 ”(A) EXEMPTION GENERALLY.\u2014The disclosures, protec- tions, responsibilities, and remedies established under this title, and any regulation prescribed or order issued by the Board in accordance with this title, shall not apply to any electronic benefit transfer program established under State or local law or administered by a State or local govern- ment. ”(B) EXCEPTION FOR DIRECT DEPOSIT INTO RECIPIENT’S ACCOUNT.\u2014Subparagraph (A) shall not apply with respect to any electronic funds transfer under an electronic benefit transfer program for deposits directly into a consumer ac- count held by the recipient of the benefit. ”(C) RULE OF CONSTRUCTION.\u2014No provision of this paragraph may be construed as\u2014 ”(i) affecting or altering the protections otherwise applicable with respect to benefits established by Fed- eral, State, or local law; or ”(ii) otherwise superseding the application of any State or local law. ”(D) ELECTRONIC BENEFIT TRANSFER PROGRAM DE- FINED.\u2014For purposes of this paragraph, the term ‘electronic benefit transfer program’\u2014 ”(i) means a program under which a government agency distributes needs-tested benefits by establishing accounts to be accessed by recipients electronically, such as through automated teller machines, or point-of- sale terminals; and ”(ii) does not include employment-related pay- ments, including salaries and pension, retirement, or unemployment benefits established by Federal, State, or local governments.”. SEC. 908. REDUCTION OF BLOCK GRANTS TO STATES FOR SOCIAL SERVICES; USE OF VOUCHERS. (a) REDUCTION OF GRANTS.\u2014Section 2003(c) of the Social Secu- rity Act (42 U.S.C. 1397b(c)) is amended\u2014 256 (1) by striking ”and” at the end of paragraph (4); and (2) by striking paragraph (5) and inserting the following: ”(5) $2,800,000,000 for each of the fiscal years 1990 through 1995; ”(6) $2,381,000,000 for the fiscal year 1996; ”(7) $2,380,000,000 for each of the fiscal years 1997 through 2002; and ”(8) $2,800,000,000 for the fiscal year 2003 and each suc- ceeding fiscal year.”. (b) AUTHORITY TO USE VOUCHERS.\u2014Section 2002 of such Act (42 U.S.C. 1937a) is amended by adding at the end the following: ”(f) A State may use funds provided under this title to provide vouchers, for services directed at the goals set forth in section 2001, to families, including\u2014 ”(1) families who have become ineligible for assistance under a State program funded under part A of title IV by rea- son of a durational limit on the provision of such assistance; and ”(2) families denied cash assistance under the State pro- gram funded under part A of title IV for a child who is born to a member of the family who is\u2014 ”(A) a recipient of assistance under the program; or ”(B) a person who received such assistance at any time during the 10-month period ending with the birth of the child.”. SEC. 909. RULES RELATING TO DENIAL OF EARNED INCOME CREDIT ON BASIS OF DISQUALIFIED INCOME. (a) REDUCTION IN DISQUALIFIED INCOME THRESHOLD.\u2014 (1) IN GENERAL.\u2014Paragraph (1) of section 32(i) of the Inter- nal Revenue Code of 1986 (relating to denial of credit for indi- viduals having excessive investment income) is amended by striking ”$2,350” and inserting ”$2,200”. (2) ADJUSTMENT FOR INFLATION.\u2014Subsection (j) of section 32 of such Code is amended to read as follows: ”(j) INFLATION ADJUSTMENTS.\u2014 ”(1) IN GENERAL.\u2014In the case of any taxable year beginning after 1996, each of the dollar amounts in subsections (b)(2) and (i)(1) shall be increased by an amount equal to\u2014 ”(A) such dollar amount, multiplied by ”(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 1995’ for ‘calendar year 1992’ in subparagraph (B) thereof. ”(2) ROUNDING.\u2014 ”(A) IN GENERAL.\u2014If any dollar amount in subsection (b)(2), after being increased under paragraph (1), is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10. ”(B) DISQUALIFIED INCOME THRESHOLD AMOUNT.\u2014If the dollar amount in subsection (i)(1), after being increased under paragraph (1), is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.”. (3) CONFORMING AMENDMENT.\u2014Paragraph (2) of section 32(b) of such Code is amended to read as follows: 257 ”(2) AMOUNTS.\u2014The earned income amount and the phase- out amount shall be determined as follows: In the case of an eligible individual with: The earned income amount is: The phaseout amount is: 1 qualifying child …………………….. $6,330 $11,610 2 or more qualifying children …… $8,890 $11,610 No qualifying children ……………… $4,220 $ 5,280”. (b) DEFINITION OF DISQUALIFIED INCOME.\u2014Paragraph (2) of section 32(i) of such Code (defining disqualified income) is amended by striking ”and” at the end of subparagraph (B), by striking the pe- riod at the end of subparagraph (C) and inserting a comma, and by adding at the end the following new subparagraphs: ”(D) the capital gain net income (as defined in section 1222) of the taxpayer for such taxable year, and ”(E) the excess (if any) of\u2014 ”(i) the aggregate income from all passive activities for the taxable year (determined without regard to any amount included in earned income under subsection (c)(2) or described in a preceding subparagraph), over ”(ii) the aggregate losses from all passive activities for the taxable year (as so determined). For purposes of subparagraph (E), the term ‘passive activity’ has the meaning given such term by section 469.”. (c) EFFECTIVE DATES.\u2014 (1) IN GENERAL.\u2014Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 1995. (2) ADVANCE PAYMENT INDIVIDUALS.\u2014In the case of any in- dividual who on or before June 26, 1996, has in effect an earned income eligibility certificate for the individual’s taxable year beginning in 1996, the amendments made by this section shall apply to taxable years beginning after December 31, 1996. SEC. 910. MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION FOR EARNED INCOME CREDIT. (a) IN GENERAL.\u2014Subsections (a)(2)(B), (c)(1)(C), and (f)(2)(B) of section 32 of the Internal Revenue Code of 1986 are each amend- ed by striking ”adjusted gross income” each place it appears and in- serting ”modified adjusted gross income”. (b) MODIFIED ADJUSTED GROSS INCOME DEFINED.\u2014Section 32(c) of such Code (relating to definitions and special rules) is amended by adding at the end the following new paragraph: ”(5) MODIFIED ADJUSTED GROSS INCOME.\u2014 ”(A) IN GENERAL.\u2014The term ‘modified adjusted gross income’ means adjusted gross income determined without regard to the amounts described in subparagraph (B). ”(B) CERTAIN AMOUNTS DISREGARDED.\u2014An amount is described in this subparagraph if it is\u2014 ”(i) the amount of losses from sales or exchanges of capital assets in excess of gains from such sales or ex- changes to the extent such amount does not exceed the amount under section 1211(b)(1), ”(ii) the net loss from estates and trusts, 258 ”(iii) the excess (if any) of amounts described in subsection (i)(2)(C)(ii) over the amounts described in subsection (i)(2)(C)(i) (relating to nonbusiness rents and royalties), and ”(iv) 50 percent of the net loss from the carrying on of trades or businesses, computed separately with re- spect to\u2014 ”(I) trades or businesses (other than farming) conducted as sole proprietorships, ”(II) trades or businesses of farming conducted as sole proprietorships, and ”(III) other trades or businesses. For purposes of clause (iv), there shall not be taken into ac- count items which are attributable to a trade or business which consists of the performance of services by the tax- payer as an employee.”. (c) EFFECTIVE DATES.\u2014 (1) IN GENERAL.\u2014Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 1995. (2) ADVANCE PAYMENT INDIVIDUALS.\u2014In the case of any in- dividual who on or before June 26, 1996, has in effect an earned income eligibility certificate for the individual’s taxable year beginning in 1996, the amendments made by this section shall apply to taxable years beginning after December 31, 1996. SEC. 911. FRAUD UNDER MEANS-TESTED WELFARE AND PUBLIC AS- SISTANCE PROGRAMS. (a) IN GENERAL.\u2014If an individual’s benefits under a Federal, State, or local law relating to a means-tested welfare or a public as- sistance program are reduced because of an act of fraud by the indi- vidual under the law or program, the individual may not, for the duration of the reduction, receive an increased benefit under any other means-tested welfare or public assistance program for which Federal funds are appropriated as a result of a decrease in the in- come of the individual (determined under the applicable program) attributable to such reduction. (b) WELFARE OR PUBLIC ASSISTANCE PROGRAMS FOR WHICH FEDERAL FUNDS ARE APPROPRIATED.\u2014For purposes of subsection (a), the term ”means-tested welfare or public assistance program for which Federal funds are appropriated” includes the food stamp pro- gram under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), any program of public or assisted housing under title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.), and any State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.). SEC. 912. ABSTINENCE EDUCATION. Title V of the Social Security Act (42 U.S.C. 701 et seq.) is amended by adding at the end the following section: ”SEPARATE PROGRAM FOR ABSTINENCE EDUCATION ”SEC. 510. (a) For the purpose described in subsection (b), the Secretary shall, for fiscal year 1998 and each subsequent fiscal year, 259 allot to each State which has transmitted an application for the fis- cal year under section 505(a) an amount equal to the product of\u2014 ”(1) the amount appropriated in subsection (d) for the fiscal year; and ”(2) the percentage determined for the State under section 502(c)(1)(B)(ii). ”(b)(1) The purpose of an allotment under subsection (a) to a State is to enable the State to provide abstinence education, and at the option of the State, where appropriate, mentoring, counseling, and adult supervision to promote abstinence from sexual activity, with a focus on those groups which are most likely to bear children out-of-wedlock. ”(2) For purposes of this section, the term ‘abstinence education’ means an educational or motivational program which\u2014 ”(A) has as its exclusive purpose, teaching the social, psychological, and health gains to be realized by abstaining from sexual activity; ”(B) teaches abstinence from sexual activity outside marriage as the expected standard for all school age chil- dren; ”(C) teaches that abstinence from sexual activity is the only certain way to avoid out-of-wedlock pregnancy, sexu- ally transmitted diseases, and other associated health prob- lems; ”(D) teaches that a mutually faithful monogamous rela- tionship in context of marriage is the expected standard of human sexual activity; ”(E) teaches that sexual activity outside of the context of marriage is likely to have harmful psychological and physical effects; ”(F) teaches that bearing children out-of-wedlock is likely to have harmful consequences for the child, the child’s parents, and society; ”(G) teaches young people how to reject sexual advances and how alcohol and drug use increases vulnerability to sexual advances; and ”(H) teaches the importance of attaining self-sufficiency before engaging in sexual activity. ”(c)(1) Sections 503, 507, and 508 apply to allotments under subsection (a) to the same extent and in the same manner as such sections apply to allotments under section 502(c). ”(2) Sections 505 and 506 apply to allotments under subsection (a) to the extent determined by the Secretary to be appropriate. ”(d) For the purpose of allotments under subsection (a), there is appropriated, out of any money in the Treasury not otherwise ap- propriated, an additional $50,000,000 for each of the fiscal years 1998 through 2002. The appropriation under the preceding sentence for a fiscal year is made on October 1 of the fiscal year.”. SEC. 913. CHANGE IN REFERENCE. Effective January 1, 1997, the third sentence of section 1902(a) and section 1908(e)(1) of the Social Security Act (42 U.S.C. 1396a(a), 1396g 1(e)(1)) are each amended by striking ”The First Church of Christ, Scientist, Boston, Massachusetts” and inserting 260 ”The Commission for Accreditation of Christian Science Nursing Organizations\/Facilities, Inc.” each place it appears. And the Senate agree to the same. JOHN R. KASICH, BILL ARCHER, WILLIAM F. GOODLING, PAT ROBERTS, TOM BLILEY, E. CLAY SHAW, Jr., JAMES TALENT, JIM NUSSLE, TIM HUTCHINSON, JIM MCCRERY, MICHAEL BILIRAKIS, LAMAR SMITH, NANCY L. JOHNSON, DAVE CAMP, GARY A. FRANKS, ”DUKE” CUNNINGHAM, MIKE CASTLE, BOB GOODLATTE, Managers on the Part of the House. From the Committee on the Budget: PETE V. DOMENICI, D. NICKLES, PHIL GRAMM, JIM EXON, From the Committee on Agriculture, Nutrition, and For- estry: RICHARD G. LUGAR, JESSE HELMS, THAD COCHRAN, RICK SANTORUM, From the Committee on Finance: WILLIAM V. ROTH, Jr., JOHN H. CHAFEE, CHUCK GRASSLEY, ORRIN HATCH, AL SIMPSON, From the Committee on Labor and Human Resources: NANCY LANDON KASSEBAUM, Managers on the Part of the Senate. (261) JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE The managers on the part of the House and the Senate at the conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H.R. 3734) to provide for rec- onciliation pursuant to section 201(a)(1) of the concurrent resolu- tion on the budget for fiscal year 1997, submit the following joint statement to the House and the Senate in explanation of the effect of the action agreed upon by the managers and recommended in the accompanying conference report: The Senate amendment struck all of the House bill after the enacting clause and inserted a substitute text. The House recedes from its disagreement to the amendment of the Senate with an amendment that is a substitute for the House bill and the Senate amendment. The differences between the House bill, the Senate amendment, and the substitute agreed to in con- ference are noted below, except for clerical corrections, conforming changes made necessary by agreements reached by the conferees, and minor drafting and clerical changes. EXPLANATION OF THE CONFERENCE AGREEMENT PRINCIPAL COMPONENTS OF THE CONFERENCE AGREEMENT The Personal Responsibility and Work Opportunity Reconcili- ation Act of 1996 puts in place the most fundamental reform of welfare since the program’s inception. It promotes work over wel- fare and self-reliance over dependency, thereby showing true com- passion for those in America who need a helping hand, not a hand- out. It takes the historic step of eliminating a Federal entitlement program\u2014Aid to Families with Dependent Children\u2014and replacing it with a block grant that restores the States’ fundamental role in assisting needy families. It makes substantial reforms in the Food Stamp Program, cracking down on fraud and abuse and applying tough work standards. It reforms the Supplemental Security In- come [SSI] disability program to strengthen eligibility require- ments and eliminating incentives for coaching children to mis- behave so they can qualify for benefits. It makes sweeping reforms relating to benefits for noncitizens, strengthening the principle that immigrants come to America to work, not to collect welfare bene- fits. The legislation does not abandon those Americans who truly need a helping hand. It retains protections for those who experi- ence genuine and intractable hardship. Above all, it recognizes the vulnerability of America’s children. It guarantees that they will continue to receive the support they need. Indeed, by discouraging illegitimacy and promoting stable families, this bill vastly improves the prospects of children in welfare families. But for most, welfare 262 should mean temporary assistance for those striving to return to self-sufficiency. The legislation is the first of three reconciliation bills called for in the reconciliation directives contained in the fiscal year 1997 budget resolution (H. Con. Res. 178). The measure will slow the growth of Federal welfare spending, but still maintain sufficient in- creases to protect vulnerable populations. According to preliminary estimates, welfare spending would grow from approximately $83 billion this year to about $107 billion in 2002, excluding the effects of Earned Income Credit [EIC] outlays. When EIC outlays are in- cluded, the preliminary estimates show welfare spending growing from about $99 billion this year to roughly $128 billion in 2002. The Federal Government still will spend nearly $600 billion on wel- fare programs not counting the EIC, and nearly $700 billion when the EIC is included. Either way, when compared with Federal spending projections for the current welfare program, this legisla- tion will reduce the Federal budget deficit by about $55 billion to $56 billion over 6 years. The importance of these budgetary effects is matched by the historic transformation of the welfare program embraced in this legislation. This measure rests on five principles that are the pil- lars of the welfare reform strategy in the 104th Congress: Welfare Should Not Be a Way of Life. The legislation assures that welfare will be a helping hand, not a lifetime handout, by im- posing a 5-year lifetime limit on benefits (although as many as 20 percent of families may be allowed exceptions for conditions of hardship). Work, Not Welfare. For the first time ever, able-bodied welfare recipients will be required to work for their benefits. At least one person in every family must be working within 2 years after receiv- ing welfare or lose benefits, and States are required to have at least half of their single-parent welfare recipients working by 2002. No More Welfare for Noncitizens and Felons. Most welfare (ex- cept emergency benefits) ends for most non-citizens during their first 5 years in the United States. Exceptions are made for refu- gees, persons who have worked and paid taxes in the United States for 10 years, and those who have served in the U.S. military. States will have the option of denying Medicaid eligibility to non- citizens who enter the United States after enactment. The legisla- tion also terminates benefits for fugitive felons fleeing from pros- ecution or imprisonment or violating parole, and offers financial in- centives to local corrections authorities to report persons incarcer- ated in their jails who are improperly receiving welfare checks. Power and Flexibility to the States. The best welfare solutions come from those closest to the problems\u2014not from bureaucrats in Washington. The legislation creates broad cash welfare and child care block grants providing maximum flexibility so that States can reform welfare in ways that are appropriate for them, and can move families into jobs. Encouraging Personal Responsibility To Halt Rising Illegit- imacy Rates. As a result of the current welfare system, which dis- courages two-parent families, today’s illegitimacy rate among wel- fare families is almost 50 percent and is rising. This legislation seeks to reverse the trend by boosting efforts to establish paternity 263 and make fathers pay child support. As an added incentive, States that reduce out-of-wedlock births will receive added cash grants. This legislation reforms welfare to make it more consistent with fundamental American values\u2014by rewarding work and self- reliance, encouraging personal responsibility, and restoring a sense of hope in the future. TITLE I: BLOCK GRANT FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES 1. FINDINGS Present law No provision. House bill Congress finds that marriage is the foundation of a successful society and an essential institution that promotes the interests of children. Promotion of responsible fatherhood and motherhood is integral to successful child-rearing and the well-being of children. It is the sense of Congress that prevention of out-of-wedlock preg- nancy and reduction on out-of-wedlock birth are very important government interests and that the policy outlined in the provisions of this title is intended to address the crisis. Senate amendment Adds that an effective strategy to combat teenage pregnancy must deal with the issue of male responsibility, including statutory rape culpability and prevention. Finds protection of teenage girls from pregnancy as well as predatory sexual behavior to be very im- portant Government interests. Conference agreement The conference agreement follows the Senate amendment. 2. REFERENCE TO THE SOCIAL SECURITY ACT Present law No provision. House bill Unless otherwise specified, any reference in this title to an amendment to or repeal of a section or other provision is to the So- cial Security Act. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 264 3. BLOCK GRANT TO STATES; PURPOSE Present law Title IV A of the Social Security Act, which provides grants to States for aid and services to needy families with children (AFDC), is designed to encourage care of dependent children in their own homes by enabling States to provide cash aid and services, main- tain and strengthen family life, and help parents attain maximum self-support consistent with maintaining parental care and protec- tion. House bill Block grants for temporary assistance for needy families (TANF), which replace Title IV A of the Social Security Act, are es- tablished to increase the flexibility of States in operating a pro- gram designed to provide assistance to needy families; end depend- ence on government benefits by promoting job preparation, work and marriage; prevent and reduce the incidence of out-of-wedlock pregnancies; and encourage the formation and maintenance of two- parent families. This part shall not be interpreted to entitle any individual or family to assistance under any State program funded under this part. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 4. ELIGIBLE STATES\u2014STATE PLAN REQUIREMENTS Present law A State must have an approved State plan for aid and services to needy families containing 43 provisions, ranging from single- agency administration to overpayment recovery rules. State plans explain the aid and services that are offered by the State. Aid is defined as money payments. For most parents without a child under age 3, States must provide education, work, or training under the JOBS program to help needy families with children avoid long-term welfare dependence. Note: work and education re- quirements of JOBS are subject to two conditions\u2014State resources must permit them and the program must be available in the recipi- ent’s political subdivision. To receive Federal funds, States must share in program costs. The Federal share of costs (matching rate) varies among States and is inversely related to the square of State per capita income. For AFDC benefits and child care, the Medicaid matching rate is used. This rate now ranges from 50 percent to 78 percent among States and averages about 55 percent. For JOBS ac- tivities, the rate averages 60 percent; for administrative costs, 50 percent. The general JOBS participation rate, which expired Sep- tember 30, 1995, required 20 percent of employable (nonexempt) adult recipients to participate in education, work, or training under 265 JOBS, in fiscal year 1995. In fiscal year 1996, at least one parent in 60 percent of unemployed-parent families must participate at least 16 hours weekly in an unpaid work experience or other work program. States must restrict disclosure of information to purposes directly connected to administration of the program and to any con- nected investigation, prosecution, legal proceeding or audit. Each State must offer family planning services to all ”appropriate” cases, including minors considered sexually active. State may not require acceptance of these services. Regulations require that States deter- mine need and amount of eligibility on an objective and equitable basis. House bill An ”eligible State” is a State that, during the 2-year period im- mediately preceding the fiscal year, has submitted a plan to the Secretary of HHS that the Secretary has found includes a written document describing how the State will: 1. conduct a program, designed to serve all political sub- divisions in the State, that provides cash assistance to needy families with (or expecting) children, and that provides parents with work and support services to enable them to become self- sufficient; 2. require a parent or a caretaker receiving assistance to engage in work as defined by the State once the parent or care- taker has received assistance for 24 months (whether or not consecutive) or earlier; 3. ensure that parents and caretakers engage in work ac- tivities as described below; 4. take such reasonable steps as the State deems necessary to restrict the use and disclosure of information about recipi- ents of assistance attributable to funds provided by the Federal government. 5. no provision. (See purpose above.) Further, the document must: 6. indicate whether the State intends to treat families moving into the State differently; and, if so, how. 7. indicate whether it intends to aid noncitizens. 8. set forth objective criteria for delivery of benefits and determinations of eligibility, and for fair and equitable treat- ment, including an explanation of how it will provide opportu- nities for adversely affected recipients to be heard in a State administrative or appeal process; 9. no provision; 10. no provision; 11. no provision. Senate amendment 1. Same. 2. Similar provision. 3. Same. 4. Same. 5. Establish goals and take action to prevent and reduce the incidence of pregnancies outside marriage, and establish numerical 266 goals for reducing the proportion of births out of wedlock for cal- endar years 1996 through 2005. Further, the document must: 6. Same. 7. Same. 8. outline how the State intends to determine, on an objective and equitable basis, the needs of and amount of aid to be provided to needy families; and, except as allowed for incoming families and noncitizens (items 6 and 7) to treat families of similar needs and circumstances similarly. 9. outline how it will grant opportunity for a fair hearing to anyone adversely affected or whose application is not acted on promptly. 10. require, not later than 1 year after enactment, a parent or caretaker is not engaged in work or exempt from work require- ments and who has received assistance for more than 2 months to participate in community service. States may opt out of this re- quirement by notifying the Secretary. 11. outline how the State will conduct a program, designed to reach States and local law enforcement officials, the education sys- tem, and relevant counseling services, that provides education and training on the problem of statutory rape so that teenage preg- nancy prevention programs may be expanded to include men. Conference agreement In general, the conference agreement follows the Senate amendment, except that the Senate recedes on requirements 2, 8, and 9. Requirement 10 is modified to provide that a State may opt out of this requirement by submitting a letter from the Governor to the Secretary. 5. ELIGIBLE STATES\u2014CERTIFICATIONS Present law States must have in effect an approved child support program. States must also have an approved plan for foster care and adop- tion assistance. States must have an income and verification sys- tem covering AFDC, Medicaid, unemployment compensation, food stamps, and\u2014in outlying areas\u2014adult cash aid. House bill State plans must include the following certifications: 1. that the State will operate a child support enforcement program; 2. that the State will operate a child protection program under Title IV B (child welfare services and family preserva- tion); 3. specifying which State agency or agencies will admin- ister and supervise the State plan, and assurances that local governments and private sector organizations have been con- sulted and have had an opportunity to submit comments on the plan; and 4. that the State will provide Indians with equitable access to assistance. 267 5. no provision. 6. no provision. Senate amendment 1. Same. 2. that the State will operate a foster care and adoption assist- ance program under Title IV E and ensure medical assistance for the children; 3. Same. 4. Same. 5. that the State has established standards to ensure against fraud and abuse. 6. that the State has established and is enforcing standards and procedures to screen for and identify recipients with a history of domestic violence, will refer them to counseling and supportive services, and will waive program requirements that would make it more difficult for these persons to escape violence. Conference agreement The conference agreement generally follows the Senate amend- ment, except that the certification that the State establish and en- force standards and special procedures regarding recipients with a history of domestic violence is made a State option. 6. ELIGIBLE STATES\u2014PUBLIC AVAILABILITY OF STATE PLAN SUMMARY Present law Federal regulations require that State program manuals and other policy issuances, which reflect the State plan, be maintained in the State office and in each local and district office for examina- tion on regular workdays. House bill The State shall make available to the public a summary of the State plan. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 7. GRANTS TO STATES\u2014FAMILY ASSISTANCE GRANT Present law AFDC entitles States to Federal matching funds. Current law provides permanent authority for appropriations without limit for grants to States for AFDC benefits, administration, and AFDC-re- lated child care. Over the years, because of court rulings, AFDC has evolved into an entitlement for qualified individuals to receive cash benefits. In general, States must give AFDC to all persons whose income and resources are below State-set limits if they are in a class or category eligible under Federal rules. 268 House bill Each eligible State and Territory is entitled to receive a grant from the Secretary for each of 6 fiscal years (1996 through 2001) in an amount equal to the State family assistance grant for the fis- cal year. A State’s family assistance grant is equal to the highest of former Federal payments to the State for AFDC benefits, AFDC Administration, Emergency Assistance, and JOBS during (1) fiscal years 1992 through 1994, on average; (2) fiscal year 1994 plus, under certain circumstances, 85 percent of increased fiscal year 1995 spending for emergency assistance, or (3) fiscal year 1995. If a State fails to make qualified State expenditures for eligible families under all State programs equal to at least 75 percent of its fiscal year 1994 spending level (or at least 80 percent, if the State fails to meet its mandatory work requirements) for AFDC benefits, AFDC Administration, Emergency Assistance, JOBS, AFDC-related child care, and at-risk child care, its family assist- ance grant is reduced by the shortfall (see the discussion of pen- alties below). Senate amendment Same, except raises required State expenditures to 80 percent of fiscal year 1994 level. Conference agreement The conference agreement follows the House bill. 8. GRANTS TO STATES\u2014GRANT TO REWARD STATES THAT REDUCE OUT- OF-WEDLOCK BIRTHS Present law No provision. House bill For each fiscal year beginning with 1998, a State’s grant amount is increased by 5 or 10 percent if the State ”illegitimacy ratio” is 1 or 2 percentage points, respectively, lower in that year than its 1995 illegitimacy ratio. Only States in which the rate of abortion falls below the 1995 level are eligible for these additional grants. The term ”illegitimacy ratio” means, during a fiscal year, the number of out-of-wedlock births that occurred in the State divided by the number of births. In calculating grants, the Secretary must disregard any difference in illegitimacy ratios or abortion rates at- tributable to a change in State methods of reporting data. Senate amendment Follows the House bill, except that for each of 5 fiscal years (1999 through 2003) the Secretary shall make a grant of up to $20 million for each of the 5 States that demonstrate the greatest de- crease in out-of-wedlock births during the most recent 2-year pe- riod for which the information is available. If fewer than 5 States are eligible, the amount of such grants shall be $25 million. 269 Conference agreement The conference agreement follows the Senate amendment, with the modification that funds are available between 1999 and 2002. 9. GRANTS TO STATES\u2014SUPPLEMENTAL GRANT FOR POPULATION IN- CREASES AND LOW FEDERAL SPENDING PER POOR PERSON IN CER- TAIN STATES Present law There is no adjustment for population growth. Instead, current law provides unlimited matching funds. When AFDC enrollment climbs, Federal funding automatically rises. House bill Subject to the eligibility criteria below, each qualifying State (for purposes of this section, the term ”State” is limited to the 50 States and the District of Columbia) is entitled to receive from the Secretary supplemental grants to assist in making cash welfare payments for 4 years, fiscal years 1997-2000. For fiscal year 1997 the supplemental grant equals 2.5 percent of Federal payments to the qualifying State during fiscal year 1994 for AFDC benefits, AFDC Administration, Emergency Assistance, JOBS and AFDC-re- lated child care. For fiscal years 1998 through 2000, each qualify- ing State is entitled to receive an amount equal to the supple- mental grant for the immediately preceding year plus, if it contin- ues to meet the eligibility criteria below, an annual increase. States that no longer meet the qualification criteria are entitled to receive the prior year’s grant without increase. A State is a qualifying State for a fiscal year if average Federal welfare spending per poor person is less than the national average and State population growth exceeds the average for all States. States must qualify dur- ing fiscal year 1997 in order to qualify during later years. Certain States (i.e. those in which Federal welfare spending per poor per- son for fiscal year 1994 was less than 35 percent of the fiscal year 1994 national average or in which population has increased by more than 10 percent from April 1, 1990 to July 1, 1994) are deemed to qualify for supplemental grants in each year between fiscal year 1997 and 2000. A total of $800 million is appropriated for this purpose. If this sum is insufficient for full supplemental grants for all qualifying States, pro rata reductions will be made. (p. 244) Senate amendment Same except for change in years of possible supplemental grants: fiscal years 1998 through 2001 (instead of 1997 through 2000). States must qualify during fiscal year 1998 in order to do so in later years. Conference agreement The conference agreement follows the Senate amendment. 270 10. GRANTS TO STATES\u2014BONUS TO REWARD HIGH PERFORMANCE STATES Present law No provision. House bill Certain ”high performing” States (i.e. those most successful in achieving the purposes of the block grant program) are entitled to receive additional payments of up to five percent of their State family assistance grant. The formula for measuring State perform- ance shall be developed by the Secretary in consultation with the National Governors’ Association and the American Public Welfare Association. A total of $0.5 billion is appropriated for high perform- ance bonuses to States during 5 fiscal years, 1999 through 2003, and average annual performance bonuses are to equal $100 million. Note.\u2014In addition, required maintenance-of-effort spending is to be reduced for States that achieve performance scores above a threshold set by the Secretary. Senate amendment Appropriates twice as much money for high performance bo- nuses\u2014$1 billion\u2014and provides that average annual bonuses are to equal $175 million for fiscal years 1999 through 2002 and $300 million for fiscal year 2003. Conference agreement The conference agreement follows the Senate amendment re- garding funding (total of $1 billion) and follows the House bill re- garding the criteria for awarding bonuses to ”high performance” States. The provision allowing certain high performance States to meet a lower maintenance of effort requirement is dropped (see below). 11. GRANTS TO STATES\u2014CONTINGENCY FUND FOR STATE WELFARE PROGRAMS Present law No provision. Current law provides unlimited matching funds. House bill To assist States (for purposes of this section, the term ”State” is limited to the 50 States and the District of Columbia) with in- creased welfare needs, the House proposal establishes a contin- gency fund for matching grants and appropriates up to $2 billion over a total of 5 fiscal years (1997 through 2001) for the fund. Eli- gible States may receive contingency fund payments totaling up to 20 percent of their annual family assistance grant in any single year (in any single month, States cannot receive more than 1\u204412 of 20 percent of the annual family assistance grant). States are to submit requests for payment of contingency funds, and the Sec- retary of the Treasury must make payments to eligible States in the order in which requests are received. 271 States are eligible to receive payments if State unemployment is high (at or above 6.5 percent in the most recent three-month pe- riod) and rising relative to previous years (at least 10 percent above the comparable level in either or both of two preceding years). States also are eligible to receive payments if food stamp participation in the State in the most recent three-month period has risen at least 10 percent from the average monthly number of recipients who would have participated in the comparable quarter of fiscal year 1994 or fiscal year 1995, as determined by the Sec- retary of Agriculture, if amendments made by this proposal to the food stamp program (including optional food stamp block grant pro- visions) and to eligibility of noncitizens had been in effect through- out fiscal year 1994 and 1995. States must maintain 100 percent of historic State welfare spending (generally, the amount of State funds spent in fiscal year 1994 for AFDC benefits and administra- tion, AFDC-related child care, at-risk child care, Emergency Assist- ance, and JOBS) during years in which contingency fund payments are made, or repay an amount reflecting the shortfall. States must share in the cost of contingency funds at their fiscal year 1995 Medicaid matching rate. To smooth their transition to recovery, States that have been receiving contingency fund payments will continue to receive payments for one month after they no longer meet the criteria described above. Senate amendment Contingency fund of $2 billion covers 4 fiscal years (1998 through 2001) rather than 5. (Because of the Byrd rule, the provi- sion specifying that the CBO baseline is to assume that no grant will be made after 2001 is deleted.) Conference agreement The conference agreement follows the House bill, with the modification that, notwithstanding section 257(b)(2) of the Bal- anced Budget and Emergency Deficit Control Act of 1985, the base- line shall assume that no grant shall be made under this sub- section after fiscal year 2001. 12. GRANTS TO STATES\u2014WORK PROGRAM GRANT Present law House bill To assist States in meeting the work requirements, eligible States may receive funds from a supplemental grant for the oper- ation of work programs. To be eligible, a State’s total expenditures for the fiscal year to meet work participation requirements must exceed its total jobs spending for fiscal year 1994, its TANF work programs must be coordinated with job training programs of Title II of the Job Training Partnership Act (JTPA), or its successor, and the State must need the extra funds to meet TANF work require- ments or certify that it intends to exceed participation require- ments. The Secretary is to issue regulations for equitable distribu- tion of the grants. For these supplemental grants, $3 billion is au- thorized for fiscal year 1999 (amounts appropriated are authorized to remain available until spent). 272 Senate amendment No provision. Conference agreement The conference agreement follows the Senate amendment. 13. USE OF GRANTS\u2014IN GENERAL Present law AFDC and JOBS funds are to be used in conformity with State plans. A State may replace a caretaker relative with a protective payee or a guardian or legal representative. House bill Grants may be used in any manner reasonably calculated to accomplish the purposes of this title, including activities now au- thorized under Titles IV-A and IV-F of the Social Security Act, or to provide low-income households with assistance in meeting home heating and cooling costs. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 14. USE OF GRANTS\u2014LIMITATION ON ADMINISTRATIVE SPENDING Present law No provision. House bill States may not use more than 15 percent of the family assist- ance grant for administrative purposes. However, this cap does not apply to spending for information technology and computerization needed to implement the tracking and monitoring required by this title. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 15. USE OF GRANTS\u2014RECIPIENTS MOVING INTO THE STATE FROM ANOTHER STATE Present law The Social Security Act forbids the Secretary to approve a plan that denies AFDC eligibility to a child unless he has resided in the State for 1 year. The U.S. Supreme Court has invalidated some State laws that withheld aid from persons who had not resided 273 there for at least 1 year. It has not ruled on the question of paying lower amounts of aid for incoming residents. House bill States may impose program rules and benefit levels of the State from which a family moved if the family has lived in the State for fewer than 12 months. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 16. USE OF GRANTS\u2014TRANSFER OF FUNDS Present law No provision. House bill States may transfer up to 30 percent of funds paid under this section to carry out a State program under Part B (child welfare and family preservation) or Part E (foster care and adoption assist- ance), the social services block grant, and the child care and devel- opment block grant. Of the 30 percent that may be transferred, not more than one-third (that is, not more than 10 percent of the total block grant) may be transferred into the Social Services Block Grant. Amounts transferred to the Social Services Block Grant must be spent on programs and services for children or their fami- lies. Senate amendment States may transfer up to 30 percent of funds only to the child care and development block grant. Conference agreement The conference agreement follows the House bill, except that the provision allowing transfers into the child protection block grant, which was deleted, is dropped. The conference agreement adds the modification that funds transferred into the Title XX So- cial Services Block Grant must be spent on families with incomes that do not exceed 200 percent of the poverty level (as determined annually by the Federal Office of Management and Budget). 17. USE OF GRANTS\u2014RESERVATION OF FUNDS Present law No provision. House bill A State may reserve amounts paid to the State for any fiscal year for the purpose of providing assistance under this part. Re- serve funds can be used in any fiscal year. 274 Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 18. USE OF GRANTS\u2014AUTHORITY TO OPERATE AN EMPLOYMENT PLACEMENT PROGRAM Present law Required JOBS services include job development and job place- ment. The State agency may provide services directly or through arrangements or under contracts with public agencies or private or- ganizations. House bill States may use a portion of the family assistance grant to make payments (or provide job placement vouchers) to State-ap- proved agencies that provide employment services to recipients of cash aid. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 19. USE OF GRANTS\u2014IMPLEMENTATION OF ELECTRONIC BENEFIT TRANSFER SYSTEM Present law Regulations permit States to receive Federal reimbursement funds (50 percent administrative cost-sharing rate) for operation of electronic benefit systems. To do so, States must receive advance approval from HHS and must comply with automatic data process- ing rules. House bill States are encouraged to implement an electronic benefit transfer (EBT) system for providing assistance under the State pro- gram funded under this part, and may use the grant for such pur- pose. (The food stamp title of the bill exempts any EBT system dis- tributing need-tested benefits established or administered by a State from Federal Reserve Board rules known collectively as ”Reg- ulation E.” The most important Regulation E provision requires that lost\/stolen benefits be restored; individuals with accounts are responsible only for the first $50 of any loss, when reported in a timely fashion.) Senate amendment Same (in Miscellaneous chapter). 275 Conference agreement The conference agreement follows the House bill. Conferees also agreed to put comprehensive language on EBT and Regulation E in the food stamps section of this legislation. 20. USE OF GRANTS\u2014INDIVIDUAL DEVELOPMENT ACCOUNTS Present law No provision. House bill No provision. Senate amendment Authorizes a State to use TANF funds to fund individual devel- opment accounts established by recipients for specified purposes: postsecondary educational expenses, first-home purchase, business capitalization. Terms include: contributions must be from earned income, withdrawals would be allowed only for the above purposes, and Federal benefit programs must disregard funds in the account in determining eligibility and amount of aid. Conference agreement The conference agreement follows the Senate amendment. 21. ADMINISTRATIVE PROVISIONS Present law The Secretary pays AFDC funds to the State on a quarterly basis. House bill The Secretary shall make each grant payable to a State in quarterly installments. The Secretary is to estimate each State’s payment on the basis of a report about expected expenditures from the State and to certify to the Secretary of the Treasury the amount estimated, adjusted if needed for overpayments or under- payments for any past quarter. The Secretary must notify States not later than three months in advance of any quarterly payment that will be reduced to reflect payments made to Indian tribes in the State. Under certain circumstances, overpayments to individ- uals no longer receiving temporary family assistance will be col- lected from Federal income tax refunds and repaid to affected States. Senate amendment Same, except the provision regarding ”Collection of State Over- payments to Families from Federal Tax Refunds” was deleted be- cause of the Byrd rule. Conference agreement The conference agreement follows the Senate amendment. 276 22. FEDERAL LOANS FOR STATE WELFARE PROGRAMS Present law No provision. Instead, current law provides unlimited match- ing funds. House bill The proposal establishes a $1.7 billion revolving loan fund from which eligible States may borrow funds to meet the purposes of this title. States that have been penalized for misspending block grant funds as determined by an audit are ineligible for loans. Loans are to mature in 3 years, at the latest, and the cumulative amount of all loans to a State during fiscal years 1997 through 2001 cannot exceed 10 percent of its basic block grant. The interest rate shall equal the current average market yield on outstanding U.S. securities with a comparable remaining maturity length. States face penalties for failing to make timely payments on their loan. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 23. MANDATORY WORK REQUIREMENTS\u2014PARTICIPATION RATE REQUIREMENTS Present law The following minimum percentage of nonexempt AFDC fami- lies must participate in JOBS: Minimum percentage Fiscal year: 1995 …………………………………………………………………………………………………… 20 1996 and thereafter (no requirement). …………………………………………………. 0 The following minimum percentages of two-parent families re- ceiving cash assistance must participate in specified work activi- ties: Minimum percentage Fiscal year: 1995 …………………………………………………………………………………………………… 50 1996 …………………………………………………………………………………………………… 60 1997 …………………………………………………………………………………………………… 75 1998 (last year) ………………………………………………………………………………….. 75 1999 and thereafter (no requirement). …………………………………………………. 0 House bill The following minimum percentages of all families receiving assistance funded by the family assistance grant (except those with a child under 1, if exempted by the State) must participate in work activities: Minimum percentage Fiscal year: 1997 …………………………………………………………………………………………………… 25 1998 …………………………………………………………………………………………………… 30 1999 …………………………………………………………………………………………………… 35 277 Minimum percentage 2000 …………………………………………………………………………………………………… 40 2001 …………………………………………………………………………………………………… 45 2002 or thereafter ………………………………………………………………………………. 50 The following minimum percentages of two-parent families re- ceiving cash assistance must participate in specified work activi- ties: Minimum percentage Fiscal year: 1996 …………………………………………………………………………………………………… 50 1997 …………………………………………………………………………………………………… 75 1998 …………………………………………………………………………………………………… 75 1999 and thereafter ……………………………………………………………………………. 90. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 24. MANDATORY WORK REQUIREMENTS\u2014CALCULATION OF PARTICIPATION RATES Present law Participation rates for all families are calculated for each month. A State’s rate, expressed as a percentage, equals the num- ber of actual JOBS participants divided by the number of AFDC re- cipients required to participate (nonexempt from JOBS). In cal- culating a State’s overall JOBS participation rate, a standard of 20 hours per week is used. The welfare agency is to count as partici- pants the largest number of persons whose combined and averaged hours in JOBS activities during the month equal 20 per week. Participation rates for two-parent families for a month equal the number of parents who participate divided by the number of principal earners in AFDC-UP families (but excluding families who received aid for two months or less, if one parent engaged in inten- sive job search). House bill 1. The participation rate (for all families and for two-parent families) for a State for the fiscal year is the average of the partici- pation rates for each month in the fiscal year. The monthly partici- pation rate for a State is a percentage obtained by dividing the number of families receiving assistance that include an adult who is engaged in work by the number of families receiving assistance (not counting those subject to a recent sanction for refusal to work). 2. The required participation rate for a year is to be adjusted down one percentage point for each percentage point that the aver- age monthly caseload is below fiscal year 1995 levels, unless the Secretary finds that the decrease was required by Federal law or results from changes in State eligibility criteria (which must be proved by the Secretary). The Secretary is to prescribe regulations for this adjustment. 278 3. States have the option of counting individuals receiving as- sistance under a tribal family assistance plan towards the State work participation requirement. 4. States have the option of not requiring single parents of chil- dren under age one to engage in work and may disregard these parents in determining work participation rates. Senate amendment 1. Same. 2. Same. 3. Same. 4. Allows a parent to receive this exemption only for a total of 12 months, whether or not consecutive. Conference agreement The conference agreement follows the Senate amendment, with a modification. For item 1, the conference agreement includes minor heads of households along with adults in the calculation of State work participation rates (in both the numerator and denomi- nator of the calculation). 25. MANDATORY WORK REQUIREMENTS\u2014OPTIONAL INDIVIDUAL RESPONSIBILITY PLAN Present law States must make an initial assessment of the educational, child care, and other supportive service needs, and of the skills and employability of each JOBS participant. In consultation with the participant, the agency shall develop an employability plan for the participant, which shall not be considered a contract. After these steps, the State agency may require the participant to negotiate and enter into an agreement that specifies matters such as the par- ticipant’s obligations, duration of participation, and services to be provided. House bill States are required to make an initial assessment of the skills, work experience, and employability of each recipient of assisting under the block grant who is over age 17 or has not completed high school or the equivalent, and is not attending secondary school. States may develop individual responsibility plans setting forth em- ployment goals, obligations of the individual, and services the State will provide. In addition to other penalties that may apply, States may reduce assistance to families that include an individual who fails to comply with the terms of such plans. Senate amendment Requires States to require TANF recipient families to enter into a personal responsibility agreement, as developed by the State. The agreement means a binding contract. It is to include a nego- tiated individual time limit for benefit eligibility, outline steps the family and State will take to move the family to self-sufficiency, provide for sanctions if the individual fails to sign the agreement 279 or comply with its terms and shall be invalid if the State fails to comply with its terms. Conference agreement The conference agreement follows the House bill. 26. MANDATORY WORK REQUIREMENTS\u2014ENGAGED IN WORK Present law Not relevant. (As discussed below, required activities in State JOBS programs are education, jobs skills training, job readiness, job development and job placement and two of these four: job search, on-the-job training, work supplementation, and community work experience, or other approved work experience. In general, to be counted as a JOBS participant, a person must be engaged in a JOBS activity for an average of 20 hours weekly.) House bill To be counted as engaged in work for a month, a recipient must be participating for at least the minimum average number of hours per week shown in the table below in one or more of these activities: unsubsidized employment, subsidized (private or public) employment, work experience, on-the-job training, job search and job readiness assistance, community service programs, or voca- tional educational training (12 months maximum). Minimum average weekly hours Fiscal year: 1996 …………………………………………………………………………………………………… 20 1997 …………………………………………………………………………………………………… 20 1998 …………………………………………………………………………………………………… 20 1999 …………………………………………………………………………………………………… 25 2000 …………………………………………………………………………………………………… 30 Exceptions to the above table: (1) to be considered engaged in work, an adult in a two-parent family must make progress in work activities at least 35 hours per week, with not fewer than 30 hours attributable to the work activities cited above; (2) an individual in job search may be counted as engaged in work for up to 8 weeks, no more than 4 of which may be consecutive; (3) a State may count a single parent with a child under age 11 as engaged in work for a month if the parent works an average of 20 hours weekly in all years (the hourly minimum does not rise for these parents); (4) not more than 20 percent of adults in all families and in two-parent families determined to be engaged in work in the State for a month may meet the work requirement through participation in voca- tional educational training; (5) teen parents (under age 20) who head their households are considered to be engaged in work if they maintain satisfactory attendance at secondary school or participate in work-related education for at least the minimum average num- ber of hours in the table; and (6) no provision. Senate amendment Changes list of work activities by substituting ”educational training (not to exceed 24 months with respect to any individual)” for ”vocational educational training (not to exceed 12 months with respect to any individual).” (Also, as the table below shows, re- 280 quired weekly hours of work rise to 35 in fiscal year 2002 and thereafter.) Minimum average weekly hours Fiscal year: 1996 …………………………………………………………………………………………………… 20 1997 …………………………………………………………………………………………………… 20 1998 …………………………………………………………………………………………………… 20 1999 …………………………………………………………………………………………………… 25 2000 …………………………………………………………………………………………………… 30 2001 …………………………………………………………………………………………………… 30 2002 and thereafter ……………………………………………………………………………. 35 Exceptions to the above table: (1) an adult in a two-parent family is considered engaged in work if he\/she works at least 35 hours weekly, with at least 30 hours attributable to one of the ac- tivities cited above, and, if the family receives federally-funded child care, the second parent makes satisfactory progress for at least 20 hours weekly in employment, work experience, on-the-job training, or community service; (2) an individual in job search may be counted as engaged in work for only 4 weeks (12 weeks if the State unemployment rate exceeds the national average); (3) same as House provision; (4) not more than 30 percent of adults in all families and in 2-parent families may meet the work activity re- quirement through participation in vocational educational training (note: bill language refers to vocational educational training, al- though references elsewhere are to educational training\u2014see above); (5) teen parents (under age 20) who head their households are considered to be engaged in work if they maintain satisfactory attendance at secondary school or the equivalent during the month or participate in education directly related to employment for at least the minimum average number of hours per week in the table; and (6) a person participating in a community service program may be treated as being engaged in work if she provides child care serv- ices to another participant in the community service program for the period of time each week determined by the State. Conference agreement The conference agreement follows the house bill and the Sen- ate amendment as follows: First, the conference agreement follows the House bill regard- ing vocational educational training as a work activity which is creditable for up to 12 months. Second, the conference agreement follows the House bill re- garding the minimum average weekly hours of work required. Finally, regarding exceptions to the work hour requirements, the conference agreement: (1) follows the Senate amendment on hours of work for adults in a 2-parent family, with the modification exempting the second parent, if such parent is disabled or caring for a severely disabled child; (2) follows the Senate amendment re- garding job search, with the modification that a total of 6 weeks is allowed, of which not more than 4 may be consecutive (and, in the case of States in which the unemployment rate is at least 50 percent above the national average, a total of 12 weeks is allowed); in addition an individual may count a partial week of job search as a full week of work limited to one occasion; (3) follows the House bill in permitting States to count certain single parents as engaged 281 in work if the parent works for 20 hours per week, with the modi- fication that the parent’s child must be under age 6 (however, the conference agreement follows the Senate amendment regarding the requirement that States may not disregard such an adult in cal- culating their work rates); (4) follows the House bill regarding the limitation on the number of parents countable if in vocational edu- cation; (5) follows the Senate amendment on teen parents and edu- cation, with the modification that teen parents meeting the work requirement in this way are counted towards the 20 percent limita- tion on vocational education (see above); and (6) follows the Senate amendment on persons providing child care, with the clarification that such hours spent providing child care count towards fulfill- ment of the hours of work required. 27. MANDATORY WORK REQUIREMENTS\u2014WORK ACTIVITIES DEFINED Present law JOBS programs must include specified educational activities (high school or equivalent education, basic and remedial education, and education for those with limited English proficiency); job skills training, job readiness activities, and job development and place- ment. In addition, States must offer at least two of these four items: group and individual job search; on-the-job training; work supplementation or community work experience program (or an- other work experience program approved by the HHS Secretary). The State also may offer postsecondary education in ”appropriate” cases. House bill ”Work activities” are defined as unsubsidized employment, subsidized private sector employment, subsidized public sector em- ployment, work experience if sufficient private sector employment is not available, on-the-job training, job search and job readiness assistance, community service programs, vocational educational training (1 year maximum), jobs skills training directly related to employment, education directly related to employment in the case of a recipient who lacks a high school diploma or equivalency, and satisfactory attendance at secondary school for a recipient who has not completed high school. Senate amendment Same as House provision except for last two items in list of ”work activities.” These activities (work-related education and sec- ondary school attendance) are creditable as ”work” only for persons under age 20. Conference agreement The conference agreement follows the House bill, with the modification to include the provision of child care services to an in- dividual who is participating in a community service program. 282 28. MANDATORY WORK REQUIREMENTS\u2014PENALTIES AGAINST INDIVIDUALS Present law For failure to meet JOBS requirements without good cause, AFDC benefits are denied to the offending parent and payments for the children are made to a third party. In a two-parent family, fail- ure of one parent to meet JOBS requirements without good cause results in denial of benefits for both parents (unless the other par- ent participates) and third-party payment on behalf of the children. Repeated failures to comply bring potentially longer penalty peri- ods. House bill If an adult recipient refuses to engage in required work, the State shall reduce the amount of assistance to the family pro rata (or more, at State option) with respect to the period of work re- fusal, or shall discontinue aid, subject to good cause and other ex- ceptions that the State may establish. In addition, if block grant re- cipients fail to meet any of the work requirements, States may ter- minate their coverage under the Medicaid program. A State may not penalize a single parent caring for a child under age eleven for refusal to work if the parent proves a demonstrated inability to ob- tain needed child care for specified reasons. Senate amendment Same as House provision except that Senate does not provide that States may end Medicaid for block grant recipients who fail to meet any of the work requirements in the act. Conference agreement The conference agreement follows the House bill with the modification that, if benefits are terminated under the work re- quirements of section 407 of this part, States may end Medicaid eli- gibility for adults made ineligible, but not children in the family. In addition, modifies the House bill and Senate amendment so that States may not penalize a single parent caring for a child under age 6 for refusal to work if the parent proves a demonstrated in- ability to obtain needed child care for specified reasons. 29. MANDATORY WORK REQUIREMENTS\u2014NONDISPLACEMENT IN WORK ACTIVITIES Present law Under JOBS law, no work assignment may displace any cur- rently employed worker or position (including partial displacement such as a reduction in hours of non-overtime work, wages, or em- ployment benefits). Nor may a JOBS participant fill a position va- cant because of layoff or because the employer has reduced the workforce with the effect of creating a position to be subsidized. House bill In general, an adult in a family receiving IV A assistance may fill a work vacancy. However, no adult in a Title IV A work activ- 283 ity shall be employed or assigned when another person is on layoff from the same or a substantially equivalent job, or when the em- ployer has terminated the employment of a regular worker or oth- erwise caused an involuntary reduction of its workforce in order to fill the vacancy thus created with a subsidized worker. This provi- sion does not preempt or supersede any State or local law providing greater protection from displacement. Senate amendment In general, an adult in a family receiving IV A assistance may fill a work vacancy. However, no IV A work assignment may displace a currently employed worker (including any partial dis- placement such as a reduction in hours of overtime work, wages, or employment benefits), impair an existing contract or collective bargaining agreement, or result in ending a regular worker’s em- ployment. States must establish and maintain a grievance proce- dure, including hearing opportunity, for resolving complaints and providing remedies for violations. This section does not preempt or supersede any State or local law providing greater protection from displacement. Conference agreement The conference agreement follows the House bill, with the modification to include a requirement that States establish a griev- ance procedure for workers adversely affected pursuant to this sec- tion. 30. MANDATORY WORK REQUIREMENTS\u2014SENSE OF THE CONGRESS THAT STATE SHOULD PLACE A PRIORITY ON PLACING CERTAIN PAR- ENTS IN WORK Present law As a condition of receiving full matching funds, a State must use 55 percent of its JOBS spending for these target groups: per- sons who have received aid for any 36 of the 60 preceding months, parents under age 24 who failed to complete high school, and par- ents whose youngest child is within 2 years of becoming ineligible for aid (i.e., whose youngest child is, usually, at least 16). House bill It is the sense of Congress that States should give highest pri- ority to requiring adults in two-parent families and adults in sin- gle-parent families with children that are older than preschool age to engage in work activities. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 284 31. MANDATORY WORK REQUIREMENTS\u2014SENSE OF THE CONGRESS THAT STATES SHOULD IMPOSE CERTAIN REQUIREMENTS ON NON- CUSTODIAL, NONSUPPORTING MINOR PARENTS Present law No provision. House bill It is the sense of the Congress that States should require non- custodial, nonsupporting parents who have not attained 18 years of age to fulfill community work obligations and attend appropriate parenting or money management classes after school. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 32. MANDATORY WORK REQUIREMENTS\u2014REVIEW OF IMPLEMENTATION OF STATE WORK PROGRAMS Present law No provision. House bill During fiscal year 1999, the Committees on Ways and Means and Finance must hold hearings to review the implementation by States of the mandatory work requirements, and may introduce legislation to remedy any problems found. Senate amendment No provision. Conference agreement The conference agreement follows the House bill. 33. PROHIBITIONS; REQUIREMENTS\u2014FAMILIES WITH NO MINOR CHILDREN Present law Only families with dependent children (under age 18, or 19 at State option if the child is still in secondary school or in the equiva- lent level of vocational or technical training) can participate in the program. House bill Only families with a minor child (who resides with a custodial parent or other adult caretaker relative of the child) or a pregnant individual may receive assistance under this part. 285 Senate amendment Adds prohibition against assistance to a family in which an adult already has received 60 months of assistance attributable to Federal funds. See also item 41. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. Conferees note that the 5-year time limit on bene- fits applies only to benefits provided using Temporary Assistance for Needy Families (TANF) Block Grant funds. Other Federal funds, such as Title XX Social Services Block Grants and support through the expanded Child Care and Development Block Grant, are not restricted for families that have already received 5 years of TANF support. 34. PROHIBITIONS; REQUIREMENTS\u2014NO ADDITIONAL CASH ASSISTANCE FOR CHILDREN BORN TO FAMILIES RECEIVING ASSISTANCE Present law No provision. House bill 1. Block grant funds may not be used to provide cash benefits for a child born to a recipient of cash welfare benefits or an individ- ual who received cash benefits at any time during the 10-month pe- riod ending with the birth of the child. This prohibition does not apply to children born as a result of rape or incest. Block grant funds can be used to provide noncash (voucher) assistance for par- ticular goods and services suitable for the care of the child. 2. States that pass a law specifically exempting their own pro- grams from this national rule may use Federal funds to increase cash benefits for families that have additional children while on welfare. 3. If a State has a family cap policy under a section 1115 waiv- er on the date of enactment, it may continue terms of those family caps. Senate amendment 1. Same family cap provision except that Senate amendment does not explicitly provide for use of block grant funds to give voucher assistance for care of the excluded child. (This provision was deleted because of the Byrd rule.) 2. Same. 3. Same provision, but adds permission for States to continue terms of family caps resulting from State law passed within 2 years of enactment. Conference agreement This provision was deleted due to the Byrd rule. 286 35. PROHIBITIONS; REQUIREMENTS\u2014NONCOOPERATION IN CHILD SUPPORT Present law As a condition of eligibility, applicants or recipients must co- operate in establishing paternity of a child born out-of-wedlock, in obtaining support payments, and in identifying any third party who may be liable to pay for medical care and services for the child. House bill The State must stop paying the parent’s share of the family welfare benefit if the parent fails to cooperate in establishing pater- nity, or in establishing, modifying or enforcing a child support order, and the individual does not qualify for a good cause or other exception; the State may deny benefits to the entire family for the parent’s failure to cooperate. Senate amendment If a parent fails to cooperate in establishing paternity or in es- tablishing, modifying, or enforcing a child support order, and the individual does not qualify for a good cause or other exception, the State shall reduce the family’s benefit by at least 25 percent. It may reduce the benefit to zero. Conference agreement The conference agreement follows the Senate amendment. 36. PROHIBITIONS; REQUIREMENTS\u2014FAILURE TO ASSIGN CERTAIN SUPPORT RIGHTS TO THE STATE Present law As a condition of AFDC eligibility, applicants must assign child support and spousal support rights to the State. House bill Block grant funds may not be used to provide cash benefits to a family with an adult who has not assigned to the State rights to child support or spousal support. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 37. PROHIBITIONS; REQUIREMENTS\u2014SCHOOL ATTENDANCE REQUIRED FOR ADULTS WITHOUT A DIPLOMA Present law No provision. House bill No provision. 287 Senate amendment Prohibits any TANF-funded assistance to the family of an adult older than 20 but younger than 51 who has received IV-A aid or food stamps if the person does not have, or is not working to- ward, a secondary school diploma or its equivalent. An exception is made for a person determined to lack the capacity to successfully complete the course of study. Conference agreement The conference agreement follows the Senate amendment. 38. PROHIBITIONS; REQUIREMENTS\u2014SCHOOL ATTENDANCE REQUIRED FOR MINOR CHILDREN Present law No provision. House bill No provision. Senate amendment Prohibits any TANF-funded aid to a family that includes an adult who has received IV A benefits or food stamps unless the adult ensures that the family’s minor dependent children attend school as required by the law of their State. Provides that a State shall not be prohibited from sanctioning a family with an adult who fails to meet this requirement. Conference agreement The conference agreement follows the Senate amendment. 39. PROHIBITIONS; REQUIREMENTS\u2014UNWED MINOR PARENT NOT ATTENDING HIGH SCHOOL OR NOT LIVING WITH AN ADULT Present law States may require unwed parents under age 18 to live with an adult in order to receive AFDC. They must require a custodial parent who is under 20 years old and who has not completed high school to participate in an educational activity under the JOBS pro- gram. House bill States have the option of using Federal funds to provide cash welfare payments to unmarried minors only under specified condi- tions. States may not use Federal family assistance grant funds to provide assistance to unwed parents under age 18 who have a child at least 12 weeks of age and did not complete high school unless they attend high school or an alternative educational or training program. States may not use Federal funds to provide assistance to unmarried parents under age 18 unless they live with a parent or in another adult-supervised setting; States may, under certain circumstances, use Federal funds to assist teen parents in locating and providing payment for a second chance home or other adult- supervised living arrangement. 288 Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 40. PROHIBITIONS; REQUIREMENTS\u2014MEDICAL SERVICES Present law States must assure that family planning services are offered to all AFDC recipients who request them. (The Secretary is to reduce AFDC payments by 1 percent for failure to offer and provide family planning services to those requesting them.) House bill Federal family assistance grants may not be used to provide medical services; Federal funds may, however, be used to provide prepregnancy family planning services. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 41. PROHIBITIONS; REQUIREMENTS\u2014TIME-LIMITED BENEFITS Present law No provision. House bill Federal family assistance grants may not be used to provide assistance for the family of a person who has received block grant aid for 60 months (or fewer, at State option), whether or not con- secutive. States may give hardship exemptions in a fiscal year to up to 20 percent of their average monthly caseload, including indi- viduals who have been battered or subjected to sexual abuse (but States are not required to exempt these persons). When considering an individual’s length of stay on welfare, States are to count only time during which the individual received assistance as the head of household or as the spouse of the household head. Any State funds spent to aid persons no longer eligible for TANF after 5 years of benefits may be counted toward the maintenance-of-effort re- quirement. This part shall not be interpreted to prohibit a State from using State funds not originating with the Federal government to aid families that lose eligibility for the block grant program be- cause of the 5-year time limit. Senate amendment Same, except adds an exemption from the time limit for per- sons who live on a reservation of an Indian tribe with a population 289 of at least 1,000 persons and with at least 50 percent of the adult population not employed. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment on the time limit policy, and includes the Senate provision on exceptions for certain Indian populations and the House provision specifying States’ authority to use State and local funds to provide support, including cash assistance, after 5 years. (For a description of other Federal funds that may be provided such families, see the conference agreement description of item 33 above.) 42. PROHIBITIONS; REQUIREMENTS\u2014FRAUDULENT MISREPRESENTATION OF RESIDENCE IN TWO STATES Present law No provision. House bill Any person convicted in Federal court or State court of having fraudulently misrepresented residence in order to obtain benefits or services in two or more States from the family assistance grant, Medicaid, Food Stamps, or Supplemental Security Income pro- grams is ineligible for family assistance grant aid for 10 years. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 43. PROHIBITIONS; REQUIREMENTS\u2014FUGITIVE FELONS AND PROBATION AND PAROLE VIOLATORS Present law States may provide a recipient’s address to a State or local law enforcement officer who furnishes the recipient’s name and social security number and demonstrates that the recipient is a fugitive felon and that the officer’s official duties include locating or appre- hending the felon. House bill No assistance may be provided to an individual who is fleeing to avoid prosecution, custody or confinement after conviction for a crime (or an attempt to commit a crime) that is a felony (or, in New Jersey, a high misdemeanor), or who violates probation or parole imposed under Federal or State law. Any safeguards established by the State against use or disclo- sure of information about individual recipients shall not prevent the agency, under certain conditions, from providing the address of a recipient to a law enforcement officer who is pursuing a fugitive felon or parole or probation violator. This provision applies also to a recipient sought by an officer not because he is a fugitive but be- 290 cause he has information that the officer says is necessary for his official duties. In both cases the officer must notify the State that location or apprehension of the recipient is within his official du- ties. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 44. PROHIBITIONS; REQUIREMENTS\u2014MINOR CHILDREN ABSENT FROM HOME FOR A SIGNIFICANT PERIOD Present law Regulations allow benefits to continue for children who are ”temporarily absent” from home. House bill No assistance may be provided for a minor child who has been absent from the home for 45 consecutive days or, at State option, between 30 and 180 consecutive days. States may establish a good cause exemption as long as it is detailed in the State report to the Secretary. No assistance can be given to a parent or caretaker who fails to report a missing minor child within five days of the time when it is clear (to the parent) that the child will be absent for the specified time. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 45. PROHIBITIONS; REQUIREMENTS\u2014MEDICAL ASSISTANCE REQUIRED TO BE PROVIDED FOR FAMILIES BECOMING INELIGIBLE FOR ASSIST- ANCE DUE TO INCREASED EARNINGS OR COLLECTION OF CHILD SUP- PORT Present law States must continue Medicaid (or pay premiums for employer- provided health insurance) for 6 months to a family that loses AFDC eligibility because of hours of, or income from, work of the caretaker relative, or because of loss of the earned income dis- regard after 4 months of work. States must offer an additional 6 months of medical assistance, for which it may require a premium payment if the family’s income after child care expenses is above the poverty guideline. For extended medical aid, families must sub- mit specified reports. States must continue Medicaid for 4 months to those who lose AFDC because of increased child or spousal sup- port. 291 House bill States must provide medical assistance for 1 year to families that become ineligible for block grant assistance because of in- creased earnings, provided they received cash block grant assist- ance in at least 3 of the 6 months before the month in which they became ineligible and their income is below the poverty line. For purposes of determining family income to compare with the Federal poverty line, States have the authority to set their own definition of income except that income from the Earned Income Tax Credit must be disregarded. States also must provide medical assistance for 4 months to families that leave welfare (after being enrolled for at least 3 of the previous 6 months) because of increased income from child support or spousal support. Senate amendment Same as current law. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment, with the modification that income restrictions con- form to current law. Transitional Medicaid coverage is extended through the life of the block grant. 46. PROHIBITIONS; REQUIREMENTS\u2014MEDICAID Present law States must provide Medicaid to all AFDC recipients and to some AFDC-related groups who do not receive cash aid. Examples include persons who do not receive a monthly payment because the amount would be below $10 (Federal law prohibits payments this small) and persons whose payments are reduced to zero in order to recover previous overpayments. States must continue Medicaid for specified periods for certain families who lose AFDC benefits. If the family loses AFDC benefits because of increased earnings or hours of employment, Medicaid coverage must be extended for 12 months. (During the second 6 months a premium may be imposed, the scope of benefits may be limited, or alternate delivery systems may be used.) If the family loses AFDC because of increased child or spousal support, coverage must be extended for 4 months. States are also required to furnish Medicaid to certain two-parent families whose principal earner is unemployed and who are not receiving cash assistance because the State has set a time limit on their AFDC coverage. House bill States must provide medical assistance to persons who would be eligible for AFDC cash benefits (under terms of July 16, 1996) if that program still were in effect. A State may increase the AFDC income standard above that of July 16, 1996 by the percentage increase in the consumer price index for all urban consumers over the same period. 292 Senate amendment States must provide medical assistance to persons who would be eligible for AFDC (under terms of July 1, 1996) as if that pro- gram were still in effect. Simplifies standards to make it easier for States to administer. States would have the option to: (1) lower their income standard, but not below those in effect on May 1, 1988; and (2) use income and resource standards and methodolo- gies that are less restrictive than those in effect on July 1, 1996. In order to provide States additional flexibility, States may use 1 application form and may administer the program through either its title IV agency or its title XIX agency. Families would receive transitional Medicaid benefits as under current law. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment, with the modification that States must retain the income and resource standards they had for AFDC eligibility on July 16, 1996. States may terminate Medicaid eligibility for an adult who is terminated from TANF because of failure to work. Conferees are concerned that the conference agreement may re- quire States to maintain a dual-eligibility determination system. Conferees, however, lacked adequate information to determine the true nature and extent of this problem. Thus, conferees recommend that the Committees on Ways and Means, Commerce, and Finance conduct hearings in the next Congress to carefully examine this problem. If the committees determine that the dual-eligibility sys- tem does in fact impose additional administrative costs on the States, Congress should consider Federal-State cost-sharing schemes and other legislative solutions. In the meantime, conferees are establishing a fund of $.5 billion in entitlement spending that will be distributed among States that experience additional admin- istrative expenses directly attributable to conducting a dual-eligi- bility system. 47. PROHIBITIONS; REQUIREMENTS\u2014STATE DISREGARD OF INCOME SECURITY PAYMENTS Present law AFDC benefits may not be paid to a recipient of old-age assist- ance (predecessor to Supplemental Security Income (SSI) and now available only in Puerto Rico, Guam, and the U.S. Virgin Islands), SSI, or AFDC foster care payments. House bill This provision allows States to disregard payments from old age and survivors’ insurance (social security), disability insurance, old-age assistance, foster care, and Supplemental Security Income in determining the amount of block grant cash assistance to be pro- vided to a family. Senate amendment No provision. 293 Conference agreement The conference agreement follows the Senate amendment. 48. PROHIBITIONS; REQUIREMENTS\u2014NONDISCRIMINATION Present law No explicit provision in current AFDC\/JOBS law. House bill No provision. Senate amendment States that have any program or activity that receives block grant funds for Temporary Assistance for Needy Families shall be subject to enforcement authorized under the Age Discrimination Act of 1975, the Rehabilitation Act of 1973 (sec. 504), and the Civil Rights Act of 1964 (Title VI). Conference agreement The conference agreement follows the Senate amendment. 49. PROHIBITIONS; REQUIREMENTS\u2014DENIAL OF BENEFITS FOR CERTAIN DRUG-RELATED CONVICTIONS Present law No explicit provision. House bill No provision. Senate amendment An individual convicted under Federal or State law of any crime related to illegal possession, use, or distribution of a drug is ineligible for any Federal means-tested benefit (for 5 years for a misdemeanor and for life for a felony). Family members or depend- ents of the individual are exempted, and individuals made ineli- gible would continue to be eligible for emergency benefits, including emergency medical services. Conference agreement The conference agreement follows the Senate amendment, with the modification that only TANF block grant benefits and food stamps are denied and that the denial is only for a felony offense. 50. PENALTIES\u2014USE OF GRANT IN VIOLATION OF THIS PART Present law If the Secretary finds that a State has failed to comply with the State plan, she is to withhold all payments from the State (or limit payments to categories not affected by noncompliance). House bill Note.\u2014Before imposing any of the penalties below, the Sec- retary shall notify the State of the violation and allow the State to enter into a corrective action plan (item 60). Also, except for items 294 51 and 52, the Secretary may not impose a penalty if she finds that the State has reasonable cause for its failure to comply. If an audit finds that a State has used Federal funds in viola- tion of the purposes of this title, the Secretary shall reduce the fol- lowing quarter’s payment by the amount misused. If the State can- not prove that the misuse was unintentional, the State’s following quarter payment will be reduced by an additional five percent. Senate amendment Same. See also item 57, Failure to Comply with Provisions of IV A or State Plan. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 51. PENALTIES\u2014FAILURE TO SUBMIT REQUIRED REPORT Present law There is no specific penalty for failure to submit a report, al- though the general noncompliance penalty could apply. House bill If a State fails to submit a required quarterly report within one month after the end of a fiscal quarter, the Secretary shall re- duce by 4 percent the block grant amount otherwise payable to the State for the next fiscal year. However, the penalty shall be re- scinded if the State submits the report before the end of the fiscal quarter succeeding the one for which the report was due. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 52. PENALTIES\u2014FAILURE TO SATISFY MINIMUM PARTICIPATION RATES Present law If a State fails to achieve the JOBS participation rate specified in law, the Secretary is to reduce to 50 percent the Federal match- ing rate for JOBS activities and for full-time personnel costs, which now ranges from 60 percent to 78 percent among States. (However, see item 54, ”Corrective Compliance,” for penalty waiver authority.) House bill If a State fails to achieve its required work participation rate for the fiscal year, the Secretary shall reduce the following year’s block grant by up to 5 percent, with the percentage cut based on the ”degree of noncompliance.” The Secretary has the authority to reduce the penalty if the State economy is in recession. In addition, failure to meet required work participation requirements results in States’ being required to maintain 80 percent of historic spending levels, instead of 75 percent. 295 Senate amendment Imposes a graduated penalty on each consecutive failure by a State to meet the work participation standard. The Senate amend- ment also does not authorize the Secretary to reduce the penalty for States with high unemployment. Conference agreement On penalty amounts, the conference agreement follows the Senate amendment with the modification that there is a graduated penalty of 5 percent the first year and 2 percent in addition to the prior year’s penalty in subsequent years (so annual penalties in consecutive years would be 5 percent in the first year, 7 percent in the second, 9 percent in the third, and so on), with a maximum cumulative penalty of 21 percent. The conference agreement follows the House bill in authorizing the Secretary to reduce the penalty for needy States as defined under the contingency fund eligibility criteria. 53. FAILURE TO PARTICIPATE IN THE INCOME AND ELIGIBILITY VERIFICATION SYSTEM Present law States must have in effect an Income and Eligibility Verifica- tion System covering AFDC, Medicaid, unemployment compensa- tion, the Food Stamp program, and adult cash aid in the outlying areas. There is no specific penalty for failure to comply. House bill If the State fails to participate in the Income and Eligibility Verification System (IEVS) designed to reduce welfare fraud, the Secretary shall reduce by up to 2 percent the annual family assist- ance grant of the State. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 54. FAILURE TO COMPLY WITH PATERNITY ESTABLISHMENT AND CHILD SUPPORT ENFORCEMENT REQUIREMENTS Present law The penalty against a State for noncompliance with child sup- port enforcement rules\u2014loss of AFDC matching funds\u2014shall be suspended if a State submits and implements a corrective action plan. House bill If the Secretary determines that a State does not enforce pen- alties requested by the Title IV D child support enforcement agen- cy against recipients of cash aid who fail to cooperate in establish- ing paternity or in establishing, modifying, or enforcing a child sup- 296 port order under Title IV D (and who do not qualify for any good cause or other exception), the Secretary shall reduce the cash as- sistance block grant by up to five percent. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 55. FAILURE TO TIMELY REPAY A FEDERAL LOAN FUND FOR STATE WELFARE PROGRAMS Present law No provision. House bill If a State fails to pay any amount borrowed from the Federal Loan Fund for State Welfare Programs within the maturity period, plus any interest owed, the Secretary shall reduce the State’s fam- ily assistance block grant for the immediately succeeding fiscal year quarter by the outstanding loan amount, plus the interest owed on it. The Secretary may not forgive these overdue debts. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 56. FAILURE OF ANY STATE TO MAINTAIN CERTAIN LEVEL OF HISTORIC EFFORT Present law No provision. House bill If in fiscal years 1997 through 2001 a State fails to spend a sum equal to at least 75 percent of its ”historic level” (generally fis- cal year 1994 expenditures for AFDC, JOBS, Emergency Assist- ance, AFDC-related child care and ”at-risk” child care) of State spending on specified programs, the Secretary shall reduce the fol- lowing year’s family assistance grant (that is, in fiscal years 1998 through 2002) by the difference between the 75 percent require- ment and what the State actually spent. However, States that fail to meet required work participation rates must maintain 80 per- cent of historic spending levels. Qualified State expenditures that count toward the 75 percent (or 80 percent) spending requirement are all State-funded expendi- tures under all State programs that provide any of the following assistance to families eligible for family assistance benefits (and those no longer eligible because of the 5-year time limit or ineli- gible because of the Act’s treatment of noncitizens): cash and child 297 care assistance; educational activities designed to increase self-suf- ficiency, job training and work (excluding any expenditure for pub- lic education in the State other than expenditures for services or assistance to a member of an eligible family that is not generally available to other persons); administrative costs not to exceed 15 percent of the total amount of qualified State expenditures; and any other use of funds reasonably calculated to accomplish pur- poses of the temporary family assistance. Qualified expenditures exclude spending from funds transferred from State or local pro- grams except those that exceed the amount expended in 1996 or those for which the State is entitled to a Federal payment under former AFDC\/JOBS law (as in effect just before enactment). The Secretary is to reduce the 75 percent (or 80 percent) main- tenance of effort spending requirement by up to eight percentage points (i.e., to no lower than 67 percent or 72 percent) for States that achieve ”high performance” scores, based on a threshold to be set by the Secretary, for achieving the goals of the program of Tem- porary Assistance for Needy Families (TANF). Senate amendment Raises required State spending to 80 percent of the ”historic” level for all States. (Does not distinguish between States that meet or fail work participation rates in maintenance-of-effort rule.) The Secretary is to reduce the 80 percent spending require- ment by up to 8 percentage points (to as low as 72 percent) for States with high performance scores. (This provision was deleted because of the Byrd rule.) Conference agreement The conference agreement follows the House bill, except that the provision allowing reduction of required State spending for high performance States is dropped. Conferees note that State spending on programs that promote self-sufficiency and prevent welfare dependence including, but not limited to, substance abuse treatment, teen parenting and pregnancy prevention shall count to- wards a State’s maintenance of effort. The fact that such funds are spent through or by State or local education agencies should not prevent their being counted towards the State maintenance of ef- fort. 57. SUBSTANTIAL NONCOMPLIANCE OF STATE CHILD SUPPORT ENFORCEMENT PROGRAM REQUIREMENTS Present law If a State child support program is found not to be in substan- tial compliance with Federal requirements, the Secretary is to re- duce AFDC matching funds: by 1 2 percent for first finding of non- compliance, by 2 3 percent for second consecutive finding, and by 3 5 percent for third or subsequent finding. (See ”corrective compli- ance” item 54.) Note: State child support plans must undertake to establish paternity of children born out-of-wedlock for whom AFDC is sought, and AFDC law requires the parent to cooperate in estab- lishing paternity. Failure to cooperate makes the parent ineligible for AFDC. 298 House bill If a State child support enforcement program is found by re- view not to have complied with Title IV D requirements, and the Secretary determines that the program is not in compliance at the time the finding is made, then the Secretary will reduce the State’s quarterly block grant payment for each quarter during which the State is not in compliance. For the first finding of noncompliance, the reduction will be between one and two percent; for the second consecutive finding, between two and three percent; for the third or subsequent findings, between three and five percent. Non-com- pliance of a technical nature is to be disregarded. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 58. FAILURE OF STATE RECEIVING AMOUNTS FROM CONTINGENCY FUND TO MAINTAIN 100 PERCENT OF HISTORIC EFFORT Present law Not relevant. House bill If the Secretary determines that a State failed to maintain 100 percent of historic State spending, as required during a year in which contingency funds are paid to the State, the following year’s block grant payment to the State is to be reduced by the amount of contingency funds paid. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 59. REQUIRED REPLACEMENT OF GRANT FUND REDUCTIONS CAUSED BY PENALTIES Present law Not applicable. House bill If a State’s block grant is reduced as a result of one of the above penalties, the State must, during the following fiscal year, replace the penalized funds using State funds. Senate amendment Same. 299 Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 60. PENALTIES\u2014FAILURE TO PROVIDE MEDICAL ASSISTANCE TO FAMI- LIES BECOMING INELIGIBLE FOR ASSISTANCE UNDER THIS PART DUE TO INCREASED EARNINGS FROM EMPLOYMENT OR COLLECTION OF CHILD SUPPORT Present law If the Secretary finds that a State fails to comply substantially with any required provision of its Medicaid plan (including transi- tional benefits for former AFDC families), she shall withhold all payments to the State (or limit payments to categories not affected by the noncompliance). House bill If the Secretary determines that a State does not comply with the requirement to provide extended medical assistance for certain families that become ineligible for block grant assistance due to in- creased earnings or the collection of child support, the Secretary must reduce the State’s block grant by up to 5 percent (depending on the severity of the violation). Senate amendment No specific provision about failure to comply with requirement for extended medical assistance, but see item below. Conference agreement The conference agreement follows the Senate amendment. 61. PENALTIES\u2014FAILURE TO COMPLY WITH PROVISIONS OF IV A OR STATE PLAN Present law If the Secretary finds that a State has failed to comply with the State plan, she is to withhold all payments from the State (or limit payments to categories not affected by noncompliance). (Item 46 above.) House bill No general penalty for failure to comply with State plan. Senate amendment If the Secretary, after notice and hearing, finds that a State has not substantially complied with any provision of IV A or the State plan during a fiscal year, she shall (if a preceding penalty paragraph does not apply) reduce the grant for the next year by up to 5 percent and shall continue an annual reduction of up to 5 per- cent until she determines that the State no longer is out of compli- ance. 300 Conference agreement The conference agreement follows the House bill, with the modification that a new penalty provision is added for States that fail to meet the requirement to not sanction, for failure to perform work, single parents who prove they cannot find child care for a child under age 6. 62. PENALTIES\u2014FAILURE TO COMPLY WITH 5-YEAR LIMIT ON ASSISTANCE Present law Not relevant. House bill No specific provision. Senate amendment If the Secretary determines that a State during a fiscal year has not complied with the 5-year time limit (for TANF-funded aid), she is to reduce the basic TANF grant for the next year by 5 per- cent. Conference agreement The conference agreement follows the Senate amendment. 63. PENALTIES\u2014REASONABLE CAUSE EXCEPTION Present law Not applicable. (States are eligible for unlimited funds, but must match every dollar at a prescribed rate.) House bill The Secretary may (except for failure to timely repay the loan fund, failure to meet the maintenance-of-effort requirement and re- quirement to replace grant reductions caused by penalties) with- hold penalties against a State if she determines that the State had reasonable cause for failing to comply with the requirement. Senate amendment The Secretary may (except for failure to timely repay the loan fund or failure to meet the maintenance-of-effort requirement) withhold penalties against a State if she determines that the State had reasonable cause for the failure. Conference agreement The conference agreement follows the House bill. 64. PENALTIES\u2014CORRECTIVE COMPLIANCE PLAN Present law The penalty against a State for substantial noncompliance with child support rules is loss of AFDC matching funds. That pen- alty shall be suspended if a State submits and implements a cor- rective action plan. Also, if a State fails to achieve the JOBS par- ticipation rate specified in law, the Secretary may waive, in whole 301 or part, the reduction in matching funds, provided the State has submitted a proposal likely to achieve the applicable participation rate for the current year. House bill Before assessing a penalty against a State under any program established or modified by this Act, the Secretary must notify the State of the violation and allow the State an opportunity to enter into a corrective compliance plan within 60 days of the notification. The Federal government will have 60 days within which to accept or reject the plan; if it accepts the plan, and if the State corrects the violation, no penalty will be assessed. A plan submitted by a State is deemed to be accepted if the Secretary does not accept or reject the plan during the 60-day period after the plan is submit- ted. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 65. PENALTIES\u2014LIMITATION ON AMOUNT OF PENALTY Present law If the Secretary finds that a State has failed to comply with the State AFDC plan, he is to withhold all AFDC payments from the State (or limit payments to categories not affected by the non- compliance.) House bill In imposing the penalties described above, a State’s quarterly family assistance grant cannot be reduced by more than a total of 25 percent; if necessary, penalties in excess of 25 percent will be carried forward to the immediately following fiscal year. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 66. APPEAL OF ADVERSE DECISION Present law Current law (sec. 1116 of the Social Security Act) entitles a State to a reconsideration, which HHS must grant upon request, of any disallowed reimbursement claim for an item or class of items. The section also provides for administrative and judicial review, upon petition of a State, of HHS decisions about approval of State plans. At the option of a State, any plan amendment may be treat- ed as the submission of a new plan. 302 House bill The Secretary is required to notify the Governor of a State within five days of any adverse decision or action under Title IV A, including any decision about the State’s plan or imposition of a penalty. This section provides for administrative review by a De- partmental Appeals Board within HHS, requires a Board decision within 60 days after an appeal is filed, and provides for judicial re- view (by a United States district court) within 90 days after a final decision by the Board. The proposal also repeals the reference to Title IV A in section 1116. Senate agreement Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 67. DATA COLLECTION AND REPORTING\u2014GENERAL REPORTING REQUIREMENT Present law States are required to report the average monthly number of families in each JOBS activity, their types, amounts spent per fam- ily, length of JOBS participation and the number of families aided with AFDC\/JOBS child care services, the kinds of child care serv- ices provided, and sliding fee schedules. States that disallow AFDC for minor mothers in their own living quarters are required to re- port the number living in their parent’s home or in another super- vised arrangement. States also must report data (including num- bers aided, types of families, how long aided, payments made) for families who receive transitional Medicaid benefits. House bill The National Integrated Quality Control System draws month- ly samples of AFDC cases and reports extensive background infor- mation about each case in the sample. JOBS regulations require States to submit a sample of monthly unaggregated case record data. Senate amendment Each eligible State must collect on a monthly basis, and report to the Secretary on a quarterly basis, the following information on individual families receiving assistance: 1. the county of residence of the family; 2. whether a child receiving assistance or an adult in the family is disabled; 3. the ages of family members; 4. the number of individuals in the family, and the rela- tionship of each member to the youngest child; 5. the employment status and earnings of the employed adult; 6. the marital status of adults, including whether they are never married, widowed, or divorced; 303 7. the race and educational status of each adult; 8. the race and educational status of each child; 9. whether the family received subsidized housing, Medic- aid, food stamps, or subsidized child care, and if the latter two, the amount received; 10. the number of months the family has received each type of assistance under the program; 11. if the adults participated in, and the number of hours per week of participation in, the following activities: education; subsidized private sector employment; unsubsidized employ- ment; public sector employment, work experience, or commu- nity service; job search; job skills training or on-the-job train- ing; and vocational education; 12. information necessary to calculate the State work par- ticipation rates; 13. the type and amount of assistance received under the program, including the amount of and reason for any reduction of assistance (including sanctions); 14. any amount of unearned income received by any family member; and 15. the citizenship of family members. In addition to data on individual cases, States must report, on a sample of cases closed during the quarter, whether families left welfare because of employment, marriage, the five-year time limit on benefits, sanction, or State policy. States may use scientifically acceptable sampling methods ap- proved by the Secretary to estimate the required data elements. The Secretary shall provide States with case sampling plans and data collection procedures deemed necessary for statistically valid estimates. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 68. OTHER STATE REPORTING REQUIREMENTS Present law Regulations require each State to submit quarterly estimates of the total amount (and the Federal share) of expenditures for AFDC benefits and administration. Required quarterly reports in- clude estimates of the Federal share of child support collections made by the State. House bill The above quarterly report submitted by the State must also include: 1. a statement of the percentage of the funds paid to the State that is used to cover administrative costs or overhead; 2. a statement of the total amount expended by the State during the quarter on programs for needy families; 304 3. the number of noncustodial parents in the State who participated in work activities as defined in the proposal dur- ing the quarter; and 4. the total amount spent by the State for providing transi- tional services to a family that no longer receives assistance because of employment, along with a description of those serv- ices. The Secretary shall prescribe regulations necessary to define the data elements. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 69. DATA COLLECTION AND REPORTING\u2014ANNUAL REPORTS TO THE CONGRESS BY THE SECRETARY Present law The law requires the HHS Secretary to report promptly to Congress the results of State reevaluations of AFDC need stand- ards and payment standards required at least every 3 years. The Secretary is to annually compile and submit to Congress annual State reports on at-risk child care. The Family Support Act re- quires the Secretary to submit recommendations regarding JOBS performance standards by a deadline that was extended. House bill Not later than 6 months after the end of fiscal year 1997, and each fiscal year thereafter, the Secretary shall send Congress a re- port describing: 1. whether States are meeting minimum participation rates and whether they are meeting objectives of increasing employment and earnings of needy families, increasing child support collections, and decreasing out-of-wedlock pregnancies and child poverty; 2. demographic and financial characteristics of applicant families, recipient families, and those no longer eligible for temporary family assistance; 3. characteristics of each State program funded under this part; and 4. trends in employment and earnings of needy families with minor children. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 305 70. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES\u2014 GRANTS FOR INDIAN TRIBES Present law No provision for AFDC administration by Indian tribes. Indian and Alaska families with children receive AFDC benefits on the same terms as other families in their States, from State or local AFDC agencies. More than 80 tribes and native organizations in 24 States are JOBS grantees, having applied to conduct JOBS within 6 months of enactment of the law establishing it. Their JOBS allocation of funds is deducted from that of their State. House bill For each fiscal year 1997 through 2000, the Secretary shall pay tribal family assistance grants to eligible Indian tribes (and shall reduce the family assistance grant for the State(s) in which the tribe’s service area lies accordingly). The tribal family assistance grant is equal to the total amount of Federal payments to the State for fiscal year 1994 in AFDC benefits, AFDC Administration, Emergency Assistance, and JOBS funds for Indian families resid- ing in the tribal service area. The Secretary shall pay tribes that participated in the JOBS program in fiscal year 1995 a grant equal to their fiscal year 1994 JOBS funding ($7.6 million). This sum is appropriated for each of six fiscal years, 1996 through 2001. Senate amendment Same as the House bill, except for adding a fifth year, 2001, for tribal family assistance grants. Conference agreement The conference agreement follows the Senate amendment. 71. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES\u2014 THREE-YEAR TRIBAL FAMILY ASSISTANCE PLAN Present law Not applicable. House bill Indian tribes must submit a tribal family assistance plan to be eligible to receive a tribal family assistance grant. The plan must outline the tribe’s approach to providing welfare services during the 3-year period, specify how services will be provided, identify populations and areas served, provide that families will not receive duplicate assistance from a State or other tribal assistance plan, identify employment opportunities in the service area, and apply fiscal accountability provisions of the Indian Self-Determination and Education Assistance Act relating to the submission of a sin- gle-agency audit report required under current law. The Secretary must approve tribal family assistance plans that meet the above requirements. For each tribe receiving a family as- sistance grant and with the participation of the tribe, the Secretary shall establish minimum work requirements, time limits, and pen- 306 alties that are consistent with provisions of this Act and the eco- nomic conditions and resources of the tribe. Tribes will be subject to the same penalties as States for misusing funds, failing to pay back Federal loan funds, and failing to meet work participation rates. Tribes will also be required to abide by the same data collec- tion and reporting requirements as States. Unless excepted through a waiver, tribes in Alaska that receive tribal family assistance grants must operate a program comparable to the temporary family assistance program of the State of Alaska. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 72. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014RESEARCH Present law Section 1110 of the Social Security Act authorizes and appro- priates ”such sums as the Congress may determine” for making grants and contracts to (or jointly financed arrangements with) States and public or private organizations for cooperative research or demonstration projects, such as those relating to the prevention and reduction of dependency. House bill The Secretary shall conduct research on the effects, benefits, and costs of operating State programs of Temporary Assistance for Needy Families, including time limits for eligibility. The research shall include studies on the effects of different programs and the impacts of the programs on welfare dependency, illegitimacy, teen pregnancy, employment rates, child well-being, and other appro- priate issues. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 73. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014DEVELOPMENT AND EVALUATION OF INNOVATIVE APPROACHES TO REDUCING WEL- FARE DEPENDENCY AND INCREASING CHILD WELL-BEING Present law Section 1115 of the Social Security Act authorizes waiver of specified provisions of AFDC law for State experimental, pilot or demonstration projects to promote objectives of the law, including self-support of parents and stronger family life. 307 House bill The Secretary may assist States in developing, and shall evalu- ate, innovative approaches for reducing welfare dependency and in- creasing the well-being of minor children, using random assign- ments in these evaluations to the maximum extent feasible. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 74. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014 DISSEMINATION OF INFORMATION Present law No provision. House bill The Secretary shall develop innovative methods of disseminat- ing information on research, evaluations, and studies, including ways to facilitate sharing of information via computers and other technologies. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 75. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014ANNUAL RANKINGS OF STATES AND REVIEW OF MOST AND LEAST SUCCESS- FUL WORK PROGRAMS Present law No provision. House bill The Secretary shall rank annually States receiving family as- sistance grants in the order of their success in moving families off welfare and into work, reducing the caseload, and, when a prac- ticable method of calculation becomes available, diverting persons from applying to the program. The Secretary shall review annually the three most and three least successful programs under these cri- teria. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 308 76. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014ANNUAL RANKINGS OF STATES AND REVIEW OF ISSUES RELATING TO OUT-OF- WEDLOCK BIRTHS Present law No provision. House bill The Secretary shall rank States annually on the percentage of births to families on welfare that are out-of-wedlock and on net changes in the percentage of out-of-wedlock births to families on welfare. The Secretary must review the programs of the five high- est and five lowest ranking States under these criteria. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 77. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014STATE- INITIATED EVALUATIONS Present law In a 1994 public notice, HHS stated that it is committed to a broad range of evaluation strategies, including true experimental, quasi-experimental, and qualitative designs, for demonstrations op- erating under waivers. Section 1115(d) of the Social Security Act required the Secretary to enter into agreements with up to eight applicant States to conduct demonstration projects testing more lib- eral treatment of unemployed 2-parent families. The law stipulated that the States must evaluate costs and work effort results by use of experimental and control groups. House bill A State is eligible to receive funding to evaluate its family as- sistance program if it submits an evaluation design determined by the Secretary to be rigorous and likely to yield credible and useful information. The State must pay 10 percent of the study’s cost, un- less the Secretary waives this rule. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 78. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014REPORT ON CIRCUMSTANCES OF CERTAIN CHILDREN AND FAMILIES Present law No provision. 309 House bill Beginning 3 years after enactment, the Secretary shall submit an annual report to 4 congressional committees (Ways and Means, Economic and Educational Opportunities, Finance, and Labor and Human Resources) about children whose families reached the cash assistance time limit of TANF, families that include a child ineli- gible because of the family cap, children born to teenaged parents, and persons who became parents as teenagers after enactment. For each of these four groups, detailed information is required, includ- ing percentages that dropped out of school, are employed, have been convicted of a crime or judged delinquent, continue to partici- pate in TANF, have health insurance (and whether from private entity or government), and average family incomes. Senate amendment No provision. Conference agreement The conference agreement follows the House bill. 79. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES\u2014FUNDING OF STUDIES AND DEMONSTRATIONS Present law See ”Research” above. For Section 1115(a) ”waiver” projects (”Innovative Approaches” above) Federal cost neutrality over the life of a demonstration project is required. Note: The annual budgets of HHS request funds for policy re- search. The fiscal year 1997 budget seeks $9 million and lists these priority issues: issues related to welfare reform, health care, family support and independence, poverty, at-risk children and youth, aging and disability, science policy, and improved access to health care and support services. House bill For research, development and evaluation of innovative ap- proaches, State-initiated evaluation studies of the family assistance program, and for costs of operating and evaluating demonstration projects begun under the AFDC waiver process, this section author- izes to be appropriated, and appropriates, a total of $15 million an- nually for 6 fiscal years, 1996 through 2001. Half of this sum is al- located to the purposes described above in ”Research” and ”Innova- tive Approaches” and half to the other purposes. The Secretary may implement and evaluate demonstrations of innovative and promising strategies that provide one-time capital funds to establish, expand, or replicate programs, test performance- based funding, and test strategies in multiple States and types of communities. Senate amendment Same, except provides funding only in 4 fiscal years, 1998 through 2001. 310 Conference agreement The conference agreement follows the House bill, with the modification to appropriate for the years 1996 through 2002. 80. CHILD POVERTY RATES Present law No provision. House bill No provision. Senate amendment Not later than 90 days after enactment, the governor of a State shall submit to the Secretary a statement of the child poverty rate in the State. Annually thereafter, the governor shall report the child poverty rate to the Secretary. If the rate increases by 5 per- cent or more as a result of changes made by the Act, the State shall prepare a corrective action plan to reduce the incidence of child poverty. Conference agreement The conference agreement follows the Senate amendment on the submission of reports on child poverty rates and the corrective action plans. The conference agreement follows the House bill on provisions in the Senate amendment that provide the Secretary of HHS with the authority to alter State plans. 81. STUDY BY THE CENSUS BUREAU Present law No provision. House bill The Census Bureau must expand the Survey of Income and Program Participation (SIPP) to evaluate the impact of welfare re- forms made by this title on a random national sample of recipients and, as appropriate, other low-income families. The study should focus on the impact of welfare reform on children and families, and should pay particular attention to the issues of out-of-wedlock birth, welfare dependency, the beginning and end of welfare spells, and the causes of repeat welfare spells. $10 million per year for 7 years (1996 2002) is appropriated for this study. Senate amendment Same provision, except that the $10 million annual appropria- tion is for only 5 years (fiscal years 1998 2002). Conference agreement The conference agreement follows the House bill. 311 82. WAIVERS Present law Section 1115 of the Social Security Act authorizes the HHS Secretary to waive specified requirements of State AFDC plans in order to enable a State to carry out any experimental, pilot, or demonstration project that the Secretary judges likely to assist in promoting the program’s objectives. Some 38 States have received waivers from the Clinton Administration for welfare reforms, as of late May 1996. House bill This section provides that terms of AFDC waivers in effect, or approved, as of September 30, 1995, will continue until their expi- ration, except that beginning with fiscal year 1996 a State operat- ing under a waiver shall receive the block grant described under Section 403 in lieu of any other payment provided for in the waiv- er. The section also allows for continuation, under certain condi- tions of waivers on or approved before July 1, 1997, on the basis of applications made before enactment of the new program. States have the option to terminate waivers before their expi- ration, but projects that are ended prematurely must be summa- rized in written reports. A State that submits a request to end a waiver within 90 days after the adjournment of the first regular session of the State legislature that begins after the date of enact- ment will be held harmless for accrued cost neutrality liabilities in- curred under the waiver. The Secretary is directed to encourage any State now operating a waiver to continue the project and to evaluate its result or effect. A State may elect to continue one or more individual waivers. Senate amendment Same. Conference agreement The conference agreement follows the Senate amendment, with the modification that such waivers may only apply to the geo- graphical areas of the State and to the specific program features for which the waiver was granted. All geographical areas of the State and program features of the State program not specifically covered by the waiver must conform to this part. Conferees urge the Secretary to approve the Wisconsin comprehensive welfare re- form waiver request (published in the Federal Register on June 10, 1996) by September 1, 1996. 83. ADMINISTRATION (AND REDUCTION IN FEDERAL WORKFORCE) Present law An Assistant Secretary for Family Support, appointed by the President by and with consent of the Senate, is to administer AFDC, child support enforcement, and the Jobs Opportunities and Basic Skills (JOBS) program. 312 House bill The provision for an Assistant Secretary for Family Support now found in section 417 of Part A of the Social Security Act is re- tained but modified to remove the reference to the JOBS program, which is repealed. No requirements to reduce workforce at HHS. Senate amendment The Temporary Assistance for Needy Families (TANF) block grant program and the child support enforcement program shall be administered by an Assistant Secretary for Family Support. The HHS Secretary must reduce the number of positions within the De- partment by 245 equivalent full-time equivalent (FTE) positions re- lated to the conversion of AFDC, Emergency Assistance, and Jobs into TANF and by 60 FTE managerial positions. In general, it re- quires the Secretary to reduce by 75 percent the number of FTE positions that relate to any direct spending program, or any pro- gram funded through discretionary spending that is converted into a block grant program under the bill and to reduce FTE depart- ment management positions similarly (on the basis of the portion of the Department’s total appropriation represented by programs converted to block grants). Conference agreement The conference agreement follows the Senate amendment. 84. LIMITATION ON FEDERAL AUTHORITY Present law No provision. House bill No officer or employee of the Federal Government may regu- late the conduct of States under this part or enforce any provision of this part, except to the extent expressly provided in this part. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 85. DEFINITIONS\u2014ADULT Present law No provision. House bill An individual who is not a minor child. Senate amendment Same. 313 Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 86. DEFINITIONS\u2014MINOR CHILD Present law No provision. A dependent child is defined as a needy child who is under age 18 (19, at State option, if a full time student in a secondary school or equivalent level of vocational and technical training and expected to complete school before age 19). House bill An individual who has not attained 18 years of age or has not attained 19 years of age and is a full-time student in a secondary school (or in the equivalent level of vocational or technical train- ing). Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 87. DEFINITIONS\u2014FISCAL YEAR Present Law No provision. House Bill Any 12-month period ending on September 30 of a calendar year. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 88. DEFINITIONS\u2014INDIAN, INDIAN TRIBE, AND TRIBAL ORGANIZATION Present law For JOBS purposes, an Indian tribe is defined as any tribe, band, Nation, or other organized group of Indians that is recog- nized as eligible for special programs and services of the U.S. be- cause of their status as Indians. An Alaska native organization is any organized group of Alaska natives eligible to operate a Federal program under P.L. 93 638 or that group’s designee. House bill With the exception of specified Indian tribes in Alaska, these terms have the meaning given in the Indian Self-Determination and Education Assistance Act. 314 Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 89. DEFINITIONS\u2014STATE Present law For purposes of AFDC, the term ”State” means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa. The last jurisdic- tion has not implemented AFDC. House bill Except as otherwise specifically provided (e.g., regarding the provision of population growth funds and contingency funds), the term ”State” means the 50 States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and American Samoa. Senate amendment Same, except adds to this definition an option for a State to contract to provide services: The term ”State” includes administra- tion and provision of services under the family assistance program and under the programs of child welfare, foster care and adoption assistance, family preservation, and independent living, through contracts with charitable, religious or private organizations, and provision of aid by means of certificates, vouchers, or other forms of disbursement redeemable by these organizations. See item 92. Conference agreement The conference agreement follows the House bill. 90. ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN ISLANDS, GUAM, AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS Present law Under current law, the territories are eligible for 75 percent matching grants for their expenditures on cash welfare for adult assistance (i.e., assistance for needy persons who are aged, blind, or disabled), Aid to Families with Dependent Children (AFDC), Emergency Assistance (EA), Foster Care and Adoption Assistance, the Job Opportunities and Basic Skills (JOBS) program, and the Family Preservation program (Title IV B, subpart 2). These match- ing grants are limited by caps on Federal payments. The territories also receive grants under the child welfare services (Title IV B, subpart 1) program. [Note.\u2014Although eligible, territories do not claim foster care and adoption assistance funds.] The law places a ceiling on total payments for AFDC, aid to needy aged, blind or disabled adults, and foster care and adoption assistance to Puerto Rico\u2014$82 million, the Virgin Islands\u2014$2.8 315 million, Guam\u2014$3.8 million, and American Samoa (AFDC, foster care, and adoption assistance)\u2014$1 million. House bill The proposal retains but increases aggregate welfare ceilings in each of the territories and combines the individual programs into a single block grant. The new ceilings would apply to aggre- gate spending for cash aid for needy families (TANF), cash aid to needy aged, blind or disabled adults, and child protection (child welfare and family preservation services). The proposal authorizes territories to transfer funds among these programs. Maximum po- tential fiscal year payments (including both the capped mandatory payments listed below and the authorization of discretionary grants) are as follows: Puerto Rico\u2014$113.5 million; Guam\u2014$5.2 million; U.S. Virgin Islands\u2014$4.0 million; and American Samoa\u2014 $1.3 million. To receive mandatory ceiling amounts (capped entitlements), territories must spend from their own funds in a fiscal year as much as they did in fiscal year 1995 for cash aid to needy families, and cash aid to needy aged, blind, or disabled adults. Federal matching funds, at a 75 percent rate, would reimburse territories for expenditures above their fiscal year 1995 base level, but below the Federal cap. Mandatory ceiling amounts: Puerto Rico\u2014$105.5 million; Guam, $4.9 million; Virgin Islands, $3.7 million; and American Samoa, $1.1 million. Senate amendment The proposal retains but increases aggregate welfare ceilings in each of the territories and, in effect, combines all but IV B serv- ices (child welfare services and family preservation) into a single block grant. The new ceilings would apply to aggregate spending for cash aid for needy families (TANF), cash aid to needy aged, blind, or disabled adults, and foster care and adoption assistance. The proposal authorizes territories to transfer funds among these programs. To receive the new ceiling amounts (capped entitlements), ter- ritories must spend from their own funds in a fiscal year for cash aid to needy families and cash aid to needy aged, blind, or disabled adults. Federal matching funds, at a 75 percent rate, would reim- burse them for expenditures above their fiscal year 1995 base level, but below the Federal cap. Mandatory ceiling amounts\u2014Puerto Rico\u2014$102 million; Guam, $4.7 million; Virgin Islands, $3.6 mil- lion; and American Samoa, $1 million. (Current law and funding arrangements are retained for IV B programs.) Conference agreement The conference agreement generally follows the Senate amend- ment. The conference agreement adds a provision specifying that States may use Title XX funds to provide vouchers to families los- ing TANF block grant assistance due to a State-imposed family cap. 316 91. REPEAL OF PROVISIONS REQUIRING DISAPPROVAL OF MEDICAID PLANS OR DENIAL OF SAME MEDICAID PAYMENTS TO STATES THAT REDUCE WELFARE PAYMENT LEVELS Present law If a State reduces AFDC ”payment levels” below those of May 1, 1988, the Secretary shall not approve the State’s Medicaid plan. If a State reduces AFDC payment levels below those of July 1, 1987, Medicaid matching funds shall be disallowed for required services to pregnant women and children not enrolled in AFDC but eligible for Medicaid on grounds of low income. House bill The House proposal repeals provisions that impose Medicaid sanctions upon States that reduce AFDC payment levels. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 92. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, AND PRIVATE ORGANIZATIONS Present law The Child Care and Development Block Grant (CCDBG) Act prohibits use of any financial assistance provided through any grant or contract for any sectarian purpose or activity. In general, the CCDBG requires religious nondiscrimination, but it does allow a sectarian organization to require employees to adhere to its reli- gious tenets and teachings. House bill The proposal authorizes States to administer and provide fam- ily assistance services (and services under SSI, the child protection block grant program, foster care, adoption assistance, and inde- pendent living programs) through contracts with charitable, reli- gious, or private organizations. Under this provision, religious orga- nizations would be eligible, on the same basis as any other private organization, to provide assistance as contractors or to accept cer- tificates and vouchers so long as their programs are implemented consistent with the Establishment Clause of the Constitution. States may pay recipients by means of certificates, vouchers, or other forms of disbursement that are redeemable with such private organizations. The proposal provides that, except as otherwise allowed by law, a religious organization administering the program may not discriminate against beneficiaries on the basis of religious belief or refusal to participate in a religious practice. States must provide an alternative provider for a beneficiary who objects to the religious character of the designated organization. 317 Nothing in this section shall be construed to preempt any pro- vision of a State constitution or State statute that prohibits or re- stricts the expenditure of State funds in or by religious organiza- tions. Senate amendment Same provision, except that administration by charitable, reli- gious, and private organizations is authorized only for TANF and SSI. Conference agreement The conference agreement follows the House bill. 93. CENSUS DATA ON GRANDPARENTS AS PRIMARY CAREGIVERS FOR THEIR GRANDCHILDREN Present law No provision. House bill The Secretary of Commerce shall expand the Census Bureau’s question (for the decennial census and the mid-decade census) con- cerning households with both grandparents and their grand- children so as to distinguish between households in which a grand- parent temporarily provides a home and those where the grand- parent serves as primary caregiver. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 94. REPORT ON DATA PROCESSING Present law No provision. (State child support plans may provide for estab- lishment of a statewide automated data processing and information retrieval system.) House bill The Secretary must report to Congress within six months on the status of automatic data processing systems in the States and on what would be required to produce a system capable of tracking participants in public programs over time and checking case records across States to determine whether some individuals are participating in public programs in more than one State. The re- port should include a plan for building on the current automatic data processing system to produce a system capable of performing these functions as well as an estimate of the time required to put the system in place and the cost of the system. Senate amendment Same. 318 Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 95. STUDY ON ALTERNATIVE OUTCOMES MEASURES Present law The Family Support Act required the Secretary to submit to Congress recommendations for JOBS performance standards re- garding ”specific measures of outcomes.” It said the standards should not be measured solely by levels of activity or participation. (The report, due Oct. 1, 1993, was submitted 1 year late.) House bill The Secretary must, in cooperation with the States, study and analyze measures of program outcomes (as an alternative to mini- mum participation rates) for evaluating the success of State block grant programs in helping recipients leave welfare. The study must include a determination of whether outcomes measures should be applied on a State or national basis and a preliminary assessment of the job placement performance bonus established in the Act. The Secretary must report findings to the Committee on Finance and the Committee on Ways and Means not later than September 30, 1998. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 96. WELFARE FORMULA FAIRNESS COMMISSION Present law No provision. AFDC funds are not distributed by formula. States are entitled to reimbursement, at matching rates inversely related to their per capita income squared, for all AFDC benefits and AFDC-related child care spending (but not ”at-risk” child care). Federal funds received by a State are a function of its AFDC bene- fit levels, caseloads, and matching rate. House bill No provision. Senate amendment Establishes a welfare formula fairness commission to make recommendations on funding formulas, bonus payments, and work requirements of the new TANF program. Commission is to have 15 members, 3 each appointed by the President, Senate Majority Leader, Senate Minority Leader, House Speaker, and House Minor- ity Leader. It is to report to Congress by Sept. 1, 1998, either mak- ing recommendations for change or giving notice that none is need- ed. 319 Conference agreement The conference agreement follows the House bill. 97. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT Present law No provision. House bill This section makes a series of technical amendments, including the repeal of the JOBS program, that conform provisions of the proposal with various titles of the Social Security Act. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 98. CONFORMING AMENDMENTS TO THE FOOD STAMP ACT OF 1977 AND RELATED PROVISIONS Present law No provision. House bill This section makes a series of technical amendments that con- form provisions of the proposal with various titles of the Food Stamp Act and other related provisions. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 99. CONFORMING AMENDMENTS TO OTHER LAWS Present law No provision. House bill This section makes a series of amendments that conform provi- sions of the proposal to the Unemployment Compensation Amend- ments of 1976, the Omnibus Budget Reconciliation Act of 1987, the Housing and Urban-Rural Recovery Act of 1983, the Tax Equity and Fiscal Responsibility Act of 1982, the Social Security Amend- ments of 1967, the Stewart B. McKinney Homeless Assistance Amendments Act of 1988, the Higher Education Act of 1965, the Carl D. Perkins Vocational and Applied Technology Education Act, the Elementary and Secondary Education Act of 1965, Public Law 99-88, the Internal Revenue Code of 1986, the Wagner-Peyser Act, the Job Training Partnership Act, the Low-Income Home Energy 320 Assistance Act of 1981, the Family Support Act of 1988, the Bal- anced Budget and Emergency Deficit Control Act of 1985, the Im- migration and Nationality Act, the Head Start Act, and the School- to-Work Opportunities Act of 1994. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 100. DEVELOPMENT OF PROTOTYPE OF COUNTERFEIT-RESISTANT SOCIAL SECURITY CARD REQUIRED Present law No provision. House bill The Commissioner of Social Security is required to develop a prototype of a counterfeit-resistant Social Security card. The Com- missioner must report to Congress on the cost of issuing a tamper- proof card for all persons over a three, five, and 10-year period. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 101. COMMUNITY STEERING COMMITTEES DEMONSTRATION PROJECTS Present law No provision. House bill No provision. Senate amendment Requires the Secretary to enter into agreements with up to 5 applicant States to conduct demonstration projects designed to help TANF parents move into the nonsubsidized workforce. Duties of the committee: identify and create unsubsidized jobs for TANF re- cipients; propose and implement solutions to work barriers; assess needs of the children and provide services to ensure that the chil- dren enter school ready to learn and stay in school. A primary re- sponsibility of the committee shall be to help assure that parents who have obtained work retain their jobs. Activities may include counseling, emergency day care, sick day care, transportation, pro- vision of clothing, housing assistance, or any other needed help. Not later than Oct. 1, 2002, the Secretary shall report to Congress on the project results. 321 Conference agreement The conference agreement follows the House bill. 102. DISCLOSURE OF RECEIPT OF FEDERAL FUNDS Present law No provision. House bill Under certain circumstances specified public funds received by nonprofit, tax-exempt 501(c) organizations, must be publicly dis- closed. When a 501(c) organization that accepts Federal funds under the Personal Responsibility and Work Opportunity Act (other than those provided under Titles IV, XVI, and XX of the So- cial Security Act) makes any communication intended to promote public support or opposition to any governmental policy (Federal, State or local) through any broadcasting station, newspaper, maga- zine, outdoor advertising facility, direct mailing, or any other type of general public advertising, the communication must state: ”This was prepared and paid for by an organization that accepts taxpayer dollars.” Senate amendment Applies the fund disclosure rule to all Federal funds under the Personal Responsibility and Work Opportunity Act. (This provision was deleted because of the Byrd rule.) Conference agreement The conference agreement follows the Senate amendment (no provision as a result of the Byrd rule). 103. MODIFICATIONS TO THE JOB OPPORTUNITIES FOR CERTAIN LOW- INCOME INDIVIDUALS PROGRAMS Present law The Family Support Act of 1988 (Sec. 505) directed the Sec- retary to enter into agreement with between 5 and 10 nonprofit or- ganizations to conduct demonstrations to create job opportunities for AFDC recipients and other low-income persons. For these projects, $6.5 million was authorized to be appropriated for each fiscal year, 1990 1992. House bill The word ”demonstration” is struck from the description of these projects; the projects are converted to grant status. The pro- vision requires the Secretary to enter into agreements with non- profit organizations to conduct projects that create job opportuni- ties for recipients of family assistance and other persons with in- come below the poverty guideline. $25 million annually is author- ized for these projects. Senate amendment Same. 322 Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 104. CONFORMING AMENDMENTS TO MEDICAID Present law House bill Provides for continued application of AFDC standards and methodologies for certain families, entitling them to Medicaid. Al- lows cost-of-living adjustments in income standards above level of July 16, 1996. See ”Prohibitions; Requirements\u2014Medicaid” above. Senate amendment Same except that States may use less restrictive income stand- ards and methodologies than under current law. Conference agreement The conference agreement follows the House bill. 105. EFFECTIVE DATE; TRANSITION RULE Present law No provision. House bill Except as otherwise provided, this title and the amendments made by it take effect on July 1, 1997. Penalties (with the major exception of penalties for misuse of Federal family assistance grant funds) will not take effect until July 1, 1997, or six months after the State plan is received by the Secretary, whichever is later. Within 90 days of enactment, the Secretary of HHS, the Com- missioner of Social Security and other heads of appropriate agen- cies shall submit to appropriate congressional committees. Nec- essary technical and conforming amendments. States may opt to begin their block grant program before July 1, 1997, in which case the State is entitled to receive no more than the State family assistance grant for the entire fiscal year; block grant payments will be made pro rata based on the number of days remaining in the fiscal year after the Secretary first received the State plan. The submission of a State plan is deemed to constitute the State’s acceptance of the family assistance grant (including pro rata reductions for a partial fiscal year) and the termination of the individual entitlement to benefits under the AFDC program. Effec- tive October 1, 1996, no individual or family shall be entitled to any benefits or services under any State plan under part A or F of Title IV of the Social Security Act (as in effect on September 30, 1995). The amendments made do not apply with respect to powers, duties, penalties and other considerations applicable to aid, assist- ance or services provided before the effective date, or with respect to administrative actions and proceedings that commenced before the effective date. Federal and State officials may use scientifically acceptable statistical sampling techniques in closing out accounts. 323 Each State shall complete the filing of all claims within 2 years after the date of enactment. The person serving as Assistant Sec- retary for Family Support within HHS on the day before the effec- tive date of this title will continue to serve in that position until a successor is named, performing functions provided under current law and having powers and duties provided in Section 103 of this bill. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. TITLE II: SUPPLEMENTAL SECURITY INCOME 1. REFERENCE TO THE SOCIAL SECURITY ACT Present law No provision. House bill Any reference in this title expressed in terms of an amendment to or repeal of a section or other provision is made to the Social Security Act. Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. Subtitle A\u2014Eligibility Restrictions 2. DENIAL OF SSI BENEFITS TO INDIVIDUALS FOUND TO HAVE FRAUDU- LENTLY MISREPRESENTED RESIDENCE IN ORDER TO OBTAIN BENE- FITS SIMULTANEOUSLY IN 2 OR MORE STATES Present law Current law states that any person who knowingly and will- fully makes or causes to be made any false statements or misrepre- sentations in applying for or continuing to receive Supplemental Security Income (SSI) payments may be subject to a civil monetary penalty or be fined or imprisoned pursuant to title 18, U.S. Code. House bill Any person convicted in Federal court or State court of having fraudulently misrepresented residence in order to obtain benefits or services from two or more States under title IV, title XV, title XIX, or the Food Stamp Act of 1977, or benefits in 2 or more States from the SSI program, is ineligible for SSI benefits for 10 years. In addi- tion, an official of the court in which the individual was convicted is required to notify the Commissioner of such conviction. 324 Senate amendment Identical to House Bill. Conference agreement The conference agreement follows the House bill. 3. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND PROBATION AND PAROLE VIOLATORS Present law Current law provides safeguards which restrict the use or dis- closure of information concerning SSI applicants or recipients to purposes directly connected with the administration of the SSI pro- gram or other federally-funded programs. House bill No individual who is fleeing to avoid prosecution, custody or confinement after conviction for a crime (or an attempt to commit a crime) that is a felony (or, in New Jersey, a high misdemeanor), or who violates probation or parole imposed under Federal or State, law shall be eligible for SSI benefits. The Social Security Administration (SSA) shall furnish the cur- rent address, Social Security number, and photograph (if applica- ble) of a recipient to any Federal, State, or local law enforcement officer who is pursuing a fugitive felon or parole or probation viola- tor. This provision applies also to a recipient sought by an officer because the recipient has information necessary to the officer’s offi- cial duties. Senate amendment Identical to House Bill. Conference agreement The conference agreement follows the House bill with technical modification. 4. TREATMENT OF PRISONERS Implementation of Prohibition Against Payment of Benefits to Prisoners Present law Current law prohibits prisoners from receiving benefits while incarcerated. Federal, State, or county or local prisons are required to make available, upon written request, the name and Social Secu- rity account number of any individual who is confined in a penal institution or correctional facility and convicted of any crime pun- ishable by imprisonment of more than 1 year. House bill The Commissioner shall enter into an agreement with any in- terested State or local institution (defined as a jail, prison, other correctional facility, or institution where the individual is confined due to court order) under which the institution shall provide monthly the names, Social Security account numbers, dates of 325 birth, confinement dates, and other identifying information. The Commissioner shall pay to the institution for each eligible individ- ual who becomes ineligible $400 if the information is provided within 30 days of the individual becoming an inmate. The payment is $200 if the information is furnished after 30 days but within 90 days. In addition, the Computer Matching and Privacy Protection Act of 1988 shall not apply to the information exchanged pursuant to this contract. The Commissioner is authorized to provide, on a reimbursable basis, information obtained pursuant to agreements to any Federal or federally assisted cash, food, or medical assistance program for eligibility purposes. The dollar amounts paid to the institution shall be reduced by 50 percent if the Commissioner is also required to make a payment with respect to the same individual based on eligibility for Social Security disability insurance benefits. Payments to institutions shall be made from funds otherwise available for the payment of benefits. Senate amendment The Senate amendment is similar to the House bill, however, it deletes all references to OASDI programs (due to Senate rule) and does not include the provision for the Commissioner to provide information to other Federal or federally assisted programs. Conference agreement The conference agreement follows the House bill, except that all OASDI references are deleted. Denial of SSI Benefits for 10 Years to a Person Found To Have Fraudulently Obtained SSI Benefits While in Prison Present law No provision. House bill No provision. Senate amendment Denies benefits for 10 years (beginning the date of release from prison) to a person found to have fraudulently obtained SSI bene- fits while in prison. This provision is effective on the date of enact- ment. Conference agreement The conference agreement follows the House bill (i.e., no provi- sion). 326 Elimination of OASDI Requirement that Confinement Stem From Crimes Punishable by Imprisonment for More Than 1 Year Present law Bars Social Security benefits from prisoners convicted of any crime punishable by imprisonment of more than a year, not just felonies. House bill Replaces ”an offense punishable by imprisonment for more than 1 year” with ”a criminal offense” and deletes other language. Effective for benefits payable more than 180 days after the date of enactment. It bars Social Security benefits from persons confined, throughout a month, to (1) a penal institution or (2) other institu- tion if the person is found guilty but insane. Senate amendment No provision, due to Senate rule. Conference agreement The conference agreement follows the Senate amendment (i.e., no provision). Study of Other Potential Improvements in the Collection of Information Respecting Public Inmates Present law No provision. House bill The Commissioner shall conduct a study of the desirability, feasibility, and cost of establishing a system for courts to furnish the Commissioner information regarding court orders and requiring that State and local jails, prisons, and other institutions enter into agreements with the Commissioner by means of an electronic or similar data exchange system. The report of this study shall be submitted to the responsible Committees not later than 1 year after enactment. Not later than October 1, 1998, the Commissioner of Social Se- curity shall provide to the responsible Committees of Congress a list of institutions that are and are not providing information to the Commissioner in accordance with these provisions. Senate amendment The Senate amendment is identical to the House bill except uses the term ”contract” instead of ”agreement.” There is no provision for the Commissioner to provide a list of institutions who are or are not in compliance with these provisions. Conference agreement The conference agreement follows the House bill. 327 5. EFFECTIVE DATE OF APPLICATION FOR BENEFITS Present law The application of an individual for SSI benefits is effective on the later of the date the application is filed or the date the individ- ual first becomes eligible for such benefits. House bill Changes the effective date of application to the later of the first day of the month following the date the application is filed or the date the individual first becomes eligible for such benefits. The provision expands SSA’s authority to issue an immediate cash ad- vance to individuals faced with financial emergencies. Effective for applications filed on or after the date of enactment. Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill with technical modifications. Subtitle B\u2014Benefits for Disabled Children 6. DEFINITION AND ELIGIBILITY RULES Definition of Childhood Disability Present law There is no definition of childhood disability in the statute. In- stead, the statute prescribes that an individual under age 18 shall be considered disabled for purposes of eligibility for SSI if that indi- vidual has an impairment or combination of impairments of ”com- parable severity” which would result in a work disability in an adult. This impairment or combination of impairments must be ex- pected to result in death or to last for a continuous period of not less than 12 months. House bill This section adds a new statutory definition of childhood dis- ability: an individual under the age of 18 is considered as disabled if the individual has a medically determinable physical or mental impairment, which results in marked and severe functional limita- tions, and which can be expected to result in death or which has lasted or can be expected to last for at least a continuous period of not less than 12 months. The Commissioner shall ensure that the combined effects of all physical or mental impairments of an individual are taken into ac- count in determining whether an individual is disabled. In addi- tion, the Commissioner shall ensure that the regulations prescribed by these provisions provide for the evaluation of children who can- not be tested because of their young age. 328 Senate amendment Identical to House bill regarding the new definition of disabil- ity. The provision does not include language regarding combined impairments or evaluation of children who cannot be tested be- cause of their young age. Conference agreement The conference agreement follows the Senate amendment. The conferees intend that only needy children with severe disabilities be eligible for SSI, and the Listing of Impairments and other cur- rent disability determination regulations as modified by these pro- visions properly reflect the severity of disability contemplated by the new statutory definition. In those areas of the Listing that in- volve domains of functioning, the conferees expect no less than two marked limitations as the standard for qualification. The conferees are also aware that SSA uses the term ”severe” to often mean ”other than minor” in an initial screening procedure for disability determination and in other places. The conferees, however, use the term ”severe” in its common sense meaning. In addition, the conferees expect that SSA will properly ob- serve the requirements of section 1614(a)(3)(F) of the Social Secu- rity Act and ensure that the combined effects of all the physical or mental impairments of an individual under age 18 are taken into account in making a determination regarding eligibility under the definition of disability. The conferees note that the 1990 Supreme Court decision in Zebley established that SSA had been previously remiss in this regard. The conferees also expect SSA to continue to use criteria in its Listing of Impairments and in the application of other determination procedures, such as functional equivalence, to ensure that young children, especially children too young to be test- ed, are properly considered for eligibility of benefits. The conferees recognize that there are rare disorders or emerg- ing disorders not included in the Listing of Impairments that may be of sufficient severity to qualify for benefits. Where appropriate, the conferees remind SSA of the importance of the use of functional equivalence disability determination procedures. Nonetheless, the conferees do not intend to suggest by this def- inition of childhood disability that every child need be especially evaluated for functional limitations, or that this definition creates a supposition for any such examination. Under current procedures for writing individual listings, level of functioning is an explicit consideration in deciding which impairment, with certain medical or other findings, is of sufficient severity to be included in the List- ing. Nonetheless, the conferees do not intend to limit the use of functional information, if reflecting sufficient severity and is other- wise appropriate. The conferees contemplate that Congress may revisit the defi- nition of childhood disability and the scope of benefits, if deemed appropriate, and have provided elsewhere for studies on these is- sues. 329 Requests for Comments To Improve Disability Evaluation Present law No provision. House bill No provision. Senate amendment Requires the Commissioner to request comments in the Fed- eral Register regarding improvements to the disability evaluation and determination procedures for individuals under age 18 to en- sure the comprehensive assessment of such individuals. Conference agreement The conference agreement follows the House bill (i.e., no provi- sion). Changes to SSI Childhood Regulations Present law Under the disability determination process for children, SSA first determines if a child meets or equals the ”Listing of Impair- ments” in Federal regulations. Under the Listings that relate to mental disorders, maladaptive behavior may be scored twice, in do- mains of social functioning and of personal\/behavior functioning. Under the disability determination process for children, indi- viduals who do not meet or equal the Listing of Impairments are subject to an ”Individualized Functional Assessment” (IFA). This assessment is intended to determine whether, or to what extent, a child can engage in age-appropriate activities. If the child cannot, the child may be determined disabled. House bill The Commissioner of Social Security shall eliminate references in the Listing of Impairments to maladaptive behavior among med- ical criteria for evaluation of mental and emotional disorders in the domain of personal\/behavioral function. The Commissioner of Social Security shall discontinue use of the Individualized Functional Assessment for children set forth in the Code of Federal Regulations. Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. Medical Improvement Review Standard as it Applies to Individuals Under the Age of 18 Present law No provision. 330 House bill This section contains technical modifications to the medical im- provement review standard based on the new definition of child- hood disability. Senate amendment Identical to the House bill. Conference agreement The conference agreement follows the House bill. Effective dates Present law No provision. House bill Changes in eligibility rules apply to new applications and pending requests for administrative or judicial review on or after the date of enactment, without regard to whether regulations have been issued. No later than 1 year after the date of enactment, the Commis- sioner shall redetermine the eligibility of any child receiving bene- fits on the date of enactment who would lose eligibility under these provisions. Benefits of current recipients will continue until their redeter- mination. Should a child be found ineligible, their benefits will end following redetermination. No later than January 1, 1997, the Commissioner must notify individuals whose eligibility for SSI benefits will terminate. The Commissioner must report to Congress within 180 days re- garding progress made in implementing the SSI children’s provi- sions. The Commissioner shall submit final regulations to the Com- mittees of jurisdiction of Congress for their review at least 45 days before they become effective. Senate amendment Identical to the House bill, except that benefits of current re- cipients will continue until the later of July 1, 1997, or the date of redetermination. The Senate amendment also includes language which authorizes and appropriates $300 million to remain available for fiscal years 1997 1999 for the Commissioner to conduct con- tinuing disability reviews (CDRs) and redeterminations. Conference agreement The conference agreement follows the Senate amendment with modification to authorize additional administrative funding for SSA: $150 million for fiscal year 1997 and $100 million for fiscal year 1998, to conduct SSI CDRs and redeterminations. The funding of CDRs and redeterminations will follow the usual appropriation process, except that the amounts above a base funding level will not be subject to discretionary caps. 331 7. ELIGIBILITY REDETERMINATIONS AND CONTINUING DISABILITY REVIEWS Present law Current law specifies that the Commissioner must reevaluate under adult disability criteria the eligibility of at least one-third of SSI children who turn age 18 in each of the fiscal years 1996, 1997, and 1998 (the CDR must be completed before these children reach age 19) and report to Congress no later than October 1, 1998. House bill At least once every 3 years the Commissioner must conduct CDRs of children receiving SSI benefits. For children who are eligi- ble for benefits and whose medical condition is not expected to im- prove, the requirement to perform such reviews does not apply (un- less the Commissioner decides otherwise). At the time of review the parent or guardian must present evidence demonstrating that the recipient is and has been receiving appropriate treatment for her disability. The eligibility for all children qualifying for SSI benefits must be redetermined using the adult criteria within 1 year after turn- ing 18 years of age. The review will be considered a substitute for any other review required under the changes made in this section. The ”minimum number of reviews” and the ”sunset” provisions of section 207 of the Social Security Independence and Program Im- provements Act of 1994 are eliminated. A review must be conducted 12 months after the birth of a child whose low birth weight is a contributing factor to the child’s disability. At the time of review, the parent or guardian must present evidence demonstrating that the recipient is and has been receiving appropriate treatment for his disability. Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. 8. ADDITIONAL ACCOUNTABILITY REQUIREMENTS Disposal of Resources for Less Than Fair Market Value Present law No provision. House bill The bill delays eligibility for any child applicant whose parents or guardians, in order to qualify a child for benefits, dispose of as- sets for less than fair market value within 36 months of the date of application. The provision stipulates that any assets in a trust in which the child (i.e., parent or representative payee) has control shall be considered assets of the child and subject to the 36-month ”look-back” rule. The delay (in months) is equal to the amount of assets divided by the SSI standard benefit. This provision is effec- tive 90 days after the date of enactment. 332 Senate amendment No provision. Conference agreement The conference agreement follows the Senate amendment (i.e., no provision). Treatment of Assets Held in Trust Present law No provision. Under current operating policy, a trust is not considered a resource if the SSI recipient does not have the legal authority to access trust assets for his or her own food, clothing, or shelter. House bill Stipulates that in determining the resources of an individual under the age of 18, a revocable trust (i.e., the person has legal ac- cess to the assets of the trust) must be considered a resource avail- able to the individual. In the case of an irrevocable trust, if there are any circumstances under which payment from the trust could be made to or for the benefit of the individual, then such payments are to be considered as resource available to the individual. The Commissioner of Social Security may waive these provisions if the Commissioner determines, on the basis of criteria prescribed in reg- ulations, that such application would be an undue hardship on the individual. Any earnings of, or additions to the principal of the trust would be considered income if they are available to the individual. Senate amendment No provision. Conference agreement The conference agreement follows the Senate amendment (i.e., no provision). Requirement To Establish Account Present law No provision. House bill Requires the representative payee (i.e., the parent) of an indi- vidual under the age of 18 to establish an account in a financial institution for the receipt of past-due SSI payments if the lump- sum payment amounts to more than 6 times the maximum month- ly SSI payment (including any State supplement). A representative payee shall use the funds in the account for the following expenses: education or job skills training; personal needs assistance; special equipment or housing modifications related to the child’s disability; medical treatment; appropriate therapy or rehabilitation; or any other item or service that the Commissioner determines is appro- priate. 333 Once the account is established the representative payee may deposit any past-due benefits owed to the recipient and any other funds representing an SSI underpayment provided the amount is more than the maximum monthly SSI benefit payment. The funds in these accounts would not be counted as a re- source and the interest and other earnings on the account would not be considered income in determining SSI eligibility. Senate amendment Identical to House provision, except allows rather than man- dates the representative payee to use the funds for allowable ex- penses. Conference agreement The conference agreement follows the House bill. 9. REDUCTION IN CASH BENEFITS PAYABLE TO INSTITUTIONALIZED IN- DIVIDUALS WHOSE MEDICAL COSTS ARE COVERED BY PRIVATE IN- SURANCE Present law Federal law stipulates that when individuals enter a hospital or other medical institution for which more than half of the bill is paid by the Medicaid program, their monthly SSI benefit is reduced to $30 per month. This personal needs allowance is intended to pay for small personal expenses, with the cost of maintenance and med- ical care provided by the Medicaid program. House bill Children in medical institutions whose medical costs are cov- ered by private insurance would be treated the same as children whose bills are currently paid by Medicaid (that is, their monthly SSI cash benefit would be reduced to $30 per month). Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. 10. REGULATIONS Present law No provision. House bill The Commissioner of Social Security and the Secretary of HHS will prescribe necessary regulations within three months after en- actment. Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. 334 Subtitle C\u2014Additional Enforcement Provisions 11. INSTALLMENT PAYMENT OF LARGE PAST-DUE SSI BENEFITS Present law No provision. House bill If an individual is eligible for past-due benefits (after any with- holding for reimbursement to a State for interim assistance) in an amount which exceeds 12 times the maximum monthly benefit pay- able to an eligible individual (currently $470) or couple (currently $705) (plus any State supplementary payments), benefits will be paid in 3 installments made at 6-month intervals. The first and second installments may not exceed 12 times the maximum month- ly benefit payable. Installment caps may be extended by certain debt (food, clothing, shelter, or medically necessary services, sup- plies, or equipment, or medicine) or the purchase of a home. In- stallment payments shall not apply to individuals whose medical impairment is expected to result in death in 12 months or for an individual who is ineligible and is likely to remain ineligible for the next 12 months. Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. 12. RECOVERY OF SSI OVERPAYMENTS FROM SOCIAL SECURITY BENEFITS Present law Generally, when an overpayment of Social Security benefits is made, recovery shall be made by adjusting future payments or by recovering the overpayment from the individual. House bill If the Commissioner is unable to recover the overpayment through future payment adjustments or direct recovery, the Com- missioner may decrease any OASI or SSDI payment to the individ- ual or their estate. As a result of this action, no individual may be- come eligible for SSI or eligible for increased SSI benefits. Senate amendment No provision (due to Senate rule). Conference agreement The conference agreement follows the Senate amendment (i.e., no provision). 13. REGULATIONS Present law No provision. 335 House bill The Commissioner of Social Security and the Secretary of HHS will prescribe necessary regulations within 3 months after enact- ment. Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. 14. REPEAL OF MAINTENANCE OF EFFORT REQUIREMENTS APPLICABLE TO OPTIONAL STATE PROGRAMS FOR SUPPLEMENTATION OF SSI Present law Since the beginning of the SSI program, States have had the option to supplement (with State funds) the Federal SSI payment. Subsequently, Congress passed section 1618 of the Social Security Act which in effect requires States to maintain such optional pay- ments or lose eligibility for Medicaid funds. The purpose of section 1618 of the Social Security Act was to encourage States to pass along to SSI recipients the amount of any Federal SSI benefit in- crease. Section 1618 allows States to comply with the ”pass along\/ maintenance of effort” provision by either maintaining their State supplementary payment levels at or above March 1983, levels or by maintaining their supplementary payment spending so that total annual Federal and State expenditures will be at least equal to what they were in the prior 12-month period, plus any Federal cost-of-living increase, provided the State was in compliance for that period. House bill Repeals the maintenance of effort requirements in Section 1618 applicable to optional State programs for supplementation of SSI benefits, effective on the date of enactment. Senate amendment No provision, due to Senate rule. Conference agreement The conference agreement follows the Senate amendment (i.e., no provision). Subtitle D\u2014Studies Regarding Supplemental Security Income Program 15. ANNUAL REPORT ON THE SUPPLEMENTAL SECURITY INCOME PROGRAM Present law The Social Security Administration collects and publishes lim- ited data on the SSI program. 336 House bill The Commissioner of Social Security must prepare and provide to the President and the Congress an annual report on the SSI pro- gram, which includes specified information and data. The report is due May 30 of each year. Senate amendment Identical to the House bill, except stipulates the inclusion of historical and correct data on prior enrollment by public assistance recipients. Conference agreement The conference agreement follows the House bill, modified by the Senate amendment. 16. STUDY OF DISABILITY DETERMINATION PROCESS Present law No provision. House bill Within 90 days of enactment, the Commissioner must contract with the National Academy of Sciences or another independent en- tity to conduct a comprehensive study of the disability determina- tion process for SSI and SSDI. The study must examine the valid- ity, reliability and consistency with current scientific standards of the Listings of Impairments cited above. The study must also ex- amine the appropriateness of the definitions of disability (and pos- sible alternatives) used in connection with SSI and SSDI, and the operation of the disability determination process, including the ap- propriate method of performing comprehensive assessments of indi- viduals under age 18 with physical or mental impairments. The Commissioner must issue interim and final reports of the findings and recommendations of the study within 18 months and 24 months, respectively, from the date of contract for the study. Senate amendment No provision, due to Senate rule. Conference agreement The conference agreement follows the Senate amendment (i.e., no provision). 17. STUDY BY GENERAL ACCOUNTING OFFICE Present law No provision. House bill No later than January 1, 1999, the Comptroller General of the United States must study and report on the impact of the amend- ments and provisions made by this bill, and extra expenses in- curred by families of children receiving benefits not covered by other Federal, State, or local programs. 337 Senate amendment Identical to House bill. Conference agreement The conference agreement follows the House bill. 18. NATIONAL COMMISSION ON THE FUTURE OF DISABILITY Present law No provision. House bill This section establishes a new Commission on the future of disability. The Commission must study all matters related to the nature, purpose and adequacy of all Federal programs for the disabled (and especially SSI and SSDI), including: projected growth in the num- ber of individuals with disabilities; possible performance standards for disability programs; the adequacy of Federal rehabilitation re- search and training; and the adequacy of policy research available to the Federal government and possible improvements. The Com- mission must submit to the President and the proper Congressional committees recommendations and possible legislative proposals effecting needed program changes. The Commission is to be composed of 15 members who are ap- pointed by the President and Congressional leadership and who serve for the life of the Commission. Members are to be chosen based on their education, training or experience, with consideration for representing the diversity of individuals with disabilities in the U.S. The Commission membership will also reflect the general in- terests of the business and taxpaying community. The Commission will have a director, appointed by the Chair, and appropriate staff, resources, and facilities. The Commission may conduct public hearings and obtain infor- mation from Federal agencies necessary to perform its duties. The Commission must issue an interim report to Congress and the President not later than 1 year prior to terminating. A final public report must be submitted prior to termination. The Commission will terminate 2 years after first having met and named a chair and vice chair. This section authorizes the appropriation of such funds as are necessary to carry out the purposes of the Commission. Senate amendment No provision, due to Senate rule. Conference agreement The conference agreement follows the Senate amendment (i.e., no provision). 338 TITLE III: CHILD SUPPORT ENFORCEMENT 1. REFERENCE TO THE SOCIAL SECURITY ACT Present law No provision. House bill Unless otherwise specified, any reference in this title to an amendment to or repeal of a section or other provision is to the So- cial Security Act. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. Subtitle A\u2014Eligibility for Services; Distribution of Payments 2. STATE OBLIGATION TO PROVIDE CHILD SUPPORT ENFORCEMENT SERVICES Present law States are required to establish paternity for children born out of wedlock if they are recipients of AFDC or Medicaid, and to ob- tain child and spousal support payments from noncustodial parents of children receiving AFDC, Medicaid benefits, or foster care main- tenance payments. States must provide child support collection or paternity determination services to persons not otherwise eligible if the person applies for services. Federal law requires States to co- operate with other States in establishing paternity (if necessary), locating absent parents, collecting child support payments, and car- rying out other child support enforcement functions. In cases in which a family ceases to receive AFDC, States are required to pro- vide appropriate notice to the family and continue to provide child support enforcement services without requiring the family to apply for services or charging an application fee. House bill States must provide services, including paternity establish- ment and establishment, modification, or enforcement of support obligations, for children receiving benefits from the Temporary As- sistance for Needy Families block grant (TANF), foster care main- tenance payments, Medicaid, and any child of an individual who applies for services. States must enforce support obligations with respect to children in their caseload and the custodial parents of such children. States must also make child support enforcement services available to individuals not residing within the State on the same terms as to individuals residing within the State. States are not required to provide services to families if the State deter- mines, taking into account the best interests of the child, that good cause and other exceptions exist. The provision also makes minor technical amendments to section 454 of the Social Security Act. 339 When a family ceases to receive benefits from the TANF block grant, States are required to provide appropriate notice to the fam- ily and continue to provide child support enforcement services without requiring the family to apply for services or charging an application fee. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 3. DISTRIBUTION OF CHILD SUPPORT COLLECTIONS Present law Federal law requires that child support collections be distrib- uted as follows: First, up to the first $50 in current support is paid to the AFDC family (a ”disregard” that does not affect the family’s AFDC benefit or eligibility status). Second, the Federal and State governments are reimbursed for the AFDC benefit paid to the fam- ily in that month. Third, if there is money left, the family receives it up to the amount of the current month’s child support obligation. Fourth, if there is still money left, the State keeps it to reimburse itself for any arrearages owed to it under the AFDC assignment (with appropriate reimbursement of the Federal share of the collec- tion to the Federal government). If no arrearages are owed the State, the money is used to pay arrearages to the family; such mon- eys are considered income under the AFDC program and would re- duce the family’s AFDC benefit. To receive AFDC benefits, a custodial parent must assign to the State any right to collect child support payments. This assign- ment covers current support and any arrearages that accumulated before the family began receiving public assistance, and lasts as long as the family receives AFDC. Some States are required to provide monthly supplemental payments to AFDC recipients who have less disposable income now than they would have had in July 1975 because child support is paid to the child support agency instead of directly to the family. States required to make these supplemental payments are often re- ferred to as ”fill-the-gap” States. These States pay less assistance than their full need standard, and allow recipients to use child sup- port income to make up all or part of the difference between the payment made by the State and the State’s need standard. House bill Several changes in the distribution rules under current law are made by this section. The $50 passthrough to families on AFDC is ended. In addition, distribution law is changed so that, beginning October 1, 1997, collections on arrearages that accumulated during the period after the family leaves welfare are paid to the State if the money was collected through the tax intercept and to the fam- ily if collected by any other method. Distribution law is also changed so that beginning on October 1, 2000, arrearages that ac- 340 cumulated during the period before the family went on welfare are paid to the State if the money was collected through the tax inter- cept and to the family if collected by any other method. (Note: These new distribution rules require the assignment rules for pre- welfare arrearages to be changed so that families can be paid be- fore States if the money was collected by a method other than the tax intercept; this change in assignment rules was made in Title I and will appear in Section 408(a)(3)(B) of the revised Social Secu- rity Act.) By October 1, 1998, the Secretary must present a report to the Congress concerning whether post-assistance arrearages have helped mothers avoid welfare and about the effectiveness of the new distribution rules. All assignments of support in effect when this proposal is en- acted must remain in effect. Several terms, including ”assistance from the State”, ”Federal share”, and ”State share” are defined. If States retain less money from collections than they retained in fiscal year 1995, States are allowed to retain the amount re- tained in fiscal year 1995. If a State follows a ”fill-the-gap” policy as outlined above, that State can continue to distribute funds to the family up to the amount needed to fill the gap. The provision also clarifies the rela- tionship between gap payments and both the $50 passthrough and the State hold harmless provision. Senate amendment Same, except Senate adds provision that stipulates that in the case of a family receiving assistance from an Indian tribe, the State distribute any support collected in accordance with any cooperative agreement between the State and the tribe. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment with the modification that the House accepts the Senate provision on Indian tribes. 4. PRIVACY SAFEGUARDS Present law Federal law limits the use or disclosure of information concern- ing recipients of Child Support Enforcement Services to purposes connected with administering specified Federal welfare programs. House bill States must implement safeguards against unauthorized use or disclosure of information related to proceedings or actions to estab- lish paternity or to establish or enforce child support. These safe- guards must include prohibitions on release of information where there is a protective order or where the State has reason to believe a party is at risk of physical or emotional harm from the other party. This provision is effective October 1, 1997. 341 Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 5. RIGHT TO NOTIFICATION OF HEARING Present law Most States have procedural due process requirements with re- spect to wage withholding. Federal law requires States to carry out withholding in full compliance with all procedural due process re- quirements of the State. House bill Parties to child support cases under Title IV D must receive notice of proceedings in which child support might be established or modified and must receive a copy of orders establishing or modi- fying child support (or a notice that modification was denied) with- in 14 days of issuance. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. Subtitle B\u2014Locate and Case Tracking 6. STATE CASE REGISTRY Present law Federal law requires that wage withholding be administered by a public agency capable of documenting payments of support and tracking and monitoring such payments. Federal law requires that child support orders be reviewed and adjusted, as appropriate, at least once every three years. House bill States must establish an automated State Case Registry that contains a record on each case in which services are being provided by the State agency, as well as each support order established or modified in the State on or after October 1, 1998. The Registry may be established by linking local case registries of support orders through an automated information network. The registry record will contain data elements on both parents, such as names, Social Security numbers and other uniform identi- fication numbers, dates of birth, case identification numbers, and any other data the Secretary may require. Each case record will contain the amount of support owed under the order and other amounts due or overdue (including inter- est or late payment penalties and fees), any amounts that have been collected and distributed, the birth date of any child for whom 342 the order requires the provision of support, and the amount of any lien imposed by the State. The State agency operating the registry will promptly estab- lish, maintain, update and regularly monitor case records in the registry with respect to which services are being provided under the State plan. Establishing and updating support orders will be based on administrative actions and administrative and judicial proceedings and orders relating to paternity and support, as well as on information obtained from comparisons with Federal, State, and local sources of information, information on support collections and distributions, and any other relevant information. The State automated system will be used to extract data for purposes of sharing and matching with Federal and State data bases and locator services, including the Federal Case Registry of Child Support Orders, the Federal Parent Locator Service, and Temporary Assistance for Needy Families and Medicaid agencies, as well as for conducting intrastate and interstate information com- parisons. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 7. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS Present law No provision, but States may provide that, at the request of ei- ther parent, child support payments be made through the child support enforcement agency or the agency that administers the State’s income withholding system regardless of whether there is an arrearage. States must charge the parent who requests child support services a fee equal to the cost incurred by the State for these services, up to a maximum of $25 per year. House bill By October 1, 1998, State child support agencies are required to operate a centralized, automated unit for collection and disburse- ment of payments on child support orders enforced by the child support agency and payments on orders issued after December 31, 1993 which are not enforced by the State agency but for which in- come is subject to withholding. The specifics of how States will es- tablish and operate their State Disbursement Unit must be out- lined in the State plan. The State Disbursement Unit must be operated directly by the State agency, by two or more State agencies under a regional coop- erative agreement, or by a contractor responsible directly to the State agency. The State Disbursement Unit may be established by linking local disbursement units through an automated information network if the Secretary agrees that the system will not cost more, take more time to establish, nor take more time to operate than a single State system. All States, including those that operate a 343 linked system, must give employers one and only one location for submitting withheld income. The Disbursement Unit must be used to collect and disburse support payments, to generate orders and notices of withholding to employers, to keep an accurate identification of payments, to promptly distribute money to custodial parents or other States, and to furnish parents with a record of the current status of support payments (but States are not responsible for records that predate passage of this legislation). The Unit shall use automated proce- dures, electronic processes, and computer-driven technology to the maximum extent feasible, efficient, and economical. The Disbursement Unit must distribute all amounts payable within 2 business days after receiving money and identifying infor- mation from the employer or other source of periodic income, if suf- ficient information identifying the payee is provided. The Unit may retain arrearages in the case of appeals until they are resolved. States must use their automated system to facilitate collection and disbursement including at least: (1) transmission of orders and notices to employers within 2 days after receipt of the withholding notice; (2) monitoring to identify missed payments of support; and (3) automatic use of enforcement procedures when pay- ments are missed. It is the sense of Congress that in establishing a centralized unit for the collection of support payments, a State should choose the method of compliance which best meets the needs of parents, employers, and children. This section of the proposal will go into effect on October 1, 1998. States that process child support payments through local courts can continue court payments until September 30, 1999. Senate amendment Same, except Senate uses the term ”wages” rather than ”in- come” throughout this section. Senate amendment does not include the provision that States are not responsible for records that pre- date passage. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment with the modification that the term ”income” rath- er than ”wages” is used throughout this section. In addition, the House ”sense of the Congress” language was deleted. 8. STATE DIRECTORY OF NEW HIRES Present law In general, no provision. Section 1128 of the Social Security Act is an antifraud provision which excludes individuals and enti- ties that have committed fraud from participation in medicare and State health care programs. Section 1128A pertains to civil mone- tary penalties and describes the appropriate procedures and pro- ceedings for such penalties. 344 House bill State plans must include the provision that by October 1, 1997 States will operate a Directory of New Hires. Establishment. States are required to establish a State Direc- tory of New Hires to which employers and labor organizations in the State must furnish a report for each newly hired employee, un- less reporting could endanger the safety of the employee or com- promise an ongoing investigation or intelligence mission as deter- mined by the head of an agency. States that already have new hire reporting laws may continue to follow the provisions of their own law until October 1, 1998, at which time States must conform to Federal law. Employer Information. Employers must furnish to the State Directory of New Hires the name, address, and Social Security number of every new employee and the name, address, and identi- fication number of the employer. Multistate employers that report electronically or magnetically may report to the single State they designate; such employers must notify the Secretary of the name of the designated State. Agencies of the U.S. Government must re- port directly to the National Directory of New Hires (see below). Timing of Report. Employers must report new hire information within 20 days of the date of hire. Employers that report new hires electronically or by magnetic tape must file twice per month; re- ports must be separated by not less than 12 days and not more than 16 days. Reporting Format and Method. The report required in this sec- tion will be made on a W 4 form or the equivalent, and can be transmitted magnetically, electronically, or by first class mail. The decision of which reporting method to use is up to employers. Civil Money Penalties on Noncomplying Employers. States have the option of setting a civil money penalty which shall be not less than $25 or $500 if, under State law, the failure is the result of a conspiracy between the employer and employee. Entry of Employer Information. New hire information must be entered in the State data base within 5 business days of receipt from employer. Information Comparisons. By May 1, 1998, each State Direc- tory of New Hires must conduct automated matches of the Social Security numbers of reported employees against the Social Security numbers of records in the State Case Registry being enforced by the State agency and report the name, address, Social Security number, and the employer name, address, and identification num- ber on matches to the State child support agency. Transmission of Information. Within 2 business days of the entry of data in the registry, the State must transmit a withhold- ing order directing the employer to withhold wages in accord with the child support order. Within 3 days, the State Directory of New Hires must furnish employee information to the National Directory of New Hires for matching with the records of other State case reg- istries. The State Directory of New Hires must also report quar- terly to the National Directory of New Hires information on wages and unemployment compensation taken from the quarterly report to the Secretary of Labor now required by Title III of the Social Se- curity Act. 345 Other Uses of New Hire Information. The State child support agency must use the new hire information to locate individuals for purposes of establishing paternity as well as establishing, modify- ing, and enforcing child support obligations. New hire information must also be disclosed to the State agency administering the Tem- porary Assistance for Needy Families, Medicaid, Unemployment Compensation, Food Stamp, SSI, and territorial cash assistance programs for income eligibility verification, and to State agencies administering unemployment and workers’ compensation programs to assist determinations of the allowability of claims. State and local government agencies must participate in quarterly wage re- porting to the State employment security agency unless the agency performs intelligence or counterintelligence functions and it is de- termined that wage reporting could endanger the safety of the em- ployee or compromise an ongoing investigation or intelligence mis- sion. States may disclose new hire information to agencies working under contract with the child support agency. Disclosure to Certain Agents. States using private contractors are allowed to share information obtained from the Directory of New Hires with private entities working under contract with the State agency. Private contractors must comply with privacy safe- guards. Senate amendment Same, except under ”Other Uses of New Hire Information” Senate Amendment has no provision allowing States to share infor- mation with agencies working under contract with the State. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment with the modification that the House provision al- lowing private entities working under contract with child support agencies access to child support information is included. 9. AMENDMENTS CONCERNING INCOME WITHHOLDING Present law Since November 1, 1990, all new or modified child support or- ders that were being enforced by the State’s child support enforce- ment agency have been subject to immediate income withholding. If the noncustodial parent’s wages are not subject to income with- holding (pursuant to the November 1, 1990 provision), such par- ent’s wages would become subject to withholding on the date when support payments are 30 days past due. Since January 1, 1994, the law has required States to use immediate income withholding for nearly all new or modified support orders, regardless of whether a parent has applied for child support enforcement services. There are two circumstances in which income withholding does not apply: (1) one of the parents argues, and the court or administrative agen- cy agrees, that there is good cause not to do so, or (2) a written agreement is reached between both parents which provides for an alternative arrangement. States must implement procedures under which income withholding for child support can occur without the need for any amendment to the support order or for any further ac- 346 tion by the court or administrative entity that issued the order. States are also required to implement income withholding in full compliance with all procedural due process requirements of the State, and States must send advance notice to each nonresident parent to whom income withholding applies (with an exception for some States that had income withholding before enactment of this provision that met State due process requirements). States must extend their income withholding systems to include out-of-State support orders. House bill States must have laws providing that all child support orders issued or modified before October 1, 1996, which are not otherwise subject to income withholding, will become subject to income with- holding immediately if arrearages occur, without the need for judi- cial or administrative hearing. State law must also allow the child support agency to execute a withholding order through electronic means and without advance notice to the obligor. Employers must remit to the State Disbursement Unit, in a format prescribed by the Secretary, income withheld within five working days after the date such amount would have been paid to the employee. Employ- ers cannot take disciplinary action against employees subject to wage withholding. All child support orders subject to income with- holding, including those which are not part of the State IV D pro- gram, must be processed through the State Disbursement Unit. In addition, States must notify noncustodial parents that income with- holding has commenced and inform them of procedures for contest- ing income withholding. Employers must follow the withholding terms and conditions stated in the order; if the terms and condi- tions are not specified employers should follow those of the State in which the obligor lives. The section includes a definition of in- come to be used in interstate withholding and several conforming amendments to section 466 of the Social Security Act. Senate amendment Same, except employers must remit income withheld to the State disbursement unit within 7 rather than 5 days. There are also minor wording differences in the rules relating to income with- holding. There is also a difference in the House and Senate defini- tions of income. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment with the modifications that employers are given 7 days rather than 5 days to remit withheld income and that the House definition of income is followed. With respect to this provi- sion, ”timely-paid” is demonstrated by postmark, or in the case of electronic payment, the date the electronic transmission is proven to have been initiated by the employer. 10. LOCATOR INFORMATION FROM INTERSTATE NETWORKS Present law No provision. 347 House bill All State and the Federal Child Support Enforcement agencies must have access to the motor vehicle and law enforcement locator systems of all States. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 11. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE Present law The law requires that the Federal Parent Locator Service (FPLS) be used to obtain and transmit information about the loca- tion of any absent parent when that information is to be used for the purpose of enforcing child support. Federal law also requires departments or agencies of the United States to be reimbursed for costs incurred in providing requested information to the FPLS. Information Comparisons and Other Disclosures. Upon re- quest, the Secretary must provide to an ”authorized person” (i.e., an employee or attorney of a child support agency, a court with ju- risdiction over the parties involved, the custodial parent, the legal guardian, or the child’s attorney) the most recent address and place of employment of any nonresident parent if the information is con- tained in the records of the Department of Health and Human Services or can be obtained from any other department or agency of the United States or of any State. The FPLS also can be used in connection with the enforcement or determination of child cus- tody, visitation, and parental kidnapping. Federal law requires the Secretary of Labor and the Secretary of Health and Human Serv- ices to enter into an agreement to give the FPLS prompt access to wage and unemployment compensation claims information useful in locating a noncustodial parent or his employer. Fees. ”Authorized persons” who request information from FPLS must be charged a fee. Restriction on Disclosure and Use. Federal law stipulates that no information shall be disclosed if the disclosure would contravene the national policy or security interests of the United States or the confidentiality of Census data. Quarterly Wage Reporting. The Secretary of Labor must pro- vide prompt access by the Secretary of HHS to wage and unem- ployment compensation claims information and data maintained by the Labor Department or State employment security agencies. House bill The purposes of the Federal Parent Locator Service are ex- panded. For the purposes of establishing parentage, establishing support orders or modifying them, or enforcing support orders, the Federal Parent Locator Service will provide information to locate individuals who owe child support or against whom an obligation is sought or to whom such an obligation is owed. Information in the 348 FPLS includes Social Security number, address, name and address of employer, wages and employee benefits (including information about health care coverage), and information about assets and debts. The provision also clarifies the statute so that parents with orders providing child custody or visitation rights are given access to information from the FPLS unless the State has notified the Sec- retary that there is reasonable evidence of domestic violence or child abuse or that the information could be harmful to the custo- dial parent or child. The Secretary is authorized to set reasonable rates for reim- bursing Federal and State agencies for the costs of providing infor- mation to the FPLS and to set reimbursement rates that State and Federal agencies that use information from the FPLS must pay to the Secretary. Federal Case Registry of Child Support Orders. Establishes within the FPLS an automated registry known as the Federal Case Registry of Child Support Orders. The Federal Case Registry con- tains abstracts of child support orders and other information speci- fied by the Secretary (such as names, Social Security numbers or other uniform identification numbers, and State case identification numbers) to identify individuals who owe or are owed support, or for or against whom support is sought to be established, and the State which has the case. States must begin reporting this informa- tion in accord with regulations issued by the Secretary by October 1, 1998. National Directory of New Hires. This provision establishes within the FPLS a National Directory of New Hires containing in- formation supplied by State Directories of New Hires. When fully implemented, the Federal Directory of New Hires will contain iden- tifying information on virtually every person who is hired in the United States. In addition, the FPLS will contain quarterly data supplied by the State Directory of New Hires on wages and Unem- ployment Compensation paid. The Secretary of the Treasury must have access to information in the Federal Directory of New Hires for the purpose of administering section 32 of the Internal Revenue Code and the Earned Income Credit. The information for the Na- tional Directory of New Hires must be entered within 2 days of re- ceipt, and requires the Secretary to maintain within the National Directory of New Hires a list of multistate employers that choose to send their report to one State and the name of the State so elect- ed. The Secretary must establish a National Directory of New Hires by October 1, 1997. Information Comparisons and Other Disclosures. The Sec- retary must verify the accuracy of the name, Social Security num- ber, birth date, and employer identification number of individuals in the Federal Parent Locator Service with the Social Security Ad- ministration. The Secretary is required to match data in the Na- tional Directory of New Hires against the child support order ab- stracts in the Federal Case Registry at least every 2 working days and to report information obtained from matches to the State child support agency responsible for the case within 2 days. The informa- tion is to be used for purposes of locating individuals to establish paternity, and to establish, modify, or enforce child support orders. The Secretary may also compare information across all components 349 of the FPLS to the extent and with the frequency that the Sec- retary determines will be effective. The Secretary will share infor- mation from the FPLS with several potential users including State agencies administering the Temporary Assistance for Needy Fami- lies program, the Commissioner of Social Security (to determine the accuracy of Social Security and Supplemental Security Income), and researchers under some circumstances. Fees. The Secretary must reimburse the Commissioner of So- cial Security for costs incurred in performing verification of Social Security information and States for submitting information on New Hires. States or Federal agencies that use information from FPLS must pay fees established by the Secretary. Restriction on Disclosure and Use. Information from the FPLS cannot be used for purposes other than those provided in this sec- tion, subject to section 6103 of the Internal Revenue Code (con- fidentiality and disclosure of returns and return information). Information Integrity and Security. The Secretary must estab- lish and use safeguards to ensure the accuracy and completeness of information from the FPLS and restrict access to confidential in- formation in the FPLS to authorized persons and purposes. Federal Government Reporting. Each department of the U.S. must submit the name, Social Security number, and wages paid the employee on a quarterly basis to the FPLS. Quarterly wage re- porting must not be filed for a Federal or State employee perform- ing intelligence or counter-intelligence functions if it is determined that filing such a report could endanger the employee or com- promise an ongoing investigation. Conforming Amendments. This section makes several conform- ing amendments to Titles III and IV of the Social Security Act, to the Federal Unemployment Tax Act, and to the Internal Revenue Code. Among the more important are that: State employment secu- rity agencies are required to report quarterly wage information to the Secretary of HHS or suffer financial penalties and that private agencies working under contract to State child support agencies can have access to certain specified information from IRS records under some circumstances. Requirement for Cooperation. The Secretaries of HHS and Labor must work together to develop cost-effective and efficient methods of accessing information in the various directories re- quired by this title; they must also consider the need to ensure the proper and authorized use of wage record information. Senate amendment Same, except under ”Information Comparisons and Other Dis- closures” the Senate amendment drops the requirement that the Social Security Administration must determine the accuracy of payments under the Social Security and SSI programs. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment with the modification that the agreement follows the Senate provision dropping the requirement that the Social Se- curity Administration determine the accuracy of Social Security and SSI payments. 350 12. COLLECTION AND USE OF SOCIAL SECURITY NUMBERS FOR USE IN CHILD SUPPORT ENFORCEMENT Present law Federal law requires that in the administration of any law in- volving the issuance of a birth certificate, States must require each parent to furnish their Social Security number for the birth records. The State is required to make such numbers available to child support agencies in accordance with Federal or State law. States may not place Social Security numbers directly on birth cer- tificates. House bill States must have procedures for recording the Social Security numbers of applicants on the application for professional licenses, commercial driver’s licenses, occupational licenses, and marriage li- censes. States must also record Social Security numbers in the records of divorce decrees, child support orders, and paternity de- termination or acknowledgment orders. Individuals who die will have their Social Security number placed in the records relating to the death and recorded on the death certificate. There are several conforming amendments to title II of the Social Security Act. Senate amendment Same, except difference in conforming amendment to Social Se- curity Act. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. Subtitle C\u2014Streamlining and Uniformity of Procedures 13. ADOPTION OF UNIFORM STATE LAWS Present law States have several options available for pursuing interstate child support cases including direct income withholding, interstate income withholding, and long-arm statutes which require the use of the court system in the State of the custodial parent. In addition, States use the Uniform Reciprocal Enforcement of Support Act (URESA) and the Revised Uniform Reciprocal Enforcement of Sup- port Act (RURESA) to conduct interstate cases. Federal law im- poses a Federal criminal penalty for the willful failure to pay past- due child support to a child who resides in a State other than the State of the obligor. In 1992, the National Conference of Commis- sioners on State Uniform Laws approved a new model State law for handling interstate child support cases. The new Uniform Inter- state Family Support Act (UIFSA) is designed to deal with deser- tion and nonsupport by instituting uniform laws in all 50 States that limit control of a child support case to a single State. This ap- proach ensures that only one child support order from one court or child support agency will be in effect at any given time. It also helps to eliminate jurisdictional disputes between States that are impediments to locating parents and enforcing child support orders 351 across State lines. As of February 1996, 26 States and the District of Columbia had enacted UIFSA. House bill By January 1, 1998, all States must have enacted the Uniform Interstate Family Support Act (UIFSA) and any amendments offi- cially adopted by the National Conference of Commissioners of Uni- form State Laws before January 1, 1998, and have the procedures required for its implementation in effect. States are allowed flexi- bility in deciding which specific interstate cases are pursued by using UIFSA and which cases are pursued using other methods of interstate enforcement. States must provide that an employer that receives an income withholding order follow the procedural rules that apply to the order under the laws of the State in which the noncustodial parent works. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment with additional clarifying provisions that conferees agreed to include at the request of the National Conference of Com- missioners of Uniform State Laws. The Commissioners asked con- ferees to make two changes in House and Senate provisions. More specifically, conferees agreed to drop language in the section on in- come withholding in interstate cases and to insert replacement lan- guage approved by the Commissioners. This provides specific in- structions to employers for rules to follow in processing interstate cases. Employers following these instructions are also provided with legal immunity. 14. IMPROVEMENTS TO FULL FAITH AND CREDIT FOR CHILD SUPPORT ORDERS Present law Federal law requires States to treat past-due support obliga- tions as final judgments that are entitled to full faith and credit in every State. This means that a person who has a support order in one State does not have to obtain a second order in another State to obtain support due should the debtor parent move from the issuing court’s jurisdiction. P.L. 103-383 restricts a State court’s ability to modify a support order issued by another State unless the child and the custodial parent have moved to the State where the modification is sought or have agreed to the modifica- tion. House bill The provision clarifies the definition of a child’s home State, makes several revisions to ensure that full faith and credit laws can be applied consistently with UIFSA, and clarifies the rules re- garding which child support orders States must honor when there is more than one order. 352 Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 15. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES Present law No provision. House bill States are required to have laws that permit them to send or- ders to and receive orders from other States. The transmission of the order itself serves as certification to the responding State of the arrears amount and of the fact that the initiating State met all pro- cedural due process requirements. In addition, each responding State must, without requiring the case to be transferred to their State, match the case against its data bases, take appropriate ac- tion if a match occurs, and send the collections, if any, to the initi- ating State. States must keep records of the number of requests they receive, the number of cases that result in a collection, and the amount collected. States must respond to interstate requests within five days. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 16. USE OF FORMS IN INTERSTATE ENFORCEMENT Present law No provision. House bill The Secretary of HHS, in consultation with State child support directors and not later than October 1, 1996, must issue forms that States must use for income withholding, for imposing liens, and for issuing administrative subpoenas in interstate cases. States must be using the forms by March 1, 1997. Senate amendment Same, except minor differences in wording. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 353 17. STATE LAWS PROVIDING EXPEDITED PROCEDURES Present law States must have procedures under which expedited processes are in effect under the State judicial system or under State admin- istrative processes for obtaining and enforcing support orders and for establishing paternity. Federal regulations provide a number of safeguards in expe- dited cases, such as requiring that the due process rights of the parties involved be protected. The Employee Retirement Income Security Act (ERISA) of 1974 supersedes any and all State laws. Under ERISA a noncusto- dial parent’s pension benefits can only be garnished or withheld if the custodial parent has a qualified domestic relations order. Simi- larly, a pension plan administrator is obligated to adhere to medi- cal support requirements only if the custodial parent has a quali- fied medical child support order. House bill States must adopt a series of procedures to expedite both the establishment of paternity and the establishment, enforcement, and modification of support. These procedures must give the State agency the authority to take the following actions, subject to due process safeguards, without the necessity of obtaining an order from any other judicial or administrative tribunal: (1) ordering genetic testing in appropriate cases; (2) issuing subpoenas to obtain information necessary to establish, modify or enforce an order, with appropriate sanc- tions for failure to respond to the subpoena; (3) requiring all entities in the State (including for-profit, nonprofit, and governmental employers) to provide information on employment, compensation and benefits of any employee or contractor in response to a request from the State IV D agency or the IV D agency of any other State, and to sanction failure to respond to such request; (4) obtaining access to a variety of public and private records including: vital statistics, State and local tax records, real and personal property, occupational and professional li- censes and records concerning ownership and control of cor- porations, partnerships and other business entities, employ- ment security records, public assistance records, motor vehicle records, corrections records, and, subject to the nonliability of these private entities and the issuance of an administrative subpoena, information in the customer records of public utili- ties and cable TV companies, and records of financial institu- tions; (5) directing the obligor or other payor to change the payee to the appropriate government entity in cases in which support is subject to an assignment or to a requirement to pay through the State Disbursement Unit; (6) ordering income withholding in certain IV D cases; (7) securing assets to satisfy arrearages: by intercepting or seizing periodic or lump sum payments from States or local agencies including Unemployment Compensation, workers’ 354 compensation, judgements, settlements, lottery winnings, as- sets held by financial institutions, and public and private re- tirement funds; by attaching and seizing assets held in finan- cial institutions; by attaching public and private retirement funds; and by imposing liens to force the sale of property; and (8) increasing automatically the monthly support due to in- clude amounts to offset arrears. Expedited procedures must include the following rules and au- thority applicable with respect to proceedings to establish paternity or to establish, modify, or enforce support orders: (1) Locator Information and Notice. Parties in paternity and child support actions must file and update information about identity, address, and employer with the tribunal and with the State Case Registry upon entry of the order. The tri- bunal can deem due process requirements for notice and serv- ice of process to be met in any subsequent action upon delivery of written notice to the most recent residential or employer ad- dress filed with the tribunal. (2) Statewide Jurisdiction. The child support agency and any administrative or judicial tribunal have the authority to hear child support and paternity cases, to exert Statewide ju- risdiction over the parties, and to grant orders that have State- wide effect; cases can also be transferred between local juris- dictions without additional filing or service of process. Except to the extent that the provisions related to expedited procedures are consistent with requirements of the ERISA qualified domestic relations orders and the qualified medical child support orders, the expedited procedures do not alter, amend, modify, inval- idate, impair or supersede ERISA requirements. The automated systems being developed by States are to be used, to the maximum extent possible, to implement expedited pro- cedures. Senate amendment Same, except for a modification that alters the nonliability of entities that share information with child support officials and eliminates the reference to administrative subpoenas. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment except that the agreement included the House pro- vision strengthening the nonliability of entities that share informa- tion with child support officials. Subtitle D\u2014Paternity Establishment 18. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT Present law Establishment Process Available from Birth Until Age 18. Fed- eral law requires States to have laws that permit the establish- ment of paternity until the child reaches age 18. As of August 16, 1984, these procedures would apply to a child for whom paternity has not been established or for whom a paternity action was 355 brought but dismissed because of statute of limitations of less than 18 years was then in effect in the State. Procedures Concerning Genetic Testing. Federal law requires States to implement laws under which the child and all other par- ties must undergo genetic testing upon the request of a party in contested cases. Voluntary Paternity Acknowledgement. Federal law requires States to implement procedures for a simple civil process for vol- untary paternity acknowledgment, including hospital-based pro- grams. Status of Signed Paternity Acknowledgement. Federal law re- quires States to implement procedures under which the voluntary acknowledgment of paternity creates a rebuttable presumption, or at State option, a conclusive presumption of paternity. Bar on Acknowledgement Ratification Proceedings. Federal law requires States to implement procedures under which voluntary ac- knowledgment is admissible as evidence of paternity and the vol- untary acknowledgment of paternity must be recognized as a basis for seeking a support order without requiring any further proceed- ings to establish paternity. Admissibility of Genetic Testing Results. Federal law requires States to implement procedures which provide that any objection to genetic testing results must be made in writing within a specified number of days before any hearing at which such results may be introduced into evidence. If no objection is made, the test results must be admissible as evidence of paternity without the need for foundation testimony or other proof of authenticity or accuracy. Presumption of Paternity in Certain Cases. Federal law re- quires States to implement procedures which create a rebuttable or, at State option, conclusive presumption of paternity based on genetic testing results indicating a threshold probability that the alleged father is the father of the child. Default Orders. Federal law requires States to implement pro- cedures that require a default order to be entered in a paternity case upon a showing of service of process on the defendant and any additional showing required by State law. House bill Establishment Process Available from Birth Until Age 18. States are required to have laws that permit paternity establish- ment until at least age 18 (or a higher limit at State option) even in cases that were previously dismissed because a statute of limita- tions of less than 18 years was then in effect. Procedures Concerning Genetic Testing. The child and all other parties, unless good cause provisions are met, must undergo ge- netic testing upon the request of a party if the request is supported by a sworn statement establishing a reasonable possibility of par- entage or nonparentage. When the tests are ordered by the State agency, States must pay the costs, subject to recoupment at State option from the father if paternity is established. Upon the request and advance payment by the contestant, States must seek addi- tional testing if the original test result is contested. Voluntary Paternity Acknowledgement. 356 (1) Simple Civil Process. States must have procedures that cre- ate a simple civil process for voluntary acknowledging paternity under which benefits, rights, and responsibilities of acknowledge- ment are explained to unwed parents before the acknowledgement is signed. (2) Hospital Program. States must have procedures that estab- lish a paternity acknowledgement program through hospitals. (3) Paternity Services. States must have procedures that re- quire the agency responsible for maintaining birth records to offer voluntary paternity establishment services. The Secretary must issue regulations governing voluntary paternity establishment services, including regulations on State agencies that may offer vol- untary paternity acknowledgement services and the conditions such agencies must meet. (4) Affidavit. States must develop their own voluntary acknowl- edgment form but the form must contain all the basic elements of a form developed by the Secretary. States must give full faith and credit to the forms of other States. Status of Signed Paternity Acknowledgement. (1) Inclusion in Birth Records. States must include the name of the father in the record of births to unmarried parents only if the father and mother have signed a voluntary acknowledgement of paternity or a court or administrative agency has issued an adju- dication of paternity. (2) Legal Finding. States must have procedures under which a signed acknowledgement of paternity is considered a legal finding of paternity unless rescinded within 60 days or the date of a judi- cial or administrative proceeding to establish a support order. (3) Contest. States must have procedures under which a pater- nity acknowledgment can be challenged in court only on the basis of fraud, duress, or material mistake of fact, with the burden of proof on the challenger. Bar on Acknowledgement Ratification Proceedings. No judicial or administrative proceedings are required or permitted to ratify a paternity acknowledgement which is not challenged by the parents. Admissibility of Genetic Testing Results. States must have pro- cedures for admitting into evidence accredited genetic tests, unless any objection is made in writing within a specified number of days, and if no objection is made, clarifying that test results are admissi- ble without the need for foundation or other testimony. Presumption of Paternity in Certain Cases. States must have laws that create a rebuttable or, at State option, conclusive pre- sumption of paternity when results from genetic testing indicate a threshold probability that the alleged father is the father of the child. Default Orders. A default order must be entered in a paternity case upon a showing of service of process on the defendant and any additional showing required by the State law. No Right to Jury Trial. State laws must state that parties in a contested paternity action are not entitled to a jury trial. In addition to all the above provisions that strengthen similar provisions of current law, the Committee report contains a number of new provisions that have no direct parallel in current law. These include: 357 Temporary Support Based on Probable Paternity. Upon motion of a party, State law must require issuance of a temporary support order pending an administrative or judicial determination of par- entage if paternity is indicated by genetic testing or other clear and convincing evidence. Proof of Certain Support and Paternity Establishment Costs. Bills for pregnancy, childbirth, and genetic testing must be admis- sible in judicial proceedings without foundation testimony and must constitute prima facie evidence of the cost incurred for such services. Standing of Putative Fathers. Putative fathers must have a reasonable opportunity to initiate a paternity action. Filing of Acknowledgement and Adjudications in State Registry of Birth Records. Both voluntary acknowledgements and adjudica- tions of paternity must be filed with the State registry of birth records for data matches with the central Case Registry of Child Support Orders. National Paternity Acknowledgement Affidavit. The Secretary is required to develop, in consultation with the States, the mini- mum requirements of an affidavit which includes the Social Secu- rity number of each parent to be used by States for voluntary ac- knowledgement of paternity. Senate amendment Same, except under ”Voluntary Paternity Acknowledgement,” the Senate amendment includes good cause exceptions. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment with modification that the good cause exceptions are dropped. 19. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT Present law States are required to regularly and frequently publicize, through public service announcements, the availability of child sup- port enforcement services. House bill States must publicize the availability and encourage the use of procedures for voluntary establishment of paternity and child sup- port. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 358 20. COOPERATION BY APPLICANTS FOR AND RECIPIENTS OF TEMPORARY FAMILY ASSISTANCE Present law AFDC applicants and recipients are required to cooperate with the State in establishing the paternity of a child and in obtaining child support payments unless the applicant or recipient is found to have good cause for refusing to cooperate. Under the ”good cause” regulations, the child support agency may determine that it is against the best interests of the child to seek to establish pater- nity in cases involving incest, rape, or pending procedures for adop- tion. Moreover, the agency may determine that it is against the best interest of the child to require the mother to cooperate if it is anticipated that such cooperation will result in the physical or emo- tional harm of the child, parent, or caretaker relative. House bill Individuals or their children who apply for or receive public as- sistance under the Temporary Assistance for Needy Families (TANF) program or the Medicaid program must cooperate, as de- termined by the State child support agency, with State efforts to establish paternity and establish, modify, or enforce a support order. State procedures must require both that applicants and re- cipients provide specific identifying information about the other parent and that applicants appear at interviews, hearings, and legal proceedings, unless the applicant or recipient is found to have good cause for refusing to cooperate. States must have ”good cause” exceptions and they must take into account the best interests of the child. The definition of good cause, and the determination of good cause in specific cases, can be accomplished by the State agen- cy administering TANF, child support enforcement, or Medicaid. States also must require the custodial parent and child to submit to genetic testing. States may not require the noncustodial parent to sign an acknowledgement of paternity or relinquish the right to genetic testing as a condition of cooperation. The State child sup- port agency must notify the agencies administering the TANF Block Grant and Medicaid programs if noncooperation is deter- mined. Senate amendment Same, except imposes a penalty for noncooperation. If it is de- termined that an individual is not cooperating, and the individual does not qualify for any good cause or other exception, then the State must deduct not less than 25 percent of the Title IV A assist- ance that otherwise would be provided to the family of the individ- ual; and the State may deny the family any Title IV A assistance. The Senate amendment also has references to Title XV not found in the House bill. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment except that the Senate penalty of 25 percent is in- cluded. This provision is included in Title I (Block Grants for Tem- porary Assistance for Needy Families) of the bill. 359 Subtitle E\u2014Program Administration and Funding 21. PERFORMANCE-BASED INCENTIVES AND PENALTIES Present law Incentive Adjustments to Federal Matching Rate. The Federal government reimburses approved administrative expenditures of States at a rate of 66 percent. In addition, the Federal government pays States an incentive amount ranging from six percent to 10 percent of both AFDC and non-AFDC collections. Conforming Amendments. No provision. Calculation of IV D Paternity Establishment Percentage. States are required to meet Federal standards for the establish- ment of paternity. The major standard relates to the percentage ob- tained by dividing the number of children in the State who are born out of wedlock, are receiving AFDC or child support enforce- ment services, and for whom paternity has been established by the number of children who are born out of wedlock and are receiving AFDC or child support enforcement services. To meet Federal re- quirements, this percentage in a State must be at least 75 percent or meet the following standards of improvement from the preceding year: (1) if the State paternity establishment ratio is between 50 and 75 percent, the State ratio must increase by 3 or more percent- age points from the ratio of the preceding year; (2) if the State ratio is between 45 and 50, the ratio must increase at least 4 percentage points; (3) if the State ratio is between 40 and 45 percent, it must increase at least 5 percentage points; and (4) if the State ratio is below 40 percent, it must increase at least 6 percentage points. If an audit finds that the State’s child support enforcement program has not substantially complied with the requirements of its State plan, the State is subject to a penalty. In accord with this penalty, the Secretary must reduce a State’s AFDC benefit payment by not less than 1 percent nor more than 2 percent for the first failure to comply; by not less than 2 percent nor more than 3 percent for the second consecutive failure to comply; and by not less than 3 percent nor more than 5 percent for third or subsequent consecutive failure to comply. House bill Incentive Adjustments to Federal Matching Rate. The Sec- retary, in consultation with State child support directors, must de- velop a proposal for a new incentive system that provides addi- tional payments to States (i.e., above the base matching rate of 66 percent) based on performance and report details of the new sys- tem to the Committees on Ways and Means and Finance by March 1, 1997. The Secretary’s new system must be revenue neutral. The current incentive system remains effective for fiscal years begin- ning before 2000. Conforming Amendments. Conforming amendments are made in Sections 458 of the Social Security Act. Calculation of IV D Paternity Establishment Percentage. States have the option of calculating the paternity establishment rate by either counting only unwed births in the State IV D case- load or by counting all unwed births in the State. The IV D pater- 360 nity establishment percentage for a fiscal year is equal to: (1) the total number of children in the State who were born out-of-wedlock, and who receive services under Part A or, at State option, Part D, and for whom paternity is acknowledged or established during the fiscal year, divided by (2) the total number of children born out-of- wedlock who receive services under Part A or E or, at State option, Part D. The Statewide paternity establishment percentage is simi- lar except that all out-of-wedlock births in the fiscal year in the State are in the denominator and all paternities established are in the numerator. The requirements for meeting the standard are the same as current law except the 75 percent rule is increased to 90 percent. States with a paternity establishment percentage of be- tween 75 percent and 90 percent must improve their performance by at least two percentage points per year. The noncompliance pro- visions of the child support program are modified so that the Sec- retary must take overall program performance into account. Senate amendment Same, except minor wording difference in amendment of Sec- tion 452(g)(2). Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 22. FEDERAL AND STATE REVIEW AND AUDITS Present law States are required to maintain a full record of child support collections and disbursements and to maintain an adequate report- ing system. The Secretary must collect and maintain, on a fiscal year basis, up-to-date State-by-State statistics on each of the services provided under the child support enforcement program. The Secretary is also required to evaluate the implementation of State child support en- forcement programs and conduct audits of these programs as nec- essary, but not less often than once every 3 years (or annually if a State has been found to be out of compliance with program rules). House bill States are required to annually review and report to the Sec- retary, using data from their automatic data processing system, both information adequate to determine the State’s compliance with Federal requirements for expedited procedures and timely case processing as well as the information necessary to calculate their levels of accomplishment and rates of improvement on the performance indicators in the proposal. The Secretary is required to determine the amount (if any) of incentives or penalties. The Secretary must also review State re- ports on compliance with Federal requirements and provide States with recommendations for corrective action. Audits must be con- ducted at least once every 3 years, or more often in the case of States that fail to meet Federal requirements. The purpose of the 361 audits is to assess the completeness, reliability, and security of data reported for use in calculating the performance indicators and to assess the adequacy of financial management of the State pro- gram. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 23. REQUIRED REPORTING PROCEDURES Present law The Secretary is required to assist States in establishing ade- quate reporting procedures and must maintain records of child sup- port enforcement operations and of amounts collected and dis- bursed, including costs incurred in collecting support payments. House bill The Secretary is required to establish procedures and uniform definitions for State collection and reporting of information nec- essary to measure State compliance with expedited processes. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 24. AUTOMATED DATA PROCESSING REQUIREMENTS Present law Federal law (P.L. 104 35) requires that by October 1, 1997, States have an operational automated data processing and infor- mation retrieval system designed to control, account for, and mon- itor all factors in the support enforcement and paternity determina- tion process, the collection and distribution of support payments, and the costs of all services rendered. The automated data processing system must be capable of pro- viding management information on all IV D cases from initial re- ferral or application through collection and enforcement. The auto- mated data processing system must also be capable of providing se- curity against unauthorized access to, or use of, the data in such system. To establish these automated data systems, the Federal government provided States with a 90 percent matching rate for the costs of development. This enhanced matching money expired on October 1, 1995. House bill States are required to have a single Statewide automated data processing and information retrieval system which has the capacity to perform the necessary functions and with the required fre- 362 quency, as described in this section. The State data system must be used to perform functions the Secretary specifies, including con- trolling and accounting for the use of Federal, State, and local funds and maintaining the data necessary to meet Federal report- ing requirements in carrying out the program. The system must maintain the requisite data for Federal reporting, calculate the State’s performance for purposes of the incentive and penalty provi- sions, and have in place systems controls to ensure the complete- ness, reliability, and accuracy of the data. To promote security of information, the State agency must have safeguards to protect the integrity, accuracy, and complete- ness of, and access to and use of, data in the automated systems including restricting access to passwords, monitoring of access to and use of the system, conducting automated systems training, and imposing penalties for unauthorized use or disclosure of confiden- tial data. The Secretary must prescribe final regulations for imple- mentation of this section no later than 2 years after the date of the enactment of this Act. The statutory provisions for State implementation of Federal automatic data processing requirements are revised to provide that, first, all requirements enacted on or before the date of enact- ment of the Family Support Act of 1988 are to be met by October 1, 1997. The requirements enacted on or before the date of enact- ment of this proposal must be met by October 1, 1999. The October 1, 1999 deadline will be extended by one day for each day by which the Secretary fails to meet the 2-year deadline for regulations. The Federal government will continue the 90 percent matching rate for 1996 and 1997 in the case of provisions outlined in advanced plan- ning documents submitted before September 30, 1995; the en- hanced match is also provided retroactively for funds expended since expiration of the enhanced rate on October 1, 1995. For fiscal years 1996 through 2001, the matching rate for the provisions of this section will be 80 percent. The Secretary must create procedures to cap payments to States to meet the new requirements at $400,000,000 over 6 years (fiscal years 1996 2001) to be distributed among States by a for- mula set in regulations which takes into account the relative size of State caseloads and the level of automation needed to meet ap- plicable automatic data processing requirements. Senate amendment Same, except that requirements enacted after the Family Sup- port Act must be met by October 1, 2000 (rather than October 1, 1999). Also, a difference in wording about payments in fiscal year 1998. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 363 25. TECHNICAL ASSISTANCE (AND FUNDING OF PARENT LOCATOR SERVICE) Present law Annual appropriations are made to cover the expenses of the Administration for Children and Families, which includes the Fed- eral Office of Child Support Enforcement (OCSE). Among OCSE’s administrative expenses are the costs of providing technical assist- ance to the States. House bill The Secretary can use 1 percent of the Federal share of child support collections on behalf of families in the Temporary Assist- ance for Needy Families program the preceding year to provide technical assistance to the States. Technical assistance can include training of State and Federal staff, research and demonstration programs, special projects of regional or national significance, and similar activities. The Secretary will receive 2 percent of the Fed- eral share of collections on behalf of TANF recipients the preceding year for operation of the Federal Parent Locator Service to the ex- tent that costs of the Parent Locator Service are not recovered by user fees. Senate amendment Same, except the effective date is October 1, 1997. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment except that the House effective date is followed. 26. REPORTS AND DATA COLLECTION BY THE SECRETARY Present law The Secretary is required to submit to Congress, not later than 3 months after the end of the fiscal year, a complete report on all child support enforcement activities. House bill In addition to current reporting requirements, the Secretary is required to report the following data to Congress in her annual re- port each fiscal year: (1) the total amount of child support payments collected; (2) the cost to the State and Federal governments of fur- nishing child support services; (3) the number of cases involving families that became in- eligible for aid under part A with respect to whom a child sup- port payment was received; (4) the total amount of current support collected and dis- tributed; (5) the total amount of past due support collected and dis- tributed; and (6) the total amount of support due and unpaid for all fis- cal years. 364 The Secretary also must report the compliance, by State, with IV D standards for responding to requests for child support assist- ance from other States and standards for distributing child support collections. Senate amendment Same, except minor difference in wording in amendment to Section 452(a)(10). Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 27. CHILD SUPPORT DELINQUENCY PENALTY Present law No provision. House bill States must impose an annual penalty of 10 percent on over- due support owed by noncustodial parents. The penalty is paid after the family has been repaid all arrearages and after the State has been repaid for welfare payments, if any, made to families. Senate amendment No provision. Conference agreement The conference agreement follows the Senate amendment by dropping this penalty provision. Subtitle F\u2014Establishment and Modification of Support Orders 28. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS Present law A child support order legally obligates noncustodial parents to provide financial support for their child and stipulates the amount of the obligation and how it is to be paid. In 1984, P.L. 98 378 re- quired States to establish guidelines for establishing child support orders. In 1988, P.L. 100 485 made the guidelines binding on judges and other officials who had authority to establish support orders. P.L. 100 485 also required States to review and adjust indi- vidual child support orders once every three years under some cir- cumstances. States are required to notify both resident and non- resident parents of their right to a review. House bill States must review and, as appropriate, adjust child support orders at the request of the parents. In the case of orders being en- forced against parents whose children are receiving benefits under Title IV A of the Social Security Act, States may also review the order at their own option. No proof of change of circumstances is needed to initiate the review. States may adjust child support or- 365 ders by either applying the State guidelines and updating the award amount or by applying a cost of living increase to the order. In the latter case, both parties must be given 30 days after notice of adjustment to contest the results. States may use automated methods to identify orders eligible for review, conduct the review, identify orders eligible for adjustment, and apply the appropriate adjustment to the orders based on the threshold established by the State. States are required to give parties one notice of their right to request review and adjustment, which may be included in the order establishing the support amount. Senate amendment Major differences in the review and adjustment provisions; the House makes reviews optional while the Senate retains mandatory 3-year reviews of IV A cases as under current law; also other dif- ferences in wording. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. The compromise provision preserves the manda- tory review every 3 years if parents request a review but allows States some flexibility in reviewing child support cases in their welfare caseload. 29. FURNISHING CONSUMER REPORTS FOR CERTAIN PURPOSES RELATING TO CHILD SUPPORT Present law The Fair Credit Act requires consumer reporting agencies to include in any consumer report information on child support delin- quencies provided by or verified by a child support enforcement agency, which antedates the report by 7 years. House bill This section amends the Fair Credit Reporting Act. In response to a request by the head of a State or local child support agency (or a State or local government official authorized by the head of such an agency), consumer credit agencies must release informa- tion if the person making the request makes all of the following certifications: that the consumer report is needed to establish an individual’s capacity to make child support payments or determine the level of payments; that paternity has been established or ac- knowledged; that the consumer has been given at least 10 days no- tice by certified or registered mail that the report is being re- quested; and that the consumer report will be kept confidential, will be used solely for child support purposes, and will not be used in connection with any other civil, administrative, or criminal pro- ceeding or for any other purpose. Consumer reporting agencies must also give reports to a child support agency for use in setting an initial or modified award. Senate amendment Same. 366 Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 30. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL RECORDS Present law No provision. House bill Financial institutions are not liable to any person for informa- tion provided to child support agencies. Child support agencies can disclose information obtained from depository institutions only for child support purposes. There is no liability for disclosures that re- sult from good faith but erroneous interpretation of this statute. However, individuals who knowingly disclose information from fi- nancial records can have civil actions brought against them in Fed- eral district court; the maximum penalty is $1,000 for each disclo- sure or actual damages plus, in the case of willful disclosure result- ing from gross negligence, punitive damages, plus the costs of the action. Definitions of ”financial institution” and ”financial record” are included in this section. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. Subtitle G\u2014Enforcement of Support Orders 31. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES Present law If the amount of overdue child support is at least $750, the In- ternal Revenue Service (IRS) can enforce the child support obliga- tion through its regular collection process, which may include sei- zure of property, freezing accounts, or use of other procedures if child support agencies request assistance according to prescribed rules (e.g., certifying that the delinquency is at least $750, etc.) House bill The Internal Revenue Code is amended so that no additional fees can be assessed for adjustment to previously certified amounts for the same obligor. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 367 32. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL EMPLOYEES Present law Federal law allows the wages of Federal employees to be gar- nished to enforce legal obligations for child support or alimony. Federal law provides that moneys payable by the United States to any individual are subject to being garnished in order to meet an individual’s legal obligation to provide child support or make ali- mony payments. An executive order issued on February 27, 1995 establishes the Federal government as a model employer in pro- moting and facilitating the establishment and enforcement of child support. Under the terms of the Executive Order, all Federal agen- cies, including the Uniformed Services, are required to cooperate fully in efforts to establish paternity and child support and to en- force the collection of child and medical support. All Federal agen- cies are to review their wage withholding procedures to ensure that they are in full compliance. Beginning no later than July 1, 1995, the Director of the Office of Personnel Management must publish annually in the Federal Register the list of agents (and their ad- dresses) designated to receive service of withholding notices for Federal employees. Federal law states that neither the United States nor any disbursing officer or government entity shall be lia- ble with respect to any payment made from moneys due or payable from the United States pursuant to the legal process. Federal law provides that money that may be garnished includes compensation for personal services, whether such compensation is denominated as wages, salary, commission, bonus, pay, or otherwise, and in- cludes but is not limited to, severance pay, sick pay, incentive pay- ments, and periodic payments. Includes definitions of ”United States”, ”child support”, ”alimony”, ”private person”, and ”legal process”. House bill Consolidation and Streamlining of Authorities: (1) Federal employees are subject to wage withholding and other actions taken against them by State child support enforce- ment agencies. (2) Federal agencies are responsible for the same wage with- holding and other child support actions taken by the State as if they were a private employer. (3) The head of each Federal agency must designate an agent and place the agent’s name, title, address, and telephone number in the Federal Register annually. The agent must, upon receipt of process, send written notice to the individual involved as soon as possible, but no later than 15 days, and to comply with any notice of wage withholding or respond to other process within 30 days. The agent also must respond to any order, process, or interrogatory about child support or alimony within 30 days after effective serv- ice of such requests. (4) Current law governing allocation of moneys owed by a Fed- eral employee is amended to give priority to child support, to re- quire allocation of available funds, up to the amount owed, among child support claimants, and to allocate remaining funds to other claimants on a first-come, first-served basis. 368 (5) A government entity served with notice of process for en- forcement of child support is not required to change its normal pay and disbursement cycle to comply with the legal process. (6) Similar to current law, the U.S., the government of the Dis- trict of Columbia, and disbursing officers are not liable for child support payments made in accord with this section; nor is any Fed- eral employee subject to disciplinary action or civil or criminal li- ability for disclosing information while carrying out the provisions of this section. (7) The President has the authority to promulgate regulations to implement this section as it applies to Federal employees of the Administrative branch of government; the President Pro Tempore of the Senate and Speaker of the House can issue regulations gov- erning their employees; and the Chief Justice can issue regulations applicable to the Judicial branch. (8) This section broadens the definition of income to include, in addition to wages, salary, commissions, bonus pay, allowances, sev- erance pay, sick pay, and incentive pay, funds such as insurance benefits, retirement and pension pay (including disability pay if the veteran has waived a portion of retirement pay to receive disability pay), survivor’s benefits, compensation for death and black lung disease, veteran’s benefits, and workers’ compensation; but to ex- clude from income funds paid to defray expenses incurred in carry- ing out job duties; amounts owed to the U.S. or used to pay Federal employment taxes, fines, or forfeitures ordered by court martial; and amounts withheld for tax purposes, for health insurance or life insurance premiums, for retirement contributions, or for life insur- ance premiums. (9) This section includes definitions of ”United States”, ”child support”, ”alimony”, ”private person”, and ”legal process”. Conforming Amendments. The House provision makes several conforming amendments to Title IV D of the Social Security Act and Title 5 of the United States Code. Military Retired and Retainer Pay. The definition of ”court” in the Armed Forces title of the U.S. Code (title 10) is amended to in- clude an administrative or judicial tribunal of a State which is competent to enter child support orders, and clarifies the definition of ”court order.” The Secretary of Defense is required to send with- held amounts for child support to the appropriate State Disburse- ment Unit. The provision also clarifies that military personnel who have never been married to the parent of their child are under ju- risdiction of the State child support program and the terms of sec- tion 459 of the Social Security Act. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 369 33. ENFORCEMENT OF CHILD SUPPORT OBLIGATIONS OF MEMBERS OF THE ARMED FORCES Present law Availability of Locator Information. The Executive Order is- sued February 27, 1995 requires a study which would include rec- ommendations on how to improve service of process for civilian em- ployees and members of the Uniformed Services stationed outside the United States. Facilitating Granting of Leave for Attendance at Hearings. No provision. Payment of Military Retired Pay in Compliance with Child Support Orders. Federal law requires allotments from the pay and allowances of any member of the uniformed service when the mem- ber fails to pay child (or child and spousal) support payments. House bill Availability of Locator Information. The Secretary of Defense must establish a central personnel locator service that contains res- idential or, in specified instances, duty addresses of every member of the Armed Services (including members of the Coast Guard, if requested). The locator service must be updated within 30 days of the time an individual establishes a new address. Information from the locator service must be made available upon request to the Federal Parent Locator Service. Facilitating Granting of Leave for Attendance at Hearings. The Secretary of each military department must issue regulations to fa- cilitate granting of leave for members of the Armed Services to at- tend hearings to establish paternity or to establish child support orders. The terms ”court” and ”child support” are defined. Payment of Military Retired Pay in Compliance with Child Support Orders. Child support orders received by the Secretary do not have to have been recently issued. The Secretary of each branch of the Armed Forces (including retirees, the Coast Guard, the National Guard, and the Reserves) is required to make child support payments from military retirement pay directly to any State to which a custodial parent has assigned support rights as a condition of receiving public assistance. Payments to satisfy cur- rent support or child support arrears must be made from dispos- able retirement pay. Payroll deductions must begin within 30 days or the first pay period after 30 days of receiving a wage withhold- ing order. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 34. VOIDING OF FRAUDULENT TRANSFERS Present law No provision. 370 House bill States must have in effect the Uniform Fraudulent Conveyance Act of 1981, the Uniform Fraudulent Transfer Act of 1984, or an equivalent law providing for voiding transfers of income or property that were made to avoid payment of child support. States also must have in effect procedures under which the State must seek to void a fraudulent transfer or obtain a settlement in the best interest of the child support creditor. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 35. WORK REQUIREMENT FOR PERSONS OWING PAST-DUE CHILD SUPPORT Present law Public Law 100 485 required the Secretary to grant waivers to up to five States allowing them to provide JOBS services on a vol- untary or mandatory basis to noncustodial parents who are unem- ployed and unable to meet their child support obligations. (In their report the conferees noted that the demonstrations would not grant any new powers to the States to require participation by noncusto- dial parents. The demonstrations were to be evaluated.) House bill States must have procedures under which the State has the authority to issue an order or request that a court or administra- tive process issue an order that requires individuals owing past-due child support for a child receiving assistance under the Temporary Family Assistance program either to pay the support due, to have and be in compliance with a plan to pay child support, or to partici- pate in work activities as deemed appropriate by the court or the child support agency. ”Past-due support” is defined and a conform- ing amendment is made to sec. 466 of the Social Security Act. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 36. DEFINITION OF SUPPORT ORDER Present law No provision. House bill A support order is defined as a judgement, decree, or order (whether temporary, final, or subject to modification) issued by a 371 court or an administrative agency for the support (monetary sup- port, health care, arrearages, or reimbursement) of a child (includ- ing a child who has reached the age of majority under State law) or of a child and the parent with whom the child lives, and which may include costs and fees, interest and penalties, income with- holding, attorney’s fees, and other relief. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 37. REPORTING ARREARAGES TO CREDIT BUREAUS Present law Federal law requires States to implement procedures which re- quire them to periodically report to consumer reporting agencies the name of debtor parents owing at least 2 months of overdue child support and the amount of child support overdue. However, if the amount overdue is less than $1,000, information regarding it shall be made available only at the option of the State. Moreover, information may only be made available after the noncustodial par- ent has been notified of the proposed action and has been given reasonable opportunity to contest the accuracy of the claim against him. States are permitted to charge consumer reporting agencies that request child support arrearage information a fee that does not exceed actual costs. House bill States are required to periodically report to consumer credit re- porting agencies the name of any noncustodial parent who is delin- quent in the payment of support and the amount of overdue sup- port owed by the parent. Before such a report can be sent, the obli- gor must have been afforded all due process rights, including notice and reasonable opportunity to contest the claim of child support de- linquency. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 38. LIENS Present law Federal law requires States to implement procedures under which liens are imposed against real and personal property for amounts of overdue support owed by a noncustodial parent who re- sides or owns property in the State. 372 House bill States must have procedures under which liens arise by oper- ation of law against property for the amount of overdue support. States must grant full faith and credit to liens of other States if the originating State agency or party has complied with procedural rules relating to the recording or serving of liens, except such rules cannot require judicial notice or hearing prior to enforcement of the lien. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 39. STATE LAW AUTHORIZING SUSPENSION OF LICENSES Present law No provision. House bill States must have the authority to withhold, suspend, or re- strict the use of drivers’ licenses, professional and occupational li- censes, and recreational licenses of individuals owing past-due sup- port or failing, after receiving appropriate notice, to comply with subpoenas or warrants relating to paternity or child support pro- ceedings. Senate amendment Same. Conference agreement The conference agreement follows the House bill and the Sen- ate amendment. 40. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD SUPPORT Present law No provision. House bill If an individual owes arrearages in excess of $5,000 of child support, the Secretary of HHS must request that the State Depart- ment deny, revoke, restrict, or limit the individual’s passport. State child support agencies must have procedures for certifying to the Secretary arrearages in excess of $5,000 and for notifying individ- uals who are in arrears and providing them with an op