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P.L.104-193

--H.R.3734--

H.R.3734

One Hundred Fourth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Wednesday,

the third day of January, one thousand nine hundred and ninety-six

An Act

To provide for reconciliation pursuant to section 201(a)(1) of the concurrent resolution on the budget for fiscal year 1997.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

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--BLOCK 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 grandchildren.

      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 provisions.

      Sec. 110. Conforming amendments to other laws.

      Sec. 111. Development of prototype of counterfeit-resistant Social Security card required.

      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--SUPPLEMENTAL SECURITY INCOME

      Sec. 200. Reference to Social Security Act.

Subtitle A--Eligibility Restrictions

      Sec. 201. Denial of SSI benefits for 10 years to individuals found to have fraudulently misrepresented residence in order to obtain benefits simultaneously in 2 or more States.

      Sec. 202. Denial of SSI benefits for fugitive felons and probation and parole violators.

      Sec. 203. Treatment of prisoners.

      Sec. 204. Effective date of application for benefits.

Subtitle B--Benefits 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--Additional Enforcement Provision

      Sec. 221. Installment payment of large past-due supplemental security income benefits.

      Sec. 222. Regulations.

Subtitle D--Studies Regarding Supplemental Security Income Program

      Sec. 231. Annual report on the supplemental security income program.

      Sec. 232. Study by General Accounting Office.

TITLE III--CHILD SUPPORT

      Sec. 300. Reference to Social Security Act.

Subtitle A--Eligibility 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--Locate 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 enforcement.

Subtitle C--Streamlining 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.

Subtitle D--Paternity 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--Program 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--Establishment 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--Enforcement 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--Medical Support

      Sec. 381. Correction to ERISA definition of medical child support order.

      Sec. 382. Enforcement of orders for health care coverage.

Subtitle I--Enhancing Responsibility and Opportunity for Non-Residential Parents

      Sec. 391. Grants to States for access and visitation programs.

Subtitle J--Effective Dates and Conforming Amendments

      Sec. 395. Effective dates and conforming amendments.

TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

      Sec. 400. Statements of national policy concerning welfare and immigration.

Subtitle A--Eligibility 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--Eligibility 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 benefits.

Subtitle C--Attribution 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 resources to the alien with respect to State programs.

      Sec. 423. Requirements for sponsor's affidavit of support.

Subtitle D--General 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 Immigration and Naturalization Service.

      Sec. 435. Qualifying quarters.

Subtitle E--Conforming Amendments Relating to Assisted Housing

      Sec. 441. Conforming amendments relating to assisted housing.

Subtitle F--Earning 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--CHILD 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--CHILD 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--CHILD NUTRITION PROGRAMS

Subtitle A--National 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--Child Nutrition Act of 1966

      Sec. 721. Special milk program.

      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--Miscellaneous 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--FOOD STAMPS AND COMMODITY DISTRIBUTION

Subtitle A--Food 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 applications.

      Sec. 843. Disqualification of retailers who are disqualified under the WIC program.

      Sec. 844. Collection of overissuances.

      Sec. 845. Authority to suspend stores violating program requirements pending administrative 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--Commodity 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--Electronic Benefit Transfer Systems

      Sec. 891. Provisions to encourage electronic benefit transfer systems.

TITLE IX--MISCELLANEOUS

      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 probation 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--BLOCK GRANTS FOR TEMPORARY 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 society which promotes the interests of children.

      (3) Promotion of responsible fatherhood and motherhood is integral to successful child rearing and the well-being of children.

      (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') 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 receiving AFDC benefits--

          (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 benefits 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 percentage 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 pregnancy rate for married couples decreased 7.3 percent between 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 pregnancies among the youngest girls is particularly severe and is linked to predatory sexual practices by men who are significantly 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. Available data suggests that almost 70 percent of births to teenage girls are fathered by men over age 20.

        (C) Surveys of teen mothers have revealed that a majority 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 documented as follows:

        (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 combined 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 experience 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 themselves.

        (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 likely 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 consequences of raising children in single-parent homes are well documented as follows:

        (A) Only 9 percent of married-couple families with children 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 1/2 of the mothers who never married received AFDC while only 1/5 of divorced mothers received AFDC.

        (C) Children born into families receiving welfare assistance are 3 times more likely to be on welfare when they reach adulthood than children not born into families receiving 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 likely 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 medicaid 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 adjustment.

        (I) Children of teenage single parents have lower cognitive 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 primarily in a home with both parents. In contrast to these incarcerated youth, 73.9 percent of the 62,800,000 children in the Nation's resident population were living with both parents.

      (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 contained in part A of title IV of the Social Security Act (as amended by section 103(a) of this Act) is intended to address the crisis.

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- Part A of title IV (42 U.S.C. 601 et seq.) is amended--

      (1) by striking all that precedes section 418 (as added by section 603(b)(2) of this Act) and inserting the following:

`PART A--BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

`SEC. 401. PURPOSE.

    `(a) IN GENERAL- The purpose of this part is to increase the flexibility of States in operating a program designed to--

      `(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;

      `(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 preventing and reducing the incidence of these pregnancies; and

      `(4) encourage the formation and maintenance of two-parent families.

    `(b) NO INDIVIDUAL ENTITLEMENT- This part shall not be interpreted 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- As 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 following:

      `(1) OUTLINE OF FAMILY ASSISTANCE PROGRAM-

        `(A) GENERAL PROVISIONS- A written document that outlines how the State intends to do the following:

          `(i) Conduct a program, designed to serve all political subdivisions in the State (not necessarily in a uniform manner), that provides assistance to needy families with (or expecting) children and provides parents with job preparation, work, and support services to enable them to leave the program and become self-sufficient.

          `(ii) Require a parent or caretaker receiving assistance 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 information about individuals and families receiving assistance 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 establish 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 system, 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-

          `(i) The document shall indicate whether the State intends to treat families moving into the State from another 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 individuals 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 eligibility and for fair and equitable treatment, including an explanation of how the State will provide opportunities 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 enactment of this Act, unless the chief executive officer of the State opts out of this provision by notifying the Secretary, a State shall, consistent with the exception provided in section 407(e)(2), require a parent or caretaker receiving assistance under the program who, after receiving 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 community 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- A 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 FOSTER CARE AND ADOPTION ASSISTANCE PROGRAM- A certification by the chief executive officer of the State that, during the fiscal year, the State will operate a foster care and adoption assistance 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 PROGRAM- A 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--

        `(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- A 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 ENSURE AGAINST PROGRAM FRAUD AND ABUSE- A certification by the chief executive officer of the State that the State has established and is enforcing standards and procedures to ensure against program fraud and abuse, including standards and procedures concerning nepotism, conflicts of interest among individuals responsible for the administration and supervision of the State program, kickbacks, and the use of political patronage.

      `(7) OPTIONAL CERTIFICATION OF STANDARDS AND PROCEDURES TO ENSURE THAT THE STATE WILL SCREEN FOR AND IDENTIFY DOMESTIC VIOLENCE-

        `(A) IN GENERAL- At the option of the State, a certification by the chief executive officer of the State that the State has established and is enforcing standards and procedures to--

          `(i) screen and identify individuals receiving assistance under this part with a history of domestic violence while maintaining the confidentiality of such individuals;

          `(ii) refer such individuals to counseling and supportive 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 assistance, residency requirements, child support cooperation 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 victimized by such violence, or individuals who are at risk of further domestic violence.

        `(B) DOMESTIC VIOLENCE DEFINED- For purposes of this paragraph, the term `domestic violence' has the same meaning as the term `battered or subjected to extreme cruelty', as defined in section 408(a)(7)(C)(iii).

    `(b) PUBLIC AVAILABILITY OF STATE PLAN SUMMARY- The State shall make available to the public a summary of any plan submitted by the State under this section.

`SEC. 403. GRANTS TO STATES.

    `(a) GRANTS-

      `(1) FAMILY ASSISTANCE GRANT-

        `(A) IN GENERAL- Each 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- As used in this part, the term `State family assistance grant' means the greatest of--

          `(i) 1/3 of the total amount required to be paid to the State under former section 403 (as in effect on September 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));

          `(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 emergency 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 assistance; or

          `(iii) 4/3 of the total amount required to be paid to the State under former section 403 (as in effect on September 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- As used in this part, the term `total amount required to be paid to the State under former section 403' means, with respect to a fiscal year--

          `(i) in the case of a State to which section 1108 does not apply, the sum of--

            `(I) the Federal share of maintenance assistance expenditures for the fiscal year, before reduction 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 expenditures (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 assistance 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 effect on September 30, 1995), as determined by the Secretary, including additional obligations or reductions 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--

            `(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-

          `(i) FOR FISCAL YEARS 1992 AND 1993-

            `(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- In determining the amounts described in subparagraph (C)(i) for any State for fiscal year 1994, the Secretary shall use information available as of April 28, 1995.

          `(iii) FOR FISCAL YEAR 1995-

            `(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 assistance expenditures and was available as of August 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- Out of any money in the Treasury 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-

        `(A) IN GENERAL- Each eligible State shall be entitled to receive from the Secretary a grant for each bonus year for which the State demonstrates a net decrease in out-of-wedlock births.

        `(B) AMOUNT OF GRANT-

          `(i) IF 5 ELIGIBLE STATES- If 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- If there are fewer than 5 eligible States for a bonus year, the amount of the grant shall be $25,000,000.

        `(C) DEFINITIONS- As used in this paragraph:

          `(i) ELIGIBLE STATE-

            `(I) IN GENERAL- The 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 period 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 terminations in the State for the fiscal year is less than the rate of induced pregnancy terminations in the State for fiscal year 1995.

            `(II) DISREGARD OF CHANGES IN DATA DUE TO CHANGED REPORTING METHODS- In making the determination required by subclause (I), the Secretary shall disregard--

`(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-wedlock births that occurred in a State for fiscal year 1995 which is attributable to a change in State methods of reporting data used to calculate the number of out-of-wedlock births; and

`(bb) any difference between the rate of induced 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- The term `bonus year' means fiscal years 1999, 2000, 2001, and 2002.

        `(D) APPROPRIATION- Out of any money in the Treasury 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-

        `(A) IN GENERAL- Each qualifying State shall, subject to subparagraph (F), be entitled to receive from the Secretary--

          `(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--

            `(I) the amount (if any) required to be paid to the State under this paragraph for the immediately preceding fiscal year; and

            `(II) 2.5 percent of the sum of--

`(aa) 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

`(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- Each State that is not a qualifying State for a fiscal year specified in subparagraph (A)(ii) but was a qualifying State for a prior fiscal year shall, subject to subparagraph (F), be entitled 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-

          `(i) IN GENERAL- For purposes of this paragraph, a State is a qualifying State for a fiscal year if--

            `(I) the level of welfare spending per poor person by the State for the immediately preceding fiscal 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- Notwithstanding clause (i), a State shall not be a qualifying State for any fiscal year after 1998 by reason 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- For purposes of this paragraph, a State is deemed to be a qualifying State for fiscal years 1998, 1999, 2000, and 2001 if--

            `(I) the level of welfare spending per poor person 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- As used in this paragraph:

          `(i) LEVEL OF WELFARE SPENDING PER POOR PERSON- The term `level of State welfare spending per poor person' means, with respect to a State and a fiscal year--

            `(I) the sum of--

`(aa) 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

`(bb) the amount (if any) paid to the State under this paragraph for the immediately preceding 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- The term `national average level of State welfare spending per poor person' means, with respect to a fiscal year, an amount equal to--

            `(I) the total amount required to be paid to the States under former section 403 (as in effect during 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- The term `State' means each of the 50 States of the United States and the District of Columbia.

        `(E) APPROPRIATION- Out of any money in the Treasury 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 APPROPRIATIONS- If 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 otherwise payable to any State for the fiscal year under this paragraph shall be reduced by a percentage equal to the amount so appropriated divided by such total amount.

        `(G) BUDGET SCORING- Notwithstanding 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-

        `(A) IN GENERAL- The 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-

          `(i) IN GENERAL- Subject to clause (ii) of this subparagraph, 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 subparagraph (D)(i) for the fiscal year that immediately precedes the bonus year.

          `(ii) LIMITATION- The 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- Not later than 1 year after the date of the enactment of the Personal Responsibility and Work Opportunity Reconciliation 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 section 401(a).

        `(D) SCORING OF STATE PERFORMANCE; SETTING OF PERFORMANCE THRESHOLDS- For each bonus year, the Secretary shall--

          `(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--

            `(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- As used in this paragraph:

          `(i) BONUS YEAR- The term `bonus year' means fiscal years 1999, 2000, 2001, 2002, and 2003.

          `(ii) HIGH PERFORMING STATE- The term `high performing State' means, with respect to a bonus year, an eligible State whose score assigned pursuant to subparagraph (D)(i) for the fiscal year immediately preceding the bonus year equals or exceeds the performance threshold prescribed under subparagraph (D)(ii) for such preceding fiscal year.

        `(F) APPROPRIATION- Out of any money in the Treasury 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-

      `(1) ESTABLISHMENT- There 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 section referred to as the `Fund').

      `(2) DEPOSITS INTO FUND- Out of any money in the Treasury 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-

        `(A) PROVISIONAL PAYMENTS- If an eligible State submits to the Secretary a request for funds under this paragraph during an eligible month, the Secretary shall, subject to this paragraph, pay to the State, from amounts appropriated pursuant to paragraph (2), an amount equal to the amount of funds so requested.

        `(B) PAYMENT PRIORITY- The Secretary shall make payments under subparagraph (A) in the order in which the Secretary receives requests for such payments.

        `(C) LIMITATIONS-

          `(i) MONTHLY PAYMENT TO A STATE- The total amount paid to a single State under subparagraph (A) during a month shall not exceed 1/12 of 20 percent of the State family assistance grant.

          `(ii) PAYMENTS TO ALL STATES- The total amount paid to all States under subparagraph (A) during fiscal years 1997 through 2001 shall not exceed the total amount appropriated pursuant to paragraph (2).

      `(4) ANNUAL RECONCILIATION- Notwithstanding paragraph (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--

        `(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--

          `(i) if the Secretary makes a payment to the State under section 418(a)(2) in the fiscal year--

            `(I) the expenditures under the State program funded under this part for the fiscal year, excluding 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

            `(II) historic State expenditures (as defined in section 409(a)(7)(B)(iii)), excluding the expenditures 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 expenditures; or

          `(ii) if the Secretary does not make a payment to the State under section 418(a)(2) in the fiscal year--

            `(I) the expenditures under the State program funded under this part for the fiscal year (excluding 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) 1/12 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- As 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- For purposes of paragraph (5), a State is a needy State for a month if--

        `(A) the average rate of--

          `(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 preceding 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--

          `(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 the corresponding 3-month period in fiscal year 1995 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 1995.

      `(7) OTHER TERMS DEFINED- As used in this subsection:

        `(A) STATE- The term `State' means each of the 50 States of the United States and the District of Columbia.

        `(B) SECRETARY- The term `Secretary' means the Secretary of the Treasury.

      `(8) ANNUAL REPORTS- The Secretary shall annually report to the Congress on the status of the Fund.

`SEC. 404. USE OF GRANTS.

    `(a) GENERAL RULES- Subject to this part, a State to which a grant is made under section 403 may use the grant--

      `(1) in any manner that is reasonably calculated to accomplish the purpose of this part, including to provide low income households with assistance in meeting home heating and cooling 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 PURPOSES-

      `(1) LIMITATION- A 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- Paragraph (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- A 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 PURPOSES-

      `(1) IN GENERAL- A State may use not more than 30 percent 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- Notwithstanding paragraph (1), not more than 1/3 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 provisions of law specified in paragraph (1) may be used to carry out State programs pursuant to title XX.

      `(3) APPLICABLE RULES-

        `(A) IN GENERAL- Except 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 pursuant 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 provided 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- All 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 ASSISTANCE- A 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 PROGRAM- A 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 SYSTEM- A State to which a grant is made under section 403 is encouraged to implement an electronic benefit transfer system for providing assistance under the State program funded under this part, and may use the grant for such purpose.

    `(h) USE OF FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS-

      `(1) IN GENERAL- A 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-

        `(A) ESTABLISHMENT- Under a State program carried out under paragraph (1), an individual development account 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- A qualified purpose described in this subparagraph is 1 or more of the following, as provided by the qualified entity providing assistance to the individual under this subsection:

          `(i) POSTSECONDARY EDUCATIONAL EXPENSES- Postsecondary educational expenses paid from an individual development account directly to an eligible educational institution.

          `(ii) FIRST HOME PURCHASE- Qualified acquisition costs with respect to a qualified principal residence for a qualified first-time homebuyer, if paid from an individual development account directly to the persons to whom the amounts are due.

          `(iii) BUSINESS CAPITALIZATION- Amounts paid from an individual development account directly to a business capitalization account which is established in a federally insured financial institution and is restricted to use solely for qualified business capitalization expenses.

        `(C) CONTRIBUTIONS TO BE FROM EARNED INCOME- An individual may only contribute to an individual development account such amounts as are derived from earned income, as defined in section 911(d)(2) of the Internal Revenue Code of 1986.

        `(D) WITHDRAWAL OF FUNDS- The Secretary shall establish 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-

        `(A) IN GENERAL- An individual development account established under this subsection shall be a trust created or organized in the United States and funded through periodic 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- As used in this subsection, the term `qualified entity' means--

          `(i) a not-for-profit organization described in section 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- Notwithstanding 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 individual development account under this subsection shall be disregarded for such purpose with respect to any period during which such individual maintains or makes contributions into such an account.

      `(5) DEFINITIONS- As used in this subsection--

        `(A) ELIGIBLE EDUCATIONAL INSTITUTION- The 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 defined 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- The term `post-secondary educational expenses' means--

          `(i) tuition and fees required for the enrollment or attendance of a student at an eligible educational institution, and

          `(ii) fees, books, supplies, and equipment required for courses of instruction at an eligible educational institution.

        `(C) QUALIFIED ACQUISITION COSTS- The term `qualified acquisition costs' means the costs of acquiring, constructing, or reconstructing a residence. The term includes any usual or reasonable settlement, financing, or other closing costs.

        `(D) QUALIFIED BUSINESS- The term `qualified business' means any business that does not contravene any law or public policy (as determined by the Secretary).

        `(E) QUALIFIED BUSINESS CAPITALIZATION EXPENSES- The term `qualified business capitalization expenses' means qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan.

        `(F) QUALIFIED EXPENDITURES- The term `qualified expenditures' means expenditures included in a qualified plan, including capital, plant, equipment, working capital, and inventory expenses.

        `(G) QUALIFIED FIRST-TIME HOMEBUYER-

          `(i) IN GENERAL- The term `qualified first-time homebuyer' means a taxpayer (and, if married, the taxpayer's spouse) who has no present ownership interest in a principal residence during the 3-year period ending on the date of acquisition of the principal residence to which this subsection applies.

          `(ii) DATE OF ACQUISITION- The term `date of acquisition' means the date on which a binding contract to acquire, construct, or reconstruct the principal residence to which this subparagraph applies is entered into.

        `(H) QUALIFIED PLAN- The term `qualified plan' means a business plan which--

          `(i) is approved by a financial institution, or by a nonprofit loan fund having demonstrated fiduciary integrity,

          `(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 advisor.

        `(I) QUALIFIED PRINCIPAL RESIDENCE- The 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- A 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 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 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 EQUIVALENT- A 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 equivalent.

`SEC. 405. ADMINISTRATIVE PROVISIONS.

    `(a) QUARTERLY- The Secretary shall pay each grant payable to a State under section 403 in quarterly installments, subject to this section.

    `(b) NOTIFICATION- Not later than 3 months before the payment 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-

      `(1) COMPUTATION- The 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 Secretary may find necessary.

      `(2) CERTIFICATION- The 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 underpayment 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- Upon receipt of a certification under subsection (c)(2) with respect to a State, the Secretary of the Treasury shall, through the Fiscal Service of the Department of the Treasury 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-

      `(1) IN GENERAL- The Secretary shall make loans to any loan-eligible State, for a period to maturity of not more than 3 years.

      `(2) LOAN-ELIGIBLE STATE- As 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- The 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- A State shall use a loan made to the State under this section only for any purpose for which grant amounts received by the State under section 403(a) may be used, including--

      `(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 Indian tribe with a tribal family assistance plan approved under section 412.

    `(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO A STATE- 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- The total dollar amount of loans outstanding under this section may not exceed $1,700,000,000.

    `(f) APPROPRIATION- Out 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 section.

`SEC. 407. MANDATORY WORK REQUIREMENTS.

    `(a) PARTICIPATION RATE REQUIREMENTS-

      `(1) ALL FAMILIES- A 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:

--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- A 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-

      `(1) ALL FAMILIES-

        `(A) AVERAGE MONTHLY RATE- For purposes of subsection (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 fiscal year.

        `(B) MONTHLY PARTICIPATION RATES- The participation rate of a State for all families of the State for a month, expressed as a percentage, is--

          `(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--

            `(I) the number of families receiving such assistance during the month that include an adult or a minor child head of household receiving such assistance; exceeds

            `(II) the number of families receiving such assistance that are subject in such month to a penalty 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-

        `(A) AVERAGE MONTHLY RATE- For purposes of subsection (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- The participation 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 term `number of families' each place such latter term appears.

      `(3) PRO RATA REDUCTION OF PARTICIPATION RATE DUE TO CASELOAD REDUCTIONS NOT REQUIRED BY FEDERAL LAW-

        `(A) IN GENERAL- The Secretary shall prescribe regulations for reducing the minimum participation rate otherwise 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--

          `(i) the average monthly number of families receiving 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- The regulations required by subparagraph (A) shall not take into account families that are diverted from a State program funded under this part as a result of differences in eligibility criteria under a State program funded under this part and eligibility criteria under the State program operated 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 ASSISTANCE UNDER A TRIBAL FAMILY ASSISTANCE PLAN- For purposes of paragraphs (1)(B) and (2)(B), a State may, at its option, 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 EXEMPTIONS- For 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-

      `(1) GENERAL RULES-

        `(A) ALL FAMILIES- For 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 activities 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 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- For purposes of subsection (b)(2)(B), an individual is engaged in work for a month in a fiscal year if--

          `(i) the individual is making progress in work activities 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 federally-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-

        `(A) NUMBER OF WEEKS FOR WHICH JOB SEARCH COUNTS AS WORK-

          `(i) LIMITATION- Notwithstanding paragraph (1) of this subsection, an individual shall not be considered 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 percent 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- For 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 participation 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- For purposes of determining monthly participation rates under subsection (b)(1)(B)(i), a recipient in a 1-parent family 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 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 SATISFACTORY SCHOOL ATTENDANCE DEEMED TO BE MEETING WORK PARTICIPATION REQUIREMENTS- For purposes of determining monthly participation rates under sub-section (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--

          `(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 VOCATIONAL EDUCATION ACTIVITIES OR BEING A TEEN HEAD OF HOUSEHOLD WHO MAINTAINS SATISFACTORY SCHOOL ATTENDANCE- For purposes of determining monthly participation rates under paragraphs (1)(B)(i) and (2)(B) of subsection (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 participation in vocational educational training or deemed to be engaged in work by reason of subparagraph (C) of this paragraph.

    `(d) WORK ACTIVITIES DEFINED- As used in this section, the term `work activities' means--

      `(1) unsubsidized employment;

      `(2) subsidized private sector employment;

      `(3) subsidized public sector employment;

      `(4) work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector 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-

      `(1) IN GENERAL- Except as provided in paragraph (2), if an individual in a family receiving assistance under the State program funded under this part refuses to engage in work required in accordance with this section, the State shall--

        `(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 individual so refuses; or

        `(B) terminate such assistance,

      subject to such good cause and other exceptions as the State may establish.

      `(2) EXCEPTION- Notwithstanding paragraph (1), a State may not reduce or terminate assistance under the State program funded under this part based on a refusal of an individual to work if the individual is a single custodial parent caring for a child who has not attained 6 years of age, and the individual 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 formal child care arrangements.

    `(f) NONDISPLACEMENT IN WORK ACTIVITIES-

      `(1) IN GENERAL- Subject 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- No 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--

        `(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 created with an adult described in paragraph (1).

      `(3) GRIEVANCE PROCEDURE- A State with a program funded under this part shall establish and maintain a grievance procedure for resolving complaints of alleged violations of paragraph (2).

      `(4) NO PREEMPTION- Nothing in this subsection shall preempt or supersede any provision of State or local law that provides greater protection for employees from displacement.

    `(g) SENSE OF THE CONGRESS- It is the sense of the Congress that in complying with this section, each State that operates a program funded under this part is encouraged to assign the highest priority to requiring adults in 2-parent families and adults in single-parent families that include older preschool or school-age children to be engaged in work activities.

    `(h) SENSE OF THE CONGRESS THAT STATES SHOULD IMPOSE CERTAIN REQUIREMENTS ON NONCUSTODIAL, NONSUPPORTING MINOR PARENTS- It 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- During fiscal year 1999, the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate 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-

      `(1) NO ASSISTANCE FOR FAMILIES WITHOUT A MINOR CHILD- A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance to a family--

        `(A) unless the family includes--

          `(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 (unless an exception described in subparagraph (B), (C), or (D) of paragraph (7) applies).

      `(2) REDUCTION OR ELIMINATION OF ASSISTANCE FOR NONCOOPERATION IN ESTABLISHING PATERNITY OR OBTAINING CHILD SUPPORT- If 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 establishing, 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--

        `(A) shall deduct from the assistance that would otherwise 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-

        `(A) IN GENERAL- A 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 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 assistance) 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 section 464) which accrued before the family received such assistance and which the State has not collected by--

          `(i) September 30, 2000, if the assignment is executed 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- A State to which a grant is made under section 403 shall not require, as a condition of providing 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 subparagraph (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 PROGRAM- A 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--

        `(A) educational activities directed toward the attainment 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-

        `(A) IN GENERAL-

          `(i) REQUIREMENT- Except as provided in subparagraph (B), a State to which a grant is made under section 403 shall not use any part of the grant to provide 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 guardian, or other adult relative of the individual as such parent's, guardian's, or adult relative's own home.

          `(ii) INDIVIDUAL DESCRIBED- For purposes of clause (i), an individual described in this clause is an individual who--

            `(I) has not attained 18 years of age; and

            `(II) is not married, and has a minor child in his or her care.

        `(B) EXCEPTION-

          `(i) PROVISION OF, OR ASSISTANCE IN LOCATING, ADULT-SUPERVISED LIVING ARRANGEMENT- In the case of an individual who is described in clause (ii), the State agency referred to in section 402(a)(4) shall provide, 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 individual, unless the State agency determines that the individual'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 program funded under this part attributable to funds provided by the Federal Government (or in an alternative appropriate arrangement, should circumstances change and the current arrangement cease to be appropriate).

          `(ii) INDIVIDUAL DESCRIBED- For purposes of clause (i), an individual is described in this clause if the individual is described in subparagraph (A)(ii), and--

            `(I) the individual has no parent, legal guardian, 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 individual'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--

`(aa) the individual or the minor child referred to in subparagraph (A)(ii)(II) is being or has been subjected to serious physical or emotional 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 individual'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- For 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 arrangement in which such individuals are required to learn 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-

        `(A) IN GENERAL- A 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- As used in subparagraph (A), the term `medical services' does not include prepregnancy family planning services.

      `(7) NO ASSISTANCE FOR MORE THAN 5 YEARS-

        `(A) IN GENERAL- A 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 Federal Government, for 60 months (whether or not consecutive) after the date the State program funded under this part commences, subject to this paragraph.

        `(B) MINOR CHILD EXCEPTION- In determining the number of months for which an individual who is a parent or pregnant has received assistance under the State program 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--

          `(i) a minor child; and

          `(ii) not the head of a household or married to the head of a household.

        `(C) HARDSHIP EXCEPTION-

          `(i) IN GENERAL- The 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- The number of families with respect 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 program funded under this part.

          `(iii) BATTERED OR SUBJECT TO EXTREME CRUELTY DEFINED- For purposes of clause (i), an individual has been battered or subjected to extreme cruelty if the individual has been subjected to--

            `(I) physical acts that resulted in, or threatened 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 sexual acts or activities;

            `(V) threats of, or attempts at, physical or sexual 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 UNEMPLOYMENT- In 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 reservation or in an Alaskan Native village if, during the month--

          `(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- Subparagraph (A) shall not be interpreted to require any State to provide assistance to any individual for any period of time under the State program funded under this part.

        `(F) RULE OF INTERPRETATION- This part shall not be interpreted to prohibit any State from expending State funds not originating with the Federal Government on benefits 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- A 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 fraudulent statement or representation with respect to the place of residence of the individual in order to receive assistance simultaneously 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 income 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 PROBATION AND PAROLE VIOLATORS-

        `(A) IN GENERAL- A 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--

          `(i) 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 an 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) 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 United States grants a pardon with respect to the conduct.

        `(B) EXCHANGE OF INFORMATION WITH LAW ENFORCEMENT AGENCIES- If 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 administering the program from furnishing a Federal, State, or local law enforcement officer, upon the request of the officer, with the current address of any recipient if the officer furnishes the agency with the name of the recipient and notifies the agency that--

          `(i) the recipient--

            `(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-

        `(A) IN GENERAL- A 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 expected 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 EXCEPTIONS- The State may establish such good cause exceptions to subparagraph (A) as the State considers appropriate 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- A State to which a grant is made under section 403 shall not use any part of the grant to provide assistance for an individual 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.

      `(11) MEDICAL ASSISTANCE REQUIRED TO BE PROVIDED FOR CERTAIN FAMILIES HAVING EARNINGS FROM EMPLOYMENT OR CHILD SUPPORT-

        `(A) EARNINGS FROM EMPLOYMENT- A 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 relative (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 provided 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- A 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 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 approved under title XIX for an extended period or periods as provided in section 1931(c)(1).

    `(b) INDIVIDUAL RESPONSIBILITY PLANS-

      `(1) ASSESSMENT- The State agency responsible for administering 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 program who--

        `(A) has attained 18 years of age; or

        `(B) has not completed high school or obtained a certificate of high school equivalency, and is not attending secondary school.

      `(2) CONTENTS OF PLANS-

        `(A) IN GENERAL- On 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 individual, which--

          `(i) sets forth an employment goal for the individual and a plan for moving the individual immediately into private sector employment;

          `(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 management 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 employment 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 obtain 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 appropriate substance abuse treatment.

        `(B) TIMING- The State agency may comply with paragraph (1) with respect to an individual--

          `(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 eligible for such assistance, in the case of any other individual.

      `(3) PENALTY FOR NONCOMPLIANCE BY INDIVIDUAL- In addition 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 includes an individual who fails without good cause to comply with an individual responsibility plan signed by the individual.

      `(4) STATE DISCRETION- The exercise of the authority of this subsection shall be within the sole discretion of the State.

    `(c) NONDISCRIMINATION PROVISIONS- The 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.).

    `(d) ALIENS- For special rules relating to the treatment of aliens, see section 402 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

`SEC. 409. PENALTIES.

    `(a) IN GENERAL- Subject to this section:

      `(1) USE OF GRANT IN VIOLATION OF THIS PART-

        `(A) GENERAL PENALTY- If 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 VIOLATIONS- If 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-

        `(A) IN GENERAL- If 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 succeeding fiscal year by an amount equal to 4 percent of the State family assistance grant.

        `(B) RESCISSION OF PENALTY- The Secretary shall rescind 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 succeeds the fiscal quarter for which the report was required.

      `(3) FAILURE TO SATISFY MINIMUM PARTICIPATION RATES-

        `(A) IN GENERAL- If the Secretary determines that a State to which a grant is made under section 403 for a fiscal year has failed to comply with section 407(a) for the fiscal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for the immediately succeeding fiscal year by an amount equal to not more than the applicable percentage of the State family assistance grant.

        `(B) APPLICABLE PERCENTAGE DEFINED- As used in subparagraph (A), the term `applicable percentage' means, with respect to a State--

          `(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--

            `(I) the percentage by which the grant payable to the State under section 403(a)(1) was reduced for such preceding fiscal year, increased by 2 percentage points; or

            `(II) 21 percent.

        `(C) PENALTY BASED ON SEVERITY OF FAILURE- The Secretary shall impose reductions under subparagraph (A) with respect to a fiscal year based on the degree of noncompliance, and may reduce the penalty if the noncompliance is due to circumstances that caused the State to become a needy State (as defined in section 403(b)(6)) during the fiscal year.

      `(4) FAILURE TO PARTICIPATE IN THE INCOME AND ELIGIBILITY VERIFICATION SYSTEM- If 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 immediately 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- Notwithstanding any other provision of this Act, if the Secretary determines that the State agency that administers a program funded under this part does not enforce the penalties requested 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 enforcing a child support order in accordance with such part and who do not qualify for any good cause or other exception established by the State under section 454(29), the Secretary shall reduce 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- If the Secretary determines that a State has failed to repay any amount borrowed from the Federal 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 forgive any outstanding loan amount or interest owed on the outstanding amount.

      `(7) FAILURE OF ANY STATE TO MAINTAIN CERTAIN LEVEL OF HISTORIC EFFORT-

        `(A) IN GENERAL- The 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 applicable percentage of historic State expenditures with respect to such preceding fiscal year.

        `(B) DEFINITIONS- As used in this paragraph:

          `(i) QUALIFIED STATE EXPENDITURES-

            `(I) IN GENERAL- The term `qualified State expenditures' means, with respect to a State and a fiscal year, the total expenditures by the State during the fiscal year, under all State programs, for any of the following with respect to eligible families:

`(aa) Cash assistance.

`(bb) Child care assistance.

`(cc) Educational activities designed to increase 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 generally available to persons who are not members 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- Such term does not include expenditures under any State or local program during a fiscal year, except to the extent that--

`(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 immediately before such date of enactment) with respect to the expenditures.

            `(III) ELIGIBLE FAMILIES- As used in subclause (I), the term `eligible families' means families 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- The term `applicable percentage' means for fiscal years 1997 through 2002, 80 percent (or, if the State meets the requirements of section 407(a) for the fiscal year, 75 percent) reduced (if appropriate) in accordance with subparagraph (C)(ii).

          `(iii) HISTORIC STATE EXPENDITURES- The term `historic State expenditures' means, with respect to a State, the lesser of--

            `(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--

`(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 effect 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 assistance plan approved under section 412, as determined by the Secretary.

          `(iv) EXPENDITURES BY THE STATE- The term `expenditures by the State' does not include--

            `(I) any expenditures from amounts made available by the Federal Government;

            `(II) any State funds expended for the medicaid 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 Federal programs other than under this part.

          Notwithstanding subclause (IV) of the preceding sentence, 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 SUPPORT ENFORCEMENT PROGRAM WITH REQUIREMENTS OF PART D-

        `(A) IN GENERAL- If a State program operated under part D is found as a result of a review conducted under section 452(a)(4) not to have complied substantially with the requirements of such part for any quarter, and the Secretary determines that the program is not complying substantially 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 subsequent quarter that ends before the 1st quarter throughout which the program is found to be in substantial compliance with such requirements by--

          `(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- For purposes of subparagraph (A) and section 452(a)(4), a State which is not in full compliance 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 ASSISTANCE- If the Secretary determines that a State has not complied with section 408(a)(1)(B) during a fiscal year, the Secretary 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 CONTINGENCY FUND TO MAINTAIN 100 PERCENT OF HISTORIC EFFORT- 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 (excluding any amounts made available by the Federal Government) are less than 100 percent of historic State expenditures (as defined in paragraph (7)(B)(iii) of this subsection), the Secretary 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-

        `(A) IN GENERAL- If the Secretary determines that a State to which a grant is made under section 403 for a fiscal 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 succeeding fiscal year by an amount equal to not more than 5 percent of the State family assistance grant.

        `(B) PENALTY BASED ON SEVERITY OF FAILURE- The Secretary shall impose reductions under subparagraph (A) with respect to a fiscal year based on the degree of noncompliance.

      `(12) FAILURE TO EXPEND ADDITIONAL STATE FUNDS TO REPLACE GRANT REDUCTIONS- If the grant payable to a State under section 403(a)(1) for a fiscal year is reduced by reason of this subsection, the State shall, during the immediately succeeding fiscal year, expend under the State program funded under this part an amount equal to the total amount of such reductions.

    `(b) REASONABLE CAUSE EXCEPTION-

      `(1) IN GENERAL- The 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- Paragraph (1) of this subsection shall not apply to any penalty under paragraph (7) or (8) of subsection (a).

    `(c) CORRECTIVE COMPLIANCE PLAN-

      `(1) IN GENERAL-

        `(A) NOTIFICATION OF VIOLATION- Before 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 violation and how the State will insure continuing compliance with this part.

        `(B) 60-DAY PERIOD TO PROPOSE A CORRECTIVE COMPLIANCE PLAN- During the 60-day period that begins on the date the State receives a notice provided under sub-paragraph (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- During 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- A corrective compliance plan submitted by a State in accordance with subparagraph (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- The 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 pursuant to the plan.

      `(3) EFFECT OF FAILING TO CORRECT VIOLATION- The Secretary 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 FEDERAL LOAN FUND FOR A STATE WELFARE PROGRAM- This subsection shall not apply to the imposition of a penalty against a State under subsection (a)(6).

    `(d) LIMITATION ON AMOUNT OF PENALTIES-

      `(1) IN GENERAL- In imposing the penalties described in subsection (a), the Secretary shall not reduce any quarterly payment to a State by more than 25 percent.

      `(2) CARRYFORWARD OF UNRECOVERED PENALTIES- To the extent that paragraph (1) of this subsection prevents the Secretary 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- Within 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-

      `(1) IN GENERAL- Within 60 days after the date a State receives 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- The Board shall consider an appeal 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 appeal is filed.

    `(c) JUDICIAL REVIEW OF ADVERSE DECISION-

      `(1) IN GENERAL- Within 90 days after the date of a final decision by the Board under this section with respect to an adverse action taken against a State, the State may obtain judicial review of the final decision (and the findings incorporated into the final decision) by filing an action in--

        `(A) the district court of the United States for the judicial 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- The district court in which an action is filed under paragraph (1) shall review the final decision of the Board on the record established in the administrative proceeding, in accordance with the standards of review prescribed 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.

`SEC. 411. DATA COLLECTION AND REPORTING.

    `(a) QUARTERLY REPORTS BY STATES-

      `(1) GENERAL REPORTING REQUIREMENT-

        `(A) CONTENTS OF REPORT- Each 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 housing, 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 received 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 activities:

            `(I) Education.

            `(II) Subsidized private sector employment.

            `(III) Unsubsidized employment.

            `(IV) Public sector employment, work experience, or community service.

            `(V) Job search.

            `(VI) Job skills training or on-the-job training.

            `(VII) Vocational education.

          `(xii) Information necessary to calculate participation rates under section 407.

          `(xiii) The type and amount of assistance received under the program, including the amount of and reason for any reduction of assistance (including sanctions).

          `(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--

            `(I) employment;

            `(II) marriage;

            `(III) the prohibition set forth in section 408(a)(7);

            `(IV) sanction; or

            `(V) State policy.

        `(B) USE OF ESTIMATES-

          `(i) AUTHORITY- A State may comply with subparagraph (A) by submitting an estimate which is obtained through the use of scientifically acceptable sampling methods approved by the Secretary.

          `(ii) SAMPLING AND OTHER METHODS- The Secretary 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 ADMINISTRATIVE COSTS AND OVERHEAD- The report required by paragraph (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- The report required by paragraph (1) for a fiscal quarter shall include a statement of the total amount expended by the State during the quarter on programs for needy families.

      `(4) REPORT ON NONCUSTODIAL PARENTS PARTICIPATING IN WORK ACTIVITIES- The 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- The report required by paragraph (1) for a fiscal quarter shall include the total amount expended by the State during the quarter to provide 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- The Secretary shall prescribe such regulations 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- 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--

      `(1) whether the States are meeting--

        `(A) the participation rates described in section 407(a); and

        `(B) the objectives of--

          `(i) increasing employment and earnings of needy families, and child support collections; and

          `(ii) decreasing out-of-wedlock pregnancies and child poverty;

      `(2) the demographic and financial characteristics of families 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 families with minor children living at home.

`SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

    `(a) GRANTS FOR INDIAN TRIBES-

      `(1) TRIBAL FAMILY ASSISTANCE GRANT-

        `(A) IN GENERAL- For 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 subparagraph (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-

          `(i) IN GENERAL- The 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 subsection (b)(1)(C) of this section.

          `(ii) USE OF STATE SUBMITTED DATA-

            `(I) IN GENERAL- The Secretary shall use State submitted data to make each determination under clause (i).

            `(II) DISAGREEMENT WITH DETERMINATION- If an Indian tribe or tribal organization disagrees with State submitted data described under subclause (I), the Indian tribe or tribal organization may submit to the Secretary such additional information as may be relevant to making the determination under clause (i) and the Secretary may consider such information before making such determination.

      `(2) GRANTS FOR INDIAN TRIBES THAT RECEIVED JOBS FUNDS-

        `(A) IN GENERAL- The Secretary shall pay to each eligible 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- For purposes of subparagraph (A), the term `eligible Indian tribe' means an Indian tribe or Alaska Native organization that conducted a job 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- Each 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- Out of any money in the Treasury 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-

      `(1) IN GENERAL- Any Indian tribe that desires to receive a tribal family assistance grant shall submit to the Secretary a 3-year tribal family assistance plan that--

        `(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 provided under the plan will be provided by the Indian tribe or through agreements, contracts, or compacts with intertribal 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 manner 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 standards; and

        `(F) applies the fiscal accountability provisions of section 5(f)(1) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450c(f)(1)), relating to the submission of a single-agency audit report required by chapter 75 of title 31, United States Code.

      `(2) APPROVAL- The Secretary shall approve each tribal family assistance plan submitted in accordance with paragraph (1).

      `(3) CONSORTIUM OF TRIBES- Nothing in this section shall preclude the development and submission of a single tribal family assistance plan by the participating Indian tribes of an intertribal consortium.

    `(c) MINIMUM WORK PARTICIPATION REQUIREMENTS AND TIME LIMITS- The 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--

      `(1) consistent with the purposes of this section;

      `(2) consistent with the economic conditions and resources available to each tribe; and

      `(3) similar to comparable provisions in section 407(e).

    `(d) EMERGENCY ASSISTANCE- Nothing in this section shall preclude an Indian tribe from seeking emergency assistance from any Federal loan program or emergency fund.

    `(e) ACCOUNTABILITY- Nothing in this section shall be construed to limit the ability of the Secretary to maintain program funding accountability consistent with--

      `(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-

      `(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 minimum work participation requirements established under section 412(c)' for `comply with section 407(a)'.

    `(g) DATA COLLECTION AND REPORTING- Section 411 shall apply to an Indian tribe with an approved tribal family assistance plan.

    `(h) SPECIAL RULE FOR INDIAN TRIBES IN ALASKA-

      `(1) IN GENERAL- Notwithstanding 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 assistance grant under this section shall use the grant to operate a program in accordance with requirements comparable to the requirements applicable to the program of the State of Alaska funded under this part. Comparability of programs shall be established on the basis of program criteria developed by the Secretary in consultation with the State of Alaska and such Indian tribes.

      `(2) WAIVER- An 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- The 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 APPROACHES TO REDUCING WELFARE DEPENDENCY AND INCREASING CHILD WELL-BEING-

      `(1) IN GENERAL- The Secretary may assist States in developing, and shall evaluate, innovative approaches for reducing welfare dependency and increasing the well-being of minor children living at home with respect to recipients of assistance under programs funded under this part. The Secretary may provide funds for training and technical assistance to carry out the approaches developed pursuant to this paragraph.

      `(2) EVALUATIONS- In performing the evaluations under paragraph (1), the Secretary shall, to the maximum extent feasible, use random assignment as an evaluation methodology.

    `(c) DISSEMINATION OF INFORMATION- The Secretary shall develop innovative methods of disseminating information on any research, evaluations, and studies conducted under this section, including the facilitation of the sharing of information and best practices 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-

      `(1) ANNUAL RANKING OF STATES- The Secretary shall rank annually the States to which grants are paid under section 403 in the order of their success in placing recipients of assistance under the State program funded under this part into long-term private sector jobs, reducing the overall welfare caseload, and, when a practicable method for calculating this information 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 poverty line and the amount of funding provided each State for such families.

      `(2) ANNUAL REVIEW OF MOST AND LEAST SUCCESSFUL WORK PROGRAMS- The 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 RELATING TO OUT-OF-WEDLOCK BIRTHS-

      `(1) ANNUAL RANKING OF STATES-

        `(A) IN GENERAL- The 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- The ratio represented by--

            `(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 available; over

            `(II) the total number of births in families receiving assistance under the State program under this part in the State for such year.

          `(ii) NET CHANGES IN THE OUT-OF-WEDLOCK RATIO- The 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 available and the ratio with respect to the State for the immediately preceding year.

      `(2) ANNUAL REVIEW- The Secretary shall review the programs of the 5 States most recently ranked highest under paragraph (1) and the 5 States most recently ranked the lowest under paragraph (1).

    `(f) STATE-INITIATED EVALUATIONS- A State shall be eligible to receive funding to evaluate the State program funded under this part if--

      `(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-

      `(1) IN GENERAL- Beginning 3 years after the date of the enactment of this Act, the Secretary of Health and Human Services 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 program 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 parents who, at the time of such birth, had not attained 20 years of age.

        `(C) Individuals who, after such date of enactment, became parents before attaining 20 years of age.

      `(2) MATTERS DESCRIBED- The 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 convicted 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 insurance provided by a private entity (broken down by whether the insurance is provided through an employer or otherwise), the percentage that has health insurance provided 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 appropriate.

    `(h) FUNDING OF STUDIES AND DEMONSTRATIONS-

      `(1) IN GENERAL- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated $15,000,000 for each of fiscal years 1997 through 2002 for the purpose of paying--

        `(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 approved under subsection (f); and

        `(D) an amount determined by the Secretary to be necessary to operate and evaluate demonstration projects, relating to this part, that are in effect or approved under section 1115 as of September 30, 1995, and are continued after such date.

      `(2) ALLOCATION- Of the amount appropriated under paragraph (1) for a fiscal year--

        `(A) 50 percent shall be allocated for the pur-poses described in subparagraphs (A) and (B) of paragraph (1), and

        `(B) 50 percent shall be allocated for the purposes described in subparagraphs (C) and (D) of paragraph (1).

      `(3) DEMONSTRATIONS OF INNOVATIVE STRATEGIES- The Secretary may implement and evaluate demonstrations of innovative and promising strategies which--

        `(A) provide one-time capital funds to establish, expand, 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 communities.

    `(i) CHILD POVERTY RATES-

      `(1) IN GENERAL- Not later than 90 days after the date of the enactment of this part, and annually thereafter, the chief executive 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- Not later than 90 days after the date a State submits a statement under paragraph (1) which indicates that, as a result of the amendments 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 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- A corrective action plan submitted under paragraph (2) shall outline the 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- A State that submits a corrective action plan that the Secretary has found contains the information required by this subsection shall implement the corrective action plan until the State determines that the child poverty rate in the State is less than the lowest child poverty rate on the basis of which the State was required to submit the corrective action plan.

      `(5) METHODOLOGY- The Secretary shall prescribe regulations establishing the methodology by which a State shall determine 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- The 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 information about the status of children participating in such panels.

    `(b) APPROPRIATION- Out 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-

      `(1) WAIVERS IN EFFECT ON DATE OF ENACTMENT OF WELFARE REFORM-

        `(A) IN GENERAL- Except 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 assistance under a State plan under this part (as in effect on September 30, 1996) is in effect as of the date of the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, 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 Reconciliation 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 such amendments are inconsistent with the waiver.

        `(B) FINANCING LIMITATION- Notwithstanding 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-

        `(A) IN GENERAL- Except 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 assistance 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 amendments made by the Personal Responsibility and Work Opportunity 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 Reconciliation 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- Notwithstanding 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 applicability of section 407 to the State.

    `(b) STATE OPTION TO TERMINATE WAIVER-

      `(1) IN GENERAL- A State may terminate a waiver described in subsection (a) before the expiration of the waiver.

      `(2) REPORT- A State which terminates a waiver under paragraph (1) shall submit a report to the Secretary summarizing the waiver and any available information concerning the result or effect of the waiver.

      `(3) HOLD HARMLESS PROVISION-

        `(A) IN GENERAL- Notwithstanding any other provision 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.

        `(B) DATE DESCRIBED- The date described in this subparagraph 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- The Secretary shall encourage any State operating a waiver described in subsection (a) to continue the waiver and to evaluate, using random sampling and other characteristics of accepted scientific evaluations, the result or effect of the waiver.

    `(d) CONTINUATION OF INDIVIDUAL WAIVERS- A State may elect to continue 1 or more individual waivers described in sub-section (a).

`SEC. 416. ADMINISTRATION.

    `The programs under this part and part D shall be administered by an Assistant Secretary for Family Support within the Department 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 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, as such amount relates 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 equivalent positions related to the program converted into a block grant under the amendment made by section 2103 of the Personal Responsibility 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 pro-vision 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- The term `adult' means an individual who is not a minor child.

      `(2) MINOR CHILD- The term `minor child' means an individual who--

        `(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- The term `fiscal year' means any 12-month period ending on September 30 of a calendar year.

      `(4) INDIAN, INDIAN TRIBE, AND TRIBAL ORGANIZATION-

        `(A) IN GENERAL- Except as provided in subparagraph (B), the terms `Indian', `Indian tribe', and `tribal organization' 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- The term `Indian tribe' means, with respect to the State of Alaska, 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- Except as otherwise specifically provided, 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.'.

    (b) GRANTS TO OUTLYING AREAS- Section 1108 (42 U.S.C. 1308) is amended--

      (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 ISLANDS, GUAM, AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS.

    `(a) LIMITATION ON TOTAL PAYMENTS TO EACH TERRITORY- Notwithstanding any other provision of this Act, the total amount certified by the Secretary of Health and Human Services under titles 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 fiscal year.

    `(b) ENTITLEMENT TO MATCHING GRANT-

      `(1) IN GENERAL- Each 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--

        `(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--

          `(i) the amount of the family assistance grant payable 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- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated for fiscal years 1997 through 2002, such sums as are necessary for grants under this paragraph.

    `(c) DEFINITIONS- As used in this section:

      `(1) TERRITORY- The term `territory' means Puerto Rico, the Virgin Islands, Guam, and American Samoa.

      `(2) CEILING AMOUNT- The term `ceiling amount' means, with respect to a territory and a fiscal year, the mandatory ceiling 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 provision of law specified in subsection (a) during the fiscal year.

      `(3) FAMILY ASSISTANCE GRANT- The term `family assistance grant' has the meaning given such term by section 403(a)(1)(B).

      `(4) MANDATORY CEILING AMOUNT- The term `mandatory ceiling amount' means--

        `(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- The term `total amount expended by the territory'--

        `(A) does not include expenditures during the fiscal year from amounts made available by the Federal Government; and

        `(B) when used with respect to fiscal year 1995, also does not include--

          `(i) expenditures during fiscal year 1995 under subsection (g) or (i) of section 402 (as in effect on September 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 reimbursement from the Federal Government.

    `(d) AUTHORITY TO TRANSFER FUNDS TO CERTAIN PROGRAMS- 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- The ceiling amount with respect to a territory shall be reduced for a fiscal year by an amount equal to the amount (if any) by which--

      `(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 immediately precedes the fiscal year referred to in the matter preceding paragraph (1).'.

    (c) ELIMINATION OF CHILD CARE PROGRAMS UNDER THE SOCIAL SECURITY ACT-

      (1) AFDC AND TRANSITIONAL CHILD CARE PROGRAMS- Section 402 (42 U.S.C. 602) is amended by striking sub-section (g).

      (2) AT-RISK CHILD CARE PROGRAM-

        (A) AUTHORIZATION- Section 402 (42 U.S.C. 602) is amended by striking subsection (i).

        (B) FUNDING PROVISIONS- Section 403 (42 U.S.C. 603) is amended by striking subsection (n).

SEC. 104. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, OR PRIVATE ORGANIZATIONS.

    (a) IN GENERAL-

      (1) STATE OPTIONS- A State may--

        (A) administer and provide services under the programs described in subparagraphs (A) and (B)(i) of paragraph (2) through contracts with charitable, religious, or private organizations; and

        (B) provide beneficiaries of assistance under the programs described in subparagraphs (A) and (B)(ii) of paragraph (2) with certificates, vouchers, or other forms of disbursement which are redeemable with such organizations.

      (2) PROGRAMS DESCRIBED- The 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--

          (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- The 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 assistance funded under such program.

    (c) NONDISCRIMINATION AGAINST RELIGIOUS ORGANIZATIONS- In the event a State exercises its authority under subsection (a), religious organizations are eligible, on the same basis as any other private organization, as contractors to provide assistance, or to accept certificates, vouchers, or other forms of disbursement, under any 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 programs shall discriminate against an organization which is or applies to be a contractor to provide assistance, or which accepts certificates, vouchers, or other forms of disbursement, on the basis that the organization has a religious character.

    (d) RELIGIOUS CHARACTER AND FREEDOM-

      (1) RELIGIOUS ORGANIZATIONS- A religious organization with a contract described in subsection (a)(1)(A), or which accepts certificates, vouchers, or other forms of disbursement under subsection (a)(1)(B), shall retain its independence from Federal, State, and local governments, including such organization's control over the definition, development, practice, and expression of its religious beliefs.

      (2) ADDITIONAL SAFEGUARDS- Neither the Federal Government nor a State shall require a religious organization to--

        (A) alter its form of internal governance; or

        (B) remove religious art, icons, scripture, or other symbols;

      in order to be eligible to contract to provide assistance, or to accept certificates, vouchers, or other forms of disbursement, funded under a program described in subsection (a)(2).

    (e) RIGHTS OF BENEFICIARIES OF ASSISTANCE-

      (1) IN GENERAL- If an individual described in paragraph (2) has an objection to the religious character of the organization or institution from which the individual receives, or would receive, assistance funded under any program described in subsection (a)(2), the State in which the individual resides shall provide such individual (if otherwise eligible for such assistance) 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- An individual described in this paragraph is an individual who receives, applies for, or requests to apply for, assistance under a program described in subsection (a)(2).

    (f) EMPLOYMENT PRACTICES- A religious organization's exemption provided under section 702 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-1a) regarding employment practices shall not be affected by its participation in, or receipt of funds from, programs described in subsection (a)(2).

    (g) NONDISCRIMINATION AGAINST BENEFICIARIES- Except as otherwise provided in law, a religious organization shall not discriminate 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-

      (1) IN GENERAL- Except as provided in paragraph (2), any religious organization contracting to provide assistance funded under any program described in subsection (a)(2) shall be subject 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- If such organization segregates Federal funds provided under such programs into separate accounts, then only the financial assistance provided with such funds shall be subject to audit.

    (i) COMPLIANCE- Any party which seeks to enforce its rights under this section may assert a civil action for injunctive relief exclusively in an appropriate State court against the entity or agency that allegedly commits such violation.

    (j) LIMITATIONS ON USE OF FUNDS FOR CERTAIN PURPOSES- No funds provided directly to institutions or organizations to provide services and administer programs under subsection (a)(1)(A) shall be expended for sectarian worship, instruction, or proselytization.

    (k) PREEMPTION- Nothing 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 religious organizations.

SEC. 105. CENSUS DATA ON GRANDPARENTS AS PRIMARY CAREGIVERS FOR THEIR GRANDCHILDREN.

    (a) IN GENERAL- Not 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 significant 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- In 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 formulated to distinguish between the following households:

      (1) A household in which a grandparent temporarily provides 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- Within 6 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall prepare and submit to the Congress a report on--

      (1) the status of the automated data processing systems operated by the States to assist management in the admin-istration of State programs under part A of title IV of the Social Security Act (whether in effect before or after October 1, 1995); and

      (2) what would be required to establish a system cap-able of--

        (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- The report required by subsection (a) should include--

      (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- The 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- Not 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 Represen-tatives 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-

      (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 Independence and Program Improvements Act of 1994, is amended--

        (A) by inserting `an agency administering a program funded under part A of title IV or' before `an agency operating'; and

        (B) by striking `A or D of title IV of this Act' and inserting `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- Section 422(b)(2) (42 U.S.C. 622(b)(2)) is amended--

      (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-

      (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--

        (A) by striking `aid to families with dependent children' and inserting `assistance under a State program funded under part A';

        (B) by striking `such aid' and inserting `such assistance'; and

        (C) by striking `under section 402(a)(26) or' and inserting `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--

        (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 referred 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 program funded under part A'.

      (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended in the matter following subparagraph (B)--

        (A) by striking `who is a dependent child' and inserting `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 cooperate 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 striking `under section 402(a)(26)' and inserting `pursuant to section 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 `assistance under a State program funded under part A'.

      (11) Section 454(5)(A) (42 U.S.C. 654(5)(A)) is amended--

        (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.

      (12) Section 454(6)(D) (42 U.S.C. 654(6)(D)) is amended by striking `aid under a State plan approved' and inserting `assistance 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 amended 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--

        (A) by striking `aid under plans approved' and inserting `assistance under State programs funded'; and

        (B) by striking `such aid' and inserting `such assistance'.

    (d) AMENDMENTS TO PART E OF TITLE IV-

      (1) Section 470 (42 U.S.C. 670) is amended--

        (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--

        (A) in the matter preceding paragraph (1)--

          (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)--

          (i) in subparagraph (A)--

            (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 effect 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 effect as of June 1, 1995) and deemed to be a recipient of aid to families with dependent children under part A of this title (as so in effect). 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 assistance under such part.

    `(2) For purposes of paragraph (1), 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 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--

        (A) in subparagraph (A)(i)--

          (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)--

          (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 effect 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 section 406 (as in effect as of June 1, 1995) and deemed to be a recipient 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--

      `(A)(i) who is a child described in subsection (a)(2), and

      `(ii) with respect to whom an adoption assistance agreement is in effect under this section (whether or not adoption assistance 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 judicial decree of adoption has been issued), or

      `(B) with respect to whom foster care maintenance payments 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 considered a child with respect to whom foster care maintenance payments are being made under section 472.'.

    (e) REPEAL OF PART F OF TITLE IV- Part F of title IV (42 U.S.C. 681-687) is repealed.

    (f) AMENDMENT TO TITLE X- Section 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-

      (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--

        (A) in subsection (a)(2)--

          (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 subparagraph:

      `(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 Secretary, 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 subsections (c) and (d) as subsections (b) and (c), respectively.

      (3) Section 1116 (42 U.S.C. 1316) is amended--

        (A) in each of subsections (a)(1), (b), and (d), by striking `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--

        (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--

        (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--

        (A) in subsection (b), by striking paragraph (1) and inserting the following:

      `(1) any State program funded under part A of title IV of this Act;'; and

        (B) in subsection (d)(1)(B)--

          (i) by striking `In this subsection--' and all that follows through `(ii) in' and inserting `In this subsection, 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- Section 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 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- Section 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- Section 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- Section 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--

      (1) in the second sentence of subsection (a), by striking `plan approved' and all that follows through `title IV of the Social 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)--

        (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 paragraphs (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--

      (1) in subsection (c)(5), by striking `the State plan approved' and inserting `the State program funded'; and

      (2) in subsection (e)(6), by striking `aid to families with dependent children' and inserting `benefits under a State program 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--

      (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 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

      (2) in subsection (b)(3), by adding at the end the following new subparagraph:

    `(I) The Secretary may not grant a waiver under this paragraph on or after the date of enactment of this subparagraph. Any 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--

      (1) in subsection (a)(2)(B) by striking `operating--' and all that follows through `(ii) any other' and inserting `operating any'; and

      (2) in subsection (b)--

        (A) in paragraph (1)--

          (i) by striking `(b)(1) A household' and inserting `(b) A household'; and

          (ii) in subparagraph (B), by striking `training program' 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--

      (1) in subsection (b)--

        (A) in paragraph (2)(C)(ii)(II)--

          (i) by striking `program for aid to families with dependent children' and inserting `State program funded'; and

          (ii) by inserting before the period at the end 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 effect on June 1, 1995'; and

        (B) in paragraph (6)--

          (i) in subparagraph (A)(ii)--

            (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 follows through `9902(2)))' and inserting `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

          (ii) in subparagraph (B), by striking `aid to families 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 standards under the State program are comparable to or more restrictive than those in effect on June 1, 1995'; and

      (2) in subsection (d)(2)(C)--

        (A) by striking `program for aid to families with dependent children' and inserting `State program funded'; and

        (B) by inserting before the period at the end 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 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--

      (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 effect on June 1, 1995'.

SEC. 110. CONFORMING AMENDMENTS TO OTHER LAWS.

    (a) Subsection (b) of section 508 of the Unemployment Compensation 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- For purposes of section 455 of the Social Security Act, expenses incurred to reimburse State employment offices for furnishing information requested of such offices--

      `(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 carrying 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 administration 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 demonstration projects to reduce number of AFDC families in welfare hotels, is amended--

      (1) in subsection (a), by striking `aid to families with dependent 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 dependent children in the State under a State plan approved' and inserting `assistance in the State under a State program funded'.

    (h) The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended--

      (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 approved' and inserting `assistance under a State program funded'.

    (i) The Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2301 et seq.) is amended--

      (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 inserting `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 children' 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 children' and inserting `the State program funded'.

    (j) The Elementary and Secondary Education Act of 1965 (20 U.S.C. 2701 et seq.) is amended--

      (1) in section 1113(a)(5) (20 U.S.C. 6313(a)(5)), by striking `Aid to Families with Dependent Children program' and inserting `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))--

        (A) in subparagraph (A)(xi), by striking `Aid to Families with Dependent Children benefits' and inserting `assistance 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 Families 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 further, That general assistance payments made by the Bureau of Indian Affairs shall be made--

      `(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

      `(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 program payments, the Bureau shall reduce general assistance payments in such State by the same percentage as the State has reduced the AFDC or State program payment.'.

    (l) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) is amended--

      (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 financial assistance under part A of title IV of the Social Security Act and as having continually received such financial assistance 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 striking `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))--

        (A) by striking `(c) or (d)' each place it appears and inserting `(c), (d), or (e)'; and

        (B) by adding at the end of subparagraph (B) the following new sentence: `Any return information disclosed with respect to section 6402(e) shall only be disclosed to officers and employees of the State agency requesting such information.';

      (5) in section 6103(p)(4) (26 U.S.C. 6103(p)(4)), in the matter preceding subparagraph (A)--

        (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)--

        (A) in subsection (a), by striking `(c) and (d)' and inserting `(c), (d), and (e)';

        (B) by redesignating subsections (e) through (i) as subsections (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- The amount of any overpayment to be refunded 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 accordance with section 405(e) of the Social Security Act (concerning recovery 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 `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--

      (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by striking `(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 funded under part A of title IV of the Social Security Act,';

      (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))--

        (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))--

        (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 paragraph (4) and inserting the following:

      `(4) the portions of title IV of the Social Security Act relating to work activities;';

      (8) in section 253 (29 U.S.C. 1632)--

        (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)--

        (A) in subparagraphs (A) and (B) of subsection (b)(1), by striking `(such as the JOBS program)' each place it appears; 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 paragraph (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,';

      (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 `assistance 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))--

        (A) in clause (v), by striking the semicolon and inserting `; 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 Assistance 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--

      (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--

      (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)--

        (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--

      (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))--

        (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 with dependent children under a State plan approved' and inserting `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 Security Act'.

SEC. 111. DEVELOPMENT OF PROTOTYPE OF COUNTERFEIT-RESISTANT SOCIAL SECURITY CARD REQUIRED.

    (a) DEVELOPMENT-

      (1) IN GENERAL- The Commissioner of Social Security (in this section referred to as the `Commissioner') shall, in accordance with this section, develop a prototype of a counterfeit-resistant social security card. Such prototype card shall--

        (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 circuits, and

        (C) be developed so as to provide individuals with reliable proof of citizenship or legal resident alien status.

      (2) ASSISTANCE BY ATTORNEY GENERAL- The Attorney General of the United States shall provide such information and assistance as the Commissioner deems necessary to enable the Commissioner to comply with this section.

    (b) STUDY AND REPORT-

      (1) IN GENERAL- The Commissioner shall conduct a study and issue a report to Congress which examines different methods of improving the social security card application process.

      (2) ELEMENTS OF STUDY- The study shall include an evaluation of the cost and work load implications of issuing a counterfeit-resistant social security card for all individuals over a 3-, 5-, and 10-year period. The study shall also evaluate the feasibility and cost implications of imposing a user fee for replacement cards and cards issued to individuals who apply for such a card prior to the scheduled 3-, 5-, and 10-year phase-in options.

      (3) DISTRIBUTION OF REPORT- The 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 enactment 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--

      (1) in the heading, by striking `demonstration';

      (2) by striking `demonstration' each place such term appears;

      (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 dependent 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)--

        (A) in paragraph (1)(C), by striking `aid to families with dependent children under title IV of the Social Security 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 inserting `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- For the purpose of conducting projects under this section, there is authorized to be appropriated 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 Commissioner 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 technical 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 FAMILIES.

    (a) IN GENERAL- Title XIX is amended--

      (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- Subject 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 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 CRITERIA-

      `(1) IN GENERAL- For purposes of this title, subject to paragraphs (2) and (3), in determining eligibility for medical assistance--

        `(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--

          `(i) the income and resource standards for determining 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 standards under such plan.

      `(2) STATE OPTION- For purposes of applying this section, a State--

        `(A) may lower its income standards applicable with respect to part A of title IV, but not below the income standards 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; United States 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 FAILURE TO MEET WORK REQUIREMENT-

        `(A) INDIVIDUALS RECEIVING CASH ASSISTANCE UNDER TANF- In the case of an individual who--

          `(i) is receiving cash assistance under a State program 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 assistance because of such refusal.

        `(B) EXCEPTION FOR CHILDREN- Subparagraph (A) shall not be construed as permitting a State to terminate 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-

      `(1) TRANSITION IN THE CASE OF CHILD SUPPORT COLLECTIONS- The provisions of section 406(h) (as in effect on July 16, 1996) shall apply, in relation to this title, with respect to individuals (and families composed of individuals) who are described in subsection (b)(1)(A), in the same manner as they applied 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 EMPLOYMENT- For continued medical assistance in the case of individuals (and families composed of individuals) described in subsection (b)(1)(A) who would otherwise become ineligible because of hours or income from employment, see sections 1925 and 1902(e)(1).

    `(d) WAIVERS- In 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 assistance 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- Nothing 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-

      `(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 effective date) or to the State plan under this title.

      `(2) Any reference in section 1902(a)(55) to a State plan approved 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 limitation 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- The provisions of this section shall apply notwithstanding any other provision of this Act.

    `(h) TRANSITIONAL INCREASED FEDERAL MATCHING RATE FOR INCREASED ADMINISTRATIVE COSTS-

      `(1) IN GENERAL- Subject to the succeeding provisions of this subsection, the Secretary shall provide that with respect to 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- The administrative expenditures described in this paragraph are expenditures described in section 1903(a)(7) that a State demonstrates 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- The 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 equitable distribution of additional funds among the States.

      `(4) TIME LIMITATION- This 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- In this section, the term `welfare reform effective date' means the effective date, with respect 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- Section 1902(a) (42 U.S.C. 1396a(a)) is amended--

      (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 eligibility with respect to individuals who are (or seek to be) eligible for medical assistance based on the application of section 1931.'.

    (c) EXTENSION OF WORK TRANSITION PROVISIONS- Sections 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 PAYMENT LEVELS- (1) Section 1902(c) (42 U.S.C. 1396a(c)) is amended by striking `if--' 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 assistance 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- An 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 possession, use, or distribution of a controlled substance (as defined in section 102(6) of the Controlled Substances Act (21 U.S.C. 802(6))) shall not be eligible for--

      (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 program carried out under the Food Stamp Act of 1977.

    (b) EFFECTS ON ASSISTANCE AND BENEFITS FOR OTHERS-

      (1) PROGRAM OF TEMPORARY ASSISTANCE FOR NEEDY FAMILIES- The amount of assistance otherwise required to be provided under a State program funded under part A of title IV of the Social Security Act to the family members of an individual 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- The amount of benefits otherwise required to be provided to a household 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- A 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 application 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-

      (1) STATE ELECTIONS-

        (A) OPT OUT- A State may, by specific reference in a law enacted after the date of the enactment of this Act, exempt any or all individuals domiciled in the State from the application of subsection (a).

        (B) LIMIT PERIOD OF PROHIBITION- A 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 BEFORE ENACTMENT- Subsection (a) shall not apply to convictions occurring on or before the date of the enactment of this Act.

    (e) DEFINITIONS OF STATE- For purposes of this section, the term `State' has the meaning given it--

      (1) in section 419(5) of the Social Security Act, when referring 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 referring 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.

    (f) RULE OF INTERPRETATION- Nothing in this section shall be construed to deny the following Federal benefits:

      (1) Emergency medical services under title XIX of the Social 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-

      (1) IN GENERAL- Except as otherwise provided in this title, this title and the amendments made by this title shall take effect on July 1, 1997.

      (2) DELAYED EFFECTIVE DATE FOR CERTAIN PROVISIONS- 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--

        (A) July 1, 1997; or

        (B) the date that is 6 months after the date the Secretary of Health and Human Services receives from the State a plan described in section 402(a) of the Social Security Act (as added by such amendment).

      (3) GRANTS TO OUTLYING AREAS- The amendments made by section 103(b) shall take effect on October 1, 1996.

      (4) ELIMINATION OF CHILD CARE PROGRAMS- The amendments made by section 103(c) shall take effect on October 1, 1996.

      (5) DEFINITIONS APPLICABLE TO NEW CHILD CARE ENTITLEMENT- Sections 403(a)(1)(C), 403(a)(1)(D), and 419(4) of the Social Security Act, as added by the amendments made by section 103(a) of this Act, shall take effect on October 1, 1996.

    (b) TRANSITION RULES- Effective on the date of the enactment of this Act:

      (1) STATE OPTION TO ACCELERATE EFFECTIVE DATE-

        (A) IN GENERAL- If 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--

          (i) on and after the date of such receipt--

            (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 respect to the State; and

            (II) the State shall be considered an eligible State for purposes of part A of title IV of the Social Security Act (as in effect pursuant to the amendments 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 remain in effect with respect to the State--

            (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-

          (i) UNDER AFDC PROGRAM- The total obligations of the Federal Government to a State under part A of title IV of the Social Security Act (as in effect on September 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 PROGRAM- Notwithstanding 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 obligations of the Federal Government to a State under such section 403(a)(1)--

            (I) for fiscal year 1996, shall be an amount equal to--

(aa) the State family assistance grant; multiplied by

(bb) 1/366 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--

(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 Security 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 1/365 of the number of days during 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 made by section 103(a)(1) of this Act), whichever is later, and ends on September 30, 1997.

          (iii) CHILD CARE OBLIGATIONS EXCLUDED IN DETERMINING FEDERAL AFDC OBLIGATIONS- As 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 expenditures 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- The submission of a plan by a State pursuant to subparagraph (A) is deemed to constitute--

          (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 individual or family to benefits or services under the State AFDC program.

        (D) DEFINITIONS- As used in this paragraph:

          (i) STATE AFDC PROGRAM- The 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- The term `State' means the 50 States and the District of Columbia.

          (iii) STATE FAMILY ASSISTANCE GRANT- The 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- The amendments made by this title shall not apply with respect to--

        (A) powers, duties, functions, rights, claims, penalties, or obligations applicable to aid, assistance, or services provided before the effective date of this title under the provisions amended; and

        (B) administrative actions and proceedings commenced before such date, or authorized before such date to be commenced, under such provisions.

      (3) CLOSING OUT ACCOUNT FOR THOSE PROGRAMS TERMINATED OR SUBSTANTIALLY MODIFIED BY THIS TITLE- In 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 2 years after the date of the enactment of this Act. The head of each Federal department shall--

        (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 assistance or services provided during a prior fiscal year from funds for fiscal year 1995, rather than from funds authorized by this title.

      (4) CONTINUANCE IN OFFICE OF ASSISTANT SECRETARY FOR FAMILY SUPPORT- The individual who, on the day before the effective 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--

        (A) continue to serve in such position; and

        (B) except as otherwise provided by law--

          (i) continue to perform the functions of the Assistant 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 amendment made by section 103(a)(1) of this Act).

    (c) TERMINATION OF ENTITLEMENT UNDER AFDC PROGRAM- 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 September 30, 1995).

TITLE II--SUPPLEMENTAL 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--Eligibility Restrictions

SEC. 201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDIVIDUALS FOUND TO HAVE FRAUDULENTLY MISREPRESENTED RESIDENCE IN ORDER TO OBTAIN BENEFITS SIMULTANEOUSLY IN 2 OR MORE STATES.

    (a) IN GENERAL- Section 1611(e) (42 U.S.C. 1382(e)), as amended by section 105(b)(4)(A) of the Contract with America Advancement Act of 1996, is amended by redesignating paragraph (5) as paragraph (3) and by adding at the end the following new paragraph:

    `(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 court of having made a fraudulent statement or representation with respect to the place of residence of the person in order to receive assistance 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 income 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 official of such court shall notify the Commissioner of such conviction.'.

    (b) EFFECTIVE DATE- The 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 PROBATION AND PAROLE VIOLATORS.

    (a) IN GENERAL- Section 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 eligible spouse for purposes of this title with respect to any month if during such month the person is--

      `(A) fleeing to avoid prosecution, or custody or confinement after conviction, under the laws of the place from which the person 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- Section 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 section 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, Social Security number, and photograph (if applicable) of any recipient of benefits under this title, if the officer furnishes the Commissioner with the name of the recipient, and other identifying information as reasonably required by the Commissioner to establish the unique identity of the recipient, and notifies the Commissioner that--

      `(A) the recipient--

        `(i) is described in subparagraph (A) or (B) of paragraph (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- The 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-

      (1) IN GENERAL- Section 1611(e)(1) (42 U.S.C. 1382(e)(1)) is amended by adding at the end the following new subparagraph:

    `(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 individuals as described in section 202(x)(1)(A), under which--

      `(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, confinement 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 information 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 information 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 reimbursable 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- The amendment made by this subsection shall apply to individuals whose period of confinement in an institution commences on or after the first day of the seventh month beginning after the month in which this Act is enacted.

    (b) STUDY OF OTHER POTENTIAL IMPROVEMENTS IN THE COLLECTION OF INFORMATION RESPECTING PUBLIC INMATES-

      (1) STUDY- The Commissioner of Social Security shall conduct a study of the desirability, feasibility, and cost of--

        (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, correctional, or medical facilities as the Commissioner may require for the purpose of carrying out section 1611(e)(1) of the Social Security Act; and

        (B) requiring that State and local jails, prisons, and other institutions that enter into agreements with the Commissioner 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 sophisticated data exchange system.

      (2) REPORT- Not later than 1 year after the date of the enactment 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 Representatives.

    (c) ADDITIONAL REPORT TO CONGRESS- Not 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- Subparagraphs (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 application is filed, or

      `(B) the first day of the month following the date such individual becomes eligible for such benefits with respect to such application.'.

    (b) SPECIAL RULE RELATING TO EMERGENCY ADVANCE PAYMENTS- Section 1631(a)(4)(A) (42 U.S.C. 1383(a)(4)(A)) is amended--

      (1) by inserting `for the month following the date the application is filed' after `is presumptively eligible for such benefits'; and

      (2) by inserting `, which shall be repaid through proportionate reductions in such benefits over a period of not more than 6 months' before the semicolon.

    (c) CONFORMING AMENDMENTS-

      (1) Section 1614(b) (42 U.S.C. 1382c(b)) is amended--

        (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-

      (1) IN GENERAL- The 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 issued to implement such amendments.

      (2) BENEFITS UNDER TITLE XVI- For purposes of this subsection, the term `benefits 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.

Subtitle B--Benefits for Disabled Children

SEC. 211. DEFINITION AND ELIGIBILITY RULES.

    (a) DEFINITION OF CHILDHOOD DISABILITY- Section 1614(a)(3) (42 U.S.C. 1382c(a)(3)), as amended by section 105(b)(1) of the Contract with America Advancement Act of 1996, is amended--

      (1) in subparagraph (A), by striking `An individual' and inserting `Except as provided in subparagraph (C), an indi-vidual';

      (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 severity)';

      (3) by redesignating subparagraphs (C) through (I) as subparagraphs (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 medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected 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 accordance 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-

      (1) MODIFICATION TO MEDICAL CRITERIA FOR EVALUATION OF MENTAL AND EMOTIONAL DISORDERS- The 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 ASSESSMENT- The Commissioner of Social Security shall discontinue 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- Section 1614(a)(4) (42 U.S.C. 1382(a)(4)) is amended--

      (1) by redesignating subclauses (I) and (II) of clauses (i) and (ii) of subparagraph (B) as items (aa) and (bb), respectively;

      (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 paragraph (3)) the following new subparagraph:

      `(A) in the case of an individual who is age 18 or older--';

      (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--

        `(i) substantial evidence which demonstrates that there has been medical improvement in the individual's impairment or combination of impairments, and that such impairment 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 decision that the individual was under a disability or continued to be under a disability, and such impairment or combination of impairments does not result in marked and severe functional limitations; or';

      (6) by redesignating subparagraph (D) as subparagraph (C) and by inserting in such subparagraph `in the case of any individual,' before `substantial evidence'; and

      (7) in the first sentence following subparagraph (C) (as redesignated by paragraph (6)), by--

        (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 individual's impairment or combination of impairments so that it no longer results in marked and severe functional limitations' immediately before the period.

    (d) EFFECTIVE DATES, ETC-

      (1) EFFECTIVE DATES-

        (A) SUBSECTIONS (a) AND (b)-

          (i) IN GENERAL- The provisions of, and amendments 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- For purposes of clause (i), no individual's claim with respect 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 claim that has been denied in whole, or there is pending, 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)- The amendments made by subsection (c) of this section shall apply with respect to benefits under title XVI of the Social Security Act 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.

      (2) APPLICATION TO CURRENT RECIPIENTS-

        (A) ELIGIBILITY REDETERMINATIONS- During the period beginning on the date of the enactment of this Act and ending on the date which is 1 year after such date of enactment, the Commissioner of Social Security shall redetermine 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 eligibility for such benefits may terminate by reason of the provisions of, or amendments made by, subsections (a) and (b) of this section. With respect to any redetermination under this subparagraph--

          (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 benefits under title XVI of such Act;

          (iii) the Commissioner shall give such redetermination priority over all continuing eligibility reviews and other reviews under such title; and

          (iv) such redetermination shall be counted as a review 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- The provisions of, and amendments made by, subsections (a) and (b) of this section, and the redetermination under subparagraph (A), shall only apply with respect to the benefits of an individual described in subparagraph (A) for months beginning on or after the later of July 1, 1997, or the date of the redetermination with respect to such individual.

        (C) NOTICE- Not 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- The Commissioner of Social Security shall report to the Congress regarding the progress made in implementing 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.

      (4) REGULATIONS- Notwithstanding any other provision of law, the Commissioner of Social Security shall submit for review 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 submission under this paragraph shall include supporting documentation providing a cost analysis, workload impact, and projections as to how the regulation will effect the future number of recipients under such title.

      (5) CAP ADJUSTMENT FOR SSI ADMINISTRATIVE WORK REQUIRED BY WELFARE REFORM-

        (A) AUTHORIZATION- For the additional costs of continuing 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- Section 251(b)(2)(H) of the Balanced 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--

          (i) in clause (i)--

            (I) in subclause (II) by--

(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--

(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 Reconciliation Act of 1996;'.

        (C) ADJUSTMENTS- Section 606(e)(1)(B) of the Congressional Budget Act of 1974 is amended by adding at the end the following new sentences: `If the adjustments referred to in the preceding sentence are made for an appropriations 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 Budget of the House of Representatives shall submit any adjustments made under this subparagraph to the House of Representatives and have such adjustments published in the Congressional Record.'.

        (D) CONFORMING AMENDMENT- Section 103(d)(1) of the Contract with America Advancement Act of 1996 (42 U.S.C. 401 note) is amended by striking `medicaid programs.' 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 Opportunity 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- For purposes of this subsection, the term `benefits 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. 212. ELIGIBILITY REDETERMINATIONS AND CONTINUING DISABILITY REVIEWS.

    (a) CONTINUING DISABILITY REVIEWS RELATING TO CERTAIN CHILDREN- Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as redesignated by section 211(a)(3) of this Act, is amended--

      (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 Commissioner 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 reason 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 demonstrating 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 interest 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 determines such application would be inappropriate or unnecessary. In making such determination, the Commissioner shall take into consideration the nature of the individual's impairment (or combination 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-

      (1) IN GENERAL- Section 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 redetermine such eligibility--

      `(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 substitute for a review or redetermination otherwise required under any other provision of this subparagraph during that 1-year period.'.

      (2) CONFORMING REPEAL- Section 207 of the Social Security 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- Section 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 individual, 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 contributing factor material to the Commissioner's determination that the individual is disabled.

    `(II) A review under subclause (I) shall be considered a substitute 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 reviewed under this clause shall present, at the time of review, evidence demonstrating 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.

    `(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 interest 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 determines such application would be inappropriate or unnecessary. In making such determination, the Commissioner shall take into consideration the nature of the individual's impairment (or combination 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.'.

    (d) EFFECTIVE DATE- The 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- Section 1631(a)(2) (42 U.S.C. 1383(a)(2)) is amended--

      (1) by redesignating subparagraphs (F) and (G) as subparagraphs (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 described 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 accordance with clause (ii).

    `(II) Benefits described in this subclause are past-due monthly benefits under this title (which, for purposes of this subclause, include 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--

      `(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 established under clause (i) to pay for allowable expenses described in subclause (II).

    `(II) An allowable expense described in this subclause is an expense for--

      `(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 determines 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 individual.

    `(III) The use of funds from an account established under clause (i) in any manner not authorized by this clause--

      `(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 benefits 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 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 established pursuant to clause (i)--

      `(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 system 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- Section 1613(a) (42 U.S.C. 1382b(a)) is amended--

      (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 earnings thereon, established and maintained in accordance with section 1631(a)(2)(F).'.

    (c) EXCLUSION FROM INCOME- Section 1612(b) (42 U.S.C. 1382a(b)) is amended--

      (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 established and maintained in accordance with section 1631(a)(2)(F).'.

    (d) EFFECTIVE DATE- The 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 INSTITUTIONALIZED INDIVIDUALS WHOSE MEDICAL COSTS ARE COVERED BY PRIVATE INSURANCE.

    (a) IN GENERAL- Section 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- The amendment made by this section shall apply to benefits for months beginning 90 or more days after the date of the enactment of this Act, without regard to whether regulations 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 subtitle.

Subtitle C--Additional Enforcement Provision

SEC. 221. INSTALLMENT PAYMENT OF LARGE PAST-DUE SUPPLEMENTAL SECURITY INCOME BENEFITS.

    (a) IN GENERAL- Section 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 benefits under this title in an amount that (after any withholding for reimbursement to a State for interim assistance under subsection (g)) equals or exceeds the product of--

      `(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 reimbursement to a State) shall be made in installments as provided in subparagraph (B).

    `(B)(i) The payment of past-due benefits subject to this subparagraph 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--

      `(I) outstanding debt attributable to--

        `(aa) food,

        `(bb) clothing,

        `(cc) shelter, or

        `(dd) medically necessary services, supplies or equipment, or medicine; or

      `(II) current expenses or expenses anticipated in the near term attributable to--

        `(aa) medically necessary services, supplies or equipment, 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 provide payment pursuant to an insurance policy, pre-paid plan, or other arrangement, the limitation specified in clause (ii) may be exceeded 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 is eligible for the payment of past-due monthly benefits under this title--

      `(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 Commissioner 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 agreement for Federal administration under section 1616(a), and payments pursuant to an agreement entered into under section 212(b) of Public Law 93-66.'.

    (b) CONFORMING AMENDMENT- Section 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-

      (1) IN GENERAL- The 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- For 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 subtitle.

Subtitle D--Studies Regarding Supplemental Security Income Program

SEC. 231. ANNUAL REPORT ON THE SUPPLEMENTAL SECURITY INCOME 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 Commissioner of Social Security shall prepare and deliver a report annually to the President and the Congress regarding the program under this title, including--

      `(1) a comprehensive description of the program;

      `(2) historical and current data on allowances and denials, including number of applications and allowance rates for initial determinations, reconsideration determinations, administrative law judge hearings, appeals council reviews, and Federal court decisions;

      `(3) historical and current data on characteristics of recipients and program costs, by recipient group (aged, blind, disabled adults, and disabled children);

      `(4) historical and current data on prior enrollment by recipients 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 dis-ability reviews, and the outcomes of such redeterminations and reviews;

      `(7) data on the utilization of work incentives;

      `(8) detailed information on administrative and other program operation costs;

      `(9) summaries of relevant research undertaken by the Social 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--

      (1) the impact of the amendments made by, and the provisions 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--CHILD 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.

Subtitle A--Eligibility for Services; Distribution of Payments

SEC. 301. STATE OBLIGATION TO PROVIDE CHILD SUPPORT ENFORCEMENT SERVICES.

    (a) STATE PLAN REQUIREMENTS- Section 454 (42 U.S.C. 654) is amended--

      (1) by striking paragraph (4) and inserting the following new paragraph:

      `(4) provide that the State will--

        `(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--

          `(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 provided 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 respect to--

          `(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)--

        (A) by striking `provide that' and inserting `provide that--';

        (B) by striking subparagraph (A) and inserting the following 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)--

          (i) by indenting the subparagraph in the same manner as, and aligning the left margin of the subparagraph 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 RECEIVE ASSISTANCE UNDER THE STATE PROGRAM FUNDED UNDER PART A- Section 454 (42 U.S.C. 654) is amended--

      (1) by striking `and' at the end of paragraph (23);

      (2) by striking the period at the end of paragraph (24) and inserting `; and'; and

      (3) by adding after paragraph (24) the following new paragraph:

      `(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 furnished under the plan, except that an application or other request to continue services shall not be required of such a family and paragraph (6)(B) shall not apply to the family.'.

    (c) CONFORMING AMENDMENTS-

      (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- Section 457 (42 U.S.C. 657) is amended to read as follows:

`SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

    `(a) IN GENERAL- Subject to subsection (e), an amount collected 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- In the case of a family receiving assistance from the State, the State shall--

        `(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- In the case of a family that formerly received assistance from the State:

        `(A) CURRENT SUPPORT PAYMENTS- To the extent that the amount so collected does not exceed the amount required to be paid to the family for the month in which collected, the State shall distribute the amount so collected to the family.

        `(B) PAYMENTS OF ARREARAGES- To 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-

            `(I) PRE-OCTOBER 1997- Except 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 Opportunity Act Reconciliation of 1996 shall apply with respect to the distribution of support arrearages that--

`(aa) accrued after the family ceased to receive assistance, and

`(bb) are collected before October 1, 1997.

            `(II) POST-SEPTEMBER 1997- With respect to the amount so collected on or after October 1, 1997 (or before such date, at the option of the State)--

`(aa) IN GENERAL- The 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- 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 Federal 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- To the extent that neither division (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-

            `(I) PRE-OCTOBER 2000- Except 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 Opportunity Reconciliation Act of 1996 shall apply with respect to the distribution of support arrearages that--

`(aa) accrued before the family received assistance, and

`(bb) are collected before October 1, 2000.

            `(II) POST-SEPTEMBER 2000- Unless, based on the report required by paragraph (4), the Congress determines otherwise, with respect to the amount so collected on or after October 1, 2000 (or before such date, at the option of the State)--

`(aa) IN GENERAL- The 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 assistance from the State.

`(bb) REIMBURSEMENT OF GOVERNMENTS FOR ASSISTANCE PROVIDED TO THE FAMILY- After the application of clause (i)(II)(aa) and division (aa) with respect to the amount so collected, the State shall retain the State share of the amount so collected, and pay to the Federal 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- To the extent that neither division (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- In the case of a family described in this subparagraph, the provisions 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- Notwithstanding any other provision of this section, any amount of support collected pursuant to section 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- For purposes of this subparagraph, unless an earlier effective date is required by this section, effective October 1, 2000, the State shall treat any support arrearages collected, except for amounts collected pursuant to section 464, as accruing in the following order:

            `(I) To the period after the family ceased to receive assistance.

            `(II) To the period before the family received assistance.

            `(III) To the period while the family was receiving assistance.

      `(3) FAMILIES THAT NEVER RECEIVED ASSISTANCE- In the case of any other family, the State shall distribute the amount so collected to the family.

      `(4) FAMILIES UNDER CERTAIN AGREEMENTS- In 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- Not later than October 1, 1998, the Secretary shall report to the Congress the Secretary's findings with respect to--

        `(A) whether the distribution of post-assistance arrearages 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 welfare;

        `(C) what the overall impact has been of the amendments made by the Personal Responsibility and Work Opportunity Act of 1996 with respect to child support enforcement 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 arrearages.

    `(b) CONTINUATION OF ASSIGNMENTS- Any rights to support obligations, which were assigned to a State as a condition of receiving assistance from the State under part A and which were in effect on the day before the date of the enactment of the Personal Responsibility and Work Opportunity Act of 1996, shall remain assigned after such date.

    `(c) DEFINITIONS- As used in subsection (a):

      `(1) ASSISTANCE- The term `assistance from the State' means--

        `(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 enactment 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- The term `Federal share' means that portion of the amount collected resulting from the application of the Federal medical assistance percentage in effect for the fiscal year in which the amount is collected.

      `(3) FEDERAL MEDICAL ASSISTANCE PERCENTAGE- The term `Federal medical assistance percentage' means--

        `(A) the Federal medical assistance percentage (as defined in section 1118), in the case of Puerto Rico, the Virgin Islands, Guam, and American Samoa; or

        `(B) the Federal medical assistance percentage (as defined in section 1905(b), as in effect on September 30, 1996) in the case of any other State.

      `(4) STATE SHARE- The term `State share' means 100 percent minus the Federal share.

    `(d) HOLD HARMLESS PROVISION- If 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 assistance 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- At 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 Responsibility 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-

      (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--

        (A) in paragraph (11)--

          (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-

      (1) IN GENERAL- Except 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- The amendments made by subsection (b)(2) shall become effective on the date of the enactment of this Act.

SEC. 303. PRIVACY SAFEGUARDS.

    (a) STATE PLAN REQUIREMENT- Section 454 (42 U.S.C. 654), as amended by section 301(b) of this Act, is amended--

      (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 paragraph:

      `(26) will have in effect safeguards, applicable to all confidential information handled by the State agency, that are designed to protect the privacy rights of the parties, including--

        `(A) safeguards against unauthorized use or disclosure of information relating to proceedings or actions to establish 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 result in physical or emotional harm to the former party.'.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) shall become effective on October 1, 1997.

SEC. 304. RIGHTS TO NOTIFICATION OF HEARINGS.

    (a) IN GENERAL- Section 454 (42 U.S.C. 654), as amended by section 302(b)(2) of this Act, is amended by inserting after paragraph (11) the following new paragraph:

      `(12) provide for the establishment of procedures to require the State to provide individuals who are applying for or receiving services under the State plan, or who are parties to cases in which services are being provided under the State plan--

        `(A) with notice of all proceedings in which support obligations 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, within 14 days after issuance of such order or determination;'.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) shall become effective on October 1, 1997.

Subtitle B--Locate 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-

      `(1) CONTENTS- The 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--

        `(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- The State case registry may be established by linking local case registries of support orders through an automated information network, subject to this section.

      `(3) USE OF STANDARDIZED DATA ELEMENTS- Such 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 contain such other information (such as on case status) as the Secretary may require.

      `(4) PAYMENT RECORDS- Each 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--

        `(A) the amount of monthly (or other periodic) support owed under the order, and other amounts (including arrearages, 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 requires 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- The State agency operating the automated system required by this section shall promptly 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--

        `(A) information on administrative actions and administrative and judicial proceedings and orders relating to paternity and support;

        `(B) information obtained from comparison with Federal, State, or local sources of information;

        `(C) information on support collections and distributions; and

        `(D) any other relevant information.

    `(f) INFORMATION COMPARISONS AND OTHER DISCLOSURES OF INFORMATION- The 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 enable the State agency (or the Secretary or other State or Federal agencies) to carry out this part, subject to section 6103 of the Internal Revenue Code of 1986. Such information comparison activities shall include the following:

      `(1) FEDERAL CASE REGISTRY OF CHILD SUPPORT ORDERS- Furnishing to the Federal Case Registry of Child Support Orders 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 recorded in the State case registry that is necessary to operate the registry (as specified by the Secretary in regulations).

      `(2) FEDERAL PARENT LOCATOR SERVICE- Exchanging information with the Federal Parent Locator Service for the purposes specified in section 453.

      `(3) TEMPORARY FAMILY ASSISTANCE AND MEDICAID AGENCIES- Exchanging 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 Secretary, as necessary to perform State agency responsibilities under this part and under such programs.

      `(4) INTRASTATE AND INTERSTATE INFORMATION COMPARISONS- Exchanging information with other agencies of the State, agencies of other States, and interstate information networks, 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- Section 454 (42 U.S.C. 654), as amended by sections 301(b) and 303(a) of this Act, is amended--

      (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 paragraph:

      `(27) provide that, on and after October 1, 1998, the State agency will--

        `(A) operate a State disbursement unit in accordance with section 454B; and

        `(B) have sufficient State staff (consisting of State employees) and (at State option) contractors reporting directly to the State agency to--

          `(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- Part 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 PAYMENTS.

    `(a) STATE DISBURSEMENT UNIT-

      `(1) IN GENERAL- In order for a State to meet the requirements of this section, the State agency must establish and operate a unit (which shall be known as the `State disbursement unit') for the collection and disbursement of payments under support orders--

        `(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 income of the noncustodial parent is subject to withholding pursuant to section 466(a)(8)(B).

      `(2) OPERATION- The State disbursement unit shall be operated--

        `(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- The State disbursement unit may be established by linking local disbursement 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 centralized system. In addition, employers shall be given 1 location to which income withholding is sent.

    `(b) REQUIRED PROCEDURES- The State disbursement unit shall use automated procedures, electronic processes, and computer-driven technology to the maximum extent feasible, efficient, and economical, for the collection and disbursement of support payments, including procedures--

      `(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 information 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 disbursement 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-

      `(1) IN GENERAL- Except 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 information identifying the payee is provided.

      `(2) PERMISSIVE RETENTION OF ARREARAGES- The State disbursement unit may delay the distribution of collections toward arrearages until the resolution of any timely appeal with respect to such arrearages.

    `(d) BUSINESS DAY DEFINED- As used in this section, the term `business day' means a day on which State offices are open for regular business.'.

    (c) USE OF AUTOMATED SYSTEM- Section 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-

      `(1) IN GENERAL- The State shall use the automated system required by this section, to the maximum extent feasible, to 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--

        `(A) transmission of orders and notices to employers (and other debtors) for the withholding of income--

          `(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 Secretary;

        `(B) ongoing monitoring to promptly identify failures to make timely payment of support; and

        `(C) automatic use of enforcement procedures (including procedures authorized pursuant to section 466(c)) if payments are not timely made.

      `(2) BUSINESS DAY DEFINED- As used in paragraph (1), the term `business day' means a day on which State offices are open for regular business.'.

    (d) EFFECTIVE DATES-

      (1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall become effective on October 1, 1998.

      (2) LIMITED EXCEPTION TO UNIT HANDLING PAYMENTS- 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 payments through local courts may, at the option of the State, continue 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- Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a), and 312(a) of this Act, is amended--

      (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 paragraph:

      `(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- Part D of title IV (42 U.S.C. 651-669) is amended by inserting after section 453 the following new section:

`SEC. 453A. STATE DIRECTORY OF NEW HIRES.

    `(a) ESTABLISHMENT-

      `(1) IN GENERAL-

        `(A) REQUIREMENT FOR STATES THAT HAVE NO DIRECTORY- Except as provided in subparagraph (B), not later than October 1, 1997, each State shall establish an automated directory (to be known as the `State Directory of New Hires') which shall contain information supplied in accordance with subsection (b) by employers on each newly hired employee.

        `(B) STATES WITH NEW HIRE REPORTING LAW IN EXISTENCE- A State which has a new hire reporting law in existence on the date of the enactment of this section may continue 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- As used in this section:

        `(A) EMPLOYEE- The term `employee'--

          `(i) means an individual who is an employee within 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 counterintelligence functions, if the head of such agency has determined 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-

          `(i) IN GENERAL- The term `employer' has the meaning given such term in section 3401(d) of the Internal Revenue Code of 1986 and includes any governmental entity and any labor organization.

          `(ii) LABOR ORGANIZATION- The term `labor organization' 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-

      `(1) REPORTING REQUIREMENT-

        `(A) IN GENERAL- Except as provided in subparagraphs (B) and (C), each employer shall furnish to the Directory 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- An 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 transmits reports pursuant to this subparagraph shall notify the Secretary in writing as to which State such employer designates for the purpose of sending reports.

        `(C) FEDERAL GOVERNMENT EMPLOYERS- Any department, 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- Each 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--

        `(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- Each 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- The State shall have the option to set a State civil money penalty which shall be less than--

      `(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- Information 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-

      `(1) IN GENERAL- Not 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- When 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, address, 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-

      `(1) TRANSMISSION OF WAGE WITHHOLDING NOTICES TO EMPLOYERS- Within 2 business days after the date information regarding a newly hired employee is entered into the State Directory 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 income of the employee an amount equal to the monthly (or other periodic) child support obligation (including any past due support 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-

        `(A) NEW HIRE INFORMATION- Within 3 business days after the date information regarding a newly hired employee 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 INFORMATION- The 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 individuals, by such dates, in such format, and containing such information as the Secretary of Health and Human Services shall specify in regulations.

      `(3) BUSINESS DAY DEFINED- As 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-

      `(1) LOCATION OF CHILD SUPPORT OBLIGORS- The 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 establishing, 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 PROGRAMS- A State agency responsible for administering a program specified in section 1137(b) shall have access to information reported by employers pursuant to subsection (b) of this section for purposes of verifying eligibility for the program.

      `(3) ADMINISTRATION OF EMPLOYMENT SECURITY AND WORKERS' COMPENSATION- State agencies operating employment security 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- Section 1137(a)(3) (42 U.S.C. 1320b-7(a)(3)) is amended--

      (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 performing intelligence or counterintelligence functions, if the head of such agency has determined that filing such a report could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission' after `paragraph (2)'.

    (d) DISCLOSURE TO CERTAIN AGENTS- Section 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 disclose 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-

      (1) IN GENERAL- Section 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 withholding 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 subject to withholding as provided in subsection (b) if arrearages occur, without the need for a judicial or administrative hearing.'.

      (2) CONFORMING AMENDMENTS-

        (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 compliance with all procedural due process requirements of the State, and the State must send notice to each noncustodial parent to whom paragraph (1) applies--

        `(i) that the withholding has commenced; and

        `(ii) of the procedures to follow if the noncustodial parent 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 requirements of section 454B.'.

        (D) Section 466(b)(6)(A) (42 U.S.C. 666(b)(6)(A)) is amended--

          (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 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 withhold funds as directed in the notice, except that when an employer receives an income withholding order issued by another State, the employer shall apply the income withholding law of the state of the obligor's principal place of employment in determining--

        `(I) the employer's fee for processing an income withholding 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 income 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 business.'.

        (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--

        `(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 obligations 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-

      (1) IN GENERAL- Section 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 individual, regardless of source, including wages, salaries, commissions, bonuses, worker's compensation, disability, payments pursuant to a pension or retirement program, and interest.'.

      (2) CONFORMING AMENDMENTS-

        (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 inserting `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- Section 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 NETWORKS- Procedures to ensure that all Federal and State agencies conducting activities under this part have access to any system used by the State to locate an individual for purposes relating to motor vehicles or law enforcement.'.

SEC. 316. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE.

    (a) EXPANDED AUTHORITY TO LOCATE INDIVIDUALS AND ASSETS- Section 453 (42 U.S.C. 653) is amended--

      (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 visitation orders--

      `(1) information on, or facilitating the discovery of, the location of any individual--

        `(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 enrollment 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 indi-vidual.'; and

      (2) in subsection (b)--

        (A) in the matter preceding paragraph (1), by striking `social security' and all that follows through `absent parent' 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 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 VISITATION RIGHTS- Section 453(c) (42 U.S.C. 653(c)) is amended--

      (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 resident parent for child custody or visitation rights, or any agent of such court;'.

    (c) REIMBURSEMENT FOR INFORMATION FROM FEDERAL AGENCIES- Section 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, compiling, or maintaining the information)' before the period.

    (d) REIMBURSEMENT FOR REPORTS BY STATE AGENCIES- Section 453 (42 U.S.C. 653) is amended by adding at the end the following new subsection:

    `(g) REIMBURSEMENT FOR REPORTS BY STATE AGENCIES- The 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 determines 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-

      (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- Section 453 (42 U.S.C. 653), as amended 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-

      `(1) IN GENERAL- Not 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 Secretary shall establish and maintain in the Federal Parent Locator 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 described in paragraph (2) with respect to each case in each State case registry maintained pursuant to section 454A(e), as furnished (and regularly updated), pursuant to section 454A(f), by State agencies administering programs under this part.

      `(2) CASE INFORMATION- The 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 established), and the State or States which have the case.

    `(i) NATIONAL DIRECTORY OF NEW HIRES-

      `(1) IN GENERAL- 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 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 Directory of New Hires, which shall contain the information supplied pursuant to section 453A(g)(2).

      `(2) ENTRY OF DATA- Information 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- The Secretary of the Treasury shall have access to the information in the National Directory of New Hires for purposes of administering section 32 of the Internal Revenue Code of 1986, or the advance payment of the earned income tax credit under section 3507 of such Code, and verifying a claim with respect to employment in a tax return.

      `(4) LIST OF MULTISTATE EMPLOYERS- The 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-

      `(1) VERIFICATION BY SOCIAL SECURITY ADMINISTRATION-

        `(A) IN GENERAL- The Secretary shall transmit information on individuals and employers maintained under this section to the Social Security Administration to the extent necessary for verification in accordance with subparagraph (B).

        `(B) VERIFICATION BY SSA- The Social Security Administration shall verify the accuracy of, correct, or supply to the extent possible, and report to the Secretary, the following 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- For the purpose of locating individuals in a paternity establishment case or a case involving the establishment, modification, or enforcement of a support order, the Secretary shall--

        `(A) compare information in the National Directory of New Hires against information in the support case abstracts in the Federal Case Registry of Child Support Orders not less often than every 2 business days; and

        `(B) within 2 business days after such a comparison reveals a match with respect to an individual, report the information to the State agency responsible for the case.

      `(3) INFORMATION COMPARISONS AND DISCLOSURES OF INFORMATION IN ALL REGISTRIES FOR TITLE IV PROGRAM PURPOSES- To 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--

        `(A) compare the information in each component of the Federal Parent Locator Service maintained under this section 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 operating such programs; and

        `(B) disclose information in such registries to such State agencies.

      `(4) PROVISION OF NEW HIRE INFORMATION TO THE SOCIAL SECURITY ADMINISTRATION- The National Directory of New Hires shall provide the Commissioner of Social Security with all information in the National Directory.

      `(5) RESEARCH- The Secretary may provide access to information reported by employers pursuant to section 453A(b) for research purposes found by the Secretary to be likely to contribute to achieving the purposes of part A or this part, but without personal identifiers.

    `(k) FEES-

      `(1) FOR SSA VERIFICATION- The Secretary shall reimburse the Commissioner of Social Security, at a rate negotiated between the Secretary and the Commissioner, for the costs incurred by the Commissioner in performing the verification services described in subsection (j).

      `(2) FOR INFORMATION FROM STATE DIRECTORIES OF NEW HIRES- The 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- A 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 reasonable (which rates shall include payment for the costs of obtaining, verifying, maintaining, and comparing the information).

    `(l) RESTRICTION ON DISCLOSURE AND USE- Information in the Federal Parent Locator Service, and information resulting from comparisons using such information, shall not be used or disclosed except as expressly provided in this section, subject to section 6103 of the Internal Revenue Code of 1986.

    `(m) INFORMATION INTEGRITY AND SECURITY- The Secretary shall establish and implement safeguards with respect to the entities established under this section designed to--

      `(1) ensure the accuracy and completeness of information in the Federal Parent Locator Service; and

      `(2) restrict access to confidential information in the Federal Parent Locator Service to authorized persons, and restrict use of such information to authorized purposes.

    `(n) FEDERAL GOVERNMENT REPORTING- Each department, agency, and instrumentality of the United States shall on a quarterly 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, agency, or instrumentality performing intelligence or counterintelligence functions, if the head of such department, agency, or instrumentality has determined that filing such a report could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission.'.

    (g) CONFORMING AMENDMENTS-

      (1) TO PART D OF TITLE IV OF THE SOCIAL SECURITY ACT-

        (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- Section 3304(a)(16) of the Internal Revenue Code of 1986 is amended--

        (A) by striking `Secretary of Health, Education, and Welfare' each place such term appears and inserting `Secretary of Health and Human Services';

        (B) in subparagraph (B), by striking `such information' and all that follows and inserting `information furnished 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 subparagraph (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 established under section 453(i) of the Social Security Act, and'.

      (3) TO STATE GRANT PROGRAM UNDER TITLE III OF THE SOCIAL SECURITY ACT- Subsection (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--

      `(A) disclose quarterly, to the Secretary of Health and Human Services, wage and claim information, as required pursuant to section 453(i)(1), contained in the records of such agency;

      `(B) ensure that information provided pursuant to subparagraph (A) meets such standards relating to correctness and verification 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 determines 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 comply substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State agency that further payments will not be made to the State until the Secretary of Labor is satisfied 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--

      `(A) the term `wage information' means information regarding 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 paying such wages to such individual; and

      `(B) the term `claim information' means information regarding 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-

        (A) IN GENERAL- Paragraph (6) of section 6103(l) of the Internal Revenue Code of 1986 (relating to disclosure of return information to Federal, State, and local child support 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- The following information disclosed to any child support enforcement agency under subparagraph (A) with respect to any individual 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 contract with such agency to carry out the purposes described in subparagraph (C):

          `(i) The address and social security account number (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-

          (i) Paragraph (3) of section 6103(a) of such Code is amended by striking `(l)(12)' and inserting `paragraph (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- Information 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- The Secretary of Labor and the Secretary of Health and Human Services shall work jointly to develop cost-effective and efficient methods of accessing the information in the various State directories of new hires and the National Directory of New Hires as established pursuant to the amendments made by this subtitle. In developing these methods the Secretaries shall take into account the impact, including costs, on the States, and shall also consider the need to insure the proper and authorized 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- Procedures requiring that the social security number of--

        `(A) any applicant for a professional license, commercial driver's license, occupational license, or marriage license be recorded on the application;

        `(B) any individual who is subject to a divorce decree, support order, or paternity determination or acknowledgment 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.'.

Subtitle C--Streamlining 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- In 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, together 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--

      (1) in subsection (a)(2), by striking `subsection (e)' and inserting `subsections (e), (f), and (i)';

      (2) in subsection (b), by inserting after the 2nd undesignated 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' before `is made';

      (4) in subsection (c)(1), by inserting `and subsections (e), (f), and (g)' after `located';

      (5) in subsection (d)--

        (A) by inserting `individual' before `contestant'; and

        (B) by striking `subsection (e)' and inserting `subsections (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)--

        (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 subsection:

    `(f) RECOGNITION OF CHILD SUPPORT ORDERS- If 1 or more child support orders have been issued with regard to an obligor and a child, a court shall apply the following rules in determining which order to recognize for purposes of continuing, exclusive jurisdiction 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 jurisdiction.';

      (11) in subsection (g) (as so redesignated)--

        (A) by striking `PRIOR' and inserting `MODIFIED'; and

        (B) by striking `subsection (e)' and inserting `subsections (e) and (f)';

      (12) in subsection (h) (as so redesignated)--

        (A) in paragraph (2), by inserting `including the duration 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- If there is no individual contestant or child residing in the issuing State, the party or support enforcement agency seeking to modify, or to modify and enforce, 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- Procedures under which--

        `(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, transmit to another State a request for assistance in a case involving the enforcement of a support order, which request--

          `(i) shall include such information as will enable the State to which the request is transmitted to compare the information about the case to the information in the data bases of the State; and

          `(ii) shall constitute a certification by the re-questing State--

            `(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 applicable 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 caseload of such other State; and

        `(D) the State shall maintain records of--

          `(i) the number of such requests for assistance received by the State;

          `(ii) the number of cases for which the State collected 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- Section 452(a) (42 U.S.C. 652(a)) is amended--

      (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--

        `(A) collection of child support through income withholding;

        `(B) imposition of liens; and

        `(C) administrative subpoenas.'.

    (b) USE BY STATES- Section 454(9) (42 U.S.C. 654(9)) is amended--

      (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 administrative subpoenas in interstate child support cases;'.

SEC. 325. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

    (a) STATE LAW REQUIREMENTS- Section 466 (42 U.S.C. 666), as amended by section 314 of this Act, is amended--

      (1) in subsection (a)(2), by striking the first sentence and inserting 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

      (2) by inserting after subsection (b) the following new subsection:

    `(c) EXPEDITED PROCEDURES- The procedures specified in this subsection are the following:

      `(1) ADMINISTRATIVE ACTION BY STATE AGENCY- Procedures which give the State agency the authority to take the following actions relating to establishment of paternity or to establishment, modification, or enforcement of support orders, without the necessity of obtaining an order from any other judicial or administrative tribunal, and to recognize and enforce the authority of State agencies of other States to take the following actions:

        `(A) GENETIC TESTING- To order genetic testing for the purpose of paternity establishment as provided in section 466(a)(5).

        `(B) FINANCIAL OR OTHER INFORMATION- To 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- To require all entities in the State (including for-profit, nonprofit, 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, information 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- To obtain access, subject to safeguards on privacy and information security, and subject to the nonliability of entities that afford such access under this subparagraph, to information contained in the following records (including automated access, in the case of records maintained in automated data bases):

          `(i) Records of other State and local government agencies, including--

            `(I) vital statistics (including records of marriage, birth, and divorce);

            `(II) State and local tax and revenue records (including information on residence address, employer, income and assets);

            `(III) records concerning real and titled personal 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 depart-ment; and

            `(VIII) corrections records.

          `(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--

            `(I) the names and addresses of such indi-viduals and the names and addresses of the employers of such individuals, as appearing in customer records of public utilities and cable television companies, pursuant to an administrative subpoena authorized by subparagraph (B); and

            `(II) information (including information on assets and liabilities) on such individuals held by financial institutions.

        `(E) CHANGE IN PAYEE- In cases in which support is subject to an assignment in order to comply with a requirement imposed pursuant to part A or section 1912, or to a requirement to pay through the State disbursement unit established 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- To order income withholding in accordance with subsections (a)(1)(A) and (b) of section 466.

        `(G) SECURING ASSETS- In cases in which there is a support arrearage, to secure assets to satisfy the arrearage by--

          `(i) intercepting or seizing periodic or lump-sum payments from--

            `(I) a State or local agency, including unemployment 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 property and distribution of proceeds.

        `(H) INCREASE MONTHLY PAYMENTS- For the purpose of securing overdue support, to increase the amount of monthly support payments to include amounts for arrearages, subject to such conditions or limitations as the State may provide.

      Such procedures shall be subject to due process safeguards, including (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- The expedited procedures required under subsection (a)(2) shall include the following rules and authority, applicable with respect to all proceedings to establish paternity or to establish, modify, or enforce support orders:

        `(A) LOCATOR INFORMATION; PRESUMPTIONS CON-CERNING NOTICE- Procedures under which--

          `(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, including Social Security number, residential and mailing addresses, telephone number, driver's license number, and name, address, and telephone number of employer; and

          `(ii) in any subsequent child support enforcement action between the parties, upon sufficient showing that diligent effort has been made to ascertain the location 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 written notice to the most recent residential or employer address filed with the tribunal pursuant to clause (i).

        `(B) STATEWIDE JURISDICTION- Procedures under which--

          `(i) the State agency and any administrative or judicial 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- Notwithstanding subsection (d) of section 514 of the Employee Retirement Income Security Act of 1974 (relating to effect on other laws), nothing in this subsection shall be construed to alter, amend, modify, invalidate, impair, or supersede subsections (a), (b), and (c) of such section 514 as it applies with respect to any procedure referred 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 qualified medical child support orders) if the reference in such section 206(d)(3) to a domestic relations order and the reference in such section 609(a) to a medical child support order were a reference to a support order referred to in paragraphs (1) and (2) relating to the same matters, respectively.'.

    (b) AUTOMATION OF STATE AGENCY FUNCTIONS- Section 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- The automated system required by this section shall be used, to the maximum extent feasible, to implement the expedited administrative procedures required by section 466(c).'.

Subtitle D--Paternity Establishment

SEC. 331. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

    (a) STATE LAWS REQUIRED- Section 466(a)(5) (42 U.S.C. 666(a)(5)) is amended to read as follows:

      `(5) PROCEDURES CONCERNING PATERNITY ESTAB-LISHMENT-

        `(A) ESTABLISHMENT PROCESS AVAILABLE FROM BIRTH UNTIL AGE 18-

          `(i) Procedures which permit the establishment of the paternity of a child at any time before the child attains 18 years of age.

          `(ii) As of August 16, 1984, clause (i) shall also apply to a child for whom paternity has not been established 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-

          `(i) GENETIC TESTING REQUIRED IN CERTAIN CONTESTED CASES- Procedures under which the State is required, in a contested paternity case (unless otherwise barred by State law) to require the child and all other parties (other than individuals found under section 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--

            `(I) alleging paternity, and setting forth facts establishing a reasonable possibility of the requisite sexual contact between the parties; or

            `(II) denying paternity, and setting forth facts establishing a reasonable possibility of the nonexistence of sexual contact between the parties.

          `(ii) OTHER REQUIREMENTS- Procedures which require the State agency, in any case in which the agency orders genetic testing--

            `(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-

          `(i) SIMPLE CIVIL PROCESS- Procedures for a simple civil process for voluntarily acknowledging paternity under which the State must provide that, before a mother and a putative father can sign an acknowledgment of paternity, the mother and the putative father must be given notice, orally and in writing, of the alternatives to, the legal consequences of, and the rights (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- Such procedures must include a hospital-based program for the voluntary acknowledgment of paternity focusing on the period immediately before or after the birth of a child.

          `(iii) PATERNITY ESTABLISHMENT SERVICES-

            `(I) STATE-OFFERED SERVICES- Such procedures must require the State agency responsible for maintaining birth records to offer voluntary paternity establishment services.

            `(II) REGULATIONS-

`(aa) SERVICES OFFERED BY HOSPITALS AND BIRTH RECORD AGENCIES- The Secretary shall prescribe regulations governing voluntary paternity establishment services offered by hospitals and birth record agencies.

`(bb) SERVICES OFFERED BY OTHER ENTITIES- The Secretary shall prescribe regulations 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 services is evaluated by, voluntary paternity establishment programs of hospitals and birth record agencies.

          `(iv) USE OF PATERNITY ACKNOWLEDGMENT AFFIDAVIT- Such procedures must require the State to develop and use an affidavit for the voluntary acknowledgment of paternity which includes the minimum requirements of the affidavit specified by the Secretary under section 452(a)(7) for the voluntary acknowledgment 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 ACKNOW-LEDGMENT-

          `(i) INCLUSION IN BIRTH RECORDS- Procedures under which the name of the father shall be included on the record of birth of the child of unmarried parents only if--

            `(I) the father and mother have signed a voluntary acknowledgment of paternity; or

            `(II) a court or an administrative agency of competent jurisdiction has issued an adjudication of paternity.

          Nothing in this clause shall preclude a State agency from obtaining an admission of paternity from the father for submission in a judicial or administrative proceeding, or prohibit the issuance of an order in a judicial 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- Procedures under which a signed voluntary acknowledgment of paternity is considered a legal finding of paternity, subject to the right of any signatory to rescind the acknowledgment within the earlier of--

            `(I) 60 days; or

            `(II) the date of an administrative or judicial proceeding relating to the child (including a proceeding to establish a support order) in which the signatory is a party.

          `(iii) CONTEST- Procedures under which, after the 60-day period referred to in clause (ii), a signed voluntary 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 challenger, and under which the legal responsibilities (including child support obligations) of any signatory arising from the acknowledgment may not be suspended during the challenge, except for good cause shown.

        `(E) BAR ON ACKNOWLEDGMENT RATIFICATION PRO-CEEDINGS- Procedures under which judicial or administrative proceedings are not required or permitted to ratify an unchallenged acknowledgment of paternity.

        `(F) ADMISSIBILITY OF GENETIC TESTING RESULTS- Procedures--

          `(i) requiring the admission into evidence, for purposes of establishing paternity, of the results of any genetic test that is--

            `(I) of a type generally acknowledged as reliable by accreditation bodies designated by the Secretary; 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 number 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 objection is made.

        `(G) PRESUMPTION OF PATERNITY IN CERTAIN CASES- Procedures which create a rebuttable or, at the option of the 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- Procedures 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- Procedures 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- Procedures which require 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 ESTABLISHMENT COSTS- Procedures under which bills for pregnancy, childbirth, and genetic testing are admissible as evidence without requiring third-party foundation testimony, 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- Procedures ensuring that the putative father has a reasonable opportunity to initiate a paternity action.

        `(M) FILING OF ACKNOWLEDGMENTS AND ADJUDICATIONS IN STATE REGISTRY OF BIRTH RECORDS- Procedures under which voluntary acknowledgments and adjudications of paternity by judicial or administrative processes are filed with the State registry of birth records for comparison with information in the State case registry.'.

    (b) NATIONAL PATERNITY ACKNOWLEDGMENT AFFIDAVIT- Section 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 Social Security number of each parent and, after consultation with the States, other common elements as determined by such designee' before the semicolon.

    (c) CONFORMING AMENDMENT- Section 468 (42 U.S.C. 668) is amended by striking `a simple civil process for voluntarily acknowledging 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 procedures 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--

      (1) by striking `and' at the end of paragraph (27);

      (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 administering the State plan--

        `(A) shall make the determination (and redetermination 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 require with respect to, the noncustodial parent of the child, subject to good cause and other exceptions which--

          `(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 administering 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 submit 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 require the individual to sign an acknowledgment or otherwise 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 noncooperation is determined, the basis therefor.'.

Subtitle E--Program Administration and Funding

SEC. 341. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

    (a) DEVELOPMENT OF NEW SYSTEM- The Secretary of Health and Human Services, in consultation with State directors of programs under part D of title IV of the Social Security Act, shall develop a new incentive system to replace, in a revenue neutral manner, the system under section 458 of such Act. The new system shall provide additional payments to any State based on such State's performance under such a program. Not later than March 1, 1997, the 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- Section 458 (42 U.S.C. 658) is amended--

      (1) in subsection (a), by striking `aid to families with dependent 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)--

        (A) by striking `AFDC collections' each place it appears and inserting `title IV-A collections', and

        (B) by striking `non-AFDC collections' each place it appears 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 inserting `combined title IV-A/non-title IV-A administrative costs'.

    (c) CALCULATION OF PATERNITY ESTABLISHMENT PERCENTAGE-

      (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--

        (A) by redesignating subparagraphs (B) through (E) as subparagraphs (C) through (F), respectively, and by inserting after subparagraph (A) the following new subparagraph:

      `(B) for a State with a paternity establishment percentage of not less than 75 percent but less than 90 percent for such fiscal 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 sentence:

    `In determining compliance under this section, a State may use as its paternity establishment percentage either the State's IV-D paternity 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--

        (A) in subparagraph (A)--

          (i) in the matter preceding clause (i)--

            (I) by striking `paternity establishment percentage' and inserting `IV-D paternity establishment 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 subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:

      `(B) the term `statewide paternity establishment percentage' means, with respect to a State for a fiscal year, the ratio (expressed as a percentage) that the total number of minor children--

        `(i) who have been born out of wedlock, and

        `(ii) the paternity of whom has been established or acknowledged during the fiscal year,

      bears to the total number of children born out of wedlock during the preceding fiscal year; and'.

      (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is amended--

        (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 striking `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-

      (1) INCENTIVE ADJUSTMENTS-

        (A) IN GENERAL- The system developed under subsection (a) and the amendments made by subsection (b) shall become effective on October 1, 1999, except to the extent provided in subparagraph (B).

        (B) APPLICATION OF SECTION 458- Section 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 purposes of incentive payments to States for fiscal years before fiscal year 2000.

      (2) PENALTY REDUCTIONS- The amendments made by subsection (c) shall become effective with respect to calendar quarters beginning on or after the date of the enactment of this Act.

SEC. 342. FEDERAL AND STATE REVIEWS AND AUDITS.

    (a) STATE AGENCY ACTIVITIES- Section 454 (42 U.S.C. 654) is amended--

      (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--

        `(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 Federal 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 transmitting to the Secretary data and calculations concerning the levels of accomplishment (and rates of improvement) with respect to applicable performance indicators (including paternity establishment percentages) to the extent necessary for purposes of sections 452(g) and 458;'.

    (b) FEDERAL ACTIVITIES- Section 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 accomplishments with respect to performance indicators for purposes 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 actions, and technical assistance; and

      `(C) conduct audits, in accordance with the Government auditing standards of the Comptroller General of the United States--

        `(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 systems used in calculating performance indicators under subsection (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--

          `(I) whether Federal and other funds made available to carry out the State program are being appropriately expended, and are properly and fully accounted for; and

          `(II) whether collections and disbursements of support 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- The 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- Section 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 provided 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- Section 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--

      (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 paragraph:

      `(30) provide that the State shall use the definitions established under section 452(a)(5) in collecting and reporting information as required under this part.'.

SEC. 344. AUTOMATED DATA PROCESSING REQUIREMENTS.

    (a) REVISED REQUIREMENTS-

      (1) IN GENERAL- Section 454(16) (42 U.S.C. 654(16)) is amended--

        (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 inserting a semicolon.

      (2) AUTOMATED DATA PROCESSING- Part 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- In 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 automated 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- The 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--

      `(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 reporting requirements under this part on a timely basis.

    `(c) CALCULATION OF PERFORMANCE INDICATORS- In order to enable the Secretary to determine the incentive payments and penalty adjustments required by sections 452(g) and 458, the State agency shall--

      `(1) use the automated system--

        `(A) to maintain the requisite data on State performance with respect to paternity establishment and child support 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 com-pleteness and reliability of, and ready access to, the data described in paragraph (1)(A), and the accuracy of the calculations described in paragraph (1)(B).

    `(d) INFORMATION INTEGRITY AND SECURITY- The State agency shall have in effect safeguards on the integrity, accuracy, and completeness of, access to, and use of data in the automated system required by this section, which shall include the following (in addition to such other safeguards as the Secretary may specify in regulations):

      `(1) POLICIES RESTRICTING ACCESS- Written policies concerning access to data by State agency personnel, and sharing of data with other persons, which--

        `(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- Systems controls (such as passwords or blocking of fields) to ensure strict adherence to the policies described in paragraph (1).

      `(3) MONITORING OF ACCESS- Routine 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- Procedures to ensure that all personnel (including State and local agency staff and contractors) who may have access to or be required to use confidential 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- Administrative penalties (up to and including dismissal from employment) for unauthorized access to, or disclosure or use of, confidential data.'.

      (3) REGULATIONS- The 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- Section 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 automated data processing and information retrieval system--

        `(A) by October 1, 1997, which meets all require-ments of this part which were enacted on or before the date of enactment of the Family Support Act of 1988, and

        `(B) by October 1, 2000, which meets all require-ments 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-

      (1) IN GENERAL- Section 455(a) (42 U.S.C. 655(a)) is amended--

        (A) in paragraph (1)(B)--

          (i) by striking `90 percent' and inserting `the percent 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 requirements 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-

        (A) IN GENERAL- The Secretary of Health and Human Services may not pay more than $400,000,000 in the aggregate under section 455(a)(3)(B) of the Social Security Act for fiscal years 1996 through 2001.

        (B) ALLOCATION OF LIMITATION AMONG STATES- The total amount payable to a State under section 455(a)(3)(B) of such Act for fiscal years 1996 through 2001 shall not exceed the limitation determined for the State by the Secretary of Health and Human Services in regulations.

        (C) ALLOCATION FORMULA- The regulations referred to in subparagraph (B) shall prescribe a formula for allocating 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--

          (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- Section 123(c) of the Family Support Act of 1988 (102 Stat. 2352; Public Law 100-485) is repealed.

SEC. 345. TECHNICAL ASSISTANCE.

    (a) FOR TRAINING OF FEDERAL AND STATE STAFF, RESEARCH AND DEMONSTRATION PROGRAMS, AND SPECIAL PROJECTS OF REGIONAL OR NATIONAL SIGNIFICANCE- Section 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 Secretary 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 of the end of the third calendar quarter following the end of such preceding fiscal year), to cover costs incurred by the Secretary for--

      `(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 systems required by this part); and

      `(2) research, demonstration, and special projects of regional or national significance relating to the operation of State programs under this part.

    The amount appropriated under this subsection shall remain available until expended.'.

    (b) OPERATION OF FEDERAL PARENT LOCATOR SERVICE- Section 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- Out of any money in the Treasury of the United States not otherwise appropriated, there is hereby appropriated to the Secretary for each fiscal year an amount equal to 2 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 of the end of the third calendar quarter following 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-

      (1) Section 452(a)(10)(A) (42 U.S.C. 652(a)(10)(A)) is amended--

        (A) by striking `this part;' and inserting `this part, including--'; and

        (B) by adding at the end the following new clauses:

          `(i) the total amount of child support payments collected 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 Government of so furnishing the services; and

          `(iii) the number of cases involving families--

            `(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 payment was received in the month;'.

      (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is amended--

        (A) in the matter preceding clause (i)--

          (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

          (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 inserting 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--

        (A) in subparagraph (H), by striking `and';

        (B) in subparagraph (I), by striking the period and inserting `; and'; and

        (C) by inserting after subparagraph (I) the following new subparagraph:

        `(J) compliance, by State, with the standards established 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 paragraph (4).

    (b) EFFECTIVE DATE- The amendments made by subsection (a) shall be effective with respect to fiscal year 1997 and succeeding fiscal years.

Subtitle F--Establishment 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-

        `(A) 3-YEAR CYCLE-

          `(i) IN GENERAL- Procedures under which every 3 years (or such shorter cycle as the State may determine), 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--

            `(I) review and, if appropriate, adjust the order in accordance with the guidelines established pursuant to section 467(a) if the amount of the 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 automated 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 ADJUSTMENT- If 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, adjustment of the order in accordance with the child support guidelines established pursuant to section 467(a).

          `(iii) NO PROOF OF CHANGE IN CIRCUMSTANCES NECESSARY IN 3-YEAR CYCLE REVIEW- Procedures which provide that any adjustment under clause (i) shall be made without a requirement for proof or showing of a change in circumstances.

        `(B) PROOF OF SUBSTANTIAL CHANGE IN CIRCUMSTANCES NECESSARY IN REQUEST FOR REVIEW OUTSIDE 3-YEAR CYCLE- Procedures under which, in the case of a request for a review, and if appropriate, an adjustment outside 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- Procedures 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 official authorized by the head of such an agency), if the person making the request certifies to the consumer reporting agency that--

      `(A) the consumer report is needed for the purpose of establishing an individual's capacity to make child support payments 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 consumer in accordance with State laws under which the obligation 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 registered 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, administrative, 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 ENFORCEMENT 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 ENFORCEMENT AGENCIES IN CHILD SUPPORT CASES.

    `(a) IN GENERAL- Notwithstanding any other provision of Federal 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 obligation of such individual.

    `(b) PROHIBITION OF DISCLOSURE OF FINANCIAL RECORD OBTAINED BY STATE CHILD SUPPORT ENFORCEMENT AGENCY- A 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-

      `(1) DISCLOSURE BY STATE OFFICER OR EMPLOYEE- If any person knowingly, or by reason of negligence, discloses a financial 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 INTERPRETATION- No 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- In 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--

        `(A) the greater of--

          `(i) $1,000 for each act of unauthorized disclosure of a financial record with respect to which such defendant is found liable; or

          `(ii) the sum of--

            `(I) the actual damages sustained by the plaintiff as a result of such unauthorized disclosure; plus

            `(II) in the case of a willful disclosure or a disclosure which is the result of gross negligence, punitive damages; plus

        `(B) the costs (including attorney's fees) of the action.

    `(d) DEFINITIONS- For purposes of this section--

      `(1) FINANCIAL INSTITUTION- The term `financial institution' means--

        `(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 section 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- The term `financial record' has the meaning given such term in section 1101 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401).'.

Subtitle G--Enforcement of Support Orders

SEC. 361. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES.

    (a) COLLECTION OF FEES- Section 6305(a) of the Internal Revenue Code of 1986 (relating to collection of certain liability) is amended--

      (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 Welfare' each place it appears and inserting `Secretary of Health and Human Services'.

    (b) EFFECTIVE DATE- The amendments made by this section shall become effective October 1, 1997.

SEC. 362. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL EMPLOYEES.

    (a) CONSOLIDATION AND STREAMLINING OF AUTHORITIES- Section 459 (42 U.S.C. 659) is amended to read as follows:

`SEC. 459. CONSENT BY THE UNITED STATES TO INCOME WITHHOLDING, GARNISHMENT, AND SIMILAR PROCEEDINGS FOR ENFORCEMENT OF CHILD SUPPORT AND ALIMONY OBLIGATIONS.

    `(a) CONSENT TO SUPPORT ENFORCEMENT- Notwithstanding 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 instrumentality 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 Columbia 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 individual obligee, to enforce the legal obligation of the individual to provide child support or alimony.

    `(b) CONSENT TO REQUIREMENTS APPLICABLE TO PRIVATE PERSON- With respect to notice to withhold income pursuant to subsection (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 PROCESS--

      `(1) DESIGNATION OF AGENT- The head of each agency subject to this section shall--

        `(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 designation of the agent or agents, identified by title or position, mailing address, and telephone number.

      `(2) RESPONSE TO NOTICE OR PROCESS- If an agent designated pursuant to paragraph (1) of this subsection receives notice pursuant to State procedures in effect pursuant to subsection (a)(1) or (b) of section 466, or is effectively served with any order, process, or interrogatory, with respect to an individual's child support or alimony payment obligations, the agent shall--

        `(A) as soon as possible (but not later than 15 days) thereafter, send written notice of the notice or service (together with a copy of the notice or service) to the individual at the duty station or last-known home address of the individual;

        `(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 applicable provisions of section 466; and

        `(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- If 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--

      `(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 section 466(b) and the regulations prescribed under such section; and

      `(3) such moneys as remain after compliance with paragraphs (1) and (2) shall be available to satisfy any other such processes on a first-come, first-served basis, with any such process being satisfied out of such moneys as remain after the satisfaction of all such processes which have been previously served.

    `(e) NO REQUIREMENT TO VARY PAY CYCLES- A 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-

      `(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 accordance with this section and the regulations issued to carry out this section.

      `(2) No Federal employee whose duties include taking actions 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- Authority to promulgate regulations for the implementation of this section shall, insofar as this section applies to moneys due from (or payable by)--

      `(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 vested in the Chief Justice of the United States (or the designee of the Chief Justice).

    `(h) MONEYS SUBJECT TO PROCESS-

      `(1) IN GENERAL- Subject 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--

        `(A) consist of--

          `(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--

            `(I) under the insurance system established by title II;

            `(II) under any other system or fund established by the United States which provides for the payment of pensions, retirement or retired pay, annuities, dependents' or survivors' benefits, or similar amounts payable on account of personal services performed by the individual or any other individual;

            `(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 retainer pay if the former member has waived a portion of the retired or retainer pay in order to receive such compensation; and

          `(iii) worker's compensation benefits paid under Federal or State law but

        `(B) do not include any payment--

          `(i) by way of reimbursement or otherwise, to defray expenses incurred by the individual in carrying out duties associated with the employment of the individual; or

          `(ii) as allowances for members of the uniformed services payable pursuant to chapter 7 of title 37, United States Code, as prescribed by the Secretaries concerned (defined by section 101(5) of such title) as necessary for the efficient performance of duty.

      `(2) CERTAIN AMOUNTS EXCLUDED- In determining the amount of any moneys due from, or payable by, the United States to any individual, there shall be excluded amounts which--

        `(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 ordered by court-martial;

        `(C) are properly withheld for Federal, State, or local income tax purposes, if the withholding of the amounts is 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 withholding 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 obligation 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 coverage); or

        `(F) are deducted as normal life insurance premiums from salary or other remuneration for employment (not including amounts deducted for supplementary coverage).

    `(i) DEFINITIONS- For purposes of this section--

      `(1) UNITED STATES- The 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 wholly owned by the Federal Government, and the governments of the territories and possessions of the United States.

      `(2) CHILD SUPPORT- The 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 judgment, 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-

        `(A) IN GENERAL- The 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 individual, 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- Such term does not include--

          `(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.

      `(4) PRIVATE PERSON- The 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- The term `legal process' means any writ, order, summons, or other similar process in the nature of garnishment--

        `(A) which is issued by--

          `(i) a court or an administrative agency of competent jurisdiction in any State, territory, or possession of the United States;

          `(ii) a court or an administrative agency of competent 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 satisfy a legal obligation of the individual to provide child support or make alimony payments.'.

    (b) CONFORMING AMENDMENTS-

      (1) TO PART D OF TITLE IV- Sections 461 and 462 (42 U.S.C. 661 and 662) are repealed.

      (2) TO TITLE 5, UNITED STATES CODE- Section 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 Security 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-

      (1) DEFINITION OF COURT- Section 1408(a)(1) of title 10, United States Code, is amended--

        (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 (including 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 Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.'.

      (2) DEFINITION OF COURT ORDER- Section 1408(a)(2) of such title is amended--

        (A) by inserting `or a support order, as defined in section 453(p) of the Social Security Act (42 U.S.C. 653(p)),' before `which--';

        (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- Section 1408(d) of such title is amended--

        (A) in the heading, by inserting `(OR FOR BENEFIT OF)' before `SPOUSE OR'; and

        (B) in paragraph (1), in the first 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 designated 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- Section 1408 of such title is amended by adding at the end the following new subsection:

    `(j) RELATIONSHIP TO OTHER LAWS- In 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 provisions of section 459 of such Act.'.

    (d) EFFECTIVE DATE- The 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 MEMBERS OF THE ARMED FORCES.

    (a) AVAILABILITY OF LOCATOR INFORMATION-

      (1) MAINTENANCE OF ADDRESS INFORMATION- The Secretary 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 locator service.

      (2) TYPE OF ADDRESS-

        (A) RESIDENTIAL ADDRESS- Except as provided in subparagraph (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- The 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--

          (i) who is permanently assigned overseas, to a vessel, or to a routinely deployable unit; or

          (ii) with respect to whom the Secretary concerned makes a determination that the member's residential address should not be disclosed due to national security or safety concerns.

      (3) UPDATING OF LOCATOR INFORMATION- Within 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- The Secretary of Defense shall make information regarding the address of a member 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-

      (1) REGULATIONS- The Secretary of each military department, 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--

        (A) the leave is needed for the member to attend a hearing described in paragraph (2);

        (B) the member is not serving in or with a unit deployed 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- Paragraph (1) applies to a hearing that is conducted by a court or pursuant to an administrative process established under State law, in connection with a civil action--

        (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- For purposes of this subsection--

        (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-

      (1) DATE OF CERTIFICATION OF COURT ORDER- Section 1408 of title 10, United States Code, as amended by section 362(c)(4) of this Act, is amended--

        (A) by redesignating subsections (i) and (j) as subsections (j) and (k), respectively; and

        (B) by inserting after subsection (h) the following new subsection:

    `(i) CERTIFICATION DATE- It is not necessary that the date of a certification of the authenticity or completeness of a copy of a court order for child support received by the Secretary concerned for the purposes of this section be recent in relation to the date of receipt by the Secretary.'.

      (2) PAYMENTS CONSISTENT WITH ASSIGNMENTS OF RIGHTS TO STATES- Section 1408(d)(1) of such title is amended by inserting after the first sentence the following new sentence: `In the case of a spouse or former spouse who, pursuant to section 408(a)(3) of the Social Security Act (42 U.S.C. 608(a)(4)), assigns to a State the rights of the spouse or former spouse to receive support, the Secretary concerned may make the child support 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- Section 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 enactment 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- The Secretary of Defense shall begin payroll deductions within 30 days after receiving notice of withholding, or for the first 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- In order to satisfy section 454(20)(A), each State must have in effect--

      `(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 Secretary finds affords comparable rights to child support creditors; 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--

        `(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- Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317, and 323 of this Act, is amended by inserting after paragraph (14) the following new paragraph:

      `(15) PROCEDURES TO ENSURE THAT PERSONS OWING PAST-DUE SUPPORT WORK OR HAVE A PLAN FOR PAYMENT OF SUCH SUPPORT-

        `(A) IN GENERAL- Procedures under which the State has the authority, in any case in which an individual owes past-due support with respect to a child receiving assistance 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--

          `(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 option of the State, the State agency administering the State program under this part, deems appropriate.

        `(B) PAST-DUE SUPPORT DEFINED- For 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- The 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- As used in this part, the term `support order' means a judgment, 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 related costs and fees, interest and penalties, income withholding, 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-

        `(A) IN GENERAL- Procedures (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 delinquent in the payment of support, and the amount of overdue support owed by such parent.

        `(B) SAFEGUARDS- Procedures ensuring that, in carrying out subparagraph (A), information with respect to a noncustodial parent is reported--

          `(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- Procedures under which--

        `(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 described 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 paragraph (15) the following:

      `(16) AUTHORITY TO WITHHOLD OR SUSPEND LICENSES- 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 subpoenas or warrants relating to paternity or child support proceedings.'.

SEC. 370. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD SUPPORT.

    (a) HHS CERTIFICATION PROCEDURE-

      (1) SECRETARIAL RESPONSIBILITY- Section 452 (42 U.S.C. 652), as amended by section 345 of this Act, is amended by adding 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 individual owes arrearages of child support in an amount exceeding $5,000, the Secretary shall transmit such certification to the Secretary of State for action (with respect to denial, revocation, or limitation of passports) pursuant to paragraph (2).

    `(2) The Secretary of State shall, upon certification by the Secretary transmitted under paragraph (1), refuse to issue a passport to such individual, and may revoke, restrict, or limit a passport issued previously to such individual.

    `(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- Section 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--

        (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 procedure for certifying to the Secretary, for purposes of the procedure under section 452(k), determinations that individuals owe arrearages of child support in an amount exceeding $5,000, under which procedure--

        `(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- This section and the amendments made by this section shall become effective October 1, 1997.

SEC. 371. INTERNATIONAL SUPPORT ENFORCEMENT.

    (a) AUTHORITY FOR INTERNATIONAL AGREEMENTS- Part 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-

      `(1) DECLARATION- The Secretary of State, with the concurrence of the Secretary of Health and Human Services, is authorized to declare any foreign country (or a political subdivision 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- A 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--

        `(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 implementation of such procedures is so unsatisfactory, that such procedures do not meet the criteria for such a declaration; or

        `(B) continued operation of the declaration is not consistent with the purposes of this part.

      `(3) FORM OF DECLARATION- A declaration under paragraph (1) may be made in the form of an international agreement, in connection with an international agreement or corresponding foreign declaration, or on a unilateral basis.

    `(b) STANDARDS FOR FOREIGN SUPPORT ENFORCEMENT PROCEDURES-

      `(1) MANDATORY ELEMENTS- Support enforcement procedures of a foreign country which may be the subject of a declaration pursuant to subsection (a)(1) shall include the following elements:

        `(A) The foreign country (or political subdivision thereof) has in effect procedures, available to residents of the United States--

          `(i) for establishment of paternity, and for establishment of orders of support for children and custodial 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), including 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--

          `(i) facilitating support enforcement in cases involving residents of the foreign country and residents of the United States; and

          `(ii) ensuring compliance with the standards established pursuant to this subsection.

      `(2) ADDITIONAL ELEMENTS- The 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 section.

    `(c) DESIGNATION OF UNITED STATES CENTRAL AUTHORITY- It shall be the responsibility of the Secretary of Health and Human Services to facilitate support enforcement in cases involving residents of the United States and residents of foreign countries that are the subject of a declaration under this section, by activities including--

      `(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 activities as the Secretary may find necessary and appropriate.

    `(d) EFFECT ON OTHER LAWS- States may enter into reciprocal arrangements for the establishment and enforcement of support obligations with foreign countries that are not the subject of a declaration pursuant to subsection (a), to the extent consistent with Federal law.'.

    (b) STATE PLAN REQUIREMENT- Section 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--

      (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 paragraph:

      `(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-

        `(A) IN GENERAL- Procedures under which the State agency shall enter into agreements with financial institutions doing business in the State--

          `(i) to develop and operate, in coordination with such financial institutions, a data match system, using automated data exchanges to the maximum extent feasible, in which each such financial institution is required to provide for each calendar quarter the name, record address, social security number or other taxpayer identification number, and other identifying information 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 number; and

          `(ii) in response to a notice of lien or levy, encumber 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 paragraph (4).

        `(B) REASONABLE FEES- The State agency may pay a reasonable fee to a financial institution for conducting the data match provided for in subparagraph (A)(i), not to exceed the actual costs incurred by such financial institution.

        `(C) LIABILITY- A financial institution shall not be liable under any Federal or State law to any person--

          `(i) for any disclosure of information to the State agency under subparagraph (A)(i);

          `(ii) for encumbering or surrendering any assets held by such financial institution in response to a notice of lien or levy issued by the State agency as provided 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- For purposes of this paragraph--

          `(i) FINANCIAL INSTITUTION- The term `financial institution' has the meaning given to such term by section 469A(d)(1).

          `(ii) ACCOUNT- The term `account' means a demand deposit account, checking or negotiable withdrawal order account, savings account, time deposit account, or money-market mutual fund account.'.

SEC. 373. ENFORCEMENT OF ORDERS AGAINST PATERNAL OR MATERNAL 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 MATERNAL GRANDPARENTS- Procedures 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- Section 523(a) of title 11, United States Code, is amended--

      (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--

        `(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)(3)'.

    (b) AMENDMENT TO THE SOCIAL SECURITY ACT- Section 456(b) (42 U.S.C. 656(b)) is amended to read as follows:

    `(b) NONDISCHARGEABILITY- A 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- The 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.

SEC. 375. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES.

    (a) CHILD SUPPORT ENFORCEMENT AGREEMENTS- Section 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--

      (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 paragraph:

      `(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 authority 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 organization, under which the State and tribe or organization shall provide 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 organization to the State agency, or conversely, by the State agency 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: `Nothing in paragraph (33) shall void any provision of any cooperative 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 prescribe 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- Section 455 (42 U.S.C. 655) is amended by adding at the end the following new subsection:

    `(b) The Secretary may, in appropriate cases, make direct payments 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- Paragraph (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 Assistance Act (25 U.S.C. 450b))' after `law enforcement officials'.

    (d) CONFORMING AMENDMENT- Subsection (c) of section 428 (42 U.S.C. 628) is amended to read as follows:

    `(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--Medical Support

SEC. 381. CORRECTION TO ERISA DEFINITION OF MEDICAL CHILD SUPPORT ORDER.

    (a) IN GENERAL- Section 609(a)(2)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1169(a)(2)(B)) is amended--

      (1) by striking `issued by a court of competent jurisdiction';

      (2) by striking the period at the end of clause (ii) and inserting 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 administrative process established under State law and has the force and effect of law under applicable State law.'.

    (b) EFFECTIVE DATE-

      (1) IN GENERAL- The 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- Any 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--

        (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 accordance 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 inserting after paragraph (18) the following new paragraph:

      `(19) HEALTH CARE COVERAGE- Procedures under which all child support orders enforced pursuant to this part shall include a provision for the health care coverage of the child, and in the case in which a noncustodial parent provides such coverage 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 enroll the child in the noncustodial parent's health plan, unless the noncustodial parent contests the notice.'.

Subtitle I--Enhancing Responsibility and Opportunity for Non-Residential Parents

SEC. 391. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    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 PROGRAMS.

    `(a) IN GENERAL- The Administration for Children and Families shall make grants under this section to enable States to establish and administer programs to support and facilitate noncustodial parents' access to and visitation of their children, by means of activities including mediation (both voluntary and mandatory), counseling, education, development of parenting plans, visitation enforcement (including monitoring, supervision and neutral drop-off and pickup), and development of guidelines for visitation and alternative custody arrangements.

    `(b) AMOUNT OF GRANT- The 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--

      `(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-

      `(1) IN GENERAL- The 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- The Administration for Children and Families shall adjust allotments to States under paragraph (1) as necessary to ensure that no State is allotted less than--

        `(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- A State to which a grant is made under this section may not use the grant to supplant expenditures by the State for activities specified in subsection (a), but shall use the grant to supplement such expenditures at a level at least equal to the level of such expenditures for fiscal year 1995.

    `(e) STATE ADMINISTRATION- Each State to which a grant is made under this section--

      `(1) may administer State programs funded with the grant, directly or through grants to or contracts with courts, local public 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.'.

Subtitle J--Effective Dates and Conforming Amendments

SEC. 395. EFFECTIVE DATES AND CONFORMING AMENDMENTS.

    (a) IN GENERAL- Except as otherwise specifically provided (but subject to subsections (b) and (c))--

      (1) the provisions of this title requiring the enactment or amendment of State laws under section 466 of the Social Security 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- The provisions of this title shall become effective with respect to a State on the later of--

      (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 legislature 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- 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--

      (1) 1 year after the effective date of the necessary State constitutional amendment; or

      (2) 5 years after the date of the enactment of this Act.

    (d) CONFORMING AMENDMENTS-

      (1) The following provisions are amended by striking `absent' 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 subsections (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)).

        (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--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

SEC. 400. STATEMENTS OF NATIONAL POLICY CONCERNING WELFARE AND IMMIGRATION.

    The Congress makes the following statements concerning national 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 immigration statutes.

      (2) It continues to be the immigration policy of the United States that--

        (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 unenforceable financial support agreements have proved wholly incapable 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 immigration policy.

      (6) It is a compelling government interest to remove the incentive for illegal immigration provided by the availability of public benefits.

      (7) With respect to the State authority to make determinations concerning the eligibility of qualified aliens for public benefits in this title, a State that chooses to follow the Federal classification in determining the eligibility of such aliens for public assistance shall be considered to have chosen the least restrictive means available for achieving the compelling governmental interest of assuring that aliens be self-reliant in accordance with national immigration policy.

Subtitle A--Eligibility for Federal Benefits

SEC. 401. ALIENS WHO ARE NOT QUALIFIED ALIENS INELIGIBLE FOR FEDERAL PUBLIC BENEFITS.

    (a) IN GENERAL- Notwithstanding 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 Federal public benefit (as defined in subsection (c)).

    (b) EXCEPTIONS-

      (1) Subsection (a) shall not apply with respect to the fol-lowing Federal public benefits:

        (A) Medical assistance under title XIX of the Social Security 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 related to an organ transplant procedure, if the alien involved otherwise meets the eligibility requirements for medical assistance under the State plan approved under such title (other than the requirement of the receipt of aid or assistance under title IV of such Act, supplemental security income benefits under title XVI of such Act, or a State supplementary payment).

        (B) Short-term, non-cash, in-kind emergency disaster relief.

        (C) Public health assistance (not including any assistance under title XIX of the Social Security Act) for immunizations with respect to immunizable diseases and for testing and treatment of symptoms of communicable diseases whether or not such symptoms are caused by a communicable 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 consultation 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 Secretary 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 lawfully 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 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-

      (1) Except as provided in paragraph (2), for purposes of this title the term `Federal public benefit' means--

        (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 individual, 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--

        (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 Nationality Act qualified for such benefits and for whom the United States under reciprocal treaty agreements is required to pay benefits, as determined by the Attorney General, 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-

      (1) IN GENERAL- Notwithstanding 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 para-graph (3)).

      (2) EXCEPTIONS-

        (A) TIME-LIMITED EXCEPTION FOR REFUGEES AND ASYLEES- Paragraph (1) shall not apply to an alien until 5 years after the date--

          (i) an alien is admitted to the United States as a refugee under section 207 of the Immigration and Nationality Act;

          (ii) an alien is granted asylum under section 208 of such Act; or

          (iii) an alien's deportation is withheld under section 243(h) of such Act.

        (B) CERTAIN PERMANENT RESIDENT ALIENS- Paragraph (1) shall not apply to an alien who--

          (i) is lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act; and

          (ii)(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 period.

        (C) VETERAN AND ACTIVE DUTY EXCEPTION- Paragraph (1) shall not apply to an alien who is lawfully residing in any State and is--

          (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 training) 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-

          (i) SSI-

            (I) IN GENERAL- With respect to the specified Federal program described in paragraph (3)(A), during the period beginning on the date of the enactment of this Act and ending on the date which is 1 year after such date of enactment, the Commissioner of Social Security shall redetermine the eligibility of any individual who is receiving benefits under such program as of the date of the enactment of this Act and whose eligibility for such benefits may terminate by reason of the provisions of this subsection.

            (II) REDETERMINATION CRITERIA- With respect to any redetermination under subclause (I), the Commissioner of Social Security shall apply the eligibility criteria for new applicants for benefits under such program.

            (III) GRANDFATHER PROVISION- The provisions of this subsection and the redetermination under subclause (I), shall only apply with respect to the benefits of an individual described in subclause (I) for months beginning on or after the date of the redetermination with respect to such individual.

            (IV) NOTICE- Not later than March 31, 1997, the Commissioner of Social Security shall notify an individual described in subclause (I) of the provisions of this clause.

          (ii) FOOD STAMPS-

            (I) IN GENERAL- With respect to the specified Federal program described in paragraph (3)(B), during the period beginning on the date of enactment 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 benefits under such program as of the date of enactment of this Act and whose eligibility for such benefits may terminate by reason of the provisions of this subsection.

            (II) RECERTIFICATION CRITERIA- With respect to any recertification under subclause (I), the State agency shall apply the eligibility criteria for applicants for benefits under such program.

            (III) GRANDFATHER PROVISION- The provisions 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 enactment.

      (3) SPECIFIED FEDERAL PROGRAM DEFINED- For purposes of this title, the term `specified Federal program' means any of the following:

        (A) SSI- The supplemental security income program under title XVI of the Social Security Act, including 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.

        (B) FOOD STAMPS- The food stamp program as defined in section 3(h) of the Food Stamp Act of 1977.

    (b) LIMITED ELIGIBILITY FOR DESIGNATED FEDERAL PROGRAMS-

      (1) IN GENERAL- Notwithstanding 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 designated Federal program (as defined in paragraph (3)).

      (2) EXCEPTIONS- Qualified aliens under this paragraph shall be eligible for any designated Federal program.

        (A) TIME-LIMITED EXCEPTION FOR REFUGEES AND ASYLEES-

          (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- An alien who--

          (i) is lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act; and

          (ii)(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 period.

        (C) VETERAN AND ACTIVE DUTY EXCEPTION- An alien who is lawfully residing in any State and is--

          (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 training) 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- An 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 benefits until January 1, 1997.

      (3) DESIGNATED FEDERAL PROGRAM DEFINED- For purposes of this title, the term `designated Federal program' means any of the following:

        (A) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES- The program of block grants to States for temporary assistance for needy families under part A of title IV of the Social Security Act.

        (B) SOCIAL SERVICES BLOCK GRANT- The program of block grants to States for social services under title XX of the Social Security Act.

        (C) MEDICAID- A 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- Notwithstanding 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 5 years beginning on the date of the alien's entry into the United States with a status within the meaning of the term `qualified alien'.

    (b) EXCEPTIONS- The limitation under subsection (a) shall not apply to the following aliens:

      (1) EXCEPTION FOR REFUGEES AND ASYLEES-

        (A) An alien who is admitted to the United States as a refugee under section 207 of the Immigration and Nationality Act.

        (B) An alien who is granted asylum under section 208 of such Act.

        (C) An alien whose deportation is being withheld under section 243(h) of such Act.

      (2) VETERAN AND ACTIVE DUTY EXCEPTION- An alien who is lawfully residing in any State and is--

        (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 individual described in subparagraph (A) or (B).

    (c) APPLICATION OF TERM FEDERAL MEANS-TESTED PUBLIC BENEFIT-

      (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 follows:

        (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 assistance under title XIX of the Social Security Act) for immunizations with respect to immunizable diseases and for testing and treatment of symptoms of communicable diseases whether or not such symptoms are caused by a communicable 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 subsection (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 consultation 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.

        (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- The limitation under subsection (a) shall not apply to refugee and entrant assistance activities, authorized by title IV of the Immigration and Nationality Act and section 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- Each 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 notification to the public and to program recipients of the changes regarding eligibility for any such program pursuant to this subtitle.

    (b) INFORMATION REPORTING UNDER TITLE IV OF THE SOCIAL SECURITY ACT- Part 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 information on, any individual who the State knows is unlawfully in the United States.'.

    (c) SSI- Section 1631(e) of such Act (42 U.S.C. 1383(e)) is amended--

      (1) by redesignating the paragraphs (6) and (7) inserted by sections 206(d)(2) and 206(f)(1) of the Social Security Independence and Programs Improvement Act of 1994 (Public Law 103-296; 108 Stat. 1514, 1515) as paragraphs (7) and (8), respectively; and

      (2) by adding at the end the following new paragraph:

    `(9) Notwithstanding any other provision of law, the Commissioner shall, at least 4 times annually and upon request of the Immigration 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 information at such times with respect to any individual who the State knows is unlawfully in the United States.'.

    (d) INFORMATION REPORTING FOR HOUSING PROGRAMS- Title 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 Immigration 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 Secretary 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--Eligibility for State and Local Public Benefits Programs

SEC. 411. ALIENS WHO ARE NOT QUALIFIED ALIENS OR NONIMMIGRANTS INELIGIBLE FOR STATE AND LOCAL PUBLIC BENEFITS.

    (a) IN GENERAL- Notwithstanding any other provision of law and except as provided in subsections (b) and (d), an alien who is not--

      (1) a qualified alien (as defined in section 431),

      (2) a nonimmigrant under the Immigration and Nationality 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- Subsection (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 symptoms 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) specified 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 assistance provided on the individual recipient's income or resources; and (C) are necessary for the protection of life or safety.

    (c) STATE OR LOCAL PUBLIC BENEFIT DEFINED-

      (1) Except as provided in paragraphs (2) and (3), for purposes of this subtitle the term `State or local public benefit' means--

        (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

        (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 individual, 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--

        (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 Nationality Act qualified for such benefits and for whom the United States under reciprocal treaty agreements is required 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- A State may provide 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- Notwithstanding any other provision of law and except as provided in subsection (b), a State is authorized to determine 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 paroled into the United States under section 212(d)(5) of such Act for less than one year.

    (b) EXCEPTIONS- Qualified aliens under this subsection shall be eligible for any State public benefits.

      (1) TIME-LIMITED EXCEPTION FOR REFUGEES AND ASYLEES-

        (A) 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.

        (B) An alien who is granted asylum under section 208 of such Act until 5 years after the date of such grant of asylum.

        (C) An alien whose deportation is being withheld under section 243(h) of such Act until 5 years after such with-holding.

      (2) CERTAIN PERMANENT RESIDENT ALIENS- An alien who--

        (A) is lawfully admitted to the United States for permanent 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 period.

      (3) VETERAN AND ACTIVE DUTY EXCEPTION- An alien who is lawfully residing in any State and is--

        (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 individual described in subparagraph (A) or (B).

      (4) TRANSITION FOR THOSE CURRENTLY RECEIVING BENEFITS- An 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--Attribution of Income and Affidavits of Support

SEC. 421. FEDERAL ATTRIBUTION OF SPONSOR'S INCOME AND RESOURCES TO ALIEN.

    (a) IN GENERAL- Notwithstanding 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 Immigration 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- Subsection (a) shall apply with respect to an alien until such time as the alien--

      (1) achieves United States citizenship through naturalization pursuant to chapter 2 of title III of the Immigration and Nationality Act; or

      (2)(A) 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 (B) 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 period.

    (c) REVIEW OF INCOME AND RESOURCES OF ALIEN UPON REAPPLICATION- Whenever an alien is required to reapply for benefits under any Federal means-tested public benefits program, the applicable agency shall review the income and resources attributed to the alien under subsection (a).

    (d) APPLICATION-

      (1) If on the date of the enactment of this Act, a Federal means-tested public benefits program attributes a sponsor'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 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 sponsor'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- Except as provided in subsection (b), in determining the eligibility and the amount of benefits of an alien for any State public benefits (as defined 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--

      (1) the income and resources of any individual who executed 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- Subsection (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 symptoms 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) specified 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 of assistance, the amount of assistance provided, or the cost of assistance provided on the individual recipient's income or resources; and (C) are necessary for the protection of life or safety.

SEC. 423. REQUIREMENTS FOR SPONSOR'S AFFIDAVIT OF SUPPORT.

    (a) IN GENERAL- Title II of the Immigration and Nationality Act is amended by inserting after section 213 the following new section:

`REQUIREMENTS FOR SPONSOR'S AFFIDAVIT OF SUPPORT

    `SEC. 213A. (a) ENFORCEABILITY- (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--

      `(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 jurisdiction 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- Not later than 90 days after the date of enactment of this section, the Attorney General, in consultation with the Secretary of State and the Secretary of Health and Human Services, shall formulate an affidavit of support consistent with the provisions of this section.

    `(c) REMEDIES- Remedies available to enforce an affidavit of support under this section include any or all of the remedies described in section 3201, 3203, 3204, or 3205 of title 28, United States Code, as well as an order for specific performance and payment of legal fees and other costs of collection, and include corresponding 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-

      `(1) IN GENERAL- The 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- Any person subject to the requirement of paragraph (1) who fails to satisfy such requirement shall be subject to a civil penalty of--

        `(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.

    `(e) REIMBURSEMENT OF GOVERNMENT EXPENSES- (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 appropriate 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 affidavit of support.

    `(3) If the sponsor fails to abide by the repayment terms established by such agency, the agency may, within 60 days of such failure, 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 collecting any moneys owed. Nothing in this subsection shall preclude any appropriate Federal, State, or local agency from directly requesting 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- For the purposes of this section--

      `(1) SPONSOR- The term `sponsor' means an indi-vidual who--

        `(A) is a citizen or national of the United States or an alien who is lawfully admitted to the United States for permanent 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- The table of contents of such Act is amended by inserting after the item relating to section 213 the following:

      `Sec. 213A. Requirements for sponsor's affidavit of support.'.

    (c) EFFECTIVE DATE- Subsection (a) of section 213A of the Immigration 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 earlier 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.

    (d) BENEFITS NOT SUBJECT TO REIMBURSEMENT- Requirements 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 including any assistance under title XIX of the Social Security Act) with respect to immunizable diseases and for testing and treatment 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 kitchens, 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 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 assistance provided on the individual recipient's income or resources; and (C) are necessary for the protection of life or safety.

      (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--General Provisions

SEC. 431. DEFINITIONS.

    (a) IN GENERAL- Except 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- For 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--

      (1) an alien who is lawfully admitted for permanent residence 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,

      (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 section 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 BENEFITS.

    (a) IN GENERAL- Not 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 Services, shall promulgate regulations requiring verification that a person 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 regulations shall, to the extent feasible, require that information requested and exchanged be similar in form and manner to information requested and exchanged under section 1137 of the Social Security Act.

    (b) STATE COMPLIANCE- Not 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 regulations.

    (c) AUTHORIZATION OF APPROPRIATIONS- There 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-

      (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 governmental 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- This title does not apply to any Federal, State, or local governmental program, assistance, or benefits provided to an alien under any program of foreign assistance as determined by the Secretary of State in consultation with the Attorney General.

    (c) SEVERABILITY- If any provision of this title or the application 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 affected thereby.

SEC. 434. COMMUNICATION BETWEEN STATE AND LOCAL GOVERNMENT AGENCIES AND THE IMMIGRATION AND NATURALIZATION 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 Immigration and Naturalization Service information regarding the immigration 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 qualifying quarters of coverage under title II of the Social Security Act an alien shall be credited with--

      (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 married 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 December 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 coverage is so credited.

Subtitle E--Conforming Amendments Relating to Assisted Housing

SEC. 441. CONFORMING AMENDMENTS RELATING TO ASSISTED HOUSING.

    (a) LIMITATIONS ON ASSISTANCE- Section 214 of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a) is amended--

      (1) by striking `Secretary of Housing and Urban Development' each place it appears and inserting `applicable Secretary';

      (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 striking `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 `applicable Secretary'; and

      (5) by adding at the end the following new subsection:

    `(h) For purposes of this section, the term `applicable Secretary' means--

      `(1) the Secretary of Housing and Urban Development, with respect to financial assistance administered by such Secretary 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- Section 501(h) of the Housing Act of 1949 (42 U.S.C. 1471(h)) is amended--

      (1) by striking `(1)';

      (2) by striking `by the Secretary of Housing and Urban Development'; and

      (3) by striking paragraph (2).

Subtitle F--Earned Income Credit Denied to Unauthorized Employees

SEC. 451. EARNED INCOME CREDIT DENIED TO INDIVIDUALS NOT AUTHORIZED TO BE EMPLOYED IN THE UNITED STATES.

    (a) IN GENERAL- Section 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 subparagraph:

        `(F) IDENTIFICATION NUMBER REQUIREMENT- The term `eligible individual' does not include any individual who does not include on the return of tax for the taxable year--

          `(i) such individual's taxpayer identification number, and

          `(ii) if the individual is married (within the meaning of section 7703), the taxpayer identification number of such individual's spouse.'.

    (b) SPECIAL IDENTIFICATION NUMBER- Section 32 of such Code is amended by adding at the end the following new subsection:

    `(l) IDENTIFICATION NUMBERS- Solely for purposes of subsections (c)(1)(F) and (c)(3)(D), a taxpayer identification number means a social security number issued to an individual by the Social Security Administration (other than a social security number issued pursuant to clause (II) (or that portion of clause (III) that relates 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- Section 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 inserting 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 section 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- The 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 enactment of this Act.

TITLE V--CHILD PROTECTION

SEC. 501. AUTHORITY OF STATES TO MAKE FOSTER CARE MAINTENANCE PAYMENTS ON BEHALF OF CHILDREN IN ANY PRIVATE 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 INFORMATION 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- The 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 neglected.

    `(b) REQUIREMENTS- The study required by subsection (a) shall--

      `(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- In conducting the study required by subsection (a), the Secretary should--

      `(1) carefully consider selecting the sample from cases of confirmed abuse or neglect; and

      `(2) follow each case for several years while obtaining information on, among other things--

        `(A) the type of abuse or neglect involved;

        `(B) the frequency of contact with State or local agencies;

        `(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-

      `(1) IN GENERAL- From time to time, the Secretary shall prepare reports summarizing the results of the study required by subsection (a).

      `(2) AVAILABILITY- The 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- The Secretary may charge and collect a fee for the furnishing of reports under para-graph (2).

    `(e) APPROPRIATION- Out of any money in the Treasury of the United States not otherwise appropriated, there are appropriated to 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 sec-tion 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--

      (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 preference 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--CHILD CARE

SEC. 601. SHORT TITLE AND REFERENCES.

    (a) SHORT TITLE- This title may be cited as the `Child Care and Development Block Grant Amendments of 1996'.

    (b) REFERENCES- Except 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 provision 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--

      (1) in the section heading by inserting `AND GOALS' after `TITLE';

      (2) by inserting `(a) SHORT TITLE- ' before `This'; and

      (3) by adding at the end the following:

    `(b) GOALS- The goals of this subchapter are--

      `(1) to allow each State maximum flexibility in developing child care programs and policies that best suit the needs of children 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 information 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, licensing, and registration standards established in State regulations.'.

SEC. 603. AUTHORIZATION OF APPROPRIATIONS AND ENTITLEMENT AUTHORITY.

    (a) IN GENERAL- Section 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 subchapter $1,000,000,000 for each of the fiscal years 1996 through 2002.'.

    (b) SOCIAL SECURITY ACT- Part A of title IV of the Social Security 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-

      `(1) GENERAL ENTITLEMENT- Subject to the amount appropriated 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--

        `(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--

          `(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-

        `(A) GRANTS- The Secretary shall use any amounts appropriated for a fiscal year under paragraph (3), and remaining 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- Subject 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 before October 1, 1995).

        `(C) MATCHING REQUIREMENT- The Secretary shall pay to each eligible State in a fiscal year an amount, under a grant under subparagraph (A), equal to the Federal medical assistance percentage for such State for fiscal year 1995 (as defined in section 1905(b)) of so much of the expenditures 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 fiscal year 1994 or 1995 (whichever is greater) that equal the non-Federal share for the programs described in subparagraph (A) of paragraph (1).

        `(D) REDISTRIBUTION-

          `(i) IN GENERAL- With 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 Secretary shall make such amounts available in the subsequent fiscal year for carrying out such purpose to one 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- 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 redistribution of amounts under clause (i) shall be made as close as practicable to the date on which such determination is made. Any amount made available to a State from an appropriation for a fiscal year in accordance 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- For grants under this section, there are appropriated--

        `(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- The 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-

      `(1) IN GENERAL- Amounts 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- A State shall ensure that not less than 70 percent of the total amount of funds received 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 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- Notwithstanding 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 established by the State under such Act, and be subject to requirements and limitations of such Act.

    `(d) DEFINITION- As 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--

      (1) in paragraph (1)--

        (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 hearing,' 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--

      (1) in subsection (b)--

        (A) by striking `implemented--' and all that follows through `(2)' and inserting `implemented'; and

        (B) by striking `for subsequent State plans';

      (2) in subsection (c)--

        (A) in paragraph (2)--

          (i) in subparagraph (A)--

            (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 detailed description of the procedures the State will implement to carry out the requirements of this subparagraph';

          (ii) in subparagraph (B)--

            (I) by striking `Provide assurances' and inserting `Certify'; and

            (II) by inserting before the period at the end `and provide a detailed description of such procedures';

          (iii) in subparagraph (C)--

            (I) by striking `Provide assurances' and inserting `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 follows:

        `(D) CONSUMER EDUCATION INFORMATION- Certify that the State will collect and disseminate to parents of eligible 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 REQUIREMENTS-

          `(i) IN GENERAL- Certify that the State has in effect licensing requirements applicable to child care services provided within the State, and provide a detailed 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- In lieu of any licensing and regulatory requirements applicable under State and local law, the Secretary, in consultation with Indian tribes and tribal organizations, 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 subchapter.';

          (vi) in subparagraph (F) by striking `Provide assurances' and inserting `Certify';

          (vii) in subparagraph (G) by striking `Provide assurances' and inserting `Certify'; and

          (viii) by striking subparagraphs (H), (I), and (J) and inserting the following:

        `(H) MEETING THE NEEDS OF CERTAIN POPULATIONS- Demonstrate the manner in which the State will meet the specific child care needs of families who are receiving assistance 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 dependent on such assistance program.';

        (B) in paragraph (3)--

          (i) in subparagraph (A), by striking `(B) and (C)' and inserting `(B) through (D)';

          (ii) in subparagraph (B)--

            (I) by striking `- Subject to the reservation contained in subparagraph (C), the' and inserting `AND RELATED ACTIVITIES- The';

            (II) in clause (i) by striking `; and' at the end and inserting a period;

            (III) by striking `for--' and all that follows through `section 658E(c)(2)(A)' and inserting `for child care services on a sliding fee scale basis, activities that improve the quality or availability of such services, and any other activity that the State deems appropriate to realize any of the goals specified in paragraphs (2) through (5) of section 658A(b)'; and

            (IV) by striking clause (ii);

          (iii) by amending subparagraph (C) to read as follows:

        `(C) LIMITATION ON ADMINISTRATIVE COSTS- Not 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 incurred by such State to carry out all of its functions and duties under this subchapter. As used in the preceding sentence, 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- A State shall ensure that a substantial portion of the amounts available (after the State has complied with the requirement of section 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)--

          (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 striking `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 increase parental choice, and activities designed to improve the quality and availability of child care (such as resource and referral services).'.

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--

      (1) in paragraph (1), by striking `, and shall have' and all that follows through `(2)'; and

      (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 expended for purposes prohibited or not authorized by this subchapter, that the Secretary deduct from the administrative portion 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--

      (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--

      (1) in the section heading by striking `ANNUAL REPORT' and inserting `REPORTS';

      (2) in subsection (a), to read as follows:

    `(a) REPORTS-

      `(1) COLLECTION OF INFORMATION BY STATES-

        `(A) IN GENERAL- A State that receives funds to carry out this subchapter shall collect the information described in subparagraph (B) on a monthly basis.

        `(B) REQUIRED INFORMATION- The information required under this subparagraph shall include, with respect to a family unit receiving assistance under this subchapter information concerning--

          `(i) family income;

          `(ii) county of residence;

          `(iii) the gender, race, and age of children receiving such assistance;

          `(iv) whether the family includes only one parent;

          `(v) the sources of family income, including the amount obtained from (and separately identified)--

            `(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 center-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.

        `(C) SUBMISSION TO SECRETARY- A 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- The Secretary may disapprove the information collected by a State under this paragraph if the State uses sampling methods to collect such information.

      `(2) BIANNUAL REPORTS- Not later than December 31, 1997, and every 6 months thereafter, a State described in paragraph (1)(A) shall prepare and submit to the Secretary a report that includes aggregate data concerning--

        `(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 provided 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 information 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)--

        (A) in paragraph (1) by striking `a application' and inserting `an application';

        (B) in paragraph (2) by striking `any agency administering 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--

      (1) by striking `1993' and inserting `1997';

      (2) by striking `annually' and inserting `biennially'; and

      (3) by striking `Education and Labor' and inserting `Economic and Educational Opportunities'.

SEC. 613. ALLOTMENTS.

    Section 658O (42 U.S.C. 9858m) is amended--

      (1) in subsection (a)--

        (A) in paragraph (1)--

          (i) by striking `POSSESSIONS' and inserting `POSSESSIONS';

          (ii) by inserting `and' after `States,'; and

          (iii) by striking `, and the Trust Territory of the Pacific Islands'; and

        (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)--

        (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-

        `(A) REQUEST FOR USE OF FUNDS- An Indian tribe or tribal organization may submit to the Secretary a request to use amounts provided under this subsection for construction or renovation purposes.

        `(B) DETERMINATION- With respect to a request submitted 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 accordance with this subchapter, and that the lack of such facilities will inhibit the operation of such programs in the future, the Secretary may permit the tribe or organization to use assistance provided under this subsection to make payments for the construction or renovation of facilities that will be used to carry out such programs.

        `(C) LIMITATION- The Secretary may not permit an Indian 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 services provided by the tribe or organization as compared to the level of such services provided by the tribe or organization in the fiscal year preceding the year for which the determination under subparagraph (A) is being made.

        `(D) UNIFORM PROCEDURES- The Secretary shall develop and implement uniform procedures for the solicitation and consideration of requests under this paragraph.'; and

      (3) in subsection (e), by adding at the end thereof the following new paragraph:

      `(4) INDIAN TRIBES OR TRIBAL ORGANIZATIONS- Any portion of a grant or contract made to an Indian tribe or tribal organization 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 subsection (c) in accordance with their respective needs.'.

SEC. 614. DEFINITIONS.

    Section 658P (42 U.S.C. 9858n) is amended--

      (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);

      (3) in paragraph (4)(B), by striking `75 percent' and inserting `85 percent';

      (4) in paragraph (5)(B)--

        (A) by inserting `great grandchild, sibling (if such provider 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)--

        (A) by inserting `or' after `Samoa,'; and

        (B) by striking `, and the Trust Territory of the Pacific Islands';

      (7) in paragraph (14)--

        (A) by striking `The term' and inserting the following:

        `(A) IN GENERAL- The term'; and

        (B) by adding at the end thereof the following new subparagraph:

        `(B) OTHER ORGANIZATIONS- Such term includes a Native Hawaiian Organization, as defined in section 4009(4) of the Augustus F. Hawkins-Robert T. Stafford Elementary and Secondary School Improvement Amendments of 1988 (20 U.S.C. 4909(4)) and a private nonprofit organization established for the purpose of serving youth who are Indians or Native Hawaiians.'.

SEC. 615. EFFECTIVE DATE.

    (a) IN GENERAL- Except as provided in subsection (b), this title and the amendments made by this title shall take effect on October 1, 1996.

    (b) EXCEPTION- The amendment made by section 603(a) shall take effect on the date of enactment of this Act.

TITLE VII--CHILD NUTRITION PROGRAMS

Subtitle A--National School Lunch Act

SEC. 701. STATE DISBURSEMENT TO SCHOOLS.

    (a) IN GENERAL- Section 8 of the National School Lunch Act (42 U.S.C. 1757) is amended--

      (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), respectively;

      (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'.

    (b) DEFINITION OF CHILD- Section 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-

        `(A) IN GENERAL- The term `child' includes an indi-vidual, regardless of age, who--

          `(i) is determined by a State educational agency, in accordance with regulations prescribed by the Secretary, to have one or more mental or physical disabilities; and

          `(ii) is attending any institution, as defined in section 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 established for individuals with mental or physical dis-abilities.

        `(B) RELATIONSHIP TO CHILD AND ADULT CARE FOOD PROGRAM- No institution that is not otherwise eligible to participate in the program under section 17 shall be considered eligible because of this paragraph.'.

SEC. 702. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

    (a) NUTRITIONAL STANDARDS- Section 9(a) of the National School Lunch Act (42 U.S.C. 1758(a)) is amended--

      (1) in paragraph (2)--

        (A) by striking `(2)(A) Lunches' and inserting `(2) Lunches';

        (B) by striking subparagraph (B); and

        (C) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively;

      (2) by striking paragraph (3); and

      (3) by redesignating paragraph (4) as paragraph (3).

    (b) UTILIZATION OF AGRICULTURAL COMMODITIES- Section 9(c) of the National School Lunch Act (42 U.S.C. 1758(c)) is amended--

      (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- Section 9(f) of the National School Lunch Act (42 U.S.C. 1758(f)) is amended--

      (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- Except 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--

        `(A) are consistent with the goals of the most recent Dietary Guidelines for Americans published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 5341); and

        `(B) provide, on the average over each week, at least--

          `(i) with respect to school lunches, 1/3 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, 1/4 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)--

        (A) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively; and

        (B) in subparagraph (A), as so redesignated, by redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively; and

      (6) in paragraph (4), as redesignated by paragraph (3)--

        (A) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively;

        (B) in subparagraph (A), as redesignated by subparagraph (A), by redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively; and

        (C) in subparagraph (A)(ii), as redesignated by subparagraph (B), by striking `subparagraph (C)' and inserting `paragraph (3)'.

    (d) USE OF RESOURCES- Section 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- 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 unless 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 requiring the school food authority to submit a policy statement.'.

SEC. 704. SPECIAL ASSISTANCE.

    (a) EXTENSION OF PAYMENT PERIOD- Section 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 subparagraph,'.

    (b) ROUNDING RULE FOR LUNCH, BREAKFAST, AND SUPPLEMENT RATES-

      (1) IN GENERAL- The 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 supplements served to individuals not determined to be eligible for free or reduced price meals and supplements shall be computed to the nearest lower cent increment and based on the unrounded amount for the preceding 12-month period'.

      (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall become effective on July 1, 1997.

    (c) APPLICABILITY OF OTHER PROVISIONS- Section 11 of the National School Lunch Act (42 U.S.C. 1759a) is amended--

      (1) by striking subsection (d);

      (2) in subsection (e)(2)--

        (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- The 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- Section 12(c) of the National School Lunch Act (42 U.S.C. 1760(c)) is amended by striking `neither the Secretary nor the State shall' and inserting `the Secretary shall not'.

    (c) DEFINITIONS- Section 12(d) of the National School Lunch Act (42 U.S.C. 1760(d)), as amended by section 701(b), is amended--

      (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- 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- Section 12(k) of the National School Lunch Act (42 U.S.C. 1760(k)) is amended--

      (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 Related Research Act of 1990 (7 U.S.C. 5341)'.

    (f) WAIVER- Section 12(l) of the National School Lunch Act (42 U.S.C. 1760(l)) is amended--

      (1) in paragraph (2)(A)--

        (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)--

        (A) in subparagraph (A), by striking `(A)'; and

        (B) by striking subparagraphs (B) through (D);

      (3) in paragraph (4)--

        (A) in the matter preceding subparagraph (A), by striking `of any requirement relating' and inserting `that increases 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 subparagraph (C), by striking `and' at the end and inserting `or'; and

      (4) in paragraph (6)--

        (A) by striking `(A)(i)' and all that follows through `(B)'; and

        (B) by redesignating clauses (i) through (iv) as subparagraphs (A) through (D), respectively.

SEC. 706. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

    (a) ESTABLISHMENT OF PROGRAM- Section 13(a) of the National School Lunch Act (42 U.S.C. 1761(a)) is amended--

      (1) in paragraph (1)--

        (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- Section 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-

      `(1) PAYMENTS-

        `(A) IN GENERAL- Except 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- Subject to subparagraph (C), payments to any institution under subparagraph (A) shall not exceed--

          `(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- Amounts specified in subparagraph (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 preceding November 30 in the series for food away from home of the Consumer Price Index for All Urban Con-sumers published 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.'.

    (c) ADMINISTRATION OF SERVICE INSTITUTIONS- Section 13(b)(2) of the National School Lunch Act (42 U.S.C. 1761(b)(2)) is amended--

      (1) in the first sentence, by striking `four meals' and inserting `3 meals, or 2 meals and 1 supplement,'; and

      (2) by striking the second sentence.

    (d) REIMBURSEMENTS- Section 13(c)(2) of the National School Lunch Act (42 U.S.C. 1761(c)(2)) is amended--

      (1) by striking subparagraphs (A), (C), (D), and (E);

      (2) by striking `(B)';

      (3) by striking `, and such higher education institu-tions,'; 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- Section 13(e)(1) of the National School Lunch Act (42 U.S.C. 1761(e)(1)) is amended--

      (1) by striking `institution: Provided, That (A) the' and inserting `institution. The';

      (2) by inserting `(excluding a school)' after `any service institution'; and

      (3) by striking `responsibilities, and (B) no' and inserting `responsibilities. No'.

    (f) FOOD REQUIREMENTS- Section 13(f) of the National School Lunch Act (42 U.S.C. 1761(f)) is amended--

      (1) by redesignating the first through seventh sentences as paragraphs (1) through (7), respectively;

      (2) by striking paragraph (3), as redesignated by para-graph (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 re-designated by paragraph (1), by striking `that bacteria levels' and all that follows through the period at the end and inserting `conformance with standards set by local health authorities.'; and

      (5) by redesignating paragraphs (4) through (7), as redesignated by paragraph (1), as paragraphs (3) through (6), respectively.

    (g) PERMITTING OFFER VERSUS SERVE- Section 13(f) of the National School Lunch Act (42 U.S.C. 1761(f)), as amended by subsection (f), is amended by adding at the end the following:

      `(7) OFFER VERSUS SERVE- A school food authority participating as a service institution may permit a child attending a site on school premises operated directly by the authority to refuse one 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- The second sentence of section 13(m) of the National School Lunch Act (42 U.S.C. 1761(m)) is amended by striking `at all times be available' and inserting `be available at any reasonable time'.

    (i) REMOVING MANDATORY NOTICE TO INSTITUTIONS- Section 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- Section 13(n) of the National School Lunch Act (42 U.S.C. 1761(n)), as amended by subsection (i), is amended--

      (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 paragraphs (3) through (6), respectively.

    (k) MONITORING AND TRAINING- Section 13(q) of the National School Lunch Act (42 U.S.C. 1761(q)) is amended--

      (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- Section 13 of the National School Lunch Act (42 U.S.C. 1761) is amended--

      (1) by striking subsection (p); and

      (2) by redesignating subsections (q) and (r) as subsections (p) and (q), respectively.

    (m) EFFECTIVE DATE- The amendments made by subsection (b) shall become effective on January 1, 1997.

SEC. 707. COMMODITY DISTRIBUTION.

    (a) CEREAL AND SHORTENING IN COMMODITY DONATIONS- Section 14(b) of the National School Lunch Act (42 U.S.C. 1762a(b)) is amended--

      (1) by striking paragraph (1); and

      (2) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

    (b) STATE ADVISORY COUNCIL- Section 14(e) of the National School Lunch Act (42 U.S.C. 1762a(e)) is amended to read as follows:

    `(e) Each State agency that receives food assistance payments under this section for any school year shall consult with representatives of schools in the State that participate in the school lunch program with respect to the needs of such schools relating to the manner of selection and distribution of commodity assistance for such program.'.

    (c) CASH COMPENSATION FOR PILOT PROJECT SCHOOLS- Section 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- Section 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- Paragraph (2) of the last sentence of section 17(a) of the National School Lunch Act (42 U.S.C. 1766(a)) is amended--

      (1) in subparagraph (B), by striking `and' at the end;

      (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 one employee, the organization does not base payments to an employee of the organization on the number of family or group day care homes recruited.'.

    (c) TECHNICAL ASSISTANCE- The 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- Section 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 supplements or three meals and one supplement' and inserting `2 meals and 1 supplement'.

    (e) IMPROVED TARGETING OF DAY CARE HOME REIMBURSEMENTS-

      (1) RESTRUCTURED DAY CARE HOME REIMBURSEMENTS- 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-

        `(A) REIMBURSEMENT FACTOR-

          `(i) IN GENERAL- An institution that participates in the program under this section as a family or group day care home sponsoring organization shall be provided, for payment to a home sponsored by the organization, 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-

            `(I) DEFINITION OF TIER I FAMILY OR GROUP DAY CARE HOME- In this paragraph, the term `tier I family or group day care home' means--

`(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 residing 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 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 organization of the home under regulations established by the Secretary.

            `(II) REIMBURSEMENT- Except 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 documentation of the costs described in clause (i), except that reimbursement shall not be provided under this subclause for meals or supplements served to the children of a person acting as a family 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- Except as provided in subclause (IV), the reimbursement factors applied to a home referred to in subclause (II) shall be the factors in effect on July 1, 1996.

            `(IV) ADJUSTMENTS- The reimbursement factors 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-

            `(I) IN GENERAL-

`(aa) FACTORS- Except as provided in subclause (II), with respect to meals or supplements 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 reimbursement factors shall be 95 cents for lunches and suppers, 27 cents for breakfasts, and 13 cents for supplements.

`(bb) ADJUSTMENTS- The 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 recent 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.

`(cc) REIMBURSEMENT- A family or group day care home shall be provided reimbursement factors under this subclause without a requirement for documentation of the costs described in clause (i), except that reimbursement shall not be provided under this subclause for meals or supplements served to the children of a person acting as a family or group day care home provider unless the children meet the income eligibility guidelines for free or reduced price meals under section 9.

            `(II) OTHER FACTORS- A family or group day care home that does not meet the criteria set forth in clause (ii)(I) may elect to be provided reimbursement factors determined in accordance with the following requirements:

`(aa) CHILDREN ELIGIBLE FOR FREE OR REDUCED PRICE MEALS- In 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- In the case of meals or supplements served under this subsection to children who are members of households 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-

`(aa) IN GENERAL- If a family or group day care home elects to claim the factors described in subclause (II), the family or group day care home sponsoring organization serving 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- In making a determination under item (aa), a family or group day care home sponsoring organization may consider a child participating in or subsidized under, or a child with a parent participating in or subsidized under, a federally or State supported child care or other benefit program with an income eligibility limit that does not exceed the eligibility standard for free or reduced price meals under section 9 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- A family or group day care home may elect to receive 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 REPORTING PROCEDURES- The 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 organization 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 number 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 factors prescribed under clause (ii)(III) or subclause (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- The Secretary may establish any minimum verification requirements that are necessary to carry out this clause.'.

      (2) GRANTS TO STATES TO PROVIDE ASSISTANCE TO FAMILY OR GROUP DAY CARE HOMES- Section 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-

          `(i) IN GENERAL-

            `(I) RESERVATION- From amounts made available to carry out this section, the Secretary shall reserve $5,000,000 of the amount made available for fiscal year 1997.

            `(II) PURPOSE- The Secretary shall use the funds made available under subclause (I) to provide grants to States for the purpose of providing--

`(aa) assistance, including grants, to family and day care home sponsoring organizations 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 family and group day care homes in the implementation of the amendment to subparagraph (A) made by section 708(e)(1) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

          `(ii) ALLOCATION- The Secretary shall allocate from the funds reserved under clause (i)(I)--

            `(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 fiscal year 1995 as a percentage of the number of all family day care homes participating in the program during fiscal year 1995.

          `(iii) RETENTION OF FUNDS- Of 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- Any payments received under this subparagraph shall be in addition to payments that a State receives under subparagraph (A).'.

      (3) PROVISION OF DATA- Section 17(f)(3) of the National School Lunch Act (42 U.S.C. 1766(f)(3)), as amended by paragraph (2), is amended by adding at the end the following:

        `(E) PROVISION OF DATA TO FAMILY OR GROUP DAY CARE HOME SPONSORING ORGANIZATIONS-

          `(i) CENSUS DATA- The 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 appropriate census survey for which the data are available showing which areas in the State meet the requirements 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-

            `(I) IN GENERAL- A State agency administering the school lunch program under this Act or the school breakfast program under the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) shall provide 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 1/2 of the children enrolled are certified to receive free or reduced price meals. The State agency shall collect the data necessary to create 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- In determining for a fiscal year or other annual period whether a home qualifies as a tier I family or group day care home under subparagraph (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- For 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 determination 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- Section 17(c) of the National School Lunch Act (42 U.S.C. 1766(c)) is amended by inserting `except as provided in subsection (f)(3),' after `For purposes of this section,' each place it appears in paragraphs (1), (2), and (3).

    (f) REIMBURSEMENT- Section 17(f) of the National School Lunch Act (42 U.S.C. 1766(f)) is amended--

      (1) in paragraph (3)--

        (A) in subparagraph (B), by striking the third and fourth sentences; and

        (B) in subparagraph (C)(ii), by striking `conduct outreach' and all that follows through `may become' and inserting `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- Section 17(g)(1) of the National School Lunch Act (42 U.S.C. 1766(g)(1)) is amended--

      (1) in subparagraph (A), by striking the second sentence; and

      (2) in subparagraph (B), by striking the second sentence.

    (h) ELIMINATION OF STATE PAPERWORK AND OUTREACH BURDEN- Section 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- A State participating 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 subsection.'.

    (i) RECORDS- The second sentence of section 17(m) of the National 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- Section 17 of the National School Lunch Act is amended by striking subsection (q).

    (k) EFFECTIVE DATE-

      (1) IN GENERAL- Except 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 REIMBURSEMENTS- The amendments made by paragraphs (1) and (4) of subsection (e) shall become effective on July 1, 1997.

      (3) REGULATIONS-

        (A) INTERIM REGULATIONS- Not later than January 1, 1997, the Secretary of Agriculture shall issue interim regulations to implement--

          (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- Not later than July 1, 1997, the Secretary of Agriculture shall issue final regulations to implement the provisions of law referred to in subparagraph (A).

    (l) STUDY OF IMPACT OF AMENDMENTS ON PROGRAM PARTICIPATION AND FAMILY DAY CARE LICENSING-

      (1) IN GENERAL- The Secretary of Agriculture, in conjunction with the Secretary of Health and Human Services, shall study the impact of the amendments made by this section on--

        (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 organizations participating in the program;

        (C) the number of day care homes that are licensed, certified, registered, or approved by each State in accordance 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--

          (i) received reimbursement under the program prior to the amendments made by this section but do 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 section and the proportion of low-income children participating in the program after the amendments made by this section.

      (2) REQUIRED DATA- Each 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--

        (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, certified, 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- Not later than 2 years after the date of enactment of this section, the Secretary of Agriculture 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- Section 18(d) of the National School Lunch Act (42 U.S.C. 1769(d)) is amended--

      (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- Section 18(e) of the National School Lunch Act (42 U.S.C. 1769(e)) is amended--

      (1) in paragraph (1)--

        (A) in subparagraph (A)--

          (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- There are authorized 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.

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--Child 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 Pacific 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- 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 unless 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 requiring the school food authority to submit a policy statement.'.

SEC. 723. SCHOOL BREAKFAST PROGRAM AUTHORIZATION.

    (a) TRAINING AND TECHNICAL ASSISTANCE IN FOOD PREPARATION- Section 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-

      (1) IN GENERAL- Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) is amended by striking subsections (f) and (g).

      (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall become effective on October 1, 1996.

SEC. 724. STATE ADMINISTRATIVE EXPENSES.

    (a) USE OF FUNDS FOR COMMODITY DISTRIBUTION ADMINISTRATION; STUDIES- Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 1776) is amended--

      (1) by striking subsections (e) and (h); and

      (2) by redesignating subsections (f), (g), and (i) as subsections (e), (f), and (g), respectively.

    (b) APPROVAL OF CHANGES- Section 7(e) of the Child Nutrition Act of 1966 (42 U.S.C. 1776(e)), as so redesignated, is amended--

      (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 Secretary 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--

      (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--

      (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)--

        (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- Section 17(b) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(b)) is amended--

      (1) in paragraph (15)(B)(iii), by inserting `of not more than 365 days' after `accommodation'; and

      (2) in paragraph (16)--

        (A) in subparagraph (A), by adding `and' at the end; and

        (B) in subparagraph (B), by striking `; and' and inserting a period; and

        (C) by striking subparagraph (C).

    (b) SECRETARY'S PROMOTION OF WIC- Section 17(c) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(c)) is amended by striking paragraph (5).

    (c) ELIGIBLE PARTICIPANTS- Section 17(d) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(d)) is amended by striking paragraph (4).

    (d) NUTRITION EDUCATION- Section 17(e) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(e)) is amended--

      (1) in paragraph (2), by striking the third sentence;

      (2) in paragraph (4)--

        (A) in the matter preceding subparagraph (A), by striking `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--

          (i) by inserting `shall' before `provide'; and

          (ii) by striking `and' at the end;

        (E) in subparagraph (B), as so redesignated--

          (i) by inserting `shall' before `provide'; and

          (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- Section 17(f) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(f)) is amended--

      (1) in paragraph (1)--

        (A) in subparagraph (A)--

          (i) by striking `annually to the Secretary, by a date specified by the Secretary, a' and inserting `to the Secretary, by a date specified by the Secretary, an initial'; and

          (ii) by adding at the end the following: `After submitting 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)--

          (i) by striking clause (iii) and inserting the following:

      `(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 applicants 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 subparagraph (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 reasonable time';

      (4) in paragraph (9)(B), by striking the second sentence;

      (5) in the first sentence of paragraph (11), by striking `, including standards that will ensure sufficient State agency staff';

      (6) in paragraph (12), by striking the third sentence;

      (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 paragraphs (6) through (20), and paragraphs (23) and (24) as paragraphs (21) and (22), respectively.

    (f) INFORMATION- Section 17(g) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(g)) is amended--

      (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-

      (1) IN GENERAL- Section 17(h) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(h)) is amended--

        (A) in paragraph (4)(E), by striking `and, on' and all that follows through `(d)(4)'; and

        (B) in paragraph (8)--

          (i) by striking subparagraphs (A), (C), and (M);

          (ii) in subparagraph (G)--

            (I) in clause (i), by striking `(i)'; and

            (II) by striking clauses (ii) through (ix);

          (iii) in subparagraph (I), by striking `Sec-retary--' 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 carrying out subparagraph (A),' and inserting `subparagraphs (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 `subparagraph (A)'.

      (2) APPLICATION- The amendments made by paragraph (1) shall not apply to a contract for the procurement of infant formula 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- Section 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- Section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) is amended by striking subsections (n), (o), and (p).

    (j) DISQUALIFICATION OF VENDORS WHO ARE DISQUALIFIED UNDER THE FOOD STAMP PROGRAM- Section 17 of the Child Nutrition 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-

      `(1) IN GENERAL- The 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- A disqualification under paragraph (1)--

        `(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- Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788) is amended--

      (1) in subsection (a), by striking `that--' and all that follows 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- Section 19(f) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(f)) is amended--

      (1) in paragraph (1)--

        (A) by striking subparagraph (B); and

        (B) in subparagraph (A)--

          (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), respectively;

          (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- The 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'.

    (d) STATE COORDINATORS FOR NUTRITION; STATE PLAN- Section 19(h) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(h)) is amended--

      (1) in the second sentence of paragraph (1)--

        (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 sentences; and

      (3) by striking paragraph (3).

    (e) AUTHORIZATION OF APPROPRIATIONS- Section 19(i) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(i)) is amended--

      (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-

        `(A) IN GENERAL- There are authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 1997 through 2002.

        `(B) GRANTS-

          `(i) IN GENERAL- Grants 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- If 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- Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788) is amended by striking subsection (j).

    (g) EFFECTIVE DATE- The amendments made by subsection (e) shall become effective on October 1, 1996.

Subtitle C--Miscellaneous Provisions

SEC. 741. COORDINATION OF SCHOOL LUNCH, SCHOOL BREAKFAST, AND SUMMER FOOD SERVICE PROGRAMS.

    (a) COORDINATION-

      (1) IN GENERAL- The Secretary of Agriculture shall develop 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- In developing proposed changes to the regulations under paragraph (1), the Secretary of Agriculture shall consult with local, State, and regional administrators of the programs described in such paragraph.

    (b) REPORT- Not later than November 1, 1997, the Secretary of Agriculture shall submit to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Economic and Educational Opportunities of the House of Representatives a report 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- Notwithstanding 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-

      (1) IN GENERAL- Nothing in this Act shall prohibit or require 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- The 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 Protection 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 reservations established under section 4(b) of the Food Stamp Act of 1977 (7 U.S.C 2013(b)).

TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION

Subtitle A--Food 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 exceed 12 months, except that the certification period may be up to 24 months if all adult household members are elderly or disabled. A State agency shall have at least 1 contact with each certified household 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 coupon, 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 themselves 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--

      (1) by striking `shall (1) make' and inserting the following: `shall--

      `(1) make';

      (2) by striking `scale, (2) make' and inserting the following: `scale;

      `(2) make';

      (3) by striking `Alaska, (3) make' and inserting the following: `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, adjust the cost of the diet to reflect the cost of the diet in the preceding 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 following:

    `(b) ELIGIBILITY STANDARDS- Except 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- Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is amended by striking paragraph (11) and inserting the following: `(11)(A) any payments or allowances made for 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 repair or replacement of an unsafe or inoperative furnace or other heating or cooling device,'.

    (b) CONFORMING AMENDMENTS- Section 5(k) of the Food Stamp Act of 1977 (7 U.S.C. 2014(k)) is amended--

      (1) in paragraph (1)--

        (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 inserting 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-

        `(A) ENERGY ASSISTANCE PAYMENTS- For purposes of subsection (d)(1), a payment made under a State law (other than a law referred to in paragraph (2)(H)) to provide energy assistance to a household shall be considered money payable directly to the household.

        `(B) ENERGY ASSISTANCE EXPENSES- For purposes of subsection (e)(7), an expense paid on behalf of a household under a State law to provide energy assistance shall be considered an out-of-pocket expense incurred and paid by the household.'.

SEC. 809. DEDUCTIONS FROM INCOME.

    (a) IN GENERAL- Section 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-

      `(1) STANDARD DEDUCTION- The 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-

        `(A) DEFINITION OF EARNED INCOME- In this paragraph, the term `earned income' does not include--

          `(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- Except as provided in subparagraph (C), a household with earned income shall be allowed a deduction of 20 percent of all earned income to compensate for taxes, other mandatory deductions from salary, and work expenses.

        `(C) EXCEPTION- The deduction described in subparagraph (B) shall not be allowed with respect to determining an overissuance due to the failure of a household to report earned income in a timely manner.

      `(3) DEPENDENT CARE DEDUCTION-

        `(A) IN GENERAL- A 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- The excluded expenses referred to in subparagraph (A) are--

          `(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 subsection (d)(3); and

          `(iii) expenses that are paid under section 6(d)(4).

      `(4) DEDUCTION FOR CHILD SUPPORT PAYMENTS-

        `(A) IN GENERAL- A 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- The Secretary 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- Under rules prescribed by the Secretary, a State agency may develop a standard 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 individuals 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 extremely low shelter costs ineligible for the allowance.

      `(6) EXCESS MEDICAL EXPENSE DEDUCTION-

        `(A) IN GENERAL- A household containing an elderly or disabled member shall be entitled, with respect to expenses 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 expenses, incurred by the elderly or disabled member, exclusive of special diets, that exceeds $35 per month.

        `(B) METHOD OF CLAIMING DEDUCTION-

          `(i) IN GENERAL- A State agency shall offer an eligible household under subparagraph (A) a method of claiming a deduction for recurring medical expenses that are initially verified under the excess medical expense deduction in lieu of submitting information on, or verification of, actual expenses on a monthly basis.

          `(ii) METHOD- The method described in clause (i) shall--

            `(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 expected medical expenses of the member for the certification period (including changes that can be reasonably anticipated based on available information 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 verification of a change in medical expenses if such a change has been anticipated for the certification period.

      `(7) EXCESS SHELTER EXPENSE DEDUCTION-

        `(A) IN GENERAL- A 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 applicable deductions have been allowed.

        `(B) MAXIMUM AMOUNT OF DEDUCTION- In the case of a household that does not contain an elderly or disabled individual, 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--

          `(i) for the period beginning on the date of enactment 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 fiscal year, $300, $521, $429, $364, and $221 per month, respectively.

        `(C) STANDARD UTILITY ALLOWANCE-

          `(i) IN GENERAL- In computing the excess shelter expense deduction, a State agency may use a standard utility allowance in accordance with regulations promulgated by the Secretary, except that a State agency may use an allowance that does not fluctuate within a year to reflect seasonal variations.

          `(ii) RESTRICTIONS ON HEATING AND COOLING EXPENSES- An allowance for a heating or cooling expense may not be used in the case of a household that--

            `(I) does not incur a heating or cooling expense, 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 allowance is prorated between the household and the other individual, household, or both.

          `(iii) MANDATORY ALLOWANCE-

            `(I) IN GENERAL- A State agency may make the use of a standard utility allowance mandatory for all households with qualifying utility costs if--

`(aa) the State agency has developed 1 or more standards that include the cost of heating and cooling and 1 or more standards that do not include the cost of heating and cooling; and

`(bb) the Secretary finds that the standards will not result in an increased cost to the Secretary.

            `(II) HOUSEHOLD ELECTION- A State agency that has not made the use of a standard utility allowance 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-

            `(I) IN GENERAL- Subject to subclause (II), if a State agency elects to use a standard utility allowance 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 assistance paid on behalf of the household to an energy provider.

            `(II) SEPARATE ALLOWANCE- A State agency may use a separate standard utility allowance for households on behalf of which a payment described in subclause (I) is made, but may not be required to do so.

            `(III) STATES NOT ELECTING TO USE SEPARATE ALLOWANCE- A State agency that does not elect to use a separate allowance but makes a single standard utility allowance available to households incurring heating or cooling expenses (other than a household described in subclause (I) or (II) of clause (ii)) may not be required to reduce the allowance 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- For the purpose of the food stamp program, assistance provided under the Low-Income Home Energy Assistance 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 provided.'.

    (b) CONFORMING AMENDMENT- Section 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 higher 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-

        `(A) IN GENERAL- Subject to the other provisions of this paragraph, the Secretary shall, in prescribing inclusions 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- The Secretary shall include in financial resources--

          `(i) any boat, snowmobile, or airplane used for recreational purposes;

          `(ii) any vacation home;

          `(iii) any mobile home used primarily for vacation purposes;

          `(iv) subject to subparagraph (C), any licensed vehicle that is used for household transportation or to obtain 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- A vehicle (and any other property, real or personal, to the extent the property is directly related to the maintenance or use of the vehicle) shall not be included in financial resources under this paragraph if the vehicle is--

          `(i) used to produce earned income;

          `(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 primary 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--

      (1) by striking subparagraph (F); and

      (2) by redesignating subparagraphs (G) and (H) as subparagraphs (F) and (G), respectively.

SEC. 812. SIMPLIFIED CALCULATION OF INCOME FOR THE SELF-EMPLOYED.

    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-EMPLOYED-

      `(1) IN GENERAL- Not 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 estimate of income excluded under subsection (d)(9) in lieu of calculating the actual cost of producing self-employment income.

      `(2) INCLUSIVE OF ALL TYPES OF INCOME OR LIMITED TYPES OF INCOME- The method submitted by a State under paragraph (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- The 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 PROGRAM REQUIREMENTS.

    Section 6(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2015(b)(1)) is amended--

      (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--

      (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.'.

SEC. 815. DISQUALIFICATION.

    (a) IN GENERAL- Section 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-

      `(1) WORK REQUIREMENTS-

        `(A) IN GENERAL- No physically and mentally fit individual over the age of 15 and under the age of 60 shall be eligible to participate in the food stamp program if the individual--

          `(i) refuses, at the time of application and every 12 months thereafter, to register for employment in a manner 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 agency;

          `(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--

            `(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 section 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--

            `(I) quits a job; or

            `(II) reduces work effort and, after the reduction, the individual is working less than 30 hours per week; or

          `(vi) fails to comply with section 20.

        `(B) HOUSEHOLD INELIGIBILITY- If 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 period, determined by the State agency, that does not exceed the lesser of--

          `(i) the duration of the ineligibility of the individual determined under subparagraph (C); or

          `(ii) 180 days.

        `(C) DURATION OF INELIGIBILITY-

          `(i) FIRST VIOLATION- The first 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--

            `(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- The second 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--

            `(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- The 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--

            `(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, permanently.

        `(D) ADMINISTRATION-

          `(i) GOOD CAUSE- The Secretary shall determine the meaning of good cause for the purpose of this paragraph.

          `(ii) VOLUNTARY QUIT- The Secretary shall determine the meaning of voluntarily quitting and reducing work effort for the purpose of this paragraph.

          `(iii) DETERMINATION BY STATE AGENCY-

            `(I) IN GENERAL- Subject to subclause (II) and clauses (i) and (ii), a State agency shall determine--

`(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 compliance with a requirement under subpara-graph (A).

            `(II) NOT LESS RESTRICTIVE- A State agency may not use a meaning, procedure, or determination under subclause (I) that is less restrictive on individuals receiving benefits under this Act than a comparable meaning, procedure, or determination 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- For 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 considered to have voluntarily quit without good cause.

          `(v) SELECTING A HEAD OF HOUSEHOLD-

            `(I) IN GENERAL- For purposes of this paragraph, the State agency shall allow the household to select any adult parent of a child in the household 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- A household may designate the head of the household under subclause (I) each time the household is certified for participation in the food stamp program, 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- If 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)--

            `(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 becomes headed by the individual shall become ineligible to participate in the food stamp program for the remaining period of ineligibility.'.

    (b) CONFORMING AMENDMENT-

      (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- An individual or a household may become 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 household for an exemption under subparagraph (B) to between 1 and 6 years of age.'.

SEC. 817. EMPLOYMENT AND TRAINING.

    (a) IN GENERAL- Section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)) is amended--

      (1) by striking `(4)(A) Not later than April 1, 1987, each' and inserting the following:

      `(4) EMPLOYMENT AND TRAINING-

        `(A) IN GENERAL-

          `(i) IMPLEMENTATION- Each';

      (2) in subparagraph (A)--

        (A) by inserting `work,' after `skills, training,'; and

        (B) by adding at the end the following:

          `(ii) STATEWIDE WORKFORCE DEVELOPMENT SYSTEM- Each component of an employment and training program carried out under this paragraph shall be delivered through a statewide workforce development system, unless the component is not available locally through such a system.';

      (3) in subparagraph (B)--

        (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 employment requirements prescribed under this subparagraph to a program applicant at the time of application:';

        (B) in clause (i), by striking `with terms and conditions' and all that follows through `time of application'; and

        (C) in clause (iv)--

          (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)--

        (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 exemption continues to be valid';

      (5) in subparagraph (E), by striking the third sentence;

      (6) in subparagraph (G)--

        (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 operation,' and all that follows through `Social Security Act' and inserting the following: `), except that no such payment or reimbursement shall exceed the applicable local market rate';

      (9)(A) by striking subparagraphs (K) and (L) and inserting the following:

        `(K) LIMITATION ON FUNDING- Notwithstanding 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 paragraph 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 subparagraphs (L) and (M), respectively; and

      (10) in subparagraph (L), as so redesignated--

        (A) by striking `(L)(i) The Secretary' and inserting `(L) The Secretary'; and

        (B) by striking clause (ii).

    (b) FUNDING- Section 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-

      `(1) IN GENERAL-

        `(A) AMOUNTS- To 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--

          `(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- The 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-

          `(i) NOTIFICATION- A State agency shall promptly notify the Secretary if the State agency determines that the State agency will not expend all of the funds allocated to the State agency under subparagraph (B).

          `(ii) REALLOCATION- On 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- Notwithstanding subparagraphs (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.'.

    (c) ADDITIONAL MATCHING FUNDS- Section 16(h)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)(2)) is amended by inserting before the period at the end the following: `, including the costs for case management and casework to facilitate the transition from economic dependency to self-sufficiency through work'.

    (d) REPORTS- Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)) is amended--

      (1) in paragraph (5)--

        (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- Section 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-

      `(1) IN GENERAL- If 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- If a disqualification is imposed under paragraph (1) for a failure of an individual to perform 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- A 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 considered in determining eligibility.'.

    (b) STATE PLAN PROVISIONS- Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)) is amended--

      (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- Section 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)'.

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 following:

    `(j) DISQUALIFICATION FOR RECEIPT OF MULTIPLE FOOD STAMP BENEFITS- An 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 fraudulent statement or representation with respect to the identity or place of residence of the individual in order to receive multiple benefits 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 following:

    `(k) DISQUALIFICATION OF FLEEING FELONS- No 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--

      `(1) fleeing to avoid prosecution, or custody or confinement after conviction, under the law of the place from which the individual 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 misdemeanor 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 following:

    `(l) CUSTODIAL PARENT'S COOPERATION WITH CHILD SUPPORT AGENCIES-

      `(1) IN GENERAL- At 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 control 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.)--

        `(A) in establishing the paternity of the child (if the child is born out of wedlock); and

        `(B) in obtaining support for--

          `(i) the child; or

          `(ii) the individual and the child.

      `(2) GOOD CAUSE FOR NONCOOPERATION- Paragraph (1) shall not apply to the individual if good cause is found for refusing to cooperate, as determined by the State agency in accordance with standards prescribed by the Secretary in consultation 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- Paragraph (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 SUPPORT AGENCIES-

      `(1) IN GENERAL- At 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 subsection 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.)--

        `(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-

        `(A) GUIDELINES- The 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- The State agency shall develop procedures, using guidelines developed under subparagraph (A), for determining whether an individual is refusing to cooperate under paragraph (1).

      `(3) FEES- Paragraph (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- The State agency shall provide safeguards to restrict the use of information collected by a State agency administering 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 following:

    `(n) DISQUALIFICATION FOR CHILD SUPPORT ARREARS-

      `(1) IN GENERAL- At the option of a State agency, no individual shall be eligible to participate in the food stamp program 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- Paragraph (1) shall not apply if--

        `(A) a court is allowing the individual to delay payment; 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.'.

SEC. 824. WORK REQUIREMENT.

    (a) IN GENERAL- Section 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-

      `(1) DEFINITION OF WORK PROGRAM- In this subsection, the term `work program' means--

        `(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 program.

      `(2) WORK REQUIREMENT- Subject 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--

        `(A) work 20 hours or more per week, averaged monthly;

        `(B) participate in and comply with the requirements of a work program for 20 hours or more per week, as determined by the State agency;

        `(C) participate in and comply with the requirements of a program under section 20 or a comparable program established by a State or political subdivision of a State; or

        `(D) receive benefits pursuant to paragraph (3), (4), or (5).

      `(3) EXCEPTION- Paragraph (2) shall not apply to an individual if the individual is--

        `(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 responsibility for a dependent child;

        `(D) otherwise exempt under subsection (d)(2); or

        `(E) a pregnant woman.

      `(4) WAIVER-

        `(A) IN GENERAL- On 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 indi-viduals reside--

          `(i) has an unemployment rate of over 10 per-cent; or

          `(ii) does not have a sufficient number of jobs to provide employment for the individuals.

        `(B) REPORT- The Secretary shall report the basis for a waiver under subparagraph (A) to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate.

      `(5) SUBSEQUENT ELIGIBILITY-

        `(A) REGAINING ELIGIBILITY- An individual denied eligibility under paragraph (2) shall regain eligibility to participate in the food stamp program if, during a 30-day period, the individual--

          `(i) works 80 or more hours;

          `(ii) participates in and complies with the requirements of a work program for 80 or more hours, as determined by a State agency; or

          `(iii) participates in and complies with the requirements of a program under section 20 or a comparable program established by a State or political subdivision of a State.

        `(B) MAINTAINING ELIGIBILITY- An individual who regains eligibility under subparagraph (A) shall remain eligible as long as the individual meets the requirements of subparagraph (A), (B), or (C) of paragraph (2).

        `(C) LOSS OF EMPLOYMENT-

          `(i) IN GENERAL- An individual who regained eligibility 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- An individual shall not receive any benefits pursuant to clause (i) for more than a single 3-month period in any 36-month period.

      `(6) OTHER PROGRAM RULES- Nothing 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- The term `preceding 36-month period' 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--

      (1) the date the State notifies recipients of food stamp benefits 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 SYSTEMS.

    (a) IN GENERAL- Section 7(i) of the Food Stamp Act of 1977 (7 U.S.C. 2016(i)) is amended--

      (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-

      `(1) IN GENERAL-

        `(A) IMPLEMENTATION- Not later than October 1, 2002, each State agency shall implement an electronic benefit transfer system under which household benefits determined 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 implementing an electronic benefit transfer system.

        `(B) TIMELY IMPLEMENTATION- Each State agency is encouraged to implement an electronic benefit transfer system under subparagraph (A) as soon as practicable.

        `(C) STATE FLEXIBILITY- Subject to paragraph (2), a State agency may procure and implement an electronic benefit transfer system under the terms, conditions, and design that the State agency considers appropriate.

        `(D) OPERATION- An electronic benefit transfer system should take into account generally accepted standard operating rules based on--

          `(i) commercial electronic funds transfer technology;

          `(ii) the need to permit interstate operation and law enforcement monitoring; and

          `(iii) the need to permit monitoring and investigations by authorized law enforcement agencies.';

      (2) in paragraph (2)--

        (A) by striking `effective no later than April 1, 1992,';

        (B) in subparagraph (A)--

          (i) by striking `, in any 1 year,'; and

          (ii) by striking `on-line';

        (C) by striking subparagraph (D) and inserting the following:

        `(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 enactment 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- Regulations 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- A 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-

        `(A) IN GENERAL- A State agency may require that an electronic benefit card contain a photograph of 1 or more members of a household.

        `(B) OTHER AUTHORIZED USERS- If a State agency requires a photograph on an electronic benefit card under subparagraph (A), the State agency shall establish procedures to ensure that any other appropriate member of the household or any authorized representative of the household may utilize the card.

      `(10) APPLICABLE LAW- Disclosures, protections, responsibilities, 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 delivered through any electronic benefit transfer system.

      `(11) APPLICATION OF ANTI-TYING RESTRICTIONS TO ELECTRONIC BENEFIT TRANSFER SYSTEMS-

        `(A) DEFINITIONS- In this paragraph:

          `(i) AFFILIATE- The term `affiliate' has the meaning provided the term in section 2(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(k)).

          `(ii) COMPANY- The term `company' has the meaning 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 company.

          `(iii) ELECTRONIC BENEFIT TRANSFER SERVICE- 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--

            `(I) issued from and stored in a central databank;

            `(II) electronically accessed by household members at the point of sale; and

            `(III) provided by a Federal or State government.

          `(iv) POINT-OF-SALE SERVICE- The 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- A company may not sell or provide electronic benefit transfer services, or fix or vary the consideration for electronic benefit transfer services, on the condition or requirement that the customer--

          `(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 service from a competitor of the company or competitor of any affiliate of the company.

        `(C) CONSULTATION WITH THE FEDERAL RESERVE BOARD- Before promulgating regulations or interpretations 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- It 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 transfer 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 HOUSEHOLDS.

    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- A 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 accordance 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-

      `(1) IN GENERAL- If the benefits of a household are reduced 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--

        `(A) the household may not receive an increased allotment as the result of a decrease in the income of the household to the extent that the decrease is the result of the reduction; and

        `(B) the State agency may reduce the allotment of the household by not more than 25 percent.

      `(2) RULES AND PROCEDURES- If the allotment of a household is reduced under this subsection for a failure to perform 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 reduce the allotment under the food stamp program.'.

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-

      `(1) IN GENERAL- In the case of an individual who resides in a center for the purpose of a drug or alcoholic treatment program described in the last sentence of section 3(i), a State agency may provide an allotment for the individual to--

        `(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- A State agency may require an individual 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 retail 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 employee of the Department of Agriculture, a designee of the Secretary, or, if practicable, an official of the State or local government designated by the Secretary has visited the store or concern for the purpose 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- The Secretary shall establish 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 program.'.

SEC. 833. INFORMATION FOR VERIFYING ELIGIBILITY FOR AUTHORIZATION.

    Section 9(c) of the Food Stamp Act of 1977 (7 U.S.C. 2018(c)) is amended--

      (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.'.

SEC. 834. WAITING PERIOD FOR STORES THAT FAIL TO MEET AUTHORIZATION 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 redeem 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 preceding 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--

      (1) in subsection (e)--

        (A) by striking paragraph (2) and inserting the following:

      `(2)(A) that the State agency shall establish procedures governing the operation of food stamp offices that the State agency determines best serve households in the State, including households with special needs, such as households with elderly or disabled members, households in rural areas with low-income members, homeless individuals, households residing on reservations, 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--

        `(i) shall provide timely, accurate, and fair service to applicants for, and participants in, the food stamp program;

        `(ii) shall develop an application containing the information 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 household first contacts a food stamp office in person during office 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--

          `(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 eligible households; and

        `(vii) may establish operating procedures that vary for local food stamp offices to reflect regional and local differences within the State.

      `(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 exclusively 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)--

          (i) by striking `shall--' 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)--

        (A) by striking `(i) Notwithstanding' and all that follows through `(2)' and inserting the following:

    `(i) APPLICATION AND DENIAL PROCEDURES-

      `(1) APPLICATION PROCEDURES- Notwithstanding 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 inserting a period and the following:

      `(2) DENIAL AND TERMINATION- Except in a case of disqualification as a penalty for failure to comply with a public assistance 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--

      (1) by striking `that (A) the' and inserting `that--

        `(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 Management'; 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--

      (1) by striking `that (A) such' and inserting the follow-ing: `that--

        `(A) the';

      (2) by striking `law, (B) notwithstanding' and inserting the following: `law;

        `(B) notwithstanding';

      (3) by striking `Act, and (C) such' and inserting the following: `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, photograph of any member of a household shall be made available, on request, to any Federal, State, or local law enforcement officer if the officer furnishes the State agency with the name of the member and notifies the agency that--

          `(i) the member--

            `(I) is fleeing to avoid prosecution, or custody or confinement after conviction, for a crime (or attempt 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 imposed under Federal or State law; or

            `(II) has information that is necessary for the officer to conduct an official duty related to subclause (I);

          `(ii) locating or apprehending the member is an official duty; and

          `(iii) the request is being made in the proper exercise 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--

      (1) in subparagraph (A), by striking `five days' and inserting `7 days';

      (2) by striking subparagraph (B);

      (3) by redesignating subparagraphs (C) and (D) as subparagraphs (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 household confirming the withdrawal request and providing the household with an opportunity to request a hearing'.

SEC. 840. INCOME, ELIGIBILITY, AND IMMIGRATION STATUS VERIFICATION SYSTEMS.

    Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is amended--

      (1) in subsection (e)(18), as redesignated by section 835(1)(D)--

        (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- Notwithstanding 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 violation 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 redemption 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--

      (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 knowing submission of an application for the approval or reauthorization to accept and redeem coupons that contains false information about a substantive matter that was a part of the application.'.

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-

      `(1) IN GENERAL- The 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 supplemental nutrition program for women, infants, and children established under section 17 of the Child Nutrition Act of 1966 (7 U.S.C. 1786).

      `(2) TERMS- A disqualification under paragraph (1)--

        `(A) shall be for the same length of time 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) notwithstanding section 14, shall not be subject to judicial or administrative review.'.

SEC. 844. COLLECTION OF OVERISSUANCES.

    (a) COLLECTION OF OVERISSUANCES- Section 13 of the Food Stamp Act of 1977 (7 U.S.C. 2022) is amended--

      (1) by striking subsection (b) and inserting the following:

    `(b) COLLECTION OF OVERISSUANCES-

      `(1) IN GENERAL- Except as otherwise provided in this subsection, a State agency shall collect any overissuance of coupons issued to a household by--

        `(A) reducing the allotment of the household;

        `(B) withholding amounts from unemployment compensation from a member of the household under subsection (c);

        `(C) recovering from Federal pay or a Federal income tax refund under subsection (d); or

        `(D) any other means.

      `(2) COST EFFECTIVENESS- Paragraph (1) shall not apply if the State agency demonstrates to the satisfaction of the Secretary that all of the means referred to in paragraph (1) are not cost effective.

      `(3) MAXIMUM REDUCTION ABSENT FRAUD- If 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 allotment 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--

        `(A) 10 percent of the monthly allotment of the household; or

        `(B) $10.

      `(4) PROCEDURES- A State agency shall collect an overissuance 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)--

        (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 following: `or a Federal income tax refund as authorized by section 3720A of title 31, United States Code'.

    (b) CONFORMING AMENDMENTS- Section 11(e)(8)(C) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(8)(C)) is amended--

      (1) by striking `and excluding claims' and all that follows through `such section'; and

      (2) by inserting before the semicolon at the end the following: `or a Federal income tax refund as authorized by section 3720A of title 31, United States Code'.

    (c) RETENTION RATE- The proviso of the first sentence of section 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 October 1, 1990' and all that follows through `section 13(b)(2) which arise' and inserting `35 percent of the value of all funds or allotments 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 collected that arise'.

SEC. 845. AUTHORITY TO SUSPEND STORES VIOLATING PROGRAM REQUIREMENTS PENDING ADMINISTRATIVE AND JUDICIAL REVIEW.

    Section 14(a) of the Food Stamp Act of 1977 (7 U.S.C. 2023(a)) is amended--

      (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- Notwithstanding 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 TRAFFICKING- The 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- Section 15 of the Food Stamp Act of 1977 (7 U.S.C. 2024) is amended by adding at the end the following:

    `(h) CRIMINAL FORFEITURE-

      `(1) IN GENERAL- In imposing a sentence on a person convicted 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 property described in paragraph (2).

      `(2) PROPERTY SUBJECT TO FORFEITURE- All 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 traceable to a violation of subsection (b) or (c), shall be subject to forfeiture to the United States under paragraph (1).

      `(3) INTEREST OF OWNER- No interest in property shall be forfeited under this subsection as the result of any act or omission established by the owner of the interest to have been committed or omitted without the knowledge or consent of the owner.

      `(4) PROCEEDS- The proceeds from any sale of forfeited property and any monies forfeited under this subsection shall be used--

        `(A) first, to reimburse the Department of Justice for the costs incurred by the Department to initiate and complete the forfeiture proceeding;

        `(B) second, to reimburse the Department of Agriculture Office of Inspector General for any costs the Office incurred in the law enforcement effort resulting in the forfeiture;

        `(C) third, to reimburse any Federal or State law enforcement agency for any costs incurred in the law enforcement 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- Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025) is amended by striking subsection (b).

    (b) CONFORMING AMENDMENTS-

      (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 Secretary'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 subsection (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-

      `(1) DEFINITION OF WORK SUPPLEMENTATION OR SUPPORT PROGRAM- In this subsection, the term `work supplementation or support program' means a program under which, as determined by the Secretary, public assistance (including any benefits 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 recipient entered the program.

      `(2) PROGRAM- A 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 established by the State.

      `(3) PROCEDURE- If a State agency makes an election under paragraph (2) and identifies each household that participates in the food stamp program that contains an individual who is participating in the work supplementation or support program--

        `(A) the Secretary shall pay to the State agency an amount equal to the value of the allotment that the household 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--

          `(i) sections 5 and 8(a), the amount received under this subsection shall be excluded from household income and resources; and

          `(ii) section 8(b), the amount received under this subsection shall be considered to be the value of an allotment 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- No individual shall be excused, by reason of the fact that a State has a work supplementation or support program, from any work requirement under section 6(d), except during the periods in which the individual is employed under the work supplementation or support program.

      `(5) LENGTH OF PARTICIPATION- A State agency shall provide 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- A 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--

      (1) by redesignating subparagraph (B) as subparagraph (C); and

      (2) in subparagraph (A)--

        (A) in the first sentence, by striking `benefits to eligible households, including' and inserting the following: `benefits to eligible households, and may waive any requirement of this Act to the extent necessary for the project to be conducted.

        `(B) PROJECT REQUIREMENTS-

          `(i) PROGRAM GOAL- The Secretary may not conduct a project under subparagraph (A) unless--

            `(I) the project is consistent with the goal of the food stamp program of providing food assistance to raise levels of nutrition among low-income individuals; and

            `(II) the project includes an evaluation to determine the effects of the project.

          `(ii) PERMISSIBLE PROJECTS- The Secretary may conduct a project under subparagraph (A) to--

            `(I) improve program administration;

            `(II) increase the self-sufficiency of food stamp recipients;

            `(III) test innovative welfare reform strate-gies; or

            `(IV) allow greater conformity with the rules of other programs than would be allowed but for this paragraph.

          `(iii) RESTRICTIONS ON PERMISSIBLE PROJECTS- If 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 benefits are reduced due to a failure to comply with work or other conduct requirements), the project--

            `(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 Secretary approves an extension requested by the State agency at any time.

          `(iv) IMPERMISSIBLE PROJECTS- The Secretary may not conduct a project under subparagraph (A) that--

            `(I) involves the payment of the value of an allotment 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 program;

            `(III) is inconsistent with--

`(aa) the last 2 sentences of section 3(i);

`(bb) the last sentence of section 5(a), insofar as a waiver denies assistance to an otherwise eligible household or individual if the household or individual has not failed to comply with any work, behavioral, or other conduct requirement under this or another program;

`(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);

`(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 sec-tion 20;

            `(IV) modifies the operation of section 5 so as to have the effect of--

`(aa) increasing the shelter deduction to households with no out-of-pocket housing costs or housing costs that consume a low percentage 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 regard to changes related to food stamp deductions);

            `(V) is not limited to a specific time period; or

            `(VI) waives a provision of section 26.

          `(v) ADDITIONAL INCLUDED PROJECTS- A pilot or experimental project may include';

        (B) by striking `to aid to families with dependent children 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- Any 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-

          `(i) RESPONSE- Not later than 60 days after the date of receiving a request for a waiver under subparagraph (A), the Secretary shall provide a response that--

            `(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 request.

          `(ii) FAILURE TO RESPOND- If the Secretary does not provide a response in accordance with clause (i), the waiver shall be considered approved, unless the approval is specifically prohibited by this Act.

          `(iii) NOTICE OF DENIAL- On denial of a waiver request under clause (i)(III), the Secretary shall provide a copy of the waiver request and a description of the 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-

      `(1) ELECTION TO PARTICIPATE-

        `(A) IN GENERAL- Subject to the other provisions of this subsection, a State may elect to carry out an employment initiatives program under this subsection.

        `(B) REQUIREMENT- A State shall be eligible to carry out an employment initiatives program under this subsection only if not less than 50 percent of the households in the State that received food stamp benefits during the summer 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-

        `(A) IN GENERAL- A 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 paragraph (3).

        `(B) PAYMENT- The Secretary shall pay to each State that has elected to carry out an employment initiatives program under paragraph (1) an amount equal to the value of the allotment that each household participating in the program in the State would be eligible to receive under this Act but for the operation of this subsection.

        `(C) OTHER PROVISIONS- For purposes of the food stamp program (other than this subsection)--

          `(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- Each State that has elected to carry out an employment initiatives program under paragraph (1) shall--

          `(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

          `(ii) pay the cost of any increase in cash benefits required by clause (i).

      `(3) ELIGIBILITY- A household shall be eligible to receive cash benefits under paragraph (2) if an adult member of the household--

        `(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- A State that operates a program under this subsection for 2 years shall provide to the Secretary a written evaluation of the impact of cash assistance under this subsection. 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- The 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- In this section, the term `Federal costs' does not include any Federal costs incurred under section 17.

    `(b) ELECTION- Subject to subsection (d), a State may elect to carry out a Simplified Food Stamp Program (referred to in this section as a `Program'), statewide or in a political subdivision of the State, in accordance with this section.

    `(c) OPERATION OF PROGRAM- If a State elects to carry out a Program, within the State or a political subdivision of the State--

      `(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;

      `(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 participate 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--

        `(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-

      `(1) STATE PLAN- A State agency may not operate a Program unless the Secretary approves a State plan for the operation of the Program under paragraph (2).

      `(2) APPROVAL OF PLAN- The Secretary shall approve any State plan to carry out a Program if the Secretary determines that the plan--

        `(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-

      `(1) DETERMINATION-

        `(A) IN GENERAL- The Secretary shall determine whether a Program being carried out by a State agency is increasing Federal costs under this Act.

        `(B) NO EXCLUDED HOUSEHOLDS- In making a determination 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- The Secretary 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- If the Secretary determines that the Program has increased Federal costs under this Act for any fiscal 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-

        `(A) CORRECTIVE ACTION- Not 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 Program from increasing Federal costs under this Act.

        `(B) TERMINATION- If 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.

    `(f) RULES AND PROCEDURES-

      `(1) IN GENERAL- In operating a Program, a State or political 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- In operating a Program, a State or political subdivision of a State may standardize the deductions provided under section 5(e). In developing the standardized deduction, the State shall consider the work expenses, dependent care costs, and shelter costs of participating households.

      `(3) REQUIREMENTS- In operating a Program, a State or political subdivision shall comply with the requirements of--

        `(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 established 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- Notwithstanding any other provision of this section, a household may not receive benefits under this section as a result of the eligibility of the household 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 Secretary determines that any household with income above 130 percent of the poverty guidelines is not eligible for the program.'.

    (b) STATE PLAN PROVISIONS- Section 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 operating the program, including--

        `(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-

      (1) Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017), as amended by section 830, is amended--

        (A) by striking subsection (e); and

        (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--

        (A) by striking subsection (i); and

        (B) by redesignating subsections (j) through (l) as subsections (i) through (k), respectively.

SEC. 855. STUDY OF THE USE OF FOOD STAMPS TO PURCHASE VITAMINS AND MINERALS.

    (a) IN GENERAL- The 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- The study shall include--

      (1) an analysis of scientific findings on the efficacy of and need for vitamins and minerals, including--

        (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 vitamin or mineral supplementation) on the health status and health care costs of women of childbearing age, pregnant or lactating 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 house-holds; and

      (6) the economic impact on the production of agricultural commodities of using food stamps to purchase vitamins and minerals.

    (c) REPORT- Not 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).

Subtitle B--Commodity Distribution Programs

SEC. 871. EMERGENCY FOOD ASSISTANCE PROGRAM.

    (a) DEFINITIONS- Section 201A of the Emergency Food Assistance 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- The term `additional commodities' 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 PERSONS- The term `average monthly number of unemployed persons' means the average monthly number of unemployed persons 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- The term `eligible recipient agency' means a public or nonprofit organiza-tion that--

        `(A) administers--

          `(i) an emergency feeding organization;

          `(ii) a charitable institution (including a hospital and a retirement home, but excluding a penal institution) to the extent that the institution serves needy persons;

          `(iii) a summer camp for children, or a child nutrition program providing food service;

          `(iv) a nutrition project operating under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.), including 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 participation in the program established under this Act.

      `(4) EMERGENCY FEEDING ORGANIZATION- The term `emergency feeding organization' means a public or nonprofit organization that administers activities and projects (including the activities 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 distress through the provision of food to needy persons, including low-income and unemployed persons.

      `(5) FOOD BANK- The 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 that, as an integral part of their normal activities, provide meals or food to feed needy persons on a regular basis.

      `(6) FOOD PANTRY- The term `food pantry' means a public or private nonprofit organization that distributes food to low-income and unemployed households, including food from sources other than the Department of Agriculture, to relieve situations of emergency and distress.

      `(7) POVERTY LINE- The term `poverty line' has the meaning provided in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)).

      `(8) SOUP KITCHEN- The term `soup kitchen' means a public or charitable institution that, as an integral part of the normal activities of the institution, maintains an established feeding operation to provide food to needy homeless persons on a regular basis.

      `(9) TOTAL VALUE OF ADDITIONAL COMMODITIES- The term `total value of additional commodities' means the actual cost of all additional commodities that are paid by the Secretary (including the distribution and processing costs incurred by the Secretary).

      `(10) VALUE OF ADDITIONAL COMMODITIES ALLOCATED TO EACH STATE- The term `value of additional commodities allocated to each State' means the actual cost of additional commodities allocated to each State that are paid by the Secretary (including the distribution and processing costs incurred by the Secretary).'.

    (b) STATE PLAN- Section 202A of the Emergency Food Assistance 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- To 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- Each plan shall--

      `(1) designate the State agency responsible for distributing the commodities received under this Act;

      `(2) set forth a plan of operation and administration to expeditiously distribute commodities under this Act;

      `(3) set forth the standards of eligibility for recipient agencies; and

      `(4) set forth the standards of eligibility for individual or household recipients of commodities, which shall require--

        `(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- The 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 commodities received under this Act.'.

    (c) AUTHORIZATION OF APPROPRIATIONS FOR ADMINISTRATIVE FUNDS- Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended--

      (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 eligible 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- Section 214 of the Emergency Food Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended--

      (1) by striking subsections (a) through (e) and (j);

      (2) by redesignating subsections (f) through (i) as subsections (a) through (d), respectively;

      (3) in subsection (b), as redesignated by paragraph (2)--

        (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-

      `(1) IN GENERAL- Commodities made available for each fiscal year under this section shall be delivered at reasonable intervals to States based on the grants calculated under subsection (a), or reallocated under subsection (b), before December 31 of the following fiscal year.

      `(2) ENTITLEMENT- Each State shall be entitled to receive the value of additional commodities determined under subsection (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- The Emergency Food Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended--

      (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 appears 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- Section 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- The 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 following:

`SEC. 27. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE PROGRAM.

    `(a) PURCHASE OF COMMODITIES- From amounts made available to carry out this Act, for each of fiscal years 1997 through 2002, the Secretary shall purchase $100,000,000 of a variety of nutritious 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 Agricultural 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- In purchasing commodities under subsection (a), the Secretary shall, to the extent practicable and appropriate, make purchases based on--

      `(1) agricultural market conditions;

      `(2) preferences and needs of States and distributing agencies; and

      `(3) preferences of recipients.'.

    (h) EFFECTIVE DATE- The 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--

      (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--Electronic Benefit Transfer Systems

SEC. 891. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) is amended--

      (1) by striking `(d) In the event that' and inserting `(d) APPLICABILITY TO SERVICE PROVIDERS OTHER THAN CERTAIN FINANCIAL INSTITUTIONS-

      `(1) IN GENERAL- If'; and

      (2) by adding at the end the following:

      `(2) STATE AND LOCAL GOVERNMENT ELECTRONIC BENEFIT TRANSFER SYSTEMS-

        `(A) DEFINITION OF ELECTRONIC BENEFIT TRANSFER SYSTEM- In this paragraph, the term `electronic benefit transfer system'--

          `(i) means a system under which a government agency distributes needs-tested benefits by establishing accounts that may be accessed by recipients electronically, such as through automated teller machines or point-of-sale terminals; and

          `(ii) does not include employment-related payments, including salaries and pension, retirement, or unemployment benefits established by a Federal, State, or local government agency.

        `(B) EXEMPTION GENERALLY- The disclosures, protections, 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- Subparagraph (B) shall not apply with respect to any electronic funds transfer under an electronic benefit transfer system for a deposit directly into a consumer account held by the recipient of the benefit.

        `(D) RULE OF CONSTRUCTION- No provision of this paragraph--

          `(i) affects or alters the protections otherwise applicable 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--MISCELLANEOUS

SEC. 901. APPROPRIATION BY STATE LEGISLATURES.

    (a) IN GENERAL- Any funds received by a State under the provisions of law specified in subsection (b) shall be subject to appropriation by the State legislature, consistent with the terms and conditions required under such provisions of law.

    (b) PROVISIONS OF LAW- The 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 recipients 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 VIOLATORS.

    (a) ELIGIBILITY FOR ASSISTANCE- The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended--

      (1) in section 6(l)--

        (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 termination of the tenancy of a public housing tenant if such tenant--

        `(A) 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

      `(2) is violating a condition of probation or parole imposed under Federal or State law.'; and

      (2) in section 8(d)(1)(B)--

        (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--

            `(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 AGENCIES- Title 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 housing 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 officer, with the current address, Social Security number, and photograph (if applicable) of any recipient of assistance under this Act, if the officer--

      `(1) furnishes the public housing agency with the name of the recipient; and

      `(2) notifies the agency that--

        `(A) such recipient--

          `(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; or

          `(iii) has information that is necessary for the officer 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 officer'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--

      (a) States should diligently continue their efforts to enforce child support payments by the non-custodial parent to the custodial 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 refuses to or is unable to pay child support must--

        (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- Not later than January 1, 1997, the Secretary of Health and Human Services shall establish and implement a strategy for--

      (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- Not later than June 30, 1998, and annually thereafter, the Secretary shall report to the Congress with respect to the progress that has been made in meeting the goals described in paragraphs (1) and (2) of subsection (a).

SEC. 906. SENSE OF THE SENATE REGARDING ENFORCEMENT OF STATUTORY RAPE LAWS.

    (a) SENSE OF THE SENATE- It is the sense of the Senate that States and local jurisdictions should aggressively enforce statutory rape laws.

    (b) JUSTICE DEPARTMENT PROGRAM ON STATUTORY RAPE- Not later than January 1, 1997, the Attorney General shall establish and implement a program that--

      (1) studies the linkage between statutory rape and teenage pregnancy, particularly by predatory older men committing repeat offenses; and

      (2) educates State and local criminal law enforcement officials on the prevention and prosecution of statutory rape, focusing in particular on the commission of statutory rape by predatory older men committing repeat offenses, and any links to teenage pregnancy.

    (c) VIOLENCE AGAINST WOMEN INITIATIVE- The Attorney General 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 TRANSFER SYSTEMS.

    Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) is amended--

      (1) by striking `(d) In the event' and inserting `(d) APPLICABILITY TO SERVICE PROVIDERS OTHER THAN CERTAIN FINANCIAL INSTITUTIONS-

      `(1) IN GENERAL- In the event'; and

      (2) by adding at the end the following new paragraph:

      `(2) STATE AND LOCAL GOVERNMENT ELECTRONIC BENEFIT TRANSFER PROGRAMS-

        `(A) EXEMPTION GENERALLY- The disclosures, protections, 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 government.

        `(B) EXCEPTION FOR DIRECT DEPOSIT INTO RECIPIENT'S ACCOUNT- Subparagraph (A) shall not apply with respect to any electronic funds transfer under an electronic benefit transfer program for deposits directly into a consumer account held by the recipient of the benefit.

        `(C) RULE OF CONSTRUCTION- No provision of this paragraph may be construed as--

          `(i) affecting or altering the protections otherwise applicable with respect to benefits established by Federal, State, or local law; or

          `(ii) otherwise superseding the application of any State or local law.

        `(D) ELECTRONIC BENEFIT TRANSFER PROGRAM DEFINED- For purposes of this paragraph, the term `electronic benefit transfer program'--

          `(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 payments, 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- Section 2003(c) of the Social Security Act (42 U.S.C. 1397b(c)) is amended--

      (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 succeeding fiscal year.'.

    (b) AUTHORITY TO USE VOUCHERS- Section 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--

      `(1) families who have become ineligible for assistance under a State program funded under part A of title IV by reason of a durational limit on the provision of such assistance; and

      `(2) families denied cash assistance under the State program funded under part A of title IV for a child who is born to a member of the family who is--

        `(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-

      (1) IN GENERAL- Paragraph (1) of section 32(i) of the Internal Revenue Code of 1986 (relating to denial of credit for individuals having excessive investment income) is amended by striking `$2,350' and inserting `$2,200'.

      (2) ADJUSTMENT FOR INFLATION- Subsection (j) of section 32 of such Code is amended to read as follows:

    `(j) INFLATION ADJUSTMENTS-

      `(1) IN GENERAL- In 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--

        `(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-

        `(A) IN GENERAL- If 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- If 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- Paragraph (2) of section 32(b) of such Code is amended to read as follows:

      `(2) AMOUNTS- The earned income amount and the phaseout 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- Paragraph (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 period 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--

          `(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-

      (1) IN GENERAL- Except 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- In the case of any individual 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- Subsections (a)(2)(B), (c)(1)(C), and (f)(2)(B) of section 32 of the Internal Revenue Code of 1986 are each amended by striking `adjusted gross income' each place it appears and inserting `modified adjusted gross income'.

    (b) MODIFIED ADJUSTED GROSS INCOME DEFINED- Section 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-

        `(A) IN GENERAL- The term `modified adjusted gross income' means adjusted gross income determined without regard to the amounts described in subparagraph (B).

        `(B) CERTAIN AMOUNTS DISREGARDED- An amount is described in this subparagraph if it is--

          `(i) the amount of losses from sales or exchanges of capital assets in excess of gains from such sales or exchanges to the extent such amount does not exceed the amount under section 1211(b)(1),

          `(ii) the net loss from estates and trusts,

          `(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 respect to--

            `(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 account items which are attributable to a trade or business which consists of the performance of services by the taxpayer as an employee.'.

    (c) EFFECTIVE DATES-

      (1) IN GENERAL- Except 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- In the case of any individual 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 ASSISTANCE PROGRAMS.

    (a) IN GENERAL- If an individual's benefits under a Federal, State, or local law relating to a means-tested welfare or a public assistance program are reduced because of an act of fraud by the individual 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 income of the individual (determined under the applicable program) attributable to such reduction.

    (b) WELFARE OR PUBLIC ASSISTANCE PROGRAMS FOR WHICH FEDERAL FUNDS ARE APPROPRIATED- For purposes of subsection (a), the term `means-tested welfare or public assistance program for which Federal funds are appropriated' includes the food stamp program 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, allot to each State which has transmitted an application for the fiscal year under section 505(a) an amount equal to the product of--

      `(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--

        `(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 children;

        `(C) teaches that abstinence from sexual activity is the only certain way to avoid out-of-wedlock pregnancy, sexually transmitted diseases, and other associated health problems;

        `(D) teaches that a mutually faithful monogamous relationship 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 appropriated, 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 `The Commission for Accreditation of Christian Science Nursing Organizations/Facilities, Inc.' each place it appears.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

END

Cite as AILA Doc. No. 96082259.

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