[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4767 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4767

                     To reform the welfare system.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 14, 1994

 Mr. Matsui (for himself, Mr. Miller of California, Mr. Becerra, Mrs. 
Clayton, Mr. Clyburn, Mr. Filner, Mr. Frank of Massachusetts, Ms. E.B. 
   Johnson of Texas, Mr. Kopetski, Mr. McDermott, Ms. McKinney, Mr. 
  Mineta, Ms. Norton, Mr. Rahall, Mr. Rangel, Ms. Roybal-Allard, Mr. 
Rush, Mr. Sabo, Ms. Velazquez, and Mr. Waxman) introduced the following 
 bill; which was referred jointly to the Committees on Ways and Means, 
 Education and Labor, Energy and Commerce, Banking, Finance and Urban 
      Affairs, Foreign Affairs, Veterans' Affairs, and Agriculture

_______________________________________________________________________

                                 A BILL


 
                     To reform the welfare system.

    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 ``Family Self-Sufficiency Act of 
1994''.

SEC. 2. AMENDMENT OF SOCIAL SECURITY ACT.

    Except as otherwise expressly provided, wherever in this Act 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 Social Security Act.

SEC. 3. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Amendment of Social Security Act.
Sec. 3. Table of contents.
            TITLE I--PROMOTION OF WORK AND SELF-SUFFICIENCY

 Subtitle A--Expansion of Funding for, and Participation in, the JOBS 
                                Program

Sec. 101. Increase in JOBS program funding.
Sec. 102. Increase in JOBS matching rate.
Sec. 103. JOBS participation requirements.
Sec. 104. Preliminary assessment of self-sufficiency needs within 30 
                            days after approval of AFDC application.
   Subtitle B--Job Creation, Job Placement and Development, and Work 
                              Requirements

Sec. 111. Public jobs creation program.
Sec. 112. Expansion of job placement, job development, and job 
                            retention activities.
Sec. 113. Self-employment programs.
Sec. 114. Provisions generally applicable to the JOBS program.
                Subtitle C--Support for Working Families

Sec. 121. End dollar-for-dollar work penalty.
Sec. 122. Increase in limitation on total family income.
Sec. 123. Availability of health care for poor working families.
Sec. 124. Elimination of different treatment of 2-parent families.
Sec. 125. Increase in stepparent income disregard.
                         Subtitle D--Child Care

Sec. 131. Increase in child care funds.
Sec. 132. Payments to encourage use of entire State allotment for at-
                            risk child care.
Sec. 133. Limitation on carryforward of unused at-risk child care 
                            allotments.
Sec. 134. Payment of local market rates.
Sec. 135. Set-aside for improvement of infrastructure and quality.
Sec. 136. Child care for working AFDC parents.
Sec. 137. Health and safety standards; continuity of care.
Sec. 138. Periodic identification of child care needs; ensuring that 
                            families understand child care 
                            alternatives.
Sec. 139. Ensuring that reimbursement mechanisms meet family needs.
Sec. 140. Facilitation of seamless services.
Sec. 141. Authority to provide for continuity of child care.
Sec. 142. Child care for families including a caretaker relative not 
                            receiving AFDC.
Sec. 143. State option to extend transitional child care benefits.
Sec. 144. State option to provide transitional child care benefits to 
                            families who have received AFDC for fewer 
                            than 3 months.
Sec. 145. Limitation of at-risk child care to families ineligible for 
                            recipient or transitional child care.
Sec. 146. Elimination of requirement that family receiving transitional 
                            child care benefits include a dependent 
                            child.
Sec. 147. State option to waive contribution requirement for families 
                            with income below the poverty level.
Sec. 148. Continuation of child care during dispute resolution.
Sec. 149. Option to consolidate State responsibility for child care.
  TITLE II--STRENGTHENING PARENTAL RESPONSIBILITY AND FAMILY STABILITY

                  Subtitle A--Federal Responsibilities

Sec. 201. Expansion of functions of Federal Parent Locator Service.
Sec. 202. Expansion of Federal parent locator systems.
Sec. 203. Federal child support order registry.
Sec. 204. National reporting of employees and child support 
                            information.
Sec. 205. Federal matching payments.
Sec. 206. Performance-based incentives and penalties.
Sec. 207. Increased Federal financial participation for States with 
                            unified child support enforcement programs.
Sec. 208. New child support audit process.
Sec. 209. National Child Support Guidelines Commission.
Sec. 210. Child Support Audit Advisory Committee.
                  Subtitle B--Paternity Establishment

Sec. 211. Paternity establishment procedures.
Sec. 212. Enhancing outreach to encourage paternity establishment.
Sec. 213. Strengthening civil procedures for paternity establishment.
Sec. 214. Penalty for failure to establish paternity promptly.
                        Subtitle C--Enforcement

Sec. 221. Access to financial records.
Sec. 222. Presumed address of obligor and obligee.
Sec. 223. Fair Credit Reporting Act amendment.
Sec. 224. Additional benefits subject to garnishment.
Sec. 225. Hold on occupational, professional, and business licenses.
Sec. 226. Driver's licenses and vehicle registrations denied to persons 
                            failing to appear in child support cases.
Sec. 227. Liens.
Sec. 228. Fraudulent transfer pursuit.
Sec. 229. Reporting of child support arrearages to credit bureaus.
Sec. 230. Denial of passports to noncustodial parents subject to State 
                            arrest warrants in cases of nonpayment of 
                            child support.
Sec. 231. Statutes of limitation.
Sec. 232. Collection of past-due support using tax collection 
                            authority.
                   Subtitle D--State Responsibilities

Sec. 241. State role.
Sec. 242. Uniform terms in orders.
Sec. 243. States required to enact the Uniform Interstate Family 
                            Support Act.
Sec. 244. Expedited processes and administrative procedures.
Sec. 245. Due process.
Sec. 246. Outreach and accessibility.
Sec. 247. Cost-of-living adjustment of child support awards.
Sec. 248. Simplified process for review and adjustment of certain child 
                            support orders.
Sec. 249. Prevention of conflicts of interest.
Sec. 250. Staffing.
Sec. 251. Training.
Sec. 252. Priorities in distribution of collected child support.
Sec. 253. Teen noncustodial parents and child support.
                       Subtitle E--Demonstrations

Sec. 261. Establishment of child support assurance demonstration 
                            projects.
                       Subtitle F--Miscellaneous

Sec. 271. Technical correction to ERISA definition of medical child 
                            support order.
               TITLE III--TEEN PARENTS AND WELFARE REFORM

                           Subtitle A--Family

Sec. 301. Minor teen parent residency requirement.
Sec. 302. Benefits increased by $50 for paternity establishment or 
                            establishment of child support order.
                  Subtitle B--Education and Employment

Sec. 311. Schooling and employment requirements.
Sec. 312. Summer activities and teen earnings.
Sec. 313. Planning, startup, and reporting.
Sec. 314. Child care for non-AFDC teen parents.
                      Subtitle C--Case Management

Sec. 321. Case management.
                   Subtitle D--Demonstration Projects

Sec. 331. Adolescent pregnancy prevention grants.
Sec. 332. Demonstration projects to provide comprehensive services to 
                            prevent adolescent pregnancy in high-risk 
                            communities.
                           TITLE IV--WAIVERS

Sec. 401. Funding for waivers that are not cost neutral.
                TITLE V--IMPROVING GOVERNMENT ASSISTANCE

                      Subtitle A--AFDC Amendments

Sec. 501. Requirement that needs standards reflect the cost of 
                            essential items.
Sec. 502. Maintenance of minimum benefit levels.
Sec. 503. Optional supplementation of benefits for families subject to 
                            retrospective budgeting.
Sec. 504. Income disregards.
Sec. 505. Increase in resource limit.
Sec. 506. Exclusions from resources.
Sec. 507. Verification of status of citizens and aliens.
Sec. 508. Calculation of 185 percent of need standard.
Sec. 509. Payments to the territories.
                 Subtitle B--Food Stamp Act Amendments

Sec. 511. Inconsequential income.
Sec. 512. Educational assistance.
Sec. 513. Training stipends and allowances; income from on-the-job 
                            training programs.
Sec. 514. Earned income tax credits.
Sec. 515. Resources necessary for self-employment.
Sec. 516. Lump-sum payments for medical expenses or replacement of lost 
                            resources.
Sec. 517. Conforming amendment.
                        TITLE VI--EFFECTIVE DATE

Sec. 601. Effective date.

            TITLE I--PROMOTION OF WORK AND SELF-SUFFICIENCY

 Subtitle A--Expansion of Funding for, and Participation in, the JOBS 
                                Program

SEC. 101. INCREASE IN JOBS PROGRAM FUNDING.

    Section 403(k)(3) (42 U.S.C. 603(k)(3)) is amended by striking 
subparagraphs (E) and (F) and inserting the following:
            ``(E) $1,590,000,000 in the case of the fiscal year 1995,
            ``(F) $2,080,000,000 in the case of the fiscal year 1996,
            ``(G) $2,620,000,000 in the case of the fiscal year 1997,
            ``(H) $3,160,000,000 in the case of the fiscal year 1998, 
        and
            ``(I) $3,700,000,000 in the case of the fiscal year 
        1999.''.

SEC. 102. INCREASE IN JOBS MATCHING RATE.

    (a) Amount of State's Entitlement for JOBS.--Paragraphs (1) and (2) 
of section 403(k) (42 U.S.C. 603(k)) are amended to read as follows:
    ``(k)(1) In addition to payments under subsection (a), the 
Secretary shall pay to each State with a plan approved under part F an 
amount equal to the product of--
            ``(A) the State's enhanced Federal medical assistance 
        percentage as defined in paragraph (7), and
            ``(B) the State's expenditures to carry out the program 
        under part F (other than expenditures required by section 
        402(g)(1)(A) in the case of the 50 States and the District of 
        Columbia),
but payments to a State under this title for any fiscal year for such 
activities may not exceed the limitation under paragraph (2) with 
respect to such State.
    ``(2) The limitation under this paragraph with respect to a State 
for any fiscal year is the amount that bears the same ratio to the 
amount specified in paragraph (3) for the fiscal year as the average 
monthly number of adult recipients (as defined in paragraph (4)) in the 
State in the immediately preceding fiscal year bears to the average 
monthly number of such recipients in all the States for the immediately 
preceding year.''.
    (b) Provisions Applicable to JOBS and Child Care Funding.--Section 
403(k) (42 U.S.C. 603(k)) is amended by adding at the end the 
following:
    ``(6) If the sum of the amount specified in any fiscal year under 
paragraph (3) exceeds (or if the Secretary estimates that it will 
exceed) the total amount paid (or estimated to be payable) under 
paragraph (1) for the fiscal year, then the Secretary shall adjust the 
maximums applicable to payments to those States to which the limits 
under such subsections have made additional payment unavailable under 
paragraph (1), and to which payments for such fiscal year under either 
or both such paragraphs would be greater but for the applicability to 
such States of such limits. The Secretary shall by regulation provide 
for the equitable adjustment of such limits in the case where all 
States' requests for adjustment of limits, and additional payments, for 
a fiscal year under this paragraph exceed the amount available for 
reallotment.
    ``(7) As used in this part, a `State's enhanced Federal medical 
assistance percentage' with respect to expenditures for a fiscal year 
means such State's Federal medical assistance percentage as defined in 
section 1905(b) (or, where applicable as defined in the last sentence 
of section 1118), plus
            ``(A) 5 percentage points, but not less than 65 percent, 
        with respect to fiscal years 1996 and 1997,
            ``(B) 7 percentage points, but not less than 67 percent, 
        with respect to fiscal year 1998,
            ``(C) 9 percentage points, but not less than 69 percent, 
        with respect to fiscal year 1999, and
            ``(D) 10 percentage points, but not less than 70 percent, 
        with respect to fiscal year 2000, and each fiscal year 
        thereafter.''.
    (c) Special Rule.--Section 403 (42 U.S.C. 603), as amended by 
section 132 of this Act, is amended by adding at the end the following:
    ``(p) Notwithstanding the preceding provisions of this section, the 
percentage applicable to a State for purposes of section 402(g)(3)(A) 
and subsections (k)(1)(A) and (n)(1)(A) (for determining the Federal 
payment with respect to a State's expenditures under part F and its 
child care expenditures, respectively) shall be the State's Federal 
medical assistance percentage, but not less than 60 percent (or, in the 
case of section 402(g)(3)(A) and subsection (n)(1)(A), the State's 
Federal medical assistance percentage) for any fiscal year in which the 
nonfederal share of the sum of its expenditures that may be included 
for purposes of subsection (a)(3) and its expenditures for its program 
under part F and child care services under subsections (g) and (i) of 
section 402 (not included under subsection (a)(3)) is less than the 
nonfederal share of expenditures for purposes of subsection (a)(3) and 
of expenditures (for which Federal matching was provided) under its 
program under part F and child care services (not included under 
subsection (a)(3)) under subsections (g) and (i) of section 402 for 
fiscal year 1994 (or fiscal year 1993 if such nonfederal share were 
greater for such year).
    (d) Conforming Amendments.--
            (1) Section 402(g)(3)(A)(i) (42 U.S.C. 602(g)(3)(A)(i) is 
        amended by striking ``Federal medical assistance percentage (as 
        defined in section 1905(b))'' and inserting ``State's enhanced 
        Federal medical assistance percentage (as defined in section 
        403(k)(7))''.
            (2) Section 402(g)(3)(A)(ii) (42 U.S.C. 602(g)(3)(A)(ii)) 
        is amended by striking ``Federal medical assistance percentage 
        (as defined in section 1118)'' and inserting ``State's enhanced 
        Federal medical assistance percentage (as defined in section 
        403(k)(7))''.
            (3) Section 403(n)(1)(A) (42 U.S.C. 603(n)(1)(A)) is 
        amended by striking ``the Federal medical assistance percentage 
        as defined in section 1905(b))'' and inserting ``the State's 
        enhanced Federal medical assistance percentage (as defined in 
        subsection (k)(7))''.

SEC. 103. JOBS PARTICIPATION REQUIREMENTS.

    (a) Participation Rates Combined.--
            (1) In general.--Section 403(l)(3)(A) (42 U.S.C. 
        603(l)(3)(A)) is amended--
                    (A) by striking ``and'' at the end of clause (v);
                    (B) by striking the period at the end of clause 
                (vi) and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(vii) 25 percent, if such year is 1996;
            ``(viii) 30 percent, if such year is 1997;
            ``(ix) 40 percent, if such year is 1998; and
            ``(x) 50 percent, if such year is 1999.''.
            (2) Elimination of separate afdc-up participation rates.--
        Section 403(l) (42 U.S.C. 603(l)) is amended by striking 
        paragraph (4).
    (b) Definition of Participation.--Section 403(l)(3)(D) (42 U.S.C. 
603(l)(3)(D)) is amended--
            (1) by inserting ``(i)'' after ``(D)''; and
            (2) by adding after and below the end the following:
    ``(ii) Each hour of classroom instruction of an individual who is 
enrolled in a degree program offered by an institution of higher 
education (as defined in section 1201(a) of the Higher Education Act of 
1965) or in such other education or training programs that require 
substantial outside classroom preparation (which programs shall be 
designated by the Secretary in regulations) shall be considered 2 hours 
of participation in the State program established under part F.
    ``(iii) Each hour spent by an individual in unsubsidized employment 
shall be considered 1 hour of participation by the individual in the 
State program established under part F.
    ``(iv) Each hour of employment of an individual who has become 
ineligible for aid under the State plan approved under this part and 
whose income (plus the other income of the family of the individual) 
are sufficient to make the individual ineligible for such aid shall be 
considered 1 hour of participation by the individual in the State 
program established under part F, until the end of the 6-month period 
that begins with the date the ineligibility begins.
    ``(v) Each hour spent by an individual in a self-employment program 
referred to in section 482(d)(1)(A)(ii)(VI) shall be considered 1 hour 
of participation by the individual in the State program established 
under part F.
    ``(vi) Each hour spent by an individual in a parenting education 
program approved by the State shall be considered 1 hour of 
participation by the individual in the State program established under 
part F.''.
    (c) Schedule of Penalties for Failure to Meet Required 
Participation Rate.--Section 403(l)(3) (42 U.S.C. 603(l)(3)) is 
amended--
            (1) in subparagraph (A), by striking all that precedes 
        clause (i) and inserting the following:
    ``(3)(A) Each State's participation rate (determined under 
subparagraph (B)) for a fiscal year shall be not less than--''; and
            (2) by amending subparagraph (E) to read as follows:
    ``(E)(i) The Secretary shall, by regulation, prescribe a set of 
penalties for noncompliance with subparagraph (A), which shall take 
into consideration--
            ``(I) the extent of the noncompliance;
            ``(II) whether the job entry rate (as defined by the 
        Secretary in regulations) of the State exceeds the average job 
        entry rate for the States operating programs under part F); and
            ``(III) any special circumstances.
    ``(ii) Notwithstanding any regulation prescribed under clause (i) 
of this subparagraph, if a State substantially fails to comply with 
subparagraph (A) of this paragraph for a fiscal year, then the 
Secretary--
            ``(I) shall pay to a State an amount equal to 50 percent 
        (in lieu of any different percentage specified in paragraph 
        (1)(A)) of the expenditures made by the State in the 
        immediately succeeding fiscal year in operating its program 
        under part F; and
            ``(II) until the Secretary determines that the substantial 
        failure to comply has ceased--
                    ``(aa) may suspend or terminate any waiver granted 
                under section 1115 of compliance by the State with a 
                requirement of section 402 ; and
                    ``(bb) may not grant any such waiver to the State 
                under section 1115.''.
    (d) Separate Participation Requirement for Work Activities.--
Section 403(l) (42 U.S.C. 603(l)) is amended by inserting after 
paragraph (3) the following:
    ``(4)(A)(i) Notwithstanding paragraph (1), the Secretary shall pay 
to a State an amount equal to 50 percent of the expenditures made by 
such State in a fiscal year in operating its program established under 
part F (in lieu of any different percentage specified in paragraph 
(1)(A)) if less than \1/2\ of the State's participation rate 
(determined under paragraph (3)(B)) for the preceding fiscal year is 
attributable to individuals engaged in--
            ``(I) unsubsidized employment;
            ``(II) on-the-job training;
            ``(III) activities under a work supplementation program 
        operated under section 482(e);
            ``(IV) public service employment;
            ``(V) a community work experience program established in 
        accordance with section 482(f);
            ``(VI) an alternative work experience program; or
            ``(VII) a self-employment program referred to in section 
        482(d)(1)(A)(ii)(VI).
    ``(ii)(I) Not more than 6 months of participation in a program 
referred to in subclause (V) or (VI) of clause (i) may be taken into 
account under clause (i) in the case of a participant who has little or 
no recent work history.
    ``(II) Not more than 90 days of participation in a program referred 
to in subclause (V) or (VI) of clause (i) may be taken into account 
under clause (i) if the work experience provided by the program is 
designed to provide experience in a specific occupation in accordance 
with the employability plan developed for the participant.
    ``(B) Subparagraph (A) shall not apply to a State for a fiscal year 
if the State demonstrates that at least \1/3\ of the expenditures made 
by the State in the fiscal year in operating its program established 
under part F were for work activities specified in subparagraph (A) and 
for job placement, job development, and job retention activities.''.
    (e) Good Cause Exemptions.--Section 402(a)(19)(G)(iv) (42 U.S.C. 
602(a)(19)(G)(iv)) is amended--
            (1) by striking ``or'' at the end of subclause (I);
            (2) by striking ``and'' at the end of subclause (II) and 
        inserting ``or''; and
            (3) by adding at the end the following:
                                    ``(III) on the basis of the refusal 
                                of an individual to participate in the 
                                program or accept employment if child 
                                care is necessary for the individual to 
                                accept such employment, and--
                                            ``(aa) child care suited 
                                        for the needs of a dependent 
                                        child of the individual is not 
                                        available; or
                                            ``(bb) placement of a 
                                        dependent child of the 
                                        individual into available child 
                                        care would pose a significant 
                                        risk of physical or 
                                        developmental harm to the 
                                        child; and''.
    (f) Reports on Job Entries.--Section 403(l)(3) (42 U.S.C. 
603(l)(3)) is amended by adding at the end the following:
    ``(F)(i) Each State operating a program under part F shall submit 
to the Secretary, with such frequency as the Secretary may require by 
regulation, reports on the following aspects of the program:
            ``(I) The number of job entries (as defined by the 
        Secretary in regulations, subject to clause (ii)) by program 
        participants.
            ``(II) Job retention by program participants.
            ``(III) Wage rates of program participants.
            ``(IV) Hours of employment of program participants.
            ``(V) The extent to which the jobs into which program 
        participants are placed offer health benefits.
            ``(VI) Such other information relating to job entries by 
        program participants as the Secretary may require by 
        regulation.
    ``(ii) The definition of job entry shall, at a minimum provide 
that--
            ``(I) the employment must be obtained after the individual 
        has been referred for participation in the program established 
        by the State under part F and after the individual has 
        registered or received orientation for the program;
            ``(II) not more than 1 employment entry per participant per 
        month may be counted;
            ``(III) the employment must be at or above the greater of 
        the State or Federal minimum wage, and must be for at least 15 
        hours per week;
            ``(IV) employment paid solely by commissions, and self-
        employment, may not be counted until the participant has earned 
        income of at least the minimum wage for at least 15 hours per 
        week;
            ``(V) changes from part-time to full-time employment with 
        the same employer shall not count as an additional job entry; 
        and
            ``(VI) job entries shall not include jobs known by the 
        State to be of extremely short duration.''.
    (g) Conforming Amendments.--Section 204(b)(2) of the Family Support 
Act of 1988 (42 U.S.C. 681 note) is amended--
            (1) by inserting ``, and amended by section 103 of the 
        Family Self-Sufficiency Act of 1994'' after ``this Act''; and
            (2) by striking ``1995'' and inserting ``1999''.

SEC. 104. PRELIMINARY ASSESSMENT OF SELF-SUFFICIENCY NEEDS WITHIN 30 
              DAYS AFTER APPROVAL OF AFDC APPLICATION.

    Section 402(a) (42 U.S.C. 602(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (44);
            (2) by striking the period at the end of paragraph (45) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (45) the following:
            ``(46) provide that, not later than 30 days after approving 
        the application of a family for aid under the State plan 
        approved under this part, the State shall--
                    ``(A) conduct a preliminary assessment of the self-
                sufficiency needs of the family;
                    ``(B) determine whether it would be appropriate to 
                require any member of the family who may be required to 
                participate in the program of the State under part F to 
                immediately begin participation in the program; and
                    ``(C) advise the family of the availability of 
                child care assistance under section 402(g) for 
                participation in education, training, and 
                employment.''.

   Subtitle B--Job Creation, Job Placement and Development, and Work 
                              Requirements

SEC. 111. PUBLIC JOBS CREATION PROGRAM.

    (a) In General.--Section 482 (42 U.S.C. 682) is amended by adding 
at the end the following:
    ``(j) Public Jobs Creation Program.--
            ``(1) In general.--Any State may establish a public jobs 
        creation program in accordance with this subsection.
            ``(2) General requirements.--A public jobs creation program 
        is a program that provides employment in the public sector or 
        in private nonprofit organizations in accordance with the 
        following requirements:
                    ``(A) Eligibility.--A State may elect to make a job 
                available to an individual under this paragraph if the 
                individual--
                            ``(i) is eligible to receive aid under the 
                        State plan approved under part A; and
                            ``(ii) has not, during the immediately 
                        preceding 6 months, voluntarily terminated, 
                        without good cause, full-time employment of the 
                        individual at a wage rate of at least the 
                        minimum wage rate then in effect under section 
                        6 of the Fair Labor Standards Act of 1938.
                    ``(B) Periodic job search required.--As a 
                continuing condition of eligibility to participate in 
                the program, each participant in the program shall 
                periodically engage in job search.
                    ``(C) Entry-level positions.--
                            ``(i) In general.--Subject to clause (ii), 
                        the program shall provide entry-level 
                        positions, to the extent practicable.
                            ``(ii) No infringement on promotional 
                        opportunities.--A job shall not be created in a 
                        promotional line that will infringe in any way 
                        upon the promotional opportunities of persons 
                        employed in jobs not subsidized under this 
                        subsection.
                    ``(D) Maximum period of subsidized employment at 
                same position.--The program shall not permit an 
                individual to remain in the same position of subsidized 
                employment for more than 24 months.
            ``(3) Wages treated as earned income.--Wages paid under a 
        program established under this subsection shall be considered 
        to be earned income for purposes of any provision of law.
            ``(4) Preservation of eligibility for child care assistance 
        and medicaid benefits.--Any individual who becomes ineligible 
        to receive aid under a State plan approved under part A by 
        reason of income from employment provided under a program 
        established under this subsection to the caretaker relative of 
        the family of which the individual is a member shall for 
        purposes of eligibility for child care benefits under section 
        402(g)(1)(A)(i) and for purposes of eligibility for medical 
        assistance under the State plan approved under title XIX, be 
        considered to be receiving such aid for so long as the 
        subsidized employment provided to the individual under this 
        subsection continues.
            ``(5) Targeted individuals.--At least 50 percent of the 
        amounts expended by a State under this subsection shall be 
        expended with respect to individuals who have received aid 
        under the State plan approved under part A for any 36 of the 
        most recent 60 months, or with respect to such other groups of 
        individuals as the State may select and are approved by the 
        Secretary.''.
    (b) Optional Component of JOBS Program.--Section 482(d)(1)(A)(ii) 
(42 U.S.C. 682(d)(1)(A)(ii)) is amended--
            (1) by striking ``and'' at the end of subclause (III);
            (2) by striking the period and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(V) a publicly funded jobs creation program as 
                described in subsection (j).''.

SEC. 112. EXPANSION OF JOB PLACEMENT, JOB DEVELOPMENT, AND JOB 
              RETENTION ACTIVITIES.

    (a) In General.--Section 403(l) (42 U.S.C. 603(l)) is amended by 
adding at the end the following:
    ``(5) Each State shall expend for job placement, job development, 
and job retention activities in each fiscal year not less than 10 
percent of the total amount expended by the State for the operation of 
the State program established under part F in the fiscal year.''.
    (b) Case Management Services Required To Be Offered to JOBS 
Participants.--Section 482(a)(1)(B) (42 U.S.C. 682(a)(1)(B)) is amended 
by adding at the end the following: ``In addition, such plan must 
provide that the State shall offer case management services to each 
participant in the program for a period of not fewer than 90 days after 
the participant becomes employed, and, at the option of the State, the 
State may extend such period to not more than 365 days.''.

SEC. 113. SELF-EMPLOYMENT PROGRAMS.

    Section 482(d)(1)(A)(ii) (42 U.S.C. 682(d)(1)(A)(ii)), as amended 
by section 111(b) of this Act, is amended--
            (1) by striking ``and'' at the end of subclause (IV);
            (2) by striking the period and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(VI) programs to prepare for self-employment or 
                to enable individuals to establish a 
                microenterprise.''.

SEC. 114. PROVISIONS GENERALLY APPLICABLE TO THE JOBS PROGRAM.

    Section 484 (42 U.S.C. 684) is amended by striking subsections (b), 
(c), and (d) and inserting the following:
    ``(b)(1)(A) Funds provided for a program established under section 
482 may be used only for programs that do not duplicate any employment 
activity otherwise available in the locality of the program.
    ``(B) Funds provided for a program established under section 482 
shall not be paid to a private nonprofit entity to conduct activities 
that are the same or substantially equivalent to activities provided by 
a State in which the entity is located or by an agency of local 
government with jurisdiction over the locality in which the entity is 
located, unless the requirements of paragraph (2) are met.
    ``(2)(A) An employer shall not displace an employee or position, 
including partial displacement such as reduction in hours, wages, or 
employment benefits, as a result of the use by the employer of a 
participant in a program established under section 482.
    ``(B) No work assignment under a program established under section 
482 shall result in any infringement of the promotional opportunities 
of any employed individual.
    ``(C)(i) A participant in a program established under section 
482(f) or an alternative work experience program shall not perform any 
services or duties or engage in activities that would otherwise be 
performed by an employee as part of the assigned duties of the 
employee.
    ``(ii) A participant in a program established under section 482 
shall not perform any services or duties or engage in activities that--
            ``(I) will supplant the hiring of employed workers; or
            ``(II) are services, duties or activities with respect to 
        which an individual has recall rights pursuant to a collective 
        bargaining agreement or applicable personnel procedures.
    ``(iii) A participant in a program established under section 482 
shall not perform services or duties that have been performed by or 
were assigned to any--
            ``(I) presently employed worker if the participant is in a 
        program established under section 482(f);
            ``(II) employee who recently resigned or was discharged;
            ``(III) employee who--
                    ``(aa) is the subject of a reduction in force; or
                    ``(bb) has recall rights pursuant to a collective 
                bargaining agreement or applicable personnel 
                procedures;
            ``(IV) employee who is on leave (terminal, temporary, 
        vacation, emergency, or sick); or
            ``(V) employee who is on strike or is being locked out.
    ``(c)(1) Sections 142(a), 143(a)(4), 143(a)(5), and 143(c)(2) of 
the Job Training Partnership Act shall apply to employment provided 
through any program established under section 482 of this Act.
    ``(2) Sections 130(f) and 176(f) of the National and Community 
Service Act of 1990 shall apply to employment provided through any 
program established under section 482 of this Act.
    ``(d)(1) A participant in a program established under subsection 
(e), (f), or (j) of section 482 may not be assigned to fill any 
established unfilled position vacancy.
    ``(2)(A) A program established under section 482 may not be used to 
assist, promote, or deter union organizing.
    ``(B) A program established under section 482 may not be used to 
impair existing contracts for services or collective bargaining 
agreements.''.

                Subtitle C--Support for Working Families

SEC. 121. END DOLLAR-FOR-DOLLAR WORK PENALTY.

    (a) In General.--Section 402(a)(8)(A)(ii) (42 U.S.C. 
602(a)(8)(A)(ii)) is amended to read as follows:
                    ``(ii) shall disregard from the earned income of 
                any child or relative receiving aid under the State 
                plan, or of any other individual (living in the same 
                home as the relative and child) whose needs are taken 
                into account in making the determination, an amount 
                equal to--
                            ``(I) not less than the first $120 
                        (adjusted pursuant to section 406(i) for the 
                        calendar quarter in which the month occurs) and 
                        not more than the first $200 (adjusted pursuant 
                        to section 406(i) for the calendar quarter in 
                        which the month occurs) of the total of such 
                        earned income for the month; plus
                            ``(II) not less than \1/3\ and not more 
                        than \1/2\ of the remainder of such earned 
                        income;''.
    (b) Inflation Adjustment.--Section 406 (42 U.S.C. 606) is amended 
by adding at the end the following:
    ``(i) The Secretary shall adjust each dollar amount required to be 
adjusted pursuant to this subsection for any month in a calendar 
quarter by--
            ``(1) multiplying the amount by the ratio of--
                    ``(A) the Consumer Price Index (as prepared by the 
                Department of Labor) for the 3rd quarter of the 
                calendar year that immediately precedes the calendar 
                year in which the calendar quarter occurs, to
                    ``(B) the Consumer Price Index for the 3rd quarter 
                of calendar year 1995; and
            ``(2) rounding the product, if not a multiple of $10, to 
        the nearer multiple of $10.''.
    (c) Conforming Amendments.--
            (1) Section 402(a)(8)(A) (42 U.S.C. 602(a)(8)(A)) is 
        amended by striking clause (iv).
            (2) Section 402(a)(8)(B) (42 U.S.C. 602(a)(8)(B)) is 
        amended--
                    (A) by striking ``--'' the first place such term 
                appears and all that follows through ``(i)'';
                    (B) by striking ``, (iii), or (iv)'' and inserting 
                ``or (iii)'';
                    (C) by redesignating subclauses (I), (II), and 
                (III) of clause (i) as clauses (i), (ii), and (iii), 
                respectively; and
                    (D) by striking clause (ii).
            (3) Section 402(a)(37) (42 U.S.C. 602(a)(37)) is amended by 
        striking ``or because of paragraph (8)(B)(ii)(II)''.
            (4) Section 402(g)(1)(A)(ii) (42 U.S.C. 602(g)(1)(A)(ii)) 
        is amended by striking ``or by reason of subsection 
        (a)(8)(B)(ii)(II)''.
            (5) Section 1925(a) (42 U.S.C. 1396r-6(a)) is amended by 
        striking ``or because of section 402(a)(8)(B)(ii)(II) 
        (providing for a time-limited earned income disregard)''.
    (d) Research and Analysis Concerning Effects of Improved Earnings 
Treatment.--The Secretary shall establish State reporting requirements 
designed to improve Federal data concerning employment entries by 
recipients of aid under a State plan approved under part A of title IV 
of the Social Security Act, and designed to calculate monthly 
employment entry rates by States. The Secretary shall also solicit from 
States applications under section 1115 of such Act for a structured set 
of waivers designed to identify the extent to which earnings disregard 
rules affect the employment entry and employment retention rates of 
such recipients.

SEC. 122. INCREASE IN LIMITATION ON TOTAL FAMILY INCOME.

    Section 402(a)(18) (42 U.S.C. 602(a)(18)) is amended by inserting 
``the greater of 130 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) for a family of the same composition or'' before ``185''.

SEC. 123. AVAILABILITY OF HEALTH CARE FOR POOR WORKING FAMILIES.

    (a) Optional Extension of Medicaid Enrollment for Former AFDC 
Recipients for 1 Additional Year.--
            (1) In general.--Section 1925(b)(1) (42 U.S.C. 1396r-
        6(b)(1)) is amended by striking the period at the end and 
        inserting the following: ``, and may provide that the State 
        shall offer to each such family the option of extending 
        coverage under this subsection for any of the first 2 
        succeeding 6-month periods, in the same manner and under the 
        same conditions as the option of extending coverage under this 
        subsection for the first succeeding 6-month period.''.
            (2) Conforming amendments.--Section 1925(b) (42 U.S.C. 
        1396r-6(b)) is amended--
                    (A) in the heading, by striking ``Extension'' and 
                inserting ``Extensions'';
                    (B) in the heading of paragraph (1), by striking 
                ``Requirement'' and inserting ``In general'';
                    (C) in paragraph (2)(B)(ii)--
                            (i) in the heading, by striking ``period'' 
                        and inserting ``periods''; and
                            (ii) by striking ``in the period'' and 
                        inserting ``in each of the 6-month periods'';
                    (D) in paragraph (3)(A), by striking ``the 6-month 
                period'' and inserting ``any 6-month period'';
                    (E) in paragraph (4)(A), by striking ``the 
                extension period'' and inserting ``any extension 
                period''; and
                    (F) in paragraph (5)(D)(i), by striking ``is a 3-
                month period'' and all that follows and inserting the 
                following: ``is, with respect to a particular 6-month 
                additional extension period provided under this 
                subsection, a 3-month period beginning with the 1st or 
                4th month of such extension period.''.
    (b) Permitting States To Provide Transitional Coverage to Any 
Individual Receiving AFDC During Previous 6 Months.--Section 1925(a)(1) 
(42 U.S.C. 1396r-6(a)(1)) is amended by striking ``such aid,'' and 
inserting ``such aid (or, at the option of the State, in any of the 6 
months immediately preceding such month),''.
    (c) Repeal of Reporting Requirement During Extension Periods.--
            (1) In general.--Section 1925(b)(2) (42 U.S.C. 1396r-
        6(b)(2)) is amended by striking subparagraph (B).
            (2) Conforming amendments.--(A) Section 1925(b)(1) (42 
        U.S.C. 1396r-6(b)(1)) is amended by striking ``and which meets 
        the requirement of paragraph (2)(B)(i)''.
            (B) Section 1925(b)(2) (42 U.S.C. 1396r-6(b)(2)) is 
        amended--
                    (i) in the heading for such paragraph, by striking 
                ``and reporting'';
                    (ii) by striking ``(A) Notice'';
                    (iii) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B);
                    (iv) in the second sentence of subparagraph (A) (as 
                so redesignated)--
                            (I) by striking ``in the 3rd month'' and 
                        all that follows through ``(II)''; and
                            (II) by striking ``(III)'' and inserting 
                        ``(II)''; and
                    (v) in subparagraph (B) (as so redesignated)--
                            (I) in the heading, by striking ``reporting 
                        requirements and''; and
                            (II) by striking ``the reporting 
                        requirement'' and all that follows through 
                        ``statement of''.
            (C) Section 1925(b)(3) (42 U.S.C. 1396r-6(b)(3)) is 
        amended--
                    (i) in subparagraph (A)--
                            (I) by striking subclause (I);
                            (II) by redesignating subclauses (II) and 
                        (III) as subclauses (I) and (II); and
                            (III) by striking the matter following 
                        subclause (II) (as so redesignated); and
                    (ii) in subparagraph (B), by striking 
                ``(A)(iii)(II)'' and inserting ``(A)(iii)(I)''.
    (d) Effective Date.--(1) Except as provided in paragraph (2), the 
amendments made by subsections (a) and (b) shall apply to calendar 
quarters beginning on or after October 1, 1995, without regard to 
whether final regulations to carry out such amendments have been 
promulgated by such date.
    (2) In the case of a State plan for medical assistance under title 
XIX of the Social Security Act which the Secretary of Health and Human 
Services determines requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirements imposed by the amendments made by subsections (a) and (b), 
the State plan shall not be regarded as failing to comply with the 
requirements of such title solely on the basis of its failure to meet 
these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first 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.

SEC. 124. ELIMINATION OF DIFFERENT TREATMENT OF 2-PARENT FAMILIES.

    (a) In General.--Section 402(a) (42 U.S.C. 602(a)) is amended by 
striking paragraph (41).
    (b) Conforming Amendments.--
            (1) Section 402(a)(19)(B)(i)(II) (42 U.S.C. 
        602(a)(19)(B)(i)(II)) is amended by striking ``(and'' and all 
        that follows through ``407(b)(2)(B)(i))''.
            (2) Section 402(a)(19)(D) (42 U.S.C. 602(a)(19)(D)) is 
        amended by striking ``eligible'' and all that follows through 
        ``earner'' and inserting ``in which both parents are living at 
        home''.
            (3) Section 402(a)(19)(G)(i) (42 U.S.C. 602(a)(19)(G)(i)) 
        is amended--
                    (A) in subclause (I), by striking ``(whether or not 
                section 407 applies)''; and
                    (B) in subclause (II)--
                            (i) by striking ``which is eligible for aid 
                        to families with dependent children by reason 
                        of section 407'' and inserting ``in which both 
                        parents are living at home''; and
                            (ii) by striking ``the needs of such spouse 
                        shall also not'' and inserting ``the spouse 
                        shall be required to participate in the program 
                        unless exempt by reason of subparagraph (C) 
                        (other than clause (iii) thereof), or by reason 
                        of subparagraph (C)(iii) if the individual 
                        demonstrates to the satisfaction of the State 
                        that it is in the best interest of the child or 
                        children not to impose such requirement, and if 
                        the spouse fails without good cause to so 
                        participate, the needs of the spouse shall''.
            (4) Section 402(a)(38)(B) (42 U.S.C. 602(a)(38)(B)) is 
        amended by striking ``or in section 407(a)''.
            (5) Section 402(a) (42 U.S.C. 602(a)) is amended by 
        striking paragraph (42).
            (6) Section 402(g)(1)(A)(ii) (42 U.S.C. 602(g)(1)(A)(ii)) 
        is amended by striking ``hours of, or increased income from,'' 
        and inserting ``income from''.
            (7) Section 406(a)(1) (42 U.S.C. 606(a)(1)) is amended by 
        striking ``who has been deprived'' and all that follows through 
        ``incapacity of a parent''.
            (8) Section 406(b)(1) (42 U.S.C. 606(b)(1)) is amended by 
        striking ``and if such relative'' and all that follows through 
        ``section 407''.
            (9) Section 407 (42 U.S.C. 607) is hereby repealed.
            (10) Section 472(a) (42 U.S.C. 672(a)) is amended by 
        striking ``or of section 407''.
            (11) Section 473(a)(2)(A)(i) (42 U.S.C. 672(a)(2)(A)(i)) is 
        amended by striking ``or section 407''.
            (12) Section 1115(b) (42 U.S.C. 1315(b)) is amended by 
        striking paragraph (5).
            (13) Section 1115 (42 U.S.C. 1315) is amended by striking 
        subsection (d).
            (14) Section 1902(a)(10)(A)(i) (42 U.S.C. 
        1396a(a)(10)(A)(i)) is amended by striking subclause (V) and by 
        redesignating subclauses (VI) and (VII) as subclauses (V) and 
        (VI), respectively.
            (15) Section 1905 (42 U.S.C. 1396d) is amended by striking 
        subsection (m).
            (16) Section 1905(n)(1) (42 U.S.C. 1396d(n)(1)) is 
        amended--
                    (A) in subparagraph (A)--
                            (i) by striking ``(or'' and all that 
                        follows through ``407)''; and
                            (ii) by adding ``or'' at the end; and
                    (B) by striking subparagraph (B).
            (17) Section 1925(a) (42 U.S.C. 1396r-6(a)) is amended by 
        striking ``hours of, or income from,'' and inserting ``income 
        from''.
            (18) Section 204(b)(2) of the Family Support Act of 1988 
        (42 U.S.C. 681 note) is amended by striking the semicolon and 
        all that follows through ``1998''.

SEC. 125. INCREASE IN STEPPARENT INCOME DISREGARD.

    Section 402(a)(31)(B) (42 U.S.C. 602(a)(31)(B)) is amended by 
striking ``the State's standard of need under such plan'' and inserting 
``the greatest of (i) the State's standard of need under such plan, 
(ii) 130 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), 
or (iii) such amount as the State may establish,''.

                         Subtitle D--Child Care

SEC. 131. INCREASE IN CHILD CARE FUNDS.

    Section 403(n)(2)(B) (42 U.S.C. 603(n)(2)(B)) is amended--
            (1) by striking ``and'' at the end of clause (iv);
            (2) in clause (v), by striking the comma and all that 
        follows and inserting a semicolon; and
            (3) by adding at the end the following:
            ``(vi) $800,000,000 for fiscal year 1996;
            ``(vii) $1,300,000,000 for fiscal year 1997;
            ``(viii) $1,800,000,000 for fiscal year 1998; and
            ``(ix) $2,300,000,000 for fiscal year 1999.''.

SEC. 132. PAYMENTS TO ENCOURAGE USE OF ENTIRE STATE ALLOTMENT FOR AT-
              RISK CHILD CARE.

    Section 403 (42 U.S.C. 603) is amended--
            (1) in subsection (n)--
                    (A) in paragraph (1)(B), by inserting ``95 percent 
                of'' before ``the limitation''; and
                    (B) in paragraph (3)--
                            (i) by inserting ``(A)'' after ``(3)''; and
                            (ii) by adding at the end the following:
    ``(B) Notwithstanding subparagraph (A), the Secretary shall reserve 
for payments under subsection (o) an amount equal to the sum of--
            ``(i) 5 percent of the amounts made available for payments 
        under this subsection for each fiscal year; and
            ``(ii) the amount of any excess referred to in paragraph 
        (2)(C)(ii) with respect to a State for a fiscal year that is 
        not used to increase the limitation determined under paragraph 
        (2) with respect to the State for the 3rd succeeding fiscal 
        year.''; and
            (2) by adding at the end the following:
    ``(o)(1)(A) In addition to any other payment under this section, 
each State that is a qualified State for a fiscal year shall be 
entitled to payment from the Secretary of an amount equal to the sum 
of--
            ``(i) 5 percent of the aggregate of the amounts paid to the 
        State under subsection (n) for the immediately preceding fiscal 
        year; and
            ``(ii)(I) the amount reserved under subsection (n)(3)(B) 
        for the immediately preceding fiscal year that remains after 
        applying clause (i) of this subparagraph to each qualified 
        State; multiplied by
            ``(II) the ratio of--
                    ``(aa) the number of children residing in the State 
                in the immediately preceding fiscal year, to
                    ``(bb) the number of children residing in a 
                qualified State in the immediately preceding fiscal 
                year.
    ``(B) As used in subparagraph (A) of this paragraph, the term 
`qualified State' means, with respect to a fiscal year, a State with 
respect to which the amount described in subsection (n)(1)(A) for the 
immediately preceding fiscal year equals the amount described in 
subsection (n)(1)(B) for the immediately preceding fiscal year.
    ``(2) The Secretary may not apply any amount to which a State is 
entitled under paragraph (1) as an offset against any amount owed by 
the State to any department or agency of the Federal Government.
    ``(3)(A) Within 1 year after a State receives an amount paid under 
paragraph (1) of this subsection, the State shall obligate the amount 
for--
            ``(i) services under section 402(i) directly to families 
        eligible therefor; or
            ``(ii) improvements in the quality of services, and the 
        building of infrastructure, under subsection (g) or (i) of 
        section 402.
    ``(B) Amounts paid under this section may not be used to supplant 
State or local expenditures for staff or administration.''.

SEC. 133. LIMITATION ON CARRYFORWARD OF UNUSED AT-RISK CHILD CARE 
              ALLOTMENTS.

    Section 403(n)(2)(C) (42 U.S.C. 603(n)(2)(C)) is amended--
            (1) by inserting ``(i)'' after ``(C)''; and
            (2) by adding after and below the end the following:
            ``(ii) The amount of such excess with respect to a State 
        for a fiscal year shall not be used to increase the limitation 
        determined under this paragraph with respect to the State for 
        any fiscal year after the 2nd succeeding fiscal year.''.

SEC. 134. PAYMENT OF LOCAL MARKET RATES.

    Section 402(g)(1)(C) (42 U.S.C. 602(g)(1)(C)) is amended to read as 
follows:
    ``(C) The State agency shall make payment for the actual cost of 
child care provided with respect to a family, in an amount that may not 
exceed the 75th percentile of the local cost of care (as determined by 
the State in accordance with regulations prescribed by the Secretary), 
or such other payment schedule (under which payment rates are not less 
than the 75th percentile of the local cost of care) as the State may 
establish.''.

SEC. 135. SET-ASIDE FOR IMPROVEMENT OF INFRASTRUCTURE AND QUALITY.

    Section 403(n) (42 U.S.C. 603(n)) is amended by adding at the end 
the following:
    ``(4) Not less than 10 percent and not more than 12 percent of the 
total amount obligated by a State from amounts provided under this 
subsection for fiscal year 1995 and for each succeeding fiscal year 
shall be used for improvement of the quality of services and the 
building of infrastructure to serve low-income children, the 
development of on-site or near-site facilities for parents who have not 
attained 20 years of age and are attending educational or vocational 
institutions, and for State licensing and registration requirements, 
monitoring, and assistance to child care providers in meeting 
applicable standards under subsection (g) or (i) of section 402.''.

SEC. 136. CHILD CARE FOR WORKING AFDC PARENTS.

    (a) Dependent Care Disregard Not To Be Regarded as Sufficient To 
Guarantee Child Care.--Section 402(g)(1)(B) (42 U.S.C. 602(g)(1)(B)) is 
amended by adding at the end the following: ``Compliance with 
subsection (a)(8)(A)(iii) with respect to a family shall not be 
construed to be a guarantee of child care for the family pursuant to 
this subsection, unless the family has been offered, and has declined, 
payment through at least 1 of the methods authorized by this 
subparagraph (other than clause (iv) of the 1st sentence of this 
subparagraph).''.
    (b) Elimination of Authority To Decrease the Dependent Care 
Disregard for Parents Not Working Full-Time.--Section 402(a)(8)(A)(iii) 
(42 U.S.C. 602(a)(8)(A)(iii)) is amended by striking ``(or'' and all 
that follows through ``month)''.
    (c) Increase in the Amount of the Dependent Care Disregards.--
Section 402(a)(8)(A)(iii) (42 U.S.C. 602(a)(8)(A)(iii)) is amended--
            (1) by striking ``$175'' and inserting ``$200 (or, if 
        greater, the dollar amount in effect under subsection (d))''; 
        and
            (2) by striking ``$200'' and inserting ``$250 (or, if 
        greater, the dollar amount in effect under subsection (d))''.
    (d) Cost-of-Living Adjustment of the Dependent Care Disregards.--
Section 402 (42 U.S.C. 602) is amended by inserting after subsection 
(c) the following:
    ``(d) Whenever benefits under title II for a month are increased by 
a percentage by reason of section 215(i)--
            ``(1) each dollar amount in effect under subsection 
        (a)(8)(A)(iii) of this section for the month and for each 
        subsequent month shall be increased by the amount (if any) by 
        which--
                    ``(A) the amount which would have been in effect 
                for the month under such subsection but for rounding of 
                the amount pursuant to paragraph (3) of this 
                subsection; exceeds
                    ``(B) the amount in effect for the month under such 
                subsection (a)(8)(A)(iii);
            ``(2) the amount obtained under paragraph (1) of this 
        subsection shall be further increased by the greater of--
                    ``(A) if the increase under title II was determined 
                on the basis of the CPI increase percentage, the 
                percentage of the increase; or
                    ``(B) if not, the percentage by which benefits 
                under title II would have been increased if the 
                increase under title II was determined on the basis of 
                the CPI increase percentage; and
            ``(3) if the amount obtained under paragraph (2) of this 
        subsection is not a multiple of $10, the amount shall be 
        rounded to the nearest multiple of $10.''.

SEC. 137. HEALTH AND SAFETY STANDARDS; CONTINUITY OF CARE.

    (a) For Recipients.--Section 402(g)(1)(A) (42 U.S.C. 602(g)(1)(A)) 
is amended by adding at the end the following:
    ``(viii) Child care guaranteed under this section, whether provided 
by a method permitted under subparagraph (B) or by means of an 
agreement under subsection (j) with the lead agency designated under 
the Child Care and Development Block Grant Act of 1990 (in this section 
referred to as the `CCDBG Act'), must meet all health and safety 
standards established by the lead agency (for purposes of the CCDBG 
Act), and, in addition to any other requirements imposed pursuant to 
that Act, the State agency must establish immunization requirements and 
assure (and any such agreement must provide) that, consistent with 
regulations of the Secretary--
            ``(I) children whose child care is paid for, in whole or in 
        part, under this subsection will be required to have received 
        all immunizations, at the appropriate times, as currently 
        recommended by the Advisory Committee on Immunization Practices 
        (an advisory committee established by the Secretary, acting 
        through the director of the Centers for Disease Control and 
        Prevention) as specified on the pediatric vaccines list 
        referred to in section 1928(e); and
            ``(II) child care providers used will take steps to assure 
        that toxic substances, weapons, and any other items at the 
        location where the child care is provided that could be harmful 
        to young children, will be secured and unobtainable by the 
        children.
    ``(ix)(I) The State shall provide information about the 
immunization requirements imposed pursuant to clause (viii) and about 
where free immunizations may be obtained, to parents upon application 
for child care assistance and to child care providers.
    ``(II) The State shall take needed action to ensure that 
immunizations are available and accessible to all recipients of such 
aid to whom clause (viii) applies, and, with respect to each such 
recipient, shall offer assistance in meeting such requirements, shall 
provide assistance in response to a parent's request for assistance, 
may not deny child care to any parent who is seeking immunizations for 
his or her child or children during a reasonable grace period, and may 
not deny or terminate such child care to a family by reason of the 
failure of the family to receive required immunizations until the State 
has identified the reason for the failure and addressed any barriers to 
access. The State shall allow for exceptions in cases where good cause 
can be shown.
    ``(III) The State shall provide information about eligibility for 
medical assistance under the State plan approved under title XIX to all 
child care providers receiving Federal child care funds and shall 
suggest strategies for informing parents about such eligibility.
    ``(IV) The State shall work with public health clinics to provide 
immunizations at child care clinics during appropriate times.
    ``(x) The State plan must assure that child care provided under 
this subsection will conform in all ways to the provisions for parental 
choice, unlimited parental access, handling of parental complaints, and 
consumer education, as well as to all the other standards, criteria, 
and requirements applicable to child care provided under the CCDBG 
Act.''.
    (b) For At-Risk Families.--Section 402(i) (42 U.S.C. 602(i)) is 
amended by redesignating paragraphs (5) and (6) as paragraphs (6) and 
(7), respectively, and by inserting after paragraph (4) the following:
    ``(5)(A) Child care provided under this subsection, whether 
provided by a method permitted under paragraph (2) of this subsection 
or by means of an agreement under subsection (j) with the lead agency 
designated under the CCDBG Act, must meet all health and safety 
standards established by the lead agency (for purposes of the CCDBG 
Act), and, in addition to any other requirements imposed pursuant to 
that Act, the State agency must establish immunization requirements and 
assure (and any such agreement must provide) that, consistent with the 
regulations of the Secretary--
            ``(i) children whose child care is paid for, in whole or in 
        part, under this subsection will be required to have received 
        all immunizations, at the appropriate times, as currently 
        recommended by the Advisory Committee on Immunization Practices 
        (as advisory committee established by the Secretary, acting 
        through the director of the Centers for Disease Control and 
        Prevention) as specified on the pediatric vaccines list 
        referred to in section 1928(e); and
            ``(ii) child care providers used will take steps to assure 
        that toxic substances, weapons, and any other items at the 
        location where the child care is provided that could be harmful 
        to young children, will be secured and unobtainable by the 
        children.
    ``(B)(i) The State shall provide information about the immunization 
requirements imposed pursuant to subparagraph (A) and about where free 
immunizations may be obtained, to parents upon application for child 
care assistance and to child care providers.
    ``(ii) The State shall provide information about eligibility for 
medical assistance under the State plan approved under title XIX to all 
child care providers receiving Federal child care funds and shall 
suggest strategies for informing parents about such eligibility.
    ``(iii) The State shall work with public health clinics to provide 
immunizations at child care clinics during appropriate times.
    ``(6) The State plan must assure that child care provided under 
this subsection will conform in all ways to the provisions for parental 
choice, unlimited parental access, handling of parental complaints, and 
consumer education, as well as to all other standards, criteria, and 
requirements applicable to child care provided under the CCDBG Act.''.
    (c) Conforming Amendments.--
            (1) Child care for participants in the jobs or work 
        program, and transitional child care.--Section 402(g) (42 
        U.S.C. 602(g)) is amended--
                    (A) in paragraph (3)(B)--
                            (i) by adding ``and'' at the end of clause 
                        (i);
                            (ii) in clause (ii), by striking 
                        ``applicable standards'' and all that follows 
                        and inserting ``all requirements, standards, 
                        and criteria applicable to child care funded 
                        under the CCDBG Act.''; and
                            (iii) by striking clause (iii); and
                    (B) by striking paragraphs (4) and (5).
            (2) At-risk child care.--Section 402(i) (42 U.S.C. 602(i)), 
        as amended by subsection (b) of this section, is amended--
                    (A) in paragraph (6)--
                            (i) in subparagraph (B), by striking 
                        ``applicable standards of State and local 
                        law;'' and inserting ``all requirements, 
                        standards, and other criteria applicable to 
                        child care funded under the CCDBG Act;''; and
                            (ii) by striking subparagraphs (C) and (D); 
                        and
                    (B) by amending paragraph (7) to read as follows:
            ``(8) In order to facilitate more accurate analysis of the 
        supply and quality of child care resources, the demand for such 
        resources that cannot currently be satisfied, and the 
        effectiveness and relationship of Federal programs providing 
        support for child care and child development activities, the 
        Secretary shall specify by regulation a core set of 
        consistently defined data elements for child care which must be 
        used by each State with respect to all reports relating to 
        child care or child development activities supported in whole 
        or in part under this Act or under the CCDBG Act.''.

SEC. 138. PERIODIC IDENTIFICATION OF CHILD CARE NEEDS; ENSURING THAT 
              FAMILIES UNDERSTAND CHILD CARE ALTERNATIVES.

    Section 402(a) (42 U.S.C. 602(a)), as amended by section 104 of 
this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (45);
            (2) by striking the period at the end of paragraph (46) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (46) the following:
            ``(47) provide that the State agency shall ensure that--
                    ``(A)(i) a qualified individual assesses the child 
                care needs of and provide counseling to each individual 
                applying for or receiving aid under the State plan, 
                unless the individual declines counseling, when--
                            ``(I) the State makes an assessment of the 
                        individual under section 482(b)(1)(A);
                            ``(II) the individual begins participation 
                        in the program established by the State under 
                        part F;
                            ``(III) the individual enters employment; 
                        and
                            ``(IV) the employment or training placement 
                        of the recipient changes; and
                    ``(ii) as used in clause (i), the term `qualified 
                individual' means, with respect to an applicant or 
                recipient, an individual knowledgeable about child care 
                options in the community in which the applicant or 
                recipient resides, including any Head Start program and 
                wraparound programs that enable families needing full-
                time, full-year care to participate in the Head Start 
                program; and
                    ``(B) if an employability plan has been developed 
                for the individual, the employability plan shall 
                include a notation with respect to how the child care 
                needs of the individual are to be met, and, if child 
                care is not to be provided by or through the State, the 
                reasons therefor.''.

SEC. 139. ENSURING THAT REIMBURSEMENT MECHANISMS MEET FAMILY NEEDS.

    Section 402(g)(1)(B) (42 U.S.C. 602(g)(1)(B)) is amended--
            (1) by inserting ``(i)'' after ``(B)'';
            (2) by redesignating clauses (i) through (v) as subclauses 
        (I) through (V), respectively; and
            (3) by striking the 2nd sentence and inserting the 
        following:
    ``(ii) When the State agency arranges for child care, the agency 
shall take into account the individual needs of the child.
    ``(iii) The State agency may make advance payments for child care 
assistance to a family eligible for such care in any appropriate case, 
and shall make advance payment if--
            ``(I) an advance is needed in order for the family to 
        secure or retain such care from the provider chosen by the 
        individual;
            ``(II) the provider of such care will not provide such care 
        without payment in advance; or
            ``(III) the family has elected to have dependent care 
        expenses disregarded under subsection (a)(8)(A)(iii), and the 
        cost of child care is not reflected in the amount of aid 
        payable to the family under the State plan approved under this 
        part due to the use by the State of retrospective budgeting.''.

SEC. 140. FACILITATION OF SEAMLESS SERVICES.

    (a) AFDC Child Care.--Section 402(g)(1)(A) (42 U.S.C. 
602(g)(1)(A)), as amended by section 137(a) of this Act, is amended by 
adding at the end the following:
    ``(xi) Each State agency shall assess the eligibility for child 
care under this paragraph of each family who ceases to receive aid to 
families with dependent children, and if the family is eligible for 
child care benefits under clause (ii), shall provide such care without 
requiring a separate application for such benefits.''.
    (b) Transitional Child Care.--Section 402(g)(1)(A)(ii) (42 U.S.C. 
602(g)(1)(A)(ii)) is amended--
            (1) by inserting ``(I)'' after ``(ii)''; and
            (2) by adding after and below the end the following:
    ``(II) Before the exhaustion of child care benefits by a family for 
whom the State is guaranteeing child care under subclause (I), the 
State must assist the family in obtaining information about, and 
referral to, other programs under which, or providers from which, the 
family may receive child care on a continuing basis upon such 
ineligibility.
    ``(III) The State must consider any family whose child care 
benefits under subclause (I) are about to be exhausted for eligibility 
for other child care benefits offered by the State.''.

SEC. 141. AUTHORITY TO PROVIDE FOR CONTINUITY OF CHILD CARE.

    Section 402(g)(1)(A) (42 U.S.C. 602(g)(1)(A)), as amended by 
sections 137(a) and 140(a) of this Act, is amended by adding at the end 
the following:
    ``(xii) A State may continue child care assistance without 
interruption during breaks between otherwise allowable activities, and 
for a reasonable period of time after any loss of employment, to ensure 
continuity of child care arrangements for the child or children of a 
family eligible to receive care under this paragraph.''.

SEC. 142. CHILD CARE FOR FAMILIES INCLUDING A CARETAKER RELATIVE NOT 
              RECEIVING AFDC.

    Section 402(g)(1)(A) (42 U.S.C. 602(g)(1)(A)), as amended by 
sections 137(a), 140(a), and 141 of this Act, is amended by adding at 
the end the following:
    ``(xiii) In any case in which child care is determined to be 
necessary for the caretaker relative of a child receiving aid to 
families with dependent children to accept or retain employment, the 
State shall guarantee child care whether or not the caretaker relative 
is receiving such aid, and if the caretaker relative is not receiving 
such aid, the State may apply a sliding fee scale to determine the 
appropriate contribution (if any) to the cost of care to be paid by the 
caretaker.''.

SEC. 143. STATE OPTION TO EXTEND TRANSITIONAL CHILD CARE BENEFITS.

    Section 402(g)(1)(A)(iii) (42 U.S.C. 602(g)(1)(A)(iii)) is 
amended--
            (1) by inserting ``(I)'' after ``(iii)''; and
            (2) by adding after and below the end the following:
    ``(II) At the option of the State, the State may, uniformly for all 
families--
            ``(aa) elect to extend the period described in subclause 
        (I) by 12 months; or
            ``(bb) elect to extend the period described in subclause 
        (I) until the income of the family exceeds 185 percent (or such 
        lower figure as the State may establish) 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) for a family 
        of the same composition.''.

SEC. 144. STATE OPTION TO PROVIDE TRANSITIONAL CHILD CARE BENEFITS TO 
              FAMILIES WHO HAVE RECEIVED AFDC FOR FEWER THAN 3 MONTHS.

    Section 402(g)(1)(A)(iv) (42 U.S.C. 602(g)(1)(A)(iv)) is amended by 
striking ``A family'' and inserting ``At the option of the State, a 
family''.

SEC. 145. LIMITATION OF AT-RISK CHILD CARE TO FAMILIES INELIGIBLE FOR 
              RECIPIENT OR TRANSITIONAL CHILD CARE.

    Section 402(i)(1)(A) (42 U.S.C. 602(i)(1)(A)) is amended to read as 
follows:
                    ``(A) is not eligible for child care under 
                subsection (g);''.

SEC. 146. ELIMINATION OF REQUIREMENT THAT FAMILY RECEIVING TRANSITIONAL 
              CHILD CARE BENEFITS INCLUDE A DEPENDENT CHILD.

    Section 402(g)(1)(A) (42 U.S.C. 602(g)(1)(A)) is amended by 
striking clause (v).

SEC. 147. STATE OPTION TO WAIVE CONTRIBUTION REQUIREMENT FOR FAMILIES 
              WITH INCOME BELOW THE POVERTY LEVEL.

    Section 402(g)(1)(A)(vii) (42 U.S.C. 602(g)(1)(A)(vii)) is amended 
by striking ``a sliding'' and all that follows and inserting ``the 
sliding fee scale established by the State under the Child Care and 
Development Block Grant Act of 1990.''.

SEC. 148. CONTINUATION OF CHILD CARE DURING DISPUTE RESOLUTION.

    (a) AFDC and Transitional Child Care.--Section 402(g)(1) (42 U.S.C. 
602(g)(1)) is amended by redesignating subparagraph (E) as subparagraph 
(F) and by inserting after subparagraph (D) the following:
    ``(E) While the State and an individual are seeking to resolve any 
dispute over whether the individual qualifies for the provision of 
child care under this paragraph, the State shall ensure the continued 
provision of such care with respect to the family of the individual.''.
    (b) At-Risk Child Care.--Section 402(i) (42 U.S.C. 602(i)), as 
amended by subsections (b) and (c)(2) of section 137 of this Act, is 
amended by redesignating paragraphs (4), (5), (6), and (7) as 
paragraphs (5), (6), (7), and (8), respectively, and by inserting after 
paragraph (3) the following:
    ``(4) While the State and an individual are seeking to resolve any 
dispute over whether the individual qualifies for the provision of 
child care under this subsection, the State shall ensure the continued 
provision of such care with respect to the family of the individual.''.

SEC. 149. OPTION TO CONSOLIDATE STATE RESPONSIBILITY FOR CHILD CARE.

    Section 402 (42 U.S.C. 602) is amended by adding at the end the 
following:
    ``(j)(1) In order to provide the child care which must be 
guaranteed pursuant to subsection (g) of this section or which may be 
furnished pursuant to subsection (i) of this section, the State agency 
may enter into an agreement with the lead agency designated under 
section 658D of the CCDBG Act under which--
            ``(A) subject to paragraph (2) of this subsection, the 
        State agency will pay (either in advance or as reimbursement) 
        the lead agency for the cost of providing child care for any 
        child with respect to whom care must be guaranteed under such 
        subsection (g) or is to be furnished under such subsection (i), 
        and the lead agency agrees that care for all such children will 
        only be paid for from such reimbursement; and
            ``(B) all child care provided by the lead agency under the 
        agreement, whether directly or by contractual or other 
        arrangements, will be subject to the same requirements, 
        standards, payment rates, and other criteria as are applicable 
        to child care funded under the CCDBG Act; and
            ``(C) parents and children to whom such care is provided 
        will be offered all the same protections and procedural 
        safeguards as are applicable to child care furnished under the 
        CCDBG Act.
    ``(2) The State agency shall pay the lead agency for care provided 
to a child the amount established by the State pursuant to subsection 
(g)(1)(C) or (i)(3)(B), whichever may be applicable to the child 
involved, and, with respect to children to whom subsection (i)(3)(B) 
applies, the State agency shall be obligated to pay the lead agency for 
child care furnished in a fiscal year only to the extent of 
appropriations available for such purpose for such fiscal year.
    ``(3) This subsection shall not be construed as precluding the 
designation of the agency established or designated under section 
402(a)(3) as the lead agency for purposes of the CCDBG Act. An 
agreement shall not be necessary in the case where the same agency is 
designated under both the CCDBG Act and this Act, but the agency shall, 
as lead agency, comply with all the provisions of this subsection.''.

  TITLE II--STRENGTHENING PARENTAL RESPONSIBILITY AND FAMILY STABILITY

                  Subtitle A--Federal Responsibilities

SEC. 201. EXPANSION OF FUNCTIONS OF FEDERAL PARENT LOCATOR SERVICE.

    Section 453(a) (42 U.S.C. 653(a)) is amended by striking 
``enforcing support obligations against such parent'' and inserting 
``establishing parentage, or establishing, modifying, and enforcing 
child support obligations, and which shall use safeguards to prevent 
the disclosure of information in cases that would jeopardize the safety 
of the custodial parent, the noncustodial parent, or any child of 
either such parent''.

SEC. 202. EXPANSION OF FEDERAL PARENT LOCATOR SYSTEMS.

    (a) Access to Additional Data Bases.--Section 453 (42 U.S.C. 653) 
is amended--
            (1) in subsection (b), by striking ``the most recent 
        address and place of employment'' and inserting ``the most 
        recent residential address, employer name and address, and 
        amounts and nature of income and assets''; and
            (2) in subsection (e), by adding at the end the following:
    ``(4) The Secretary of the Treasury shall enter into an agreement 
with the Secretary to provide prompt access by the Secretary (in 
accordance with this subsection and section 6103(l)(6) of the Internal 
Revenue Code of 1986) to all Federal income tax returns filed by 
individuals with the Internal Revenue Service.''.
    (b) Expansion of Access to the National Parent Locator Network.--
Section 453 (42 U.S.C. 653) is amended by adding at the end the 
following:
    ``(g) The Secretary shall expand the Parent Locator Service to 
establish a national network based on the comprehensive statewide child 
support enforcement systems developed by the States, to--
            ``(1) allow each State to--
                    ``(A) locate any absent parent who owes child 
                support or for whom a child support obligation is being 
                established, by--
                            ``(i) accessing the records of other State 
                        agencies and sources of locate information 
                        directly from one computer system to another; 
                        and
                            ``(ii) accessing Federal sources of locate 
                        information in the same fashion;
                    ``(B) access the files of other States to determine 
                whether there are other child support orders and obtain 
                the details of those orders;
                    ``(C) provide for both on-line and batch processing 
                of locate requests, with on-line access restricted to 
                cases in which the information is needed immediately 
                (for such reasons as court appearances) and batch 
                processing used to access data bases to locate 
                individuals or update information periodically; and
                    ``(D) direct locate requests to individual States 
                or Federal agencies, broadcast requests to selected 
                States, or broadcast cases to all States when there is 
                no indication of the source of needed information;
            ``(2) provide for a maximum of 48-hour turnaround time for 
        information to be broadcast and returned to a requesting State;
            ``(3) provide ready access to courts and administrative 
        agencies of the information on the network by location of a 
        computer terminal in each court; and
            ``(4) access the registries of child support orders 
        maintained by States pursuant to section 466(a)(20)(A).''.

SEC. 203. FEDERAL CHILD SUPPORT ORDER REGISTRY.

    (a) Establishment.--Not later than October 1, 1995, the Secretary 
shall establish a Federal registry of all child support orders recorded 
in State registries established pursuant to section 466(a)(20)(A) of 
the Social Security Act.
    (b) Comparison of Information on W-4 Forms With Information in 
Child Support Orders.--Within 10 days after the registry established 
under subsection (a) receives a W-4 form of an employee, the registry 
shall--
            (1) compare the information on the form with the 
        information in the registry on the child support obligations of 
        the employee; and
            (2) transmit to the registry established pursuant to 
        section 466(a)(20)(A) of the Social Security Act of the State 
        that is collecting and disbursing the child support payment--
                    (A) a notice as to whether the amount specified on 
                the W-4 form as the monthly child support obligation of 
                the employee is accurate or not; and
                    (B) the name and address of the employee.
    (c) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary to carry out this section, especially in cases 
involving an employee who has 2 or more employers or child support 
obligations.
    (d) State Access to the Registry.--The Secretary shall, upon 
request of any State, provide the State with access to the information 
contained in the registry established under subsection (a).
    (e) Safeguards.--The Secretary shall implement such safeguards as 
may be necessary to prevent the disclosure of information of the 
registry established under subsection (a) in cases that would 
jeopardize the safety of a custodial parent, a noncustodial parent, or 
a child of such a parent.
    (f) Definitions.--As used in this section:
            (1) Child support order.--The term ``child support order'' 
        means an order requiring payments for support (including 
        medical support) and maintenance of a child or of a child and 
        the parent with whom the child is living.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (3) State.--The term ``State'' includes the several States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        Commonwealth of the Northern Mariana Islands, the United States 
        Virgin Islands, Guam, American Samoa, and the Trust Territory 
        of the Pacific Islands.

SEC. 204. NATIONAL REPORTING OF EMPLOYEES AND CHILD SUPPORT 
              INFORMATION.

    (a) In General.--The Secretary of the Treasury, in consultation 
with the Secretary of Labor, shall establish a system of reporting of 
employees by requiring employers to provide a copy of every employee's 
W-4 form to the Federal child support order registry established 
pursuant to section 203(a) of this Act--
            (1) in the case of employees hired on or after the 
        effective date of this section, on the date the employee is 
        hired; or
            (2) in the case of employees hired before such effective 
        date, within 10 days after such effective date.
    (b) Inclusion of Child Support Information on W-4 Forms.--The 
Secretary of the Treasury shall modify the W-4 form to enable the 
employee to indicate on the form--
            (1) whether the employee owes child support, and if so--
                    (A) the amount of the support payable;
                    (B) whether the support is to be paid through wage 
                withholding; and
                    (C) to whom the support is to be paid; and
            (2) whether health care insurance is available to the new 
        employee, and, if so, whether the employee has obtained such 
        insurance for the dependent children of the employee.

SEC. 205. FEDERAL MATCHING PAYMENTS.

    (a) Increased Base Matching Rate.--Section 455(a)(2) (42 U.S.C. 
655(a)(2)) is amended to read as follows:
            ``(2) The percent described in this paragraph for a quarter 
        in a fiscal year is--
                    ``(A) 69 percent, for fiscal year 1996;
                    ``(B) 72 percent, for fiscal year 1997; and
                    ``(C) 75 percent, for fiscal year 1998 and each 
                succeeding fiscal year.''.
    (b) Maintenance of Effort.--Section 455 (42 U.S.C. 655) is 
amended--
            (1) in subsection (a)(1), in the matter preceding 
        subparagraph (A), by striking ``From'' and inserting ``Subject 
        to subsection (c), from''; and
            (2) by inserting after subsection (b) the following:
    ``(c) Maintenance of Effort.--Notwithstanding subsection (a), the 
total expenditures for the State program under this part for each 
fiscal year, reduced by the percent specified in subsection (a)(2) for 
the fiscal year, shall not be less than such total expenditures for 
fiscal year 1995, reduced by 66 percent.''
    (c) Conforming Amendment.--Section 455(a)(1)(A) (42 U.S.C. 
655(a)(1)(A)) is amended by striking ``specified'' and inserting 
``described''.

SEC. 206. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

    (a) Incentive Adjustments to Federal Matching Rate.--
            (1) In general.--Section 458 (42 U.S.C. 658) is amended to 
        read as follows:

                ``incentive adjustments to matching rate

    ``Sec. 458. (a) Incentive Adjustment.--
            ``(1) In general.--In order to encourage and reward State 
        child support enforcement programs which perform in an 
        effective manner, the Federal matching rate for payments to a 
        State under section 455(a)(1)(A), for each fiscal year 
        beginning on or after October 1, 1997, shall be increased by a 
        factor reflecting the sum of the applicable incentive 
        adjustments (if any) determined in accordance with regulations 
        under this section with respect to Statewide paternity 
        establishment and to overall performance in child support 
        enforcement.
            ``(2) Standards.--
                    ``(A) In general.--The Secretary shall specify in 
                regulations--
                            ``(i) the levels of accomplishment, and 
                        rates of improvement as alternatives to such 
                        levels, which States must attain to qualify for 
                        incentive adjustments under this section; and
                            ``(ii) the amounts of incentive adjustment 
                        that shall be awarded to States achieving 
                        specified accomplishment or improvement levels, 
                        which amounts shall be graduated, ranging up 
                        to--
                                    ``(I) 5 percentage points, in 
                                connection with Statewide paternity 
                                establishment; and
                                    ``(II) 10 percentage points, in 
                                connection with overall performance in 
                                child support enforcement.
                    ``(B) Limitation.--In setting performance standards 
                pursuant to subparagraph (A)(i) and adjustment amounts 
                pursuant to subparagraph (A)(ii), the Secretary shall 
                ensure that the aggregate number of percentage point 
                increases as incentive adjustments to all States do not 
                exceed such aggregate increases as assumed by the 
                Secretary in estimates of the cost of this section as 
                of June 1994, unless the aggregate performance of all 
                States exceeds the projected aggregate performance of 
                all States in such cost estimates.
            ``(3) Determination of incentive adjustment.--The Secretary 
        shall determine the amount (if any) of incentive adjustment due 
        each State on the basis of the data submitted by the State 
        through the system prescribed by the Secretary in regulations 
        issued pursuant to section 259 of the Family Self-Sufficiency 
        Act of 1994, concerning the levels of accomplishment (and rates 
        of improvement) with respect to performance indicators 
        specified by the Secretary pursuant to this section.
            ``(4) Fiscal year subject to incentive adjustment.--The 
        total percentage point increase determined pursuant to this 
        section with respect to a State program in a fiscal year shall 
        apply as an adjustment to the percent described in section 
        455(a)(2) for payments to such State for the succeeding fiscal 
        year.
    ``(b) Meaning of Terms.--For purposes of this section--
            ``(1) the term `Statewide paternity establishment 
        percentage' means, with respect to a fiscal year, the ratio 
        (expressed as a percentage) of--
                    ``(A) the total number of out-of-wedlock children 
                in the State under one year of age for whom paternity 
                is established or acknowledged during the fiscal year, 
                to
                    ``(B) the total number of children born out of 
                wedlock in the State during such fiscal year; and
            ``(2) the term `overall performance in child support 
        enforcement' means a measure or measures of the effectiveness 
        of the State agency in a fiscal year which takes into account 
        factors including--
                    ``(A) the percentage of cases requiring a child 
                support order in which such an order was established;
                    ``(B) the percentage of cases in which child 
                support is being paid;
                    ``(C) the ratio of child support collected to child 
                support due; and
                    ``(D) the cost-effectiveness of the State program, 
                as determined in accordance with standards established 
                by the Secretary in regulations.''.
    (b) Title IV-D Payment Adjustment.--Section 455(a)(2) (42 U.S.C. 
655(a)(2)), as amended by section 205 of this Act, is amended--
            (1) by striking the period at the end of subparagraph (C) 
        and inserting a comma; and
            (2) by adding after and below subparagraph (C), flush with 
        the left margin of the subsection, the following: ``increased 
        by the incentive adjustment factor (if any) determined by the 
        Secretary pursuant to section 458.''.
    (c) Conforming Amendments.--Section 454(22) (42 U.S.C. 654(22)) is 
amended--
            (1) by striking ``incentive payments'' the first place such 
        term appears and inserting ``incentive adjustments''; and
            (2) by striking ``any such incentive payments made to the 
        State for such period'' and inserting ``any increases in 
        Federal payments to the State resulting from such incentive 
        adjustments''.
    (d) Calculation of IV-D Paternity Establishment Percentage.--
            (1) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is amended in 
        the matter preceding subparagraph (A), by inserting ``its 
        overall performance in child support enforcement is 
        satisfactory (as defined in section 458(b) and regulations of 
        the Secretary), and'' after ``1994,''.
            (2) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended--
                    (A) in subparagraph (A), 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)'';
                    (B) in subparagraph (A)(i), by striking ``during 
                the fiscal year'';
                    (C) in subparagraph (A)(ii)(I), by striking ``as of 
                the end of the fiscal year'' and inserting ``in the 
                fiscal year or, at the option of the State, as of the 
                end of such year'';
                    (D) in subparagraph (A)(ii)(II), by striking ``or 
                (E) as of the end of the fiscal year'' and inserting 
                ``in the fiscal year or, at the option of the State, as 
                of the end of such year'';
                    (E) in subparagraph (A)(iii)--
                            (i) by striking ``during the fiscal year''; 
                        and
                            (ii) by striking ``and'' at the end; and
                    (F) in the matter following subparagraph (A)--
                            (i) by striking ``who were born out of 
                        wedlock during the immediately preceding fiscal 
                        year'' and inserting ``born out of wedlock'';
                            (ii) by striking ``such preceding fiscal 
                        year'' both places such term appears and 
                        inserting ``the preceding fiscal year''; and
                            (iii) by striking ``or (E)'' the 2nd place 
                        such term appears.
            (3) 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;
                    (B) in subparagraph (A), as so redesignated, by 
                striking ``the percentage of children born out-of-
                wedlock in the State'' and inserting ``the percentage 
                of children in the State who are born out of wedlock or 
                for whom support has not been established''; and
                    (C) in subparagraph (B), as so redesignated--
                            (i) by inserting ``and overall performance 
                        in child support enforcement'' after 
                        ``paternity establishment percentages''; and
                            (ii) by inserting ``and securing support'' 
                        before the period.
    (e) Title IV-A Payment Reduction.--Section 403 (42 U.S.C. 603) is 
amended--
            (1) in subsection (a), by striking ``1958--'' and inserting 
        ``1958--(subject to subsection (h))--'';
            (2) in subsection (h), by striking all that precedes 
        paragraph (3) and inserting the following:
    ``(h)(1) If the Secretary finds, with respect to a State program 
under this part in a fiscal year beginning on or after October 1, 
1996--
            ``(A)(i) on the basis of data submitted by a State through 
        the system referred to in section 458(a)(3), that the State 
        program in such fiscal year failed to achieve the reqired 
        paternity establishment percentage (as defined in section 
        452(g)(2)(A)) or the appropriate level of overall performance 
        in child support enforcement (as defined in section 458(b)(2)), 
        or to meet other performance measures that may be established 
        by the Secretary; or
            ``(ii) on the basis of an audit or audits of such State 
        data conducted pursuant to section 452(a)(4)(C), that the State 
        data submitted through the system referred to in section 
        458(a)(3) is incomplete or unreliable; and
            ``(B) that, with respect to the succeeding fiscal year--
                    ``(i) the State failed to take sufficient 
                corrective action to achieve the appropriate 
                performance levels as described in subparagraph (A)(i); 
                or
                    ``(ii) the data submitted by the State through the 
                system referred to in section 458(a)(3) is incomplete 
                or unreliable,
the amounts otherwise payable to the State under this part for quarters 
after the end of the immediately succeeding fiscal year, before 
quarters occurring after the end of the 1st quarter throughout which 
the State program is in compliance with the performance requirement, 
shall be reduced by the percentage specified in paragraph (2) of this 
subsection.
    ``(2) The reductions required under paragraph (1) shall be--
            ``(A) not less than 1 nor more than 2 percent; or
            ``(B) not less than 2 nor more than 3 percent, if the 
        finding is the 2nd consecutive finding made pursuant to 
        paragraph (1); or
            ``(C) not less than 3 nor more than 5 percent, if the 
        finding is the 3rd or a subsequent consecutive such finding.''; 
        and
    (3) in subsection (h)(3), by striking ``not in full compliance'' 
and all that follows and inserting ``determined as a result of an audit 
to have submitted incomplete or unreliable data through the system 
referred to in section 458(a)(3), shall be determined to have submitted 
adequate data if the Secretary determines that the extent of the 
incompleteness or unreliability of the data is of a technical nature 
which does not adversely affect the determination of the level of the 
State's performance.''.
    (f) Temporary Continued Applicability of Former Incentive System.--
Section 458 of the Social Security Act, as in effect immediately before 
the enactment of this section, shall remain in effect for purposes of 
incentive payments to States for fiscal years before fiscal year 1998.

SEC. 207. INCREASED FEDERAL FINANCIAL PARTICIPATION FOR STATES WITH 
              UNIFIED CHILD SUPPORT ENFORCEMENT PROGRAMS.

    (a) In General.--Section 455(a)(2) (42 U.S.C. 655(a)(2)), as 
amended by sections 205(a) and 206(b) of this Act, is amended--
            (1) by inserting ``(A)'' after ``(2)'';
            (2) by redesignating subparagraphs (A), (B), and (C) as 
        clauses (i), (ii), and (iii), respectively; and
            (3) by adding after and below the end the following:
    ``(B) The percent described in this paragraph for a State for a 
quarter in a fiscal year shall be the percent specified in subparagraph 
(A) for the fiscal year increased by 5 percentage points if the 
following apply to the State child support enforcement program:
            ``(i) All authority, accountability, and responsibility for 
        the program is centered at the State level in a unified State 
        agency.
            ``(ii) The program is administered by a single agency, and 
        policymaking for the program is centralized.
            ``(iii) There is statewide uniformity of case-processing 
        procedures and forms.
            ``(iv) There is a uniform hearing and appeal process.
            ``(v) All financing decisions are made at the State level.
            ``(vi) All non-Federal funding is appropriated at the State 
        level.
            ``(vii) All personnel and contracting decision making is 
        made by the State agency, and all personnel are employees of 
        the State agency, except that the Secretary may by regulation 
        establish exceptions with respect to not more than 10 percent 
        of personnel.''.
    (b) Conforming Amendment.--Section 455(c) (42 U.S.C. 655(c)), as 
added by section 205 of this Act, is amended by striking ``(a)(2)'' and 
inserting ``(a)(2)(A)''.

SEC. 208. NEW CHILD SUPPORT AUDIT PROCESS.

    (a) In General.--After consultation with the Child Support Audit 
Advisory Committee, the Secretary of Health and Human Services shall--
            (1) in accordance with subsection (b), promulgate new 
        criteria and standards for conducting reviews under section 
        452(a)(4) of the Social Security Act and establishing a system 
        for the reporting of data relevant to such reviews, which 
        emphasize program outcomes; and
            (2) not later than the 1st day of the 12th calendar month 
        beginning after the date of the enactment of this Act, 
        recommend to the Congress such legislation as may be necessary, 
        with respect to the financing of State child support programs 
        under part D of title IV of the Social Security Act, to enhance 
        the effectiveness of such audits and the associated penalty 
        process under section 403(h) of the Social Security Act.
    (b) Timing.--
            (1) Notice of proposed rulemaking.--Not later than 270 days 
        after the date of the enactment of this Act, the Secretary of 
        Health and Human Services shall issue a notice of proposed 
        rulemaking with respect to the audit criteria and standards 
        required by subsection (a)(1).
            (2) Final regulations.--Not later than the first day of the 
        12th calendar month beginning after the date of the enactment 
        of this Act, and after allowing not less than 45 days for 
        public comment on the proposed rulemaking required by paragraph 
        (1) of this subsection, the Secretary of Health and Human 
        Services shall issue final regulations with respect to the 
        audit criteria and standards required by subsection (a)(1).

SEC. 209. NATIONAL CHILD SUPPORT GUIDELINES COMMISSION.

    (a) Establishment.--There is hereby established a commission to be 
known as the ``National Child Support Guidelines Commission'' (in this 
section referred to as the ``Commission'').
    (b) General Duties.--The Commission shall develop a national child 
support guideline for consideration by the Congress that is based on a 
study of various guideline models, the benefits and deficiencies of 
such models, and any needed improvements.
    (c) Membership.--
            (1) Number; appointment.--
                    (A) In general.--The Commission shall be composed 
                of 12 individuals appointed jointly by the Secretary of 
                Health and Human Services and the Congress, not later 
                than January 15, 1996, of which--
                            (i) 2 shall be appointed by the Chairman of 
                        the Committee on Finance of the Senate, and 1 
                        shall be appointed by the ranking minority 
                        member of the Committee;
                            (ii) 2 shall be appointed by the Chairman 
                        of the Committee on Ways and Means of the House 
                        of Representatives, and 1 shall be appointed by 
                        the ranking minority member of the Committee; 
                        and
                            (iii) 6 shall be appointed by the Secretary 
                        of Health and Human Services.
                    (B) Qualifications of members.--Members of the 
                Commission shall have expertise and experience in the 
                evaluation and development of child support guidelines. 
                At least 1 member shall represent advocacy groups for 
                custodial parents, at least 1 member shall represent 
                advocacy groups for noncustodial parents, and at least 
                1 member shall be the director of a State program under 
                part D of title IV of the Social Security Act.
            (2) Terms of office.--Each member shall be appointed for a 
        term of 2 years. A vacancy in the Commission shall be filled in 
        the manner in which the original appointment was made.
    (d) Commission Powers, Compensation, Access to Information, and 
Supervision.--The first sentence of subparagraph (C), the first and 
third sentences of subparagraph (D), subparagraph (F) (except with 
respect to the conduct of medical studies), clauses (ii) and (iii) of 
subparagraph (G), and subparagraph (H) of section 1886(e)(6) of the 
Social Security Act shall apply to the Commission in the same manner in 
which such provisions apply to the Prospective Payment Assessment 
Commission.
    (e) Report.--Not later than 2 years after the appointment of 
members, the Commission shall submit to the President, the Committee on 
Ways and Means of the House of Representatives, and the Committee on 
Finance of the Senate, a recommended national child support guideline 
and a final assessment of issues relating to such a proposed national 
child support guideline.
    (f) Termination.--The Commission shall terminate 6 months after the 
submission of the report described in subsection (e).

SEC. 210. CHILD SUPPORT AUDIT ADVISORY COMMITTEE.

    (a) Establishment.--Not later than 60 days after the date of the 
enactment of this Act, the Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall establish a 
committee which shall be known as the Child Support Audit Advisory 
Committee (in this section referred to as the ``Committee'').
    (b) Duties.--The Committee shall assist the Secretary in--
            (1) developing revised audit criteria and standards to be 
        used pursuant to section 452(a)(4) of the Social Security Act 
        based on--
                    (A) common data elements which are defined, 
                collected, and reported in a uniform manner from each 
                State;
                    (B) numeric measures of the outcomes of the child 
                support enforcement program under part D of title IV of 
                such Act; and
                    (C) numeric measures for assessing compliance with 
                the regulations issued by the Secretary pursuant to 
                subsections (h) and (i) of section 452 of such Act;
            (2) formulating a definition of substantial compliance that 
        is based on such revised audit criteria and standards;
            (3) determining the period of time after interim or final 
        Federal regulations are issued implementing such revised audit 
        criteria and standards after which a State may be audited to 
        determine compliance with such regulations; and
            (4) recommending to the Congress such legislation as may be 
        necessary, with respect to the financing of child support 
        programs under part D of title IV of such Act, to enhance the 
        effectiveness of audits required to be conducted under section 
        452(a)(4) of such Act and the associated penalty process under 
        section 403(h) of such Act.
    (c) Membership.--The Committee shall be composed of not less than 6 
members appointed by the Secretary, including--
            (1) at least 1 director of a State child support 
        enforcement program operating under part D of title IV of the 
        Social Security Act;
            (2) at least 1 commissioner of a State human services 
        agency;
            (3) individuals who have demonstrated expertise in the 
        development of quantitative and qualitative measures for 
        performance-based audits; and
            (4) at least 2 representatives of recipients of child 
        support enforcement services.
    (d) Procedure.--
            (1) Participation of the secretary.--The Secretary (or a 
        designee of the Secretary) shall be an ex officio member of the 
        Committee, and shall not vote on matters before the Committee.
            (2) Meetings.--The Committee shall meet at the call of the 
        Secretary or a designee of the Secretary.
    (e) Compensation.--
            (1) In general.--No member of the Committee may receive 
        compensation for service on the Committee.
            (2) Travel expenses.--Each member of the Committee shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with sections 5702 and 5703 of title 
        5, United States Code.
    (f) Administrative Support.--Upon request of the Committee, the 
Secretary shall provide to the Committee the administrative support 
services necessary for the Committee to carry out its duties under this 
Act.
    (g) Inapplicability of the Federal Advisory Committee Act.--The 
Federal Advisory Committee Act shall not apply to the Committee.
    (h) Report.--Within 180 days after the date of the enactment of 
this Act, the Committee shall submit to the Secretary a report that 
contains proposed criteria and standards for conducting audits under 
section 452(a)(4) of the Social Security Act, which emphasize program 
outcomes.

                  Subtitle B--Paternity Establishment

SEC. 211. PATERNITY ESTABLISHMENT PROCEDURES.

    (a) In General.--Section 466(a)(5) (42 U.S.C. 666(a)(5)) is amended 
by striking subparagraphs (C) and (D) and inserting the following:
            ``(C)(i) 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 putative father and the mother 
        must be given notice, orally, in writing, and in a language 
        that each can understand, 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) 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) Such procedures must require the State agency 
        responsible for maintaining birth records to offer voluntary 
        paternity establishment services.
            ``(iv) The Secretary shall prescribe regulations governing 
        voluntary paternity establishment services offered by hospitals 
        and birth record agencies. 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, 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, voluntary paternity establishment programs of 
        hospitals and birth record agencies.
            ``(v) Such procedures must require the State and those 
        required to establish paternity to use only the affidavit 
        developed 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.
            ``(D)(i) Procedures under which a signed acknowledgment of 
        paternity is considered a legal finding of paternity, subject 
        to the right of any signatory to rescind the acknowledgment 
        within 30 days.
            ``(ii)(I) Procedures under which, after the 30-day period 
        referred to in clause (i), a signed 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.
            ``(II) Procedures under which, after the 30-day period 
        referred to in clause (i), a minor who signs an acknowledgment 
        of paternity other than in the presence of a parent or court-
        appointed guardian ad litem may rescind the acknowledgment in a 
        judicial or administrative proceeding, until the earlier of--
                    ``(aa) attaining the age of majority; or
                    ``(bb) the date of the first judicial or 
                administrative proceeding brought (after the signing) 
                to establish a child support obligation, visitation 
                rights, or custody rights with respect to the child 
                whose paternity is the subject of the acknowledgment, 
                and at which the minor is represented by a parent, 
                guardian ad litem, or attorney.''.
    (b) National Paternity Acknowledgment Affidavit.--Section 452(a)(7) 
(42 U.S.C. 652(a)(7)) is amended by inserting ``, and develop an 
affidavit to be used for the voluntary acknowledgment of paternity 
which shall include the social security account number of each parent'' 
before the semicolon.

SEC. 212. ENHANCING OUTREACH TO ENCOURAGE PATERNITY ESTABLISHMENT.

    (a) In General.--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 inserting after paragraph (24) the following:
            ``(25) in order to encourage voluntary paternity 
        acknowledgement, provide for--
                    ``(A) the development and distribution of material 
                at schools, hospitals, agencies administering programs 
                under part A of this title and title XIX, prenatal 
                health-care providers, WIC programs, health 
                departments, clinics, and other appropriate locations, 
                that describe the benefits and responsibilities of 
                paternity establishment and the process by which 
                paternity services may be obtained; and
                    ``(B) outreach programs at hospitals and birthing 
                facilities and programs for prenatal care, child birth, 
                and parenting, in accordance with regulations which 
                shall be prescribed by the Secretary not later than 1 
                year after such effective date.''.
    (b) Enhanced Federal Match.--Section 455(a)(1) (42 U.S.C. 
655(a)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (B);
            (2) by inserting ``and'' at the end of subparagraph (C); 
        and
            (3) by inserting after subparagraph (C) the following:
                    ``(D) equal to 90 percent (rather than the 
                percentage specified in subparagraph (A)) of so much of 
                the sums expended during such quarter as are 
                attributable to costs incurred in carrying out section 
                454(25);''.

SEC. 213. STRENGTHENING CIVIL PROCEDURES FOR PATERNITY ESTABLISHMENT.

    Section 466(a) (42 U.S.C. 666(a)) is amended by inserting after 
paragraph (11) the following:
            ``(12) As part of the State's civil procedures for 
        establishment of paternity, the State shall--
                    ``(A) allow for expedited procedures for ordering 
                genetic tests upon the birth of a child if the putative 
                father of the child has not acknowledged paternity of 
                the child;
                    ``(B) authorize the State agency to order all 
                parties to a paternity action to submit to genetic 
                testing upon request of any party or if the putative 
                father denies paternity or fails to appear at any 
                scheduled conference to respond to the allegation of 
                paternity;
                    ``(C)(i) advance the costs of genetic tests, 
                subject to recoupment from the putative father of a 
                child if he is determined to be the biological father 
                of the child; and
                    ``(ii) if the result of genetic testing done by a 
                laboratory is disputed, then, upon reasonable request 
                of any party, order that additional testing be done by 
                the same laboratory or by an independent laboratory at 
                the expense of the requesting party;
                    ``(D) authorize the State to forgive costs incurred 
                by the State for delivery medical expenses or payments 
                of aid under the State plan approved under part A (but 
                not forgive debts owed to the mother) if the father of 
                the child cooperates or acknowledges paternity before 
                or after the completion of a genetic test;
                    ``(E) authorize the State agency to enter default 
                orders to establish paternity if a party refuses to 
                comply with an order to submit to genetic testing;
                    ``(F) prohibit the use of hearings by a court or 
                administrative agency to ratify an acknowledgement of 
                paternity;
                    ``(G) allow a putative father of a child (if not 
                presumed to be the father under State law) standing to 
                bring paternity actions;
                    ``(H) after paternity of a child is established by 
                affidavit, and until an action for custody of the child 
                is brought and heard by a tribunal, presume that the 
                primary caretaker of a child born out of wedlock has 
                physical custody of the child (with the mother presumed 
                to be the primary caretaker of a newborn child whose 
                paternity is established by affidavit in a hospital), 
                unless the mother and father of the child agree that 
                physical custody should be with another individual;
                    ``(I) upon motion by a party, require a tribunal in 
                contested cases to order the absent parent of a child 
                to provide child support with respect to the child on a 
                temporary basis in accordance with State law if--
                            ``(i) the results of parentage testing 
                        create a rebuttable presumption that the 
                        putative parent is a parent of the child;
                            ``(ii) the person from whom support is 
                        sought has signed a verified statement of 
                        parentage of the child; or
                            ``(iii) there is other clear and convincing 
                        evidence that the person from whom support is 
                        sought is a parent of the child;
                    ``(J) repeal any law that provides for paternity 
                cases to be tried by a jury, except to the extent that 
                such a trial is required by the State constitution; and
                    ``(K) have and use laws that provide for the 
                introduction and admission into evidence, without need 
                for third-party foundation testimony, of pre-natal and 
                post-natal birth-related and parentage-testing bills, 
                under which such a bill shall be regarded as prima 
                facie evidence of the amount incurred on behalf of the 
                child for the procedures included in the bill.''.

SEC. 214. PENALTY FOR FAILURE TO ESTABLISH PATERNITY PROMPTLY.

    Section 403 (42 U.S.C. 603) is amended by inserting after 
subsection (h) the following:
    ``(i) Penalty for Failure To Establish Paternity Promptly.--
            ``(1) In general.--The amounts otherwise payable under 
        subsection (a) to a State for any calendar quarter beginning 10 
        months or more after the date of the enactment of this 
        subsection shall be reduced by an amount, determined pursuant 
        to regulations in accordance with paragraph (2), for certain 
        children for whom paternity has not been established.
            ``(2) Reduction formula.--The Secretary shall promulgate 
        regulations specifying the formula for the reduction required 
        under this subsection, which formula shall provide for a 
        reduction in Federal matching payments to a State under this 
        section by an amount equal to the product of--
                    ``(A) the number (after allowing for the tolerance 
                level established under paragraph (3)) of children born 
                on or after the date that is 10 months after the date 
                of the enactment of this subsection--
                            ``(i) who are receiving aid under the State 
                        plan approved under part A;
                            ``(ii) whose custodial relatives have, 
                        throughout the preceding 12-month period, 
                        complied with the cooperation requirements 
                        specified in section 402(a)(26)(B)(i); and
                            ``(iii) for whom paternity has not been 
                        established;
                    ``(B) the average monthly assistance payment under 
                the State plan approved under this part; and
                    ``(C) the Federal matching rate applicable to the 
                assistance payment.
            ``(3) Tolerance level.--
                    ``(A) In general.--For purposes of paragraph 
                (2)(A), the tolerance level shall not be higher than 
                the applicable percentage of children in the State 
                described in paragraph (1), and may decrease over time 
                to make allowance for a State's inability to establish 
                paternity in all cases.
                    ``(B) Applicable percentage.--As used in 
                subparagraph (A), the term `applicable percentage' 
                means--
                            ``(i) 25 percent for fiscal years 1997 and 
                        1998;
                            ``(ii) 20 percent for fiscal years 1999 and 
                        2000;
                            ``(iii) 15 percent for fiscal years 2001 
                        and 2002; and
                            ``(iv) 10 percent for fiscal year 2003 and 
                        each succeeding fiscal year.''.

                        Subtitle C--Enforcement

SEC. 221. ACCESS TO FINANCIAL RECORDS.

    Section 466(a) (42 U.S.C. 666(a)), as amended by section 213 of 
this Act, is amended by inserting after paragraph (12) the following:
            ``(13) Procedures under which the State may obtain access 
        to financial records maintained by any financial institution 
        doing business in the State, for the purpose of establishing, 
        modifying, or enforcing a child support obligation of the 
        person.''.

SEC. 222. PRESUMED ADDRESS OF OBLIGOR AND OBLIGEE.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 213 and 
221 of this Act, is amended by inserting after paragraph (13) the 
following:
            ``(14) Procedures under which the State shall--
                    ``(A) require the court or administrative agency 
                with authority to issue the final order in a child 
                support or parentage case to require each party subject 
                to the order to file with the court or administrative 
                agency, on or before the date the order is issued--
                            ``(i) the party's residential address or 
                        addresses;
                            ``(ii) the party's mailing address or 
                        addresses;
                            ``(iii) the party's home telephone number 
                        or numbers;
                            ``(iv) the party's driver's license number 
                        and the State that issued the license;
                            ``(v) the party's social security account 
                        number;
                            ``(vi) the name of each employer of the 
                        party;
                            ``(vii) the addresses of each place of 
                        employment of the party; and
                            ``(viii) the party's work telephone number 
                        or numbers; and
                    ``(B) require the court or administrative agency in 
                any action related to child support to presume, for the 
                purpose of providing sufficient notice (other than the 
                initial notice in an action to establish parentage or a 
                child support order), that the parent resides at the 
                last residential address given by the parent to the 
                court or agency.''.

SEC. 223. FAIR CREDIT REPORTING ACT AMENDMENT.

    Section 604 of the Consumer Credit Protection Act (15 U.S.C. 1681b) 
is amended by adding at the end the following:
    ``(4) To a State agency administering a State plan under section 
454 of the Social Security Act, for use to establish, modify, or 
enforce a child support award.''.

SEC. 224. ADDITIONAL BENEFITS SUBJECT TO GARNISHMENT.

    (a) Federal Death Benefits, Black Lung Benefits, and Veterans 
Benefits.--Section 462(f)(2) (42 U.S.C. 662(f)(2)) is amended by 
striking ``(not including'' and all that follows through 
``compensation)''.
    (b) Workers' Compensation.--Section 462(f) (42 U.S.C. 662(f)) is 
amended--
            (1) by striking ``or'' at the end of paragraph (1);
            (2) by striking the period at the end of paragraph (2) and 
        inserting ``, or''; and
            (3) by adding at the end the following:
            ``(3) workers' compensation benefits.''.

SEC. 225. HOLD ON OCCUPATIONAL, PROFESSIONAL, AND BUSINESS LICENSES.

    (a) State Hold Based on Warrant or Support Delinquency.--Section 
466(a) (42 U.S.C. 666(a)), as amended by sections 213, 221, and 222 of 
this Act, is amended by inserting after paragraph (14) the following:
            ``(15) Procedures under which the State occupational 
        licensing and regulating departments and agencies (other than 
        the department or agency responsible for licensing the 
        operation of motor vehicles) may not issue or renew any 
        occupational, professional, or business license of--
                    ``(A) a noncustodial parent who is the subject of 
                an outstanding failure to appear warrant, capias, or 
                bench warrant related to a child support proceeding 
                that appears on the State's crime information system, 
                until removed from the system; or
                    ``(B) an individual who is delinquent in the 
                payment of child support, until the obligee or a State 
                entity responsible for child support enforcement 
                consents to, or a court or administrative agency that 
                is responsible for the order's enforcement orders, the 
                release of the hold on the license, or an expedited 
                inquiry and review is completed while the individual is 
                granted a 60-day temporary license.''.
    (b) Federal Hold Based on Support Delinquency.--A Federal agency 
may not issue or renew any occupational, professional, or business 
license of an individual who is delinquent in the payment of child 
support, until the obligee, the obligee's attorney or a State entity 
responsible for child support enforcement consents to, or a court or 
administrative agency that is responsible for the order's enforcement 
orders, the release of the hold on the license, or an expedited inquiry 
and review is completed while the individual is granted a 60-day 
temporary license.

SEC. 226. DRIVER'S LICENSES AND VEHICLE REGISTRATIONS DENIED TO PERSONS 
              FAILING TO APPEAR IN CHILD SUPPORT CASES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 213, 221, 
222, and 225 of this Act, is amended by inserting after paragraph (15) 
the following:
            ``(16) Procedures under which--
                    ``(A) the State motor vehicle department--
                            ``(i) may not issue or renew the driver's 
                        license or any vehicle registration (other than 
                        temporary) of any noncustodial parent who is 
                        the subject of an outstanding failure to appear 
                        warrant, capias, or bench warrant related to a 
                        child support proceeding that appears on the 
                        State's crime information system, until removed 
                        from the system; and
                            ``(ii) in any case in which a show cause 
                        order has been issued as described in 
                        subparagraph (B), may grant a temporary license 
                        or vehicle registration to the individual 
                        pending the show cause hearing or the removal 
                        of the warrant, whichever occurs first; and
                    ``(B) a State court, upon receiving notice that an 
                individual to whom a State driver's license or vehicle 
                registration has been issued is the subject of a 
                warrant related to a child support proceeding, shall 
                issue a show cause order to the individual requesting 
                the individual to demonstrate why the individual's 
                driver's license or vehicle registration should not be 
                suspended until the warrant is removed by the State 
                responsible for issuing the warrant.''.

SEC. 227. LIENS.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 213, 221, 
222, 225, and 226 of this Act, is amended by inserting after paragraph 
(16) the following:
            ``(17) Procedures under which the State shall 
        systematically place liens on all nonexempt real and titled 
        personal property for child support arrearages determined under 
        a court order or an order of an administrative process 
        established under State law, using a method for updating the 
        value of the lien on a regular basis or allowing for an 
        expedited inquiry to and response from a State child support 
        order registry established pursuant to paragraph (20)(A) for 
        proof of the amount of arrears, with an expedited method for 
        the titleholder or the individual owing the arrearage to 
        contest the arrearage or to request a release upon fulfilling 
        the support obligation, and under which such a lien has 
        precedence over all other encumbrances on a title to personal 
        property other than a purchase money security interest, and 
        that the individual owed the arrearage may execute on, seize, 
        and sell the property in accordance with State law.''.

SEC. 228. FRAUDULENT TRANSFER PURSUIT.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 213, 221, 
222, 225, 226, and 227 of this Act, is amended by inserting after 
paragraph (17) the following:
            ``(18) Procedures requiring that, in any case related to 
        child support, any transfer of property for significantly less 
        than the fair market value of the property by an individual who 
        owes a child support arrearage shall be presumed to be made 
        with the intent to avoid payment of the arrearage, and may be 
        rebutted by evidence to the contrary.''.

SEC. 229. REPORTING OF CHILD SUPPORT ARREARAGES TO CREDIT BUREAUS.

    Section 466(a)(7)(A) (42 U.S.C. 666(a)(7)(A)) is amended by 
striking ``$1,000'' and inserting ``the amount of the monthly support 
obligation''.

SEC. 230. DENIAL OF PASSPORTS TO NONCUSTODIAL PARENTS SUBJECT TO STATE 
              ARREST WARRANTS IN CASES OF NONPAYMENT OF CHILD SUPPORT.

    The Secretary of State is authorized to refuse a passport or 
revoke, restrict, or limit a passport in any case in which the 
Secretary of State determines or is informed by competent authority 
that the applicant or passport holder is a noncustodial parent who is 
the subject of an outstanding State warrant of arrest for nonpayment of 
child support, where the amount in controversy is not less than 
$10,000.

SEC. 231. STATUTES OF LIMITATION.

    (a) In General.--Section 466(a) (42 U.S.C. 666(a)), as amended by 
sections 213, 221, 222, 225, 226, 227, and 228 of this Act, is amended 
by inserting after paragraph (18) the following:
            ``(19) Procedures which permit the enforcement of any child 
        support order until the child attains at least 30 years of 
        age.''.
    (b) Applicability.--The amendment made by this section shall apply 
to orders entered before, on, and after the date of the enactment of 
this Act.

SEC. 232. COLLECTION OF PAST-DUE SUPPORT USING TAX COLLECTION 
              AUTHORITY.

    (a) Expanded Role of the Internal Revenue Service.--
            (1) In general.--Section 6305 of the Internal Revenue Code 
        of 1986 (relating to collection of certain liability) is 
        amended by redesignating subsections (a) and (b) as subsections 
        (b) and (c), respectively, and by inserting before subsection 
        (b) (as so redesignated) the following new subsection:
    ``(a) In General.--The head of any State child support order 
registry established pursuant to section 466(a)(20)(A) of the Social 
Security Act may certify to the Secretary for collection under this 
subsection the amount of any child support obligation. No amount may be 
certified under the preceding sentence except the amount of the 
delinquency under a court or administrative order for support and upon 
a showing by such agency head that such State has made reasonable 
efforts to collect such amount using its own collection mechanisms.''
            (2) Conforming amendments.--
                    (A) Subsection (b) of section 6305 of such Code (as 
                redesignated by subsection (a)) is amended by striking 
                ``Upon receiving'' and all that follows through 
                ``Welfare'' the second place it appears and inserting 
                ``Upon receiving a certification referred to in 
                subsection (a)''.
                    (B) Subsection (c) of section 6305 of such Code (as 
                redesignated by subsection (a)) is amended by striking 
                ``subsection (a)'' and inserting ``subsection (b)''.
    (b) Collection of Past-Due Support Using Refund Offset.--
            (1) In general.--Subsection (c) of section 6402 of such 
        Code is amended to read as follows:
    ``(c) Offset of Past-Due Support Against Overpayments.--
            ``(1) In general.--Upon receiving notice from any State 
        registry that an individual owes past-due support, the 
        Secretary shall determine whether any amounts, as refunds of 
        Federal taxes paid, are payable to such individual (regardless 
        of whether such individual filed a tax return as a married or 
        unmarried individual). If the Secretary finds that any such 
        amount is payable, the Secretary--
                    ``(A) shall withhold from such refunds an amount 
                equal to the past-due support,
                    ``(B) shall concurrently send a notice to such 
                individual that the withholding has been made 
                (including in or with such notice a notification to any 
                other individual who may have filed a joint return with 
                such individual of the steps which such other 
                individual may take in order to secure his or her 
                proper share of the refund), and
                    ``(C) shall pay such amount to such registry 
                (together with notice of the individual's home 
                address).
            ``(2) Procedure.--
                    ``(A) In general.--Prior to notifying the Secretary 
                under paragraph (1) that an individual owes past-due 
                support, the head of the State registry shall send 
                notice to such individual that a withholding will be 
                made from any refund otherwise payable to such 
                individual. The notice shall also (i) instruct the 
                individual owing the past-due support of the steps 
                which may be taken to contest the State registry's 
                determination that past-due support is owed or the 
                amount of the past-due support, and (ii) provide 
                information, as may be prescribed by the Secretary of 
                Health and Human Services by regulation in consultation 
                with the Secretary, with respect to procedures to be 
                followed, in the case of a joint return, to protect the 
                share of the refund which may be payable to another 
                individual.
            ``(B) Special rules for offsets against overpayments on 
        joint returns.--
                            ``(i) In general.--If the Secretary 
                        determines that an amount should be withheld 
                        under paragraph (1), and that the refund from 
                        which it should be withheld is based upon a 
                        joint return, the Secretary shall notify the 
                        State registry that the withholding is being 
                        made from a refund based upon a joint return, 
                        and shall furnish to the State registry the 
                        names and addresses of each spouse filing such 
                        joint return.
                            ``(ii) Share of refund payable to spouse 
                        not owing past-due support.--If the other 
                        individual filing the joint return with the 
                        named individual owing the past-due support 
                        takes appropriate action to secure his or her 
                        proper share of a refund from which a 
                        withholding was made under paragraph (1), the 
                        Secretary shall pay such share to such other 
                        individual. The Secretary shall deduct the 
                        amount of such payment from amounts 
                        subsequently payable to the State registry to 
                        which the amount originally withheld from such 
                        refund was paid.
                    ``(C) Erroneous offsets.--In any case in which an 
                amount was withheld under paragraph (1) and paid to a 
                State registry, and the State registry subsequently 
                determines that the amount certified as past-due 
                support was in excess of the amount actually owed at 
                the time the amount withheld is to be distributed to or 
                on behalf of the child, the State registry shall pay 
                the excess amount withheld to the named individual 
                thought to have owed the past-due support (or, in the 
                case of amounts withheld on the basis of a joint 
                return, jointly to the parties filing such return).
            ``(3) Regulations; contents, etc.--The Secretary shall 
        issue regulations, approved by the Secretary of Health and 
        Human Services, prescribing the time or times at which State 
        registries must submit notices of past-due support, the manner 
        in which such notices must be submitted, and the necessary 
        information that must be contained in or accompany the notices. 
        The regulations--
                    ``(A) shall be consistent with the provisions of 
                paragraph (2),
                    ``(B) shall specify the minimum amount of past-due 
                support to which the offset procedure established by 
                paragraph (1) may be applied, and
                    ``(C) shall provide that the Secretary will advise 
                the Secretary of Health and Human Services, not less 
                frequently than annually, of--
                            ``(i) the State registries which have 
                        furnished notices of past-due support under 
                        paragraph (1) of this subsection,
                            ``(ii) the number of cases in each State 
                        with respect to which such notices have been 
                        furnished,
                            ``(iii) the amount of support sought to be 
                        collected under this subsection by each State 
                        registry, and
                            ``(iv) the amount of such collections 
                        actually made in the case of each State 
                        registry.
            ``(4) State registry.--For purposes of this subsection, the 
        term `State registry' means any State child support order 
        registry established pursuant to section 466(a)(20)(A) of the 
        Social Security Act.
            ``(5) Past-due support.--For purposes of this subsection, 
        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 
        (including medical support) and maintenance of a child, or of a 
        child and the parent with whom the child is living.
            ``(6) Subsection applied before crediting to future 
        liability.--This subsection shall be applied to an overpayment 
        prior to its being credit to a taxpayer's future liability for 
        any internal revenue tax.''
            (2) Conforming amendment.--Paragraph (2) of section 6402(d) 
        of such Code is amended by striking ``with respect to past-due 
        support collected pursuant to an assignment under section 
        402(a)(26) of the Social Security Act''.
    (c) Elimination of the Role of the Secretary of Health and Human 
Services.--
            (1) Section 464 (42 U.S.C. 664) is hereby repealed.
            (2) Section 452 (42 U.S.C. 652) is amended by striking 
        subsections (b) and (c).

                   Subtitle D--State Responsibilities

SEC. 241. STATE ROLE.

    (a) State Child Support Order Registries, Etc.--
            (1) In general.--Section 466(a) (42 U.S.C. 666(a)), as 
        amended by subtitle C of this title, is amended by inserting 
        after paragraph (19) the following:
            ``(20) Procedures under which--
                    ``(A) the State child support enforcement agency 
                shall--
                            ``(i) establish an automated central child 
                        support order registry (including, at State 
                        option, by integrating local registries through 
                        computers, if the cost of such integration does 
                        not exceed the cost of a single centralized 
                        registry) which shall maintain a current record 
                        of--
                                    ``(I) each child support order 
                                issued, modified, or registered in the 
                                State under the State plan;
                                    ``(II) each child support order 
                                issued, modified, or being enforced in 
                                the State after the effective date of 
                                this paragraph; and
                                    ``(III) any other child support 
                                order, at the request of a party to the 
                                order;
                            ``(ii) for each such child support order, 
                        record the amount of support ordered and 
                        maintain a record of payments under the order;
                            ``(iii) prepare a support abstract that 
                        conforms to the child support order abstract 
                        developed pursuant to section 452(a)(1)), 
                        forward the abstract to the Federal child 
                        support order registry established under 
                        section 203 of the Family Self-Sufficiency Act 
                        of 1994, and enter the abstract into the State 
                        registry for purposes of matching against other 
                        data bases on a regular basis;
                            ``(iv) program the statewide automated 
                        system to extract weekly updates automatically 
                        of all case records included in the State 
                        registry;
                            ``(v) provide a central point of access to 
                        the Federal new-hire reporting directory and 
                        other Federal data bases, statewide data bases, 
                        and interstate case activity;
                            ``(vi) routinely match information in the 
                        State registry against other State data bases 
                        to which the agency has access;
                            ``(vii) use a national identification 
                        number, preferably the social security account 
                        number, for all individuals or cases as 
                        determined by the Secretary;
                            ``(viii) maintain procedures (such as 
                        notification to parents) to ensure that 
                        arrearages do not accrue after the child for 
                        whom support is ordered is no longer eligible 
                        for support or the order becomes invalid;
                            ``(ix) use technology and automated 
                        procedures in operating the State registry 
                        wherever feasible and cost-effective;
                            ``(x) ensure that the amount of any 
                        interest due with respect to delinquent child 
                        support obligations can be automatically 
                        calculated;
                            ``(xi) ensure that the State registry has 
                        access to vital statistics or other information 
                        necessary to provide the Secretary with such 
                        information as the Secretary may require in 
                        order to apply the formula provided for in 
                        section 403(i);
                            ``(xii) use the State registry (whether 
                        centralized or established through the 
                        integration of local registries)--
                                    ``(I) as a clearinghouse for the 
                                centralized collection and disbursement 
                                of child support payments, enabling the 
                                functions to be carried out (by the 
                                State or a private entity) at 1 
                                location within the State, and through 
                                a fully automated process (including, 
                                at State option, through multi-State 
                                regional cooperative agreements through 
                                1 `drop box' location with computer 
                                linkage to the individual State 
                                registries); and
                                    ``(II) as the central payment 
                                center--
                                            ``(aa) for all employers 
                                        remitting child support 
                                        withheld from wages; and
                                            ``(bb) for all payments not 
                                        made through wage withholding, 
                                        through the use of payment 
                                        coupons or stubs or electronic 
                                        means, unless otherwise agreed 
                                        by the parties to the order and 
                                        the court or administrative 
                                        agency that issued or modified 
                                        the order (which agreement may 
                                        be unilaterally rescinded by 
                                        the individual to whom child 
                                        support is payable under the 
                                        order or by the individual 
                                        obligated to pay child support 
                                        under the order, without 
                                        permission of any court or 
                                        administrative agency), and, at 
                                        State option, payments may be 
                                        made at local offices or 
                                        financial institutions only if 
                                        the payments are remitted to 
                                        the State registry by the local 
                                        office or financial institution 
                                        for payment processing by 
                                        electronic funds transfer 
                                        within 24 hours after receipt; 
                                        and
                            ``(xiii) require the State registry to--
                                    ``(I) accept all payments for child 
                                support by any means of transfer;
                                    ``(II) generate bills which provide 
                                for accurate payment identification, 
                                such as return stubs or coupons, for 
                                cases with respect to which wage 
                                withholding is not required;
                                    ``(III) identify all payments made 
                                to the State registry and match the 
                                payment to the correct child support 
                                case record;
                                    ``(IV) distribute all collections 
                                as required by law;
                                    ``(V) disburse to custodial parents 
                                child support payments that are payable 
                                to such parents, including through the 
                                use of direct deposit upon the request 
                                of the custodial parent;
                                    ``(VI) process and send to 
                                custodial parents child support 
                                payments that are payable to such 
                                parents within 24 hours after receipt;
                                    ``(VII) maintain records of 
                                transactions and the status of all 
                                accounts, including arrears, and 
                                monitor all payments of support;
                                    ``(VIII) develop automatic 
                                monitoring procedures for all cases 
                                where a disruption in payments triggers 
                                automatic enforcement mechanisms;
                                    ``(IX) accept and transmit 
                                interstate collections to other States, 
                                whenever possible, using electronic 
                                funds transfer technology; and
                                    ``(X) when necessary, change payees 
                                in child support cases 
                                administratively, with notice to both 
                                parties;
                    ``(B) each child support order issued or modified 
                in the State is required to be transmitted to the 
                registry within such period of time after the issuance 
                or modification as the Secretary shall prescribe in 
                regulations; and
                    ``(C) the State shall--
                            ``(i) prohibit any State agency from 
                        imposing a fee on any custodial or noncustodial 
                        parent for inclusion in the State registry, or 
                        imposing any new fee on a custodial parent for 
                        routine establishment, enforcement, or 
                        modification of cases handled through the State 
                        registry;
                            ``(ii) have automated procedures to monitor 
                        cases and impose those enforcement measures 
                        that can be handled on a mass or group basis 
                        using computer automation technology, by--
                                    ``(I) monitoring all cases within 
                                the State registry on a regular basis, 
                                determining on at least a monthly basis 
                                whether the child support payment has 
                                been made;
                                    ``(II) maintaining automation 
                                capability whereby a disruption in 
                                payments triggers automatic enforcement 
                                mechanisms; and
                                    ``(III) administratively imposing 
                                measures such as--
                                            ``(aa) ordering wages to be 
                                        withheld automatically for the 
                                        purposes of satisfying child 
                                        support obligations, and 
                                        directing wage withholding 
                                        orders to employers immediately 
                                        upon notification by the 
                                        Federal child support order 
                                        registry established under 
                                        section 203(a) of the Family 
                                        Self-Sufficiency Act of 1990;
                                            ``(bb) attaching accounts 
                                        at financial institutions, 
                                        including, at State option, 
                                        freezing withdrawals from such 
                                        accounts and, if the freeze is 
                                        not challenged, turning over 
                                        the part of the account subject 
                                        to the freeze up to the amount 
                                        of the child support debt to 
                                        the person or State seeking the 
                                        support;
                                            ``(cc) intercepting certain 
                                        lump-sum monies such as lottery 
                                        winnings and settlements to be 
                                        turned over to the State to 
                                        satisfy pending arrearages;
                                            ``(dd) attaching public and 
                                        private retirement funds in 
                                        appropriate cases, as 
                                        determined by the Secretary;
                                            ``(ee) attaching 
                                        unemployment compensation, 
                                        worker's compensation, and 
                                        other State benefits;
                                            ``(ff) increasing required 
                                        payments to cover arrearages;
                                            ``(gg) intercepting State 
                                        tax refunds; and
                                            ``(hh) submitting cases for 
                                        Federal tax refund offset; and
                            ``(iii) be able to provide parents with up-
                        do-date information on payments that are not 
                        past due, payments that are past due, and 
                        general information on available child support 
                        services;
                    ``(D) child support arrears with respect to cases 
                in the State registry are considered judgments by 
                operation of law, and reducing the amount of such 
                arrears to money judgments is not a prerequisite to 
                enforcement;
                    ``(E) all cases in the State registry shall receive 
                services offered by the registry without regard to 
                whether an application for such services has been made; 
                and
                    ``(F) the State agency referred to in section 
                402(a)(3) shall notify the State child support 
                enforcement agency of the commencement or termination 
                of aid under the State plan approved under part A to 
                any individual or family, within 10 days after the 
                commencement or termination.''.
            (2) Conforming amendment.--Section 466(b) (42 U.S.C. 
        666(b)) is amended by striking paragraph (5).
    (b) Wage Withholding.--
            (1) In general.--Section 466(b) (42 U.S.C. 666(b)) is 
        amended by adding at the end the following:
            ``(11)(A)(i) Upon the issuance or modification by a State 
        court or administrative agency of an order imposing a child 
        support obligation on an individual, the State shall transmit 
        to any employer of the individual a wage withholding order 
        developed under section 452(a)(11) directing the employer to 
        withhold amounts from the wages of the individual pursuant to 
        the order, or such greater amount as the State child support 
        order registry established pursuant to subsection (a)(20)(A) 
        may determine is the total amount of the child support 
        obligations of the individual.
            ``(ii) Clause (i) shall not apply to an order upon 
        agreement of the parties to the order and the court or 
        administrative agency that issued or modified the order.
            ``(iii) An agreement referred to in clause (ii) may be 
        unilaterally rescinded by the individual to whom child support 
        is payable under the order or by the individual obligated to 
        pay child support under the order, without permission of any 
        court or administrative agency.
            ``(B) Any individual or entity engaged in commerce, as a 
        condition of doing business in the State, shall, on receipt of 
        a wage withholding order developed under section 452(a)(11) 
        that is regular on its face and has been issued by a court or 
        administrative agency of any State--
                    ``(i) immediately provide a copy of the order to 
                the employee subject to the order;
                    ``(ii) comply with the order by forwarding to the 
                State registry established pursuant to subsection 
                (a)(20)(A) of this section, within 5 days after the end 
                of each payroll period ending after receipt of the 
                order, the greater of--
                            ``(I) the amount required to be withheld 
                        pursuant to the order; or
                            ``(II) the amount that the State registry 
                        has notified the individual or family is the 
                        amount required to be withheld from the wages 
                        of the employee for payment of child support 
                        obligations of the employee; and
                    ``(iii) keep records of the amounts so withheld and 
                the dates of such withholding.
            ``(C) Such an order may be served on the individual or 
        entity directly or by first-class mail.
            ``(D) An individual or entity who complies with 
        subparagraph (B)(ii) with respect to such an order may not be 
        held liable for wrongful withholding of income from the 
        employee subject to the order.
            ``(E) The State shall impose a civil fine of $1,000 on any 
        individual or entity who receives such an order for each 
        failure to comply with subparagraph (B)(ii) with respect to the 
        order.
            ``(F) The State shall have in effect such procedures as the 
        Secretary may require by regulation for carrying out this 
        paragraph in cases involving an employee who has 2 or more 
        employers or child support obligations.
            ``(12) If the State transmits to an individual or entity 
        engaged in commerce only outside the State a wage withholding 
        order issued by the State with respect to an employee of the 
        individual or entity, and the individual or entity refuses to 
        comply with the order, the State shall send an informational 
        copy of the order to the registry established pursuant to 
        subsection (a)(20)(A) of any other State in which the 
        individual or entity is engaged in commerce.
            ``(13) If an employee requests a hearing to contest wage 
        withholding based on claim of a mistake of fact, the hearing 
        may be held in the State from which the child support is 
        collected, and, within 45 days after the income source receives 
        the withholding order, the entity conducting the hearing must 
        adjudicate the claim. The State in which the hearing is held 
        shall provide appropriate services in cases enforced under the 
        State plan to ensure that the interests of the individual to 
        whom the withheld income is to be paid are adequately 
        represented.''.
            (2) Conforming amendment.--Section 466(b)(6)(A)(i) (42 
        U.S.C. 666(b)(6)(A)(i)) is amended by striking ``(which may 
        include'' and all that follows through ``paragraph (5))'' and 
        inserting ``and pay such amount to the State registry 
        established under subsection (a)(12)''.
    (c) Priorities in Application of Withheld Wages.--Section 466(b) 
(42 U.S.C. 666(b)), as amended by subsection (b)(1) of this section, is 
amended by inserting after paragraph (13) the following:
            ``(14) Procedures under which the amounts withheld pursuant 
        to a child support or wage withholding order are to be applied 
        in the following order:
                    ``(A) To payments of support due during the month 
                of withholding.
                    ``(B) To payments of premiums for health care 
                insurance coverage for dependent children.
                    ``(C) To payments of support due before the month 
                of withholding or collection, and of unreimbursed 
                health-care expenses.''.
    (d) Access to Various Data Bases.--Section 466(a) (42 U.S.C. 
666(a)), as amended by subtitle C of this title and by subsection (a) 
of this section, is amended by inserting after paragraph (20) the 
following:
            ``(21) Procedures under which the State child support 
        enforcement agency shall have automated on-line or batch access 
        (or, if necessary, nonautomated access) to information 
        regarding residential addresses, employers and employer 
        addresses, income and assets, and medical insurance benefits 
        with respect to absent parents that is available through any 
        data base maintained by--
                    ``(A) any agency of the State or any political 
                subdivision thereof, that contains information on 
                residential addresses, or on employers and employer 
                addresses;
                    ``(B) any publicly regulated utility company 
                located in the State; and
                    ``(C) any credit reporting agency.''.
    (e) Expanded Interaction With the National Parent Locator 
Network.--Section 454(16) (42 U.S.C. 654(16)) is amended--
            (1) by striking ``and (E)'' and inserting ``(E)''; and
            (2) by striking ``enforcement;'' and inserting 
        ``enforcement, and (F) to provide access to the national 
        network developed pursuant to section 453(g);''.
    (f) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by section 212(a) 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 inserting after paragraph (25) the following:
            ``(26) will have in effect safeguards applicable to all 
        sensitive and confidential information handled by the State 
        agency 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; and
                    ``(B) prohibitions against the release of 
                information on the whereabouts of a party to another 
                party against whom a protective order with respect to 
                the party has been entered.''.

SEC. 242. UNIFORM TERMS IN ORDERS.

    Section 452(a) (42 U.S.C. 652(a)) is amended--
            (1) in paragraph (9), by striking ``and'' after the 
        semicolon;
            (2) in paragraph (10), by striking the period at the end of 
        the 2nd sentence and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(11) not later than 12 months after the date of the 
        enactment of this paragraph, develop a uniform abstract of a 
        child support order, for use by the child support order 
        registry established pursuant to section 466(a)(20)(A), in 
        which may be recorded--
                    ``(A) the date support payments are to begin under 
                the order;
                    ``(B) the circumstances upon which support payments 
                are to end under the order;
                    ``(C) the amount of child support payable pursuant 
                to the order expressed as a sum certain to be paid on a 
                monthly basis, arrearages expressed as a sum certain as 
                of a certain date, and any payback schedule for the 
                arrearages;
                    ``(D) whether the order awards support in a lump 
                sum (nonallocated) or per child;
                    ``(E) if the award is in a lump sum, the event 
                causing a change in the support award and the amount of 
                any change;
                    ``(F) other expenses covered by the order;
                    ``(G) the names of the parents subject to the 
                order;
                    ``(H) the social security account numbers of the 
                parents;
                    ``(I) the name, date of birth, and social security 
                account number (if any) of each child covered by the 
                order;
                    ``(J) the identification (FIPS code, name, and 
                address) of the court or administrative agency that 
                issued the order;
                    ``(K) any information on health care support 
                required by the order;
                    ``(L) the party to contact if additional 
                information is obtained; and
                    ``(M) such other information as the Secretary deems 
                appropriate.''.

SEC. 243. STATES REQUIRED TO ENACT THE UNIFORM INTERSTATE FAMILY 
              SUPPORT ACT.

    (a) In General.--Section 466 (42 U.S.C. 666) is amended by adding 
at the end the following:
    ``(f) In order to satisfy section 454(20)(A), each State must have 
in effect laws which adopt the officially approved version of the 
Uniform Interstate Family Support Act adopted by the National 
Conference of Commissioners on Uniform State Laws in August 1992.''.
    (b) Applicability.--
            (1) In general.--Except as provided in paragraph (2) of 
        this subsection, the amendment made by subsection (a) shall 
        apply to calendar quarters beginning on or after October 1, 
        1995, without regard to whether regulations to implement such 
        amendments are promulgated by such date.
            (2) Delay permitted if state legislation required.--In the 
        case of a State plan approved under part D of title IV of the 
        Social Security Act which the Secretary of Health and Human 
        Services determines requires State legislation (other than 
        legislation appropriating funds) in order for the plan to meet 
        the additional requirement imposed by the amendment made by 
        subsection (a) of this section, the State plan shall not be 
        regarded as failing to comply with such additional requirement 
        solely on the basis of the failure of the plan to meet such 
        additional requirement before 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.

SEC. 244. EXPEDITED PROCESSES AND ADMINISTRATIVE PROCEDURES.

    (a) Monitoring of Compliance.--Section 452(a)(4) (42 U.S.C. 
652(a)(4)) is amended by inserting ``and to determine whether the 
expedited processes required under section 466(a)(2)(A) are in effect'' 
before ``, and, not less''.
    (b) Noncompliant States With Judicial System for Processing Child 
Support Cases Required to Convert to Administrative System.--Section 
466(a)(2) (42 U.S.C. 666(a)(2)) is amended by inserting after the 1st 
sentence the following: ``If the Secretary finds that the processes for 
obtaining and modifying child support orders under the State judicial 
system has not met the standards established in such regulations, such 
procedures shall provide for the use of State administrative processes 
for obtaining and modifying such orders.''.

SEC. 245. DUE PROCESS.

    Section 454 (42 U.S.C. 654), as amended by sections 212(a) and 
241(f) 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 inserting after paragraph (26) the following:
            ``(27) provide for procedures to ensure that--
                    ``(A) individuals who are parties to cases in which 
                services are being provided under this part--
                            ``(i) receive notice of all proceedings in 
                        which support obligations might be established 
                        or modified; and
                            ``(ii) receive a copy of any order 
                        establishing or modifying a child support 
                        obligation within 14 days after issuance of 
                        such order; and
                    ``(B) individuals receiving services under this 
                part have timely access to a fair hearing or other 
                formal complaint procedure, meeting standards 
                established by the Secretary, that ensures prompt 
                consideration and resolution of complaints (but the 
                resort to the procedure shall not stay the enforcement 
                of any support order);''.

SEC. 246. OUTREACH AND ACCESSIBILITY.

    (a) Uniform Application for Child Support Services.--
            (1) Requirement that states use federal application form.--
        Section 454(6)(A) (42 U.S.C. 654(6)(A)) is amended by inserting 
        ``(which shall be made on the service application form 
        developed under section 452(a)(7))'' after ``State''.
            (2) Duty to develop application form.--Section 452(a)(7) 
        (42 U.S.C. 652(a)(7)), as amended by section 211(b) of this 
        Act, is amended by inserting ``, and develop a form to be used 
        to apply for services established under State plans under this 
        part'' before the semicolon.
    (b) Outreach.--
            (1) State plan requirement.--Section 454 (42 U.S.C. 654), 
        as amended by sections 212(a), 241(f), and 245 of this Act, is 
        amended--
                    (A) by striking ``and'' at the end of paragraph 
                (26);
                    (B) by striking the period at the end of paragraph 
                (27) and inserting ``; and''; and
                    (C) by inserting after paragraph (27) the 
                following:
            ``(28) provide for the establishment and conduct of an 
        ongoing program of outreach to persons eligible for services 
        under the plan, in accordance with regulations issued under 
        section 452(a)(11).''.
            (2) Regulations.--Section 452(a) (42 U.S.C. 652(a)), as 
        amended by section 242 of this Act, is amended--
                    (A) in paragraph (10), by striking ``and'' after 
                the semicolon;
                    (B) in paragraph (11), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(12) issue such regulations as are necessary to ensure 
        that State agencies--
                    ``(A) develop and implement a plan for serving 
                underserved populations;
                    ``(B) use appropriate personnel and printed 
                material for use by persons who do not speak English or 
                whose hearing is impaired; and
                    ``(C) work in cooperation with other Federal, 
                State, and local government agencies and private 
                nonprofit organizations which serve low-income families 
                to publicize the availability of such services and 
                coordinate the delivery of such services.''.

SEC. 247. COST-OF-LIVING ADJUSTMENT OF CHILD SUPPORT AWARDS.

    Part D of title IV (42 U.S.C. 651-669) is amended by inserting 
after section 467 the following:

``SEC. 467A. COST-OF-LIVING ADJUSTMENT OF CHILD SUPPORT AWARDS.

    ``(a) In General.--Each State, as a condition for having its State 
plan approved under this part, shall have in effect such laws and 
procedures as are necessary to ensure that each child support order 
issued or modified in the State after the effective date of this 
section provides that amount of child support payable under the order 
during the 12-month period that begins on each anniversary of the date 
the order was issued or most recently so modified shall be an amount 
equal to--
            ``(1) the amount of the award specified in the order; 
        multiplied by
            ``(2) the percentage (if any) by which--
                    ``(A) the average of the Consumer Price Index (as 
                defined in section 1(f)(5) of the Internal Revenue Code 
                of 1986) for the most recent 12-month period for which 
                such information is available; exceeds
                    ``(B) the average of the Consumer Price Index (as 
                so defined) for the 12-month period that ends on the 
                date the order was issued or most recently so modified.
    ``(b) Notice Requirements.--The laws and procedures described in 
subsection (a) shall include a requirement that notice of the cost-of-
living adjustment of a child support award be provided to--
            ``(1) the individual obligated to pay the child support, 
        and if wages are to be withheld to pay such support, to each 
        employer of the individual; and
            ``(2) the individual to whom the child support is owed.
    ``(c) Rule of Interpretation.--Subsection (a) shall not be 
construed to affect other grounds for modifying a child support 
award.''.

SEC. 248. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF CERTAIN CHILD 
              SUPPORT ORDERS.

    (a) In General.--Section 466(a)(10) (42 U.S.C. 666(a)(10)) is 
amended by adding at the end the following:
            ``(D)(i) Procedures under which--
                    ``(I) every 3 years, at the request of either 
                parent subject to a child support order, the State 
                shall review and, as appropriate, adjust the order in 
                accordance with the guidelines established under 
                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 such guidelines by more than 
                the total of the adjustments required to be made in the 
                amount of the award pursuant to section 467A during the 
                3 year period ending on the date of the request; and
                    ``(II) upon request of either parent subject to a 
                child support order, the State shall review and, as 
                appropriate, adjust the order in accordance with the 
                guidelines established under section 467(a) based on a 
                significant change in the circumstances of either such 
                parent.
            ``(ii) Such procedures shall require both parents subject 
        to a child support order to be notified of their rights 
        provided for under clause (i) at the time the order is issued 
        and in the annual information exchange form provided under 
        subparagraph (E).
            ``(E) Procedures under which each child support order 
        issued or modified in the State after the effective date of 
        this subparagraph shall require the parents subject to the 
        order to provide each other with a complete statement of their 
        respective financial condition annually on a form which shall 
        be established by the Secretary and provided by the State.''.
    (b) Conforming Amendment.--Section 466(a) (42 U.S.C. 666(a)) is 
amended by striking paragraph (10).

SEC. 249. PREVENTION OF CONFLICTS OF INTEREST.

    Section 466(a)(10) (42 U.S.C. 666(a)(10)), as amended by section 
248 of this Act, is amended by adding at the end the following:
            ``(F) Procedures to ensure that the State does not provide 
        to any noncustodial parent of a child representation relating 
        to the review or adjustment of an order for the payment of 
        child support with respect to the child, unless the State makes 
        provision for such representation outside the State agency.''.

SEC. 250. STAFFING.

    (a) Studies.--The Secretary of Health and Human Services shall 
conduct and, not later than 1 year after the date of the enactment of 
this Act, complete staffing studies for each State child support 
enforcement program, including each agency and court involved in the 
child support process.
    (b) Report to the Congress.--Within 90 days after the end of the 1-
year period described in subsection (a), the Secretary shall report to 
the Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate, and to each State, the results of 
the studies required by subsection (a).
    (c) Implementation.--Section 455(a) (42 U.S.C. 655(a)) is amended 
by adding at the end the following:
    ``(3) The Secretary shall reduce by 2 percent the amount otherwise 
payable to a State pursuant to paragraph (1)(A) for any calendar 
quarter ending 2 or more years after the State receives a report 
transmitted pursuant to section 250(b) of the Family Self-Sufficiency 
Act of 1994, if the Secretary determines that, during the quarter, the 
State has not met performance standards and has not implemented the 
staffing levels recommended in the report.''.

SEC. 251. TRAINING.

    (a) Federal Training Assistance.--Section 452(a)(7) (42 U.S.C. 
652(a)(7)) is amended by inserting ``and training'' after ``technical 
assistance''.
    (b) State Training Program.--Section 454 (42 U.S.C. 654), as 
amended by sections 212(a), 241(f), 245, and 246(b)(1) 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:
            ``(29) provide that the State will develop and implement a 
        training program under which training is to be provided not 
        less frequently than annually to all personnel performing 
        functions under the State plan.''.
    (c) Report.--Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended 
by redesignating subparagraphs (H) and (I) as subparagraphs (I) and 
(J), respectively, and by inserting after subparagraph (G) the 
following:
                    ``(H) the training activities at the Federal and 
                State levels, the training audit, and the amounts 
                expended on training;''.
    (d) Resources.--For technical assistance, training, operational 
research, demonstrations, and staffing studies under part D of title IV 
of the Social Security Act, there are authorized to be appropriated to 
the Secretary of Health and Human Services for each fiscal year an 
amount equal to not more than 2 percent of the total amount paid to the 
Federal Government pursuant to section 457(b) of such Act during the 
immediately preceding fiscal year.

SEC. 252. PRIORITIES IN DISTRIBUTION OF COLLECTED CHILD SUPPORT.

    (a) In General.--Section 457(a) (42 U.S.C. 657(a)) is amended to 
read as follows:
    ``(a) Amounts collected as support by a State pursuant to a child 
support or wage withholding order are to be allocated as follows:
            ``(1) First, for support payments for the month that are 
        not past due, as follows:
                    ``(A) First, for cash support payments.
                    ``(B) Then, for payments related to premiums for 
                health care insurance coverage of children covered by 
                the order.
            ``(2) Then, for payments of support that are past due, and 
        for payment of unreimbursed health care expenses.''.
    (b) Increase in Pass-Through of Collected Child Support.--
            (1) In general.--Section 457(b)(1) (42 U.S.C. 657(b)(1)) is 
        amended--
                    (A) by inserting ``or such greater amount of such 
                child support payments as the State may establish and 
                provide for in the State plan, or if greater, \1/2\'' 
                after ``the first $50'' each place such term appears; 
                and
                    (B) by inserting ``less the amount of any payment 
                made to the family under section 402(a)(48) in the 
                month in which the child support was received,'' before 
                ``shall''.
            (2) Increase in disregard of passed through child 
        support.--Section 402(a)(8)(A)(vi) (42 U.S.C. 602(a)(8)(A)(vi)) 
        is amended to read as follows:
                    ``(vi) shall disregard--
                            ``(I) the first $50 (adjusted pursuant to 
                        section 406(i) for the calendar quarter in 
                        which the month occurs) or such greater amount 
                        of such child support payments as the State may 
                        establish and provide for in the State plan, 
                        or, if greater, \1/2\ of any child support 
                        payments for the month received in the month;
                            ``(II) the first $50 (as so adjusted) or 
                        such greater amount of such child support 
                        payments as the State may establish and provide 
                        for in the State plan, or if greater, \1/2\ of 
                        child support payments for each prior month 
                        received in the month if the payments were made 
                        by the absent parent in the month in which due; 
                        and
                            ``(III) any amount paid to the family under 
                        section 457(b)(1), with respect to the 
                        dependent child or children in the family;''.
    (c) Persons no Longer Receiving AFDC.--Section 457(c) (42 U.S.C. 
657(c)) is amended--
            (1) by striking ``any amount of support collected'' and all 
        that follows through ``the individuals'' and inserting ``to the 
        family any amount of support collected in payment of current or 
        future support obligations or arrears accrued for a month for 
        which the family did not receive such assistance, subject to 
        the same conditions and on the same basis as in the case of 
        payments made to families''; and
            (2) by adding at the end the following: ``If collections 
        are received in a month with respect to a family which has 
        ceased to receive such assistance, the collections shall be 
        credited first as payments for the month that are not past due, 
        then to payments of arrears accrued in months for which the 
        family did not receive such assistance, then to any other 
        unpaid arrears, and then against future support obligations.''.
    (d) Married Couples.--Section 457 (42 U.S.C. 657) is amended by 
adding at the end the following:
    ``(e) If an individual obligor and obligee join households by 
marrying or remarrying each other, or (if married to each other) by 
reuniting after a period of legal separation, the State shall suspend 
or forgive collection of child support arrearages owed to the State if 
the income of the resulting family is less than 200 percent of the 
poverty line (as determined by the Secretary).''.

SEC. 253. TEEN NONCUSTODIAL PARENTS AND CHILD SUPPORT.

    (a) Authority of States To Temporarily Waive Right To Collect Child 
Support Obligations of Teen Noncustodial Parents Who Are Participating 
in a State Educational or Employment Preparation Program.--
            (1) In general.--Section 454 (42 U.S.C. 454), as amended by 
        sections 212(a), 241(f), 245, 246(b)(1), and 251(b) of this 
        Act, is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (28);
                    (B) by striking the period at the end of paragraph 
                (29) and inserting ``; and''; and
                    (C) by inserting after paragraph (29) the 
                following:
            ``(30) at the option of the State, provide that, if the 
        State agency determines that a noncustodial parent who has not 
        attained 20 years of age owes but is unable to pay child 
        support, then the State may, in lieu of enforcing the right to 
        such support for such period as the State considers 
        appropriate, allow the parent to choose to comply with an 
        educational or job training program.''.
            (2) Conformity of state guidelines for child support 
        awards.--Section 467 (42 U.S.C. 667) is amended by adding at 
        the end the following:
    ``(d) The guidelines established pursuant to subsection (a) shall 
provide that if the State agency determines that a noncustodial parent 
who has not attained 20 years of age owes but is unable to pay child 
support, then the State may, in lieu of enforcing the right to such 
support for such period as the State considers appropriate, allow the 
parent to choose to comply with an educational or job training 
program.''.
    (b) Limitation on Use of JOBS Funds.--Section 403(l) (42 U.S.C. 
603(l)), as amended by section 112(a) of this Act, is amended by adding 
at the end the following:
    ``(6) The Secretary shall not make a payment to a State under this 
section with respect to amounts expended by a State to carry out 
section 454(30), to the extent that such expenditures exceed 5 percent 
of the total amount expended by the State to operate the State program 
established under part F.''.

                       Subtitle E--Demonstrations

SEC. 261. ESTABLISHMENT OF CHILD SUPPORT ASSURANCE DEMONSTRATION 
              PROJECTS.

    (a) In General.--In order to encourage States to provide a 
guaranteed minimum level of child support for every eligible child not 
receiving such support, the Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall make grants to not 
more than 6 States to conduct demonstration projects for the purpose of 
establishing or improving a system of assured minimum child support 
payments in accordance with this section.
    (b) Contents of Application.--An application for grants under this 
section shall be submitted by the Governor of a State and shall--
            (1) contain a description of the proposed child support 
        assurance project to be established, implemented, or improved 
        using amounts provided under this section, including the level 
        of the assured benefit to be provided, the specific activities 
        to be undertaken, and the agencies that will be involved;
            (2) specify whether the project will be carried out 
        throughout the State or in limited areas of the State;
            (3) estimate the number of children who will be eligible 
        for assured minimum child support payments under the project, 
        and the amounts to which they will be entitled on average as 
        individuals and in the aggregate;
            (4) describe the child support guidelines and review 
        procedures which are in use in the State and any expected 
        modifications;
            (5) contain a commitment by the State to carry out the 
        project during a period of not less than 7 and not more than 10 
        consecutive fiscal years beginning with fiscal year 1996;
            (6) contain assurances that the State--
                    (A) is currently at or above the national median 
                paternity establishment rate (as defined in section 
                452(g)(2) of the Social Security Act);
                    (B) will improve the performance of the agency 
                designated by the State to carry out the requirements 
                under part D of title IV of the Social Security Act by 
                at least 4 percent each year in which the State 
                operates a child support assurance project under this 
                section in--
                            (i) the number of cases in which paternity 
                        is established when required;
                            (ii) the number of cases in which child 
                        support orders are obtained; and
                            (iii) the number of cases with child 
                        support orders in which collections are made; 
                        and
                    (C) to the maximum extent possible under current 
                law, will use Federal, State, and local job training 
                assistance to assist obligors who have been determined 
                to be unable to meet their child support obligations;
            (7) describe the extent to which multiple agencies, 
        including those responsible for administering the program of 
        aid to families with dependent children under part A of title 
        IV of the Social Security Act and child support collection, 
        enforcement, and payment under part D of such title, will be 
        involved in the design and operation of the child support 
        assurance project; and
            (8) contain such other information as the Secretary may 
        require by regulation.
    (c) Use of Funds.--A State shall use amounts provided under a grant 
awarded under this section to carry out a child support assurance 
project designed to provide a minimum monthly child support benefit for 
each eligible child in the State to the extent that such minimum child 
support is not paid in a month by the noncustodial parent.
    (d) Requirements.--(1) A child support assurance project funded 
under this section shall provide that--
            (A) a child shall be eligible for the assured child support 
        benefit if--
                    (i) the child has a living noncustodial parent for 
                whom--
                            (I) a child support order has been sought 
                        (as defined in paragraph (3)); or
                            (II) a child support order has been 
                        obtained and is being enforced by the State 
                        child support order registry established 
                        pursuant to section 466(a)(12) of the Social 
                        Security Act; or
                    (ii) a parent of the child has good cause for not 
                seeking or enforcing a support order;
            (B) the assured child support benefit shall be paid 
        promptly to the custodial parent at least once a month and 
        shall be--
                    (i) an amount determined by the State which is--
                            (I) not less than $1,500 per year for the 
                        first child, $1,000 per year for the second 
                        child, and $500 per year for the third and each 
                        subsequent child, and
                            (II) not more than $3,000 per year for the 
                        first child and $1,000 per year for the second 
                        and each subsequent child;
                    (ii) indexed and adjusted for inflation; and
                    (iii) in the case of a family of children with 
                multiple noncustodial parents, calculated in the same 
                manner as if all such children were full siblings;
            (C) when child support is collected for a child in a month 
        in which the child has received a child support assurance 
        benefit, the amount due to the child from the child support 
        collection shall be reduced by the child support assurance 
        already paid to the child for the month, and if the child is 
        receiving child support assurance benefits in common with 
        siblings or half-siblings, the amount of the child support 
        assurance benefits attributable to the child shall be not more 
        than the child's pro rata share of the total benefits.
            (D) for purposes of determining the need of a child or 
        relative and the level of assistance under part A of title IV 
        of the Social Security Act, \1/2\ of the amount received as a 
        child support assurance benefit shall be disregarded from 
        income until the total amount of child support and aid to 
        families with dependent children benefit received under part A 
        of title IV of the Social Security Act equals the Federal 
        poverty level for a family of comparable size;
            (E) in determining need and the amount of assistance under 
        part A of title IV of the Social Security Act, the needs of any 
        family member not receiving an assured child support benefit 
        shall be determined without consideration of the assured child 
        support benefits;
            (F) the consideration under a State plan under part A of 
        title IV of the Social Security Act of any child support 
        payment received by a family other than a child support 
        assurance benefit shall be governed by section 402(a)(8)(A)(vi) 
        of such Act; and
            (G) in order to participate in the child support assurance 
        project, the child's caretaker shall apply for or be receiving 
        services of the State's child support enforcement program under 
        part D of title IV of the Social Security Act.
    (2) For purposes of this section, the term ``child'' means an 
individual who is of such an age, disability, or educational status as 
to be eligible for child support as provided for by the law of the 
State in which such individual resides.
    (3) For purposes of this section, a child support order shall be 
deemed to have been ``sought'' where an individual has applied for or 
is receiving services from the State child support agency, or has 
sought a child support order through representation by private or 
public counsel or pro se.
    (e) Consideration and Priority of Applications.--(1) The Secretary 
shall consider all applications received from States desiring to 
conduct demonstration projects under this section and shall approve not 
more than 6 applications which appear likely to contribute 
significantly to the achievement of the purpose of this section. In 
selecting States to conduct demonstration projects under this section, 
the Secretary shall--
            (A) ensure that the applications selected represent a 
        diversity of minimum benefits distributed throughout the range 
        specified in subsection (d)(1)(B)(i);
            (B) consider the geographic dispersion and variation in 
        population of the applicants;
            (C) give priority to States the applications of which 
        demonstrate--
                    (i) significant recent improvements in--
                            (I) establishing paternity and child 
                        support awards,
                            (II) enforcement of child support awards, 
                        and
                            (III) collection of child support payments;
                    (ii) a record of effective automation; and
                    (iii) that efforts will be made to link child 
                support systems with other service delivery systems;
            (D) ensure that the proposed projects will be of a size 
        sufficient to obtain a meaningful measure of the effects of 
        child support assurance;
            (E) give priority, first, to States intending to operate a 
        child support assurance project on a statewide basis, and, 
        second, to States that are committed to phasing in an expansion 
        of such project to the entire State, if interim evaluations 
        suggest such expansion is warranted; and
            (F) ensure that, if feasible, the States selected use a 
        variety of approaches for child support guidelines.
    (2) The Secretary shall, if feasible, require at least 2 of the 
States selected to participate in the demonstration projects conducted 
under this section to provide intensive integrated social services for 
low-income participants in the child support assurance project, for the 
purpose of assisting such participants in improving their employment, 
housing, health, and educational status.
    (f) Duration.--During fiscal year 1995, the Secretary shall develop 
criteria, select the States to participate in the demonstration, and 
plan for the evaluation required under subsection (h). The 
demonstration projects conducted under this section shall commence on 
October 1, 1995, and shall be conducted for not less than 7 and not 
more than 10 consecutive fiscal years, except that the Secretary may 
terminate a project before the end of such period if the Secretary 
determines that the State conducting the project is not in substantial 
compliance with the terms of the application approved by the Secretary 
under this section. The Secretary shall determine from interim reports 
required under subsection (i) whether a project may be extended beyond 
such period, and Federal financial participation shall be available for 
such an extension.
    (g) Cost Savings Recovery.--The Secretary shall develop a 
methodology to identify any State cost savings realized in connection 
with the implementation of a child support assurance project conducted 
under this section. Any such savings realized as a result of the 
implementation of a child support assurance project shall be utilized 
for child support enforcement improvements or expansions and 
improvements in the program of aid to families with dependent children 
conducted under part A of title IV of the Social Security Act within 
the participating State.
    (h) Evaluation and Report to Congress.--(1) The Secretary shall 
conduct an evaluation of the effectiveness of the demonstration 
projects funded under this section and determine whether to recommend 
that such projects be phased in on a national basis. The evaluation 
shall include an assessment of the effect of an assured benefit on--
            (A) parental income from nongovernment sources and the 
        number of hours worked;
            (B) the use and amount of government supports by the 
        parents;
            (C) the ability of the parents to accumulate resources;
            (D) the well-being of the children receiving child support 
        assurance benefits, including educational attainment and school 
        behavior; and
            (E) the State's rates of establishing paternity and support 
        orders and of collecting support.
    (2) 4 years after commencement of the demonstration projects, and 
at the completion of the designated duration of a demonstration 
project, the Secretary shall submit an interim and final report based 
on the evaluation to the Committee on Finance and the Committee on 
Labor and Human Resources of the Senate, and the Committee on Ways and 
Means and the Committee on Education and Labor of the House of 
Representatives concerning the effectiveness of the child support 
assurance projects funded under this section.
    (i) State Reports.--The Secretary shall require each State that 
conducts a demonstration project under this section to annually report 
such information on the project's operation as the Secretary may 
require, except that all such information shall be reported according 
to a uniform format prescribed by the Secretary. Each such State shall 
provide an opportunity for the public to comment on the demonstration 
project during such period as the State may establish, and shall 
include any such comments in the annual report.
    (j) Restrictions on Matching and Use of Funds.--(1) A State 
conducting a demonstration project under this section shall be 
required--
            (A) except as provided in paragraph (2), to provide not 
        less than 20 percent of the total amounts expended in each 
        calendar year of the project to pay the costs associated with 
        the project funded under this section;
            (B) to maintain its level of expenditures for child support 
        collection, enforcement, and payment at the same level, or at a 
        higher level, than such expenditures were prior to such State's 
        participation in a demonstration project provided by this 
        section; and
            (C) to maintain the aid to families with dependent children 
        benefits provided under part A of title IV of the Social 
        Security Act at the same level, or at a higher level, as the 
        level of such benefits on the date of the enactment of this 
        Act.
    (2) A State participating in a demonstration project under this 
section may provide no less than 10 percent of the total amounts 
expended to pay the costs associated with the project funded under this 
section in years after the first year such project is conducted in a 
State if the State meets the improvements specified in subsection 
(b)(6)(B).
    (k) Coordination With Certain Means-Tested Programs.--For purposes 
of--
            (1) the United States Housing Act of 1937;
            (2) title V of the Housing Act of 1949;
            (3) section 101 of the Housing and Urban Development Act of 
        1965;
            (4) sections 221(d)(3), 235, and 236 of the National 
        Housing Act;
            (5) the Food Stamp Act of 1977;
            (6) title XIX of the Social Security Act; and
            (7) child care assistance provided through part A of title 
        IV of the Social Security Act, the Child Care and Development 
        Block Grant, or title XX of the Social Security Act,
any payment made to an individual within the demonstration project area 
for child support up to the amount which an assured child support 
benefit would provide shall not be treated as income and shall not be 
taken into account in determining resources for the month of its 
receipt and the following month.
    (l) Treatment of Child Support Benefit.--Any assured child support 
benefit received by an individual under this section shall be 
considered child support for purposes of the Internal Revenue Code of 
1986.
    (m) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary in each of the fiscal years 
1995, 1996, 1997, 1998, 1999, and 2000 to carry out this section.

                       Subtitle F--Miscellaneous

SEC. 271. TECHNICAL 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 by an 
                administrative adjudicator and has the force and effect 
                of law under applicable State law.''.
    (b) Plan Amendments Not Required Until October 1, 1996.--
            (1) In general.--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 first plan year beginning on or after 
        October 1, 1996, if--
                    (A) during the period after the date before the 
                effective date of this Act and before such first plan 
                year, the plan is operated in accordance with the 
                requirements of the amendments made by this section; 
                and
                    (B) the plan amendment applies retroactively to the 
                period after the date before the effective date of this 
                Act and before such first plan year.
            (2) Hold harmless provision.--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 
        paragraph (1).

               TITLE III--TEEN PARENTS AND WELFARE REFORM

                           Subtitle A--Family

SEC. 301. MINOR TEEN PARENT RESIDENCY REQUIREMENT.

    Section 402(a)(43) (42 U.S.C. 602(a)(43)) is amended to read as 
follows:
            ``(43) provide that--
                    ``(A) aid under the State plan shall not be 
                provided to an individual who has not attained 18 years 
                of age, has never married, and has a dependent child in 
                his or her care or is pregnant and eligible for such 
                aid, for the individual and the dependent child (or for 
                herself in the case of a pregnant woman), if the case 
                manager for the individual determines that--
                            ``(i) the individual is not residing in a 
                        place of residence maintained by a parent, 
                        legal guardian, or other adult relative of the 
                        individual as the home of the parent, legal 
                        guardian, or other adult relative, or in a 
                        foster home, maternity home, or other adult-
                        supervised supportive living arrangement;
                            ``(ii) an appropriate adult-supervised 
                        living arrangement is available for the 
                        individual and the dependent child (or for 
                        herself in the case of a pregnant woman); and
                            ``(iii) the individual should be required 
                        to relocate to such a place of residence; and
                    ``(B) subparagraph (A) shall not apply to an 
                individual if--
                            ``(i) the circumstances described in 
                        subparagraph (A) have persisted for less than 2 
                        months since the case manager made the 
                        determination described in subparagraph (A);
                            ``(ii) the individual does not have a 
                        parent or legal guardian who is living in the 
                        State and whose whereabouts are known;
                            ``(iii) the individual has been living 
                        independently from any parent or legal guardian 
                        of the individual for at least 1 year before 
                        the date the child was born or the date the 
                        individual applied for aid under the State 
                        plan;
                            ``(iv) the individual is a ward of the 
                        court or of the State, and the court or the 
                        State (as the case may be) has approved the 
                        individual for independent living; or
                            ``(v) the individual has been emancipated 
                        by court order;
                    ``(C) subparagraph (A) shall not apply to an 
                individual if the case manager for the individual 
                determines--
                            ``(i) that the individual does not have a 
                        parent or legal guardian who will allow the 
                        individual to live in the home of the parent or 
                        legal guardian;
                            ``(ii) that the physical or emotional 
                        health or safety of the individual or the 
                        dependent child would be jeopardized if the 
                        individual and the child lived in the same 
                        residence with the parent or legal guardian of 
                        the individual;
                            ``(iii) that the application of 
                        subparagraph (A) would prevent the continued 
                        participation of the individual in--
                                    ``(I) a substance abuse treatment 
                                program approved by the State; or
                                    ``(II) an education or training 
                                program, or in employment, without 
                                providing an equivalent alternative; or
                            ``(iv) in accordance with regulations 
                        issued by the Secretary, that there is other 
                        good cause for not applying subparagraph (A) to 
                        the individual;
                    ``(D) in making the determinations described in 
                subparagraphs (A), (B), and (C), the case manager for 
                an individual shall--
                            ``(i) consider all relevant factors, 
                        including--
                                    ``(I) whether there is evidence 
                                that the individual or the child has 
                                suffered or is at risk of suffering 
                                physical or emotional abuse by someone 
                                in the place;
                                    ``(II) whether illegal activity 
                                occurs at the place; and
                                    ``(III) whether a mandatory 
                                relocation of the individual would 
                                result in overcrowding, violation of 
                                the terms of a lease, or a violation of 
                                local health or safety standards;
                            ``(ii) if the case manager is not a family 
                        counselor, consult with a family counselor who 
                        has specialized training or demonstrated 
                        experience serving individuals and families, 
                        and the written recommendations of the 
                        counselor shall be included in the case record;
                    ``(E) if the case manager determines that the 
                individual should be required to relocate, the State 
                agency shall offer the individual counseling and other 
                services designed to help the individual make the 
                transition from independent to supervised living; and
                    ``(F) the case manager shall determine in all cases 
                in which aid under the State plan is payable to an 
                individual who is pregnant or a parent, and has not 
                attained 20 years of age, for the needs of the 
                individual and for the needs of a dependent child of 
                the individual, whether such aid should be paid to 
                another individual in the manner described in section 
                406(b)(2).''.

SEC. 302. BENEFITS INCREASED BY $50 FOR PATERNITY ESTABLISHMENT OR 
              ESTABLISHMENT OF CHILD SUPPORT ORDER.

    Section 402(a) (42 U.S.C. 602(a)), as amended by sections 104 and 
138 of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (46);
            (2) by striking the period at the end of paragraph (47) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (47) the following:
            ``(48) provide that the amount of aid otherwise payable 
        under the State plan for a month to a family that includes an 
        individual who has not attained 20 years of age and is the 
        parent of a child whose paternity has been established or with 
        respect to whom a child support order is in effect shall be 
        increased by $50.''.

                  Subtitle B--Education and Employment

SEC. 311. SCHOOLING AND EMPLOYMENT REQUIREMENTS.

    (a) In General.--Section 482 (42 U.S.C. 682), as amended by section 
111(a) of this Act, is amended by adding at the end the following:
    ``(k) Each State program established under this part shall impose 
only the following requirements with respect to each participant who 
has not attained 20 years of age, has not completed secondary school or 
received a certificate of high school equivalency, and is a custodial 
parent or pregnant:
            ``(1) The participant shall participate in an educational 
        program or an employment preparation program that leads to a 
        high school diploma or the equivalent unless--
                    ``(A) the participant has a need for child care or 
                other supportive services that cannot be addressed by 
                the program; or
                    ``(B) the case manager determines, after 
                consultation with the school or training program, that 
                the recipient would not benefit from direct placement 
                in any such program, in which case the recipient shall 
                participate in appropriate alternative activities 
                specified in an individualized plan developed for the 
                individual by the case manager which may include a plan 
                for subsequent placement in such a program.
            ``(2)(A) If an individual required to participate in a 
        program referred to in paragraph (1) fails to meet a standard 
        (established by the State in accordance with subparagraph (B)) 
        for minimum performance in the program, the amount of aid 
        otherwise payable to the individual on a monthly basis under 
        the State plan approved under part A shall be reduced by the 
        lesser of--
                    ``(i) $60;
                    ``(ii) 20 percent of such otherwise payable amount; 
                or
                    ``(iii) the difference between such otherwise 
                payable amount and the amount of such aid that would be 
                so payable if the family of the individual included 1 
                less person.
            ``(B) The minimum performance standard referred to in 
        subparagraph (A)--
                    ``(i) shall be based on the achievement of 
                satisfactory progress in the program or on fulfillment 
                of an attendance standard established by the State; and
                    ``(ii) if based on the achievement of satisfactory 
                progress--
                            ``(I) shall not require maintenance of a 
                        grade that is higher than a passing grade in 
                        the school district in which the program is 
                        located, or if the program does not award 
                        grades, of a performance level higher than a 
                        level prescribed by the Secretary in 
                        regulations; and
                            ``(II) shall provide for consideration, 
                        under a plan approved by the Secretary, of 
                        whether the failure of an individual to achieve 
                        a specified grade or other applicable 
                        performance level is due to limitations on the 
                        ability of the individual to learn or other 
                        circumstances that limit the ability of the 
                        individual to perform up to his or her 
                        capacities, or shall provide for deeming 
                        progress to be satisfactory if the individual 
                        meets a specified attendance standard.
            ``(C) Subparagraph (A) shall not apply to an individual who 
        has good cause (as determined by the State in accordance with 
        regulations prescribed by the Secretary) for failing to meet 
        the standard of minimum performance.
            ``(D) The State may place in an escrow account with respect 
        to an individual whose aid is reduced pursuant to subparagraph 
        (A) of this paragraph an amount equal to the amount of the 
        reduction in such aid, and may pay to the individual all 
        amounts placed in an escrow account with respect to the 
        individual, upon a demonstration by the individual of a 
        satisfactory effort (as defined by the State in accordance with 
        regulations prescribed by the Secretary) in the program.
            ``(E) The State shall monitor the percentage of the persons 
        attending each school upon whom sanctions are imposed pursuant 
        to subparagraph (A), and, if the State determines that the 
        percentage for any school significantly exceeds such percentage 
        at similar schools, the State shall determine the reasons for 
        the excessive sanction percentage, and shall suspend the 
        imposition of sanctions upon the persons attending the school 
        until the State determines that the sanction percentage is not 
        excessive.
            ``(3)(A) If an individual required to participate in a 
        program referred to in paragraph (1) meets a standard 
        (established by the State in accordance with subparagraph (B) 
        of this paragraph) for sufficient performance in the program, 
        the amount of aid otherwise payable to the individual on a 
        monthly basis under the State plan approved under part A shall 
        be increased by not less than the lesser of--
                    ``(i) $60;
                    ``(ii) 20 percent of such otherwise payable amount; 
                or
                    ``(iii) the difference between such otherwise 
                payable amount and the amount of such aid that would be 
                so payable if the family of the individual included 1 
                less person.
            ``(B) The sufficient performance standard referred to in 
        subparagraph (A) of this paragraph shall be based on 
        measurement of the same factors used to determine whether the 
        minimum performance standard referred to in paragraph (2)(B)(i) 
        has been met, and may require a higher degree of performance 
        (subject to such limits as the Secretary shall prescribe in 
        regulations) than the minimum performance standard.''.
    (b) Conforming Amendments.--Section 402(a)(19) (42 U.S.C. 
602(a)(19)) is amended--
            (1) in subparagraph (C)--
                    (A) in clause (iii), by inserting ``, is not 
                described by clause (viii), and'' before ``--'';
                    (B) in clause (v)--
                            (i) by inserting a comma after ``16''; and
                            (ii) by inserting ``and is not a custodial 
                        parent or pregnant'' before the semicolon; and
                    (C) by striking ``or'' at the end of clause (vi);
                    (D) by adding ``or'' at the end of clause (vii); 
                and
                    (E) by adding at the end the following:
                            ``(viii)(I) has not attained 20 years of 
                        age,
                            ``(II) has not completed secondary school 
                        or received a certificate of high school 
                        equivalency, and
                            ``(III) is pregnant, or is a custodial 
                        parent of a child who has not attained 4 months 
                        of age and is personally providing care for the 
                        child;''; and
            (2) by striking subparagraph (E).

SEC. 312. SUMMER ACTIVITIES AND TEEN EARNINGS.

    (a) Grant Bonus for Participation in Appropriate Summer 
Activities.--Section 482 (42 U.S.C. 682), as amended by sections 111(a) 
and 301 of this Act, is amended by adding at the end the following:
    ``(l) Each State with a program established under this part--
            ``(1) may increase the aid otherwise payable on a monthly 
        basis under the State plan approved under part A to any 
        participant described in subsection (k) who participates in 
        appropriate summer activities (as determined by the case 
        manager in accordance with State guidelines), by the lesser of 
        $60 or 20 percent of such otherwise payable aid; and
            ``(2) shall make available to any such participant who 
        participates in a summer educational program or other 
        activities approved by the State the same child care and other 
        supportive services that are made available to participants in 
        the program of the State under this part.''.
    (b) Earned Income Disregard.--Section 402(a)(8)(A) (42 U.S.C. 
602(a)(8)) is amended--
            (1) by striking ``and'' at the end of clause (vii); and
            (2) by adding at the end the following:
                    ``(ix) shall disregard all earned income of any 
                individual applying for or receiving aid under the 
                State plan who has not attained 20 years of age and to 
                whom section 482(k) applies;''.

SEC. 313. PLANNING, STARTUP, AND REPORTING.

    (a) Required Participation Rates.--Section 403(l) (42 U.S.C. 
603(l)), as amended by sections 112(a) and 256(b) of this Act, is 
amended by adding at the end the following:
    ``(7)(A) Notwithstanding paragraph (1), the Secretary shall pay to 
a State an amount equal to 50 percent of the expenditures made by such 
State in a fiscal year in operating its program established under part 
F (in lieu of any different percentage specified in paragraph (1)(A)) 
if the State's teen participation rate (determined under subparagraph 
(B)) for the preceding fiscal year does not exceed or equal--
            ``(i) 15 percent if the preceding fiscal year is 1996;
            ``(ii) 40 percent if such year is 1997;
            ``(iii) 70 percent if such year is 1998; or
            ``(iv) 90 percent if such year is 1999.
    ``(B) The State's teen participation rate for a fiscal year shall 
be the average of its teen participation rates for each month in such 
fiscal year.
    ``(C) The State's teen participation rate for a month shall be the 
number, expressed as a percentage, equal to--
            ``(i) the average monthly number of individuals required to 
        comply with section 482(k) for the month who have received aid 
        under the State plan approved under part A for at least 60 
        days, and--
                    ``(I) are in an assigned or individualized activity 
                or in the midst of a regularly scheduled school break;
                    ``(II) have good cause for not participating in a 
                program under such section;
                    ``(III) are in conciliation or whose aid under the 
                State plan approved under this part has been reduced 
                pursuant to such section; or
                    ``(IV) are former recipients of such aid who are 
                receiving case management services under the State 
                plan; divided by
            ``(ii) the number of individuals required to comply with 
        section 482(k) for the month, plus the number of former 
        recipients of such aid who are receiving case management 
        services under the State plan.
    ``(D) Subparagraphs (D) and (E) of paragraph (3) shall apply in 
like manner to this paragraph.
    ``(E) The State shall submit to the Secretary a report on the 
number of individuals in each category or subcategory of participants 
in programs under section 482(k) as the Secretary may define.
    ``(F) The Secretary shall develop such procedures as may be 
necessary to ensure that participation rates reported by States are 
accurate, and shall annually submit to the Congress a compilation of 
the State reports made pursuant to subparagraph (E).''.
    (b) State Plan Requirement.--Section 482(a)(1)(B) (42 U.S.C. 
682(a)(1)(B)) is amended by striking ``and (iii)'' and inserting 
``(iii) a description of the plans of the State for ensuring that, 
within 5 years after the effective date of this clause, all individuals 
required to comply with subsection (k) do so, including the strategy 
for phasing in the requirements of subsection (k), which shall reflect 
the finding of a needs assessment that identifies the current and 
projected numbers of recipients of aid under the State plan in 
different regions of the State who have not attained 20 years of age, 
the availability of appropriate educational institutions and 
alternatives (including parenting education capacity) and the 
availability of support services, and of the plans of the State for 
ensuring that service providers have agreed to cooperate in supplying 
necessary data (such as reports on attendance, satisfactory 
participation, and performance), and a commitment by the State to make 
annual reports to the Secretary on progress in carrying out this clause 
and subsection (k), and (iv).''.

SEC. 314. CHILD CARE FOR NON-AFDC TEEN PARENTS.

    (a) Eligibility for AFDC Child Care.--
            (1) In general.--Section 402(g)(1)(A)(i) (42 U.S.C. 
        602(g)(1)(A)(i)) is amended--
                    (A) by striking ``and'' at the end of subclause 
                (I);
                    (B) by striking the period at the end of subclause 
                (II) and inserting ``; and''; and
                    (C) by adding after and below the end the 
                following:
            ``(III) at the option of the State, for each individual who 
        has not attained 20 years of age, whose income is less than 150 
        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 the family of the 
        individual, who is a custodial parent of a child, and who 
        requires such care in order to attend an educational 
        institution or such training programs as the State deems 
        appropriate.''.
            (2) Authority of state to require contribution by non-afdc 
        teen parents in accordance with a sliding fee scale consistent 
        with that established by the state under the ccdbg.--Section 
        402(g)(1)(A) (42 U.S.C. 602(g)(1)(A)), as amended by sections 
        137(a), 140(a), 141, and 142 of this Act, is amended by adding 
        at the end the following:
    ``(xiv) The State may elect to require a family to contribute to 
the cost of child care provided under clause (i)(III) in accordance 
with a sliding fee scale that is consistent with the sliding fee scale 
established by the State under the Child Care and Development Block 
Grant Act of 1990.''.
    (b) State Option To Provide Child Care for Teen Parents 
Participating in an Educational Program and Accepting Case Management 
Services.--Section 402(g)(1)(A) (42 U.S.C. 602(g)(1)(A)), as amended by 
sections 137(a), 140(a), 141, and 142 of this Act, and by subsection 
(a)(2) of this section, is amended by adding at the end the following:
    ``(xv) Each State may guarantee child care in accordance with 
subparagraph (B) of this paragraph for each individual described in 
subparagraph (A)(ii) or (B)(ii) of subsection (a)(48) whose income does 
not exceed 150 percent of the poverty line and who is participating in 
an educational program pursuant to section 482(k), if and for so long 
as the individual accepts case management as provided for in such 
subsection.''.
    (c) Eligibility for At-Risk Child Care.--Section 402(i)(1)(B) (42 
U.S.C. 602(i)(1)(B)) is amended--
            (1) by inserting ``(i)'' after ``(B)'' and
            (2) by striking ``and'' and inserting ``or''; and
            (3) by adding after and below the end the following:
            ``(ii) in the case of a family that includes a individual 
        who has not attained 20 years of age and is a custodial parent, 
        needs such care in order to participate in an education or 
        training program approved by the State; and''.

                      Subtitle C--Case Management

SEC. 321. CASE MANAGEMENT.

    (a) In General.--Section 402(a) (42 U.S.C. 602(a)), as amended by 
sections 104 and 138 of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (46);
            (2) by striking the period at the end of paragraph (47) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (47) the following:
            ``(48) provide that the State agency--
                    ``(A) shall assign a case manager--
                            ``(i) to each recipient of aid under the 
                        State plan who--
                                    ``(I) is a custodial parent of a 
                                child or pregnant; and
                                    ``(II) has not attained 20 years of 
                                age;
                            ``(ii) for 1 year, to each former recipient 
                        of such aid who--
                                    ``(I) is a custodial parent;
                                    ``(II) has not attained 20 years of 
                                age; and
                                    ``(III) has not declined such 
                                assignment; and
                    ``(B) may assign a case manager to any individual--
                            ``(i) who--
                                    ``(I) is a noncustodial parent 
                                receiving aid under the State plan; and
                                    ``(II) has not attained 20 years of 
                                age; or
                            ``(ii)(I) who is a parent not receiving aid 
                        under the State plan;
                            ``(II) who has not attained 20 years of 
                        age;
                            ``(III) whose income does not exceed 150 
                        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; and
                            ``(IV) who has not declined the assignment;
                    ``(C) shall require each case manager to improve 
                the capacity of any individual to whom assigned to 
                assume greater responsibility for the individual and 
                the family of the individual, by--
                            ``(i) in the case of an individual 
                        receiving aid under the State plan who is a 
                        custodial parent and has not attained 18 years 
                        of age, assessing the appropriateness of the 
                        living arrangement of the individual;
                            ``(ii) providing referrals to appropriate 
                        services (such as prenatal care, pre-and post-
                        partum school reentry, child care, well-baby 
                        care (including immunizations), and home visits 
                        if appropriate) needed for the individual to 
                        complete educational programs or employment 
                        preparation programs;
                            ``(iii) facilitating paternity 
                        establishment through contacts with the 
                        putative father during the mother's pregnancy, 
                        if appropriate, and if paternity is not 
                        established at birth, exploring ways to 
                        establish paternity;
                            ``(iv) explaining the rights and 
                        responsibilities of such individuals as 
                        established under the State plans approved 
                        under this part and part D, and helping such 
                        individuals meet their responsibilities;
                            ``(v) developing and monitoring the case 
                        plan and service provision in order to assess 
                        progress and make necessary changes;
                            ``(vi) ensuring that the case plan 
                        incorporates education, health, and employment 
                        goals during and after the completion of 
                        secondary school or the training program, and 
                        if the individual is required or allowed to 
                        participate in the program established by the 
                        State under part F, ensuring that the case plan 
                        is the employability plan for purposes of the 
                        State program established under part F;
                            ``(vii) attempting to identify the cause 
                        of, and address, any problems that are causing 
                        those of such individuals who are receiving aid 
                        under the State plan to be in danger of a 
                        reduction in aid;
                            ``(viii) recommending to the State agency 
                        that those of such individuals who are involved 
                        in an educational activity pursuant to a 
                        program established under section 482(k) 
                        receive bonuses, or that the State apply 
                        sanctions, as appropriate, under the State 
                        plan, or that there be exemptions from a 
                        requirement imposed by or under the State plan; 
                        and
                            ``(ix) in the case of an individual who has 
                        not attained 20 years of age and is a parent or 
                        pregnant, providing the individual with health 
                        agency information and family planning 
                        materials, and facilitating appointments with 
                        respect to such matters on request;
                    ``(D) shall, to the extent feasible, require each 
                case manager to work with such individuals to identify 
                appropriate opportunities for volunteer activities;
                    ``(E) shall locate case managers in State offices 
                that administer the State plan, or allow such offices 
                to subcontract the duties of case managers to 
                community-based organizations or other agencies of 
                State government such as health or education agencies; 
                and
                    ``(F)(i) shall ensure that the case load of a case 
                manager assigned full-time to teen parent case 
                management does not exceed 65 cases, and that the 
                average number of cases managed by such full-time case 
                managers does not exceed 50, and the Secretary shall 
                prescribe regulations to address situations in which a 
                case manager works less than full-time with teen 
                parents.''.
    (b) State Option To Provide Child Care for Teen Parents Who Perform 
Voluntary Community Service.--Section 402(g)(1)(A) (42 U.S.C. 
602(g)(1)(A)), as amended by sections 137(a), 140(a), 141, 142, 
314(a)(2), and 314(b) of this Act, is amended by adding at the end the 
following:
    ``(xvi) Each State may guarantee child care in accordance with 
subparagraph (B) of this paragraph for each individual required to 
comply with section 482(k) who voluntarily engages in community service 
activities approved by the State.''.

                   Subtitle D--Demonstration Projects

SEC. 331. ADOLESCENT PREGNANCY PREVENTION GRANTS.

    Title XX (42 U.S.C. 1397-1397f) is amended by adding at the end the 
following:

``SEC. 2008. ADOLESCENT PREGNANCY PREVENTION GRANTS.

    ``(a) Purpose.--The purpose of this section is to encourage and 
provide financial assistance for the development of intensive and 
sustained school-linked and school-based pregnancy prevention programs 
for adolescents and their families in areas of high poverty or high 
unmarried adolescent birth rates that build upon other Federal, State, 
and local pregnancy prevention and youth development programs.
    ``(b) General Authority.--Notwithstanding section 2005(a)(6), the 
Secretary, the Secretary of Education, and the Chief Executive Officer 
of the Corporation for National and Community Service (in this section 
referred to as the `responsible Federal officials'), in consultation 
with other relevant Federal agencies, shall jointly make grants to 
eligible entities, to carry out programs in accordance with this 
section.
    ``(c) Federal Administration.--
            ``(1) Notwithstanding the Department of Education 
        Organization Act (20 U.S.C. 3401 et seq.) and the General 
        Education Provisions Act (20 U.S.C. 1221 et seq.), the 
        responsible Federal officials shall jointly provide for the 
        administration of this section, and shall jointly issue 
        whatever regulations, procedures, and guidelines, the 
        responsible Federal officials consider necessary and 
        appropriate to administer and enforce the provisions of this 
        section.
            ``(2) The responsible Federal officials may enter into 
        agreements with any other Federal entity with expertise in 
        youth development activities to administer the program under 
        this section and may provide such entity with appropriate 
        reimbursement.
    ``(d) Funding.--
            ``(1) In general.--To achieve the purposes of this section, 
        the responsible Federal officials shall make grants to eligible 
        entities under subsection (b) and conduct activities under 
        subsections (m) and (n) so that in the aggregate the 
        expenditures for such grants and activities do not exceed 
        $20,000,000 for fiscal year 1995, $40,000,000 for fiscal year 
        1996, $60,000,000 for fiscal year 1997, $80,000,000 for fiscal 
        year 1998, and $100,000,000 for fiscal year 1999 and each 
        subsequent fiscal year.
            ``(2) Payments to grantees.--Upon approval by the 
        responsible Federal officials, each grant applicant shall be 
        entitled to payment of at least $50,000 and not more than 
        $400,000 for each fiscal year based on an assessment by the 
        responsible Federal officials of the scope and quality of the 
        proposed program and the number of adolescents to be served by 
        the program. Payments to a grantee for any fiscal year shall be 
        available for expenditure by such grantee in such fiscal year 
        or the succeeding fiscal year.
            ``(3) Reservation for evaluation, training, technical 
        assistance, and national clearinghouse.--The responsible 
        Federal officials shall reserve, with respect to each fiscal 
        year, up to 10 percent of the aggregate amount described in 
        paragraph (1) for expenditure by the responsible Federal 
        officials for evaluation, training, and technical assistance 
        related to the programs under this section, and for the 
        establishment and operation of a National Clearinghouse on 
        Adolescent Pregnancy Prevention Programs under subsection (n).
            ``(4) Excess amount.--If in any fiscal year the aggregate 
        amount specified in paragraph (1) for such fiscal year exceeds 
        the amount required to carry out approved grant applications 
        and other functions under paragraph (3), then the amount 
        specified in section 2003(c)(5) shall be increased by the 
        excess.
    ``(e) Definitions.--As used in this section:
            ``(1) Adolescents.--The term `adolescents' means youth who 
        have attained 10 years of age but have not attained 20 years of 
        age.
            ``(2) Eligible entity.--The term `eligible entity' means a 
        partnership that includes--
                    ``(A) a local education agency, acting on behalf of 
                one or more schools, together with
                    ``(B) one or more community-based organizations, 
                institutions of higher education, or public or private 
                agencies or organizations.
            ``(3) Eligible area.--The term `eligible area' means a 
        school attendance area in which--
                    ``(A) at least 75 percent of the children are from 
                low-income families as that term is used in part A of 
                title I of the Elementary and Secondary Education Act 
                of 1965;
                    ``(B) the number of children receiving aid to 
                families with dependent children under a State plan 
                approved part A of title IV is substantial as 
                determined by the responsible Federal officials; or
                    ``(C) the unmarried adolescent birth rate is high, 
                as determined by the responsible Federal officials.
            ``(4) School.--The term `school' means a public elementary, 
        middle, or secondary school.
            ``(5) Responsible federal officials.--The term `responsible 
        Federal officials' means the Secretary of Education, the 
        Secretary, and the Chief Executive Officer of the Corporation 
        for National and Community Service.
    ``(f) Uses of Funds.--Grants under this section--
            ``(1) shall be used to--
                    ``(A) develop, operate, expand, and improve a 
                sequential, age-appropriate program of instruction and 
                counseling services for adolescents designed to promote 
                personal responsibility and a healthy drug free 
                lifestyle, and to prevent adolescent pregnancy, through 
                such activities as counseling and instruction in the 
                full range of consequences of premature sexual behavior 
                and adolescent pregnancy, training in decision-making, 
                and activities to promote involvement of parents and 
                families in adolescent development and personal 
                responsibility; and
                    ``(B) provide opportunities for youth at-risk to 
                develop sustained contact with one or more volunteer or 
                professionally trained adults to provide character 
                development, through such activities as mentoring, 
                group coaching, or after-school activities; and
            ``(2) may be used to conduct other related activities that 
        promote the purposes of this section.
    ``(g) Application.--Each applicant for a grant under subsection (b) 
must submit an application that--
            ``(1) includes a plan, based on local needs, for 
        accomplishing the purposes of this section that--
                    ``(A) sets forth specific, measurable goals 
                intended to be accomplished under the program, and 
                describes the methods to be used in measuring progress 
                toward accomplishment of such goals;
                    ``(B) describes the components of the program, 
                including--
                            ``(i) the role in the program of any 
                        national service participants supported by the 
                        National and Community Service Act of 1990 or 
                        by any other national service law as defined in 
                        such Act, and
                            ``(ii) the activities, in accordance with 
                        subsection (f), that will be made available 
                        under the program,
                and the manner in which such components will be 
                implemented, including the extent to which activities 
                will take place after school, on weekends, or during 
                the summer;
                    ``(C) describes the manner in which one or more 
                professional staff will administer the program, and, 
                where appropriate or feasible, the manner in which 
                national service participants will be involved in the 
                development or delivery of services and in the 
                coordination of during or after-school activities;
            ``(2) demonstrates the manner in which the program will be 
        based on research concerning effective means of reducing 
        adolescent pregnancy, including reducing risk-taking behaviors 
        correlated with adolescent pregnancy;
            ``(3) demonstrates that the program will serve male and 
        female adolescents and, where feasible, out-of-school 
        adolescents, and describes the steps the applicant will take to 
        serve such adolescents;
            ``(4) demonstrates the manner in which the applicant will 
        provide, to the extent feasible, a continuity of services for 
        adolescents through age 19;
            ``(5) demonstrates the extent to which school personnel, 
        parents, community organizations, and the adolescents to be 
        served have participated in the development of the application 
        and will participate in the planning and implementation of the 
        program;
            ``(6) describes the applicant's partnership, including the 
        relationship of the partners, the role of each partner in the 
        development and implementation of the program, and the manner 
        in which the partners will coordinate their resources;
            ``(7) describes the nature and scope of commitment to the 
        program by other community institutions, such as religious 
        organizations, community groups, institutions of higher 
        education, business, and labor;
            ``(8) describes the methods to be used in coordinating the 
        provision of services under the program with the provision of 
        services or benefits under other Federal or federally assisted 
        programs, State and local programs, and private programs 
        serving the same population;
            ``(9) demonstrates that the area to be served is an 
        eligible area;
            ``(10) contains assurances that at least one activity will 
        be located in a school in the area to be served and describes 
        the activities that will be school-based;
            ``(11) contains assurances that the amounts provided under 
        this section will not be used to supplant Federal, State, or 
        local funds for services and activities that promote the 
        purposes of this section;
            ``(12) contains assurances that the applicant will provide 
        a non-Federal share, in cash or in kind, of at least 20 percent 
        of the cost of carrying out the approved program;
            ``(13) describes the applicant's plan for continuation of 
        the program following completion of the grant period and 
        termination of Federal support under this section;
            ``(14) contains assurances that the applicant will furnish 
        such reports, containing such information, and participate in 
        such evaluations, as the responsible Federal officials may 
        require; and
            ``(15) includes such other information and assurances as 
        the responsible Federal officials may reasonably require.
    ``(h) Priorities.--In making awards under this section, the 
responsible Federal officials shall give priority to applicants that--
            ``(1) provide for non-Federal resources significantly in 
        excess of those required in subsection (g)(12) or for an 
        increasing ratio of non-Federal resources over the term of the 
        grant; and
            ``(2) participate in other Federal and non-Federal programs 
        that relate to the purposes of this section.
    ``(i) Treatment as Non-Federal Share.--For purposes of the National 
and Community Service Act of 1990, the funds provided to a grantee 
under this section shall not be considered Federal funds.
    ``(j) Prohibition on Use of Funds.--No assistance made available 
under this section shall be used to provide religious instruction, to 
conduct worship services, or to promote any religious view or teaching 
in any manner.
    ``(k) Geographic Diversity.--The responsible Federal officials 
shall, to the extent feasible, ensure that applications are approved 
from both urban and rural areas and reflect nationwide geographic 
diversity.
    ``(l) Application Period.--An application approved under this 
section shall be for a term of 5 years; except that approval may be 
terminated before the end of such period if the responsible Federal 
officials determine that the grantee conducting the program has failed 
substantially to carry out the program as described in the approved 
application.
    ``(m) Evaluation, Training, and Technical Assistance.--
            ``(1) Evaluation.--The responsible Federal officials shall 
        evaluate the effectiveness of programs conducted under this 
        section, directly or by grant or contract, and may require each 
        grantee conducting such a program to provide such information 
        as the responsible Federal officials determine is necessary for 
        such evaluations.
            ``(2) Training and technical assistance.--The responsible 
        Federal officials may provide training and technical assistance 
        with respect to the development, implementation, or operation 
        of programs under this section.
            ``(3) Coordination with national clearinghouse.--The 
        responsible Federal officials shall coordinate the activities 
        conducted under this subsection with the activities conducted 
        by the National Clearinghouse on Adolescent Pregnancy 
        Prevention Programs under subsection (n).
    ``(n) National Clearinghouse on Adolescent Pregnancy.--
            ``(1) Establishment.--The responsible Federal officials 
        shall establish, through grant or contract, a national center 
        for the collection and provision of programmatic information 
        and technical assistance that relates to adolescent pregnancy 
        prevention programs, to be known as the `National Clearinghouse 
        on Adolescent Pregnancy Prevention Programs'.
            ``(2) Functions.--The national center established under 
        paragraph (1) shall serve as a national information and data 
        clearinghouse, and as a training, technical assistance, and 
        material development source for adolescent pregnancy prevention 
        programs. Such center shall--
                    ``(A) develop and maintain a system for 
                disseminating information on all types of adolescent 
                pregnancy prevention program and on the state of 
                adolescent pregnancy prevention program development, 
                including information concerning the most effective 
                model programs;
                    ``(B) develop and sponsor a variety of training 
                institutes and curricula for adolescent pregnancy 
                prevention program staff;
                    ``(C) identify model programs representing the 
                various types of adolescent pregnancy prevention 
                programs;
                    ``(D) develop technical assistance materials and 
                activities to assist other entities in establishing and 
                improving adolescent pregnancy prevention programs;
                    ``(E) develop networks of adolescent pregnancy 
                prevention programs for the purpose of sharing and 
                disseminating information; and
                    ``(F) conduct such other activities as the 
                responsible Federal officials find will assist in 
                developing and carrying out programs or activities to 
                reduce adolescent pregnancy.''.

SEC. 332. DEMONSTRATION PROJECTS TO PROVIDE COMPREHENSIVE SERVICES TO 
              PREVENT ADOLESCENT PREGNANCY IN HIGH-RISK COMMUNITIES.

    Title XX (42 U.S.C. 1397-1397f), as amended by section 331 of this 
Act, is amended by adding at the end the following:

``SEC. 2009. DEMONSTRATION PROJECTS TO PROVIDE COMPREHENSIVE SERVICES 
              TO PREVENT ADOLESCENT PREGNANCY IN HIGH-RISK COMMUNITIES.

    ``(a)(1) Purpose.--In order to stimulate the development of 
innovative approaches for the effective delivery of comprehensive 
services, with particular emphasis on pregnancy prevention, to certain 
youth and their families in high-risk communities and the promotion of 
community involvement in improving the environment in which such youth 
live, the Secretary shall conduct demonstration projects in accordance 
with this section.
    ``(2) Approval of Projects.--The Secretary, in consultation with 
the Secretary of Education, the Secretary of Housing and Urban 
Development, the Attorney General, the Director of the Office of 
National Drug Control Policy, and the Secretary of Labor, shall approve 
at least 5 and not more than 7 projects, in accordance with subsection 
(c). Upon approval by the Secretary, each project applicant shall be 
entitled to payment of up to $3,600,000 for each of fiscal years 1995 
through 1999 for the purpose of conducting approved demonstration 
projects.
    ``(b) Funding.--
            ``(1) In general.--There shall be made available to the 
        Secretary not to exceed $20,000,000 for each of fiscal years 
        1995 through 1999 for carrying out the projects under this 
        section. Payments to a grantee for any fiscal year must be 
        expended by the grantee in such fiscal year or the succeeding 
        fiscal year.
            ``(2) Evaluation, training, and technical assistance.--The 
        Secretary shall reserve, with respect to each fiscal year, 10 
        percent of the amount described in paragraph (1) for 
        expenditure by the Secretary for training and technical 
        assistance related to the demonstration projects under this 
        section and for evaluation of such projects. The amount so 
        reserved shall remain available for obligation through fiscal 
        year 1999.
            ``(3) Excess amounts.--If in any fiscal year the amount 
        specified in paragraph (1) of this subsection for such fiscal 
        year exceeds the amount required to carry out approved projects 
        and evaluation, training, and technical assistance under this 
        section, then the amount specified in section 2003(c)(5) shall 
        be increased by the excess.
    ``(c) Application; Eligibility Criteria.--A local public or private 
nonprofit organization, including a unit of government, or any 
combination of such entities, shall be eligible to submit a project 
application. In order that an application be approved under subsection 
(a), the application must--
            ``(1) demonstrate that the geographic area to be served by 
        the project satisfies the following criteria:
                    ``(A) it includes a population of 20,000 to 35,000 
                residents,
                    ``(B) it has an identifiable boundary and is 
                recognizable as a community by its residents, and
                    ``(C) within the community, there is a poverty rate 
                of not less than 20 percent;
            ``(2) include a plan for accomplishing the purposes of this 
        section that--
                    ``(A) describes the comprehensive, integrated 
                services, in accordance with subsection (e), that will 
                be made available under the project;
                    ``(B)(i) sets forth the goals intended to be 
                accomplished under the project, and
                    ``(ii) describes the methods to be used in 
                measuring progress toward accomplishment of such goals 
                and the outcomes to be measured, including unmarried 
                adolescent birth rates, rates of youth alcohol and drug 
                use, rates of youth violence, high school graduation 
                rates, and such other outcomes as the Secretary finds 
                appropriate;
                    ``(C) describes the process by which the affected 
                community (including parents, the youth to be served, 
                schools, local government, religious organizations, 
                community groups, business, and labor) is a full 
                partner in the process of developing and implementing 
                the project and the extent to which parents, the youth 
                to be served, and local institutions and organizations 
                have contributed to the planning process;
                    ``(D) identifies the private and public 
                partnerships to be used;
                    ``(E) describes the methods to be used in 
                coordinating the provision of services under the 
                project and the provision of services or benefits under 
                other Federal or federally assisted programs, State and 
                local programs, and private programs serving the same 
                population; and
                    ``(F) describes the manner in which other Federal 
                funds and non-Federal funds will be used to further the 
                purpose of the program;
            ``(3) demonstrate strong State and local government 
        commitment to the project and involvement in the planning and 
        implementation of the project;
            ``(4) demonstrate the ability of the applicant to carry out 
        the project;
            ``(5) describe the methods to be used for maintaining 
        accurate records regarding the activities carried out with 
        funds under this section;
            ``(6) contain assurances that the amounts provided under 
        this section will not be used to supplant Federal, State, and 
        local funds for services and activities that promote the 
        purposes of this section;
            ``(7) contain assurances that the applicant will provide a 
        non-Federal share, in cash or in kind, of 10 percent of the 
        cost of carrying out the approved project and describe the 
        capacity of the applicant to provide the non-Federal share;
            ``(8) contain assurances that the applicant will furnish 
        such reports, containing such information, and participate in 
        such evaluations, as the Secretary may require; and
            ``(9) include such other information as the Secretary may 
        require.
    ``(d) Priority.--In making awards under this section, the Secretary 
shall give priority to applicants that provide for non-Federal 
resources significantly in excess of those required in subsection 
(c)(7).
    ``(e) Use of Grants.--Under each demonstration project conducted 
under this section, the grantee shall develop a community-wide strategy 
to address the causes and factors of risk-taking tendencies among 
youth, to positively affect community norms, to increase community 
health and safety, and to generally improve the social environment to 
enhance the life choice of community youth. The strategy shall be used 
to provide a comprehensive set of coordinated services designed to 
saturate the community and shall include, but not be limited to, the 
following areas:
            ``(1) Health education and access services designed to 
        promote physical and mental well-being and personal 
        responsibility (with particular emphasis on pregnancy 
        prevention), such as school health services, family planning 
        services, alcohol and drug abuse prevention services and 
        referral for treatment, life skills training, and decision-
        making skills training.
            ``(2) Educational and employability development services 
        designed to promote educational advancement leading to a high 
        school diploma or its equivalent and opportunities for high 
        skill, high wage job attainment and productive employment, to 
        establish a lifelong commitment to learning and achievement, 
        and to increase self-confidence, such as academic tutoring, 
        literacy training, drop-out prevention programs, career and 
        college counseling, mentoring programs, job skills training, 
        apprenticeships, and part-time paid work opportunities.
            ``(3) Social support services designed to provide youth 
        with a stable environment, opportunities for a sustained 
        relationship with one or more adults, and opportunities for 
        participation in safe and productive activities, such as 
        cultural, recreational and sports activities, leadership 
        development, peer counseling and crisis intervention, mentoring 
        programs, parenting skills training, and family counseling.
            ``(4) Community activities designed to improve community 
        stability, and to encourage youth to participate in community 
        service and establish a stake in the community, such as 
        community policing, community service programs, community 
        activities in partnership with less distressed neighborhoods, 
        local media campaigns, and establishment of community advisory 
        councils with youth representation.
            ``(5) Employment opportunity development activities 
        designed to be coordinated with educational and employability 
        development services, social support services, and community 
        activities described in paragraphs (2) through (4). Emphasis 
        shall be on development of linkages with employers within and 
        outside the community to help create employment opportunities 
        and foster an understanding by community youth of the 
        relationship between productive employment, healthy 
        development, and sound life choices.
    ``(f) Evaluation, Training, and Technical Assistance.--
            ``(1) Evaluation.--The Secretary shall evaluate the 
        effectiveness of each demonstration project conducted under 
        this section and may require each grantee conducting such a 
        project to provide such information as the Secretary determines 
        is necessary for such evaluations.
            ``(2) Training and technical assistance.--The Secretary 
        shall provide training and technical assistance with respect to 
        the development, implementation, or operation of projects under 
        this section.
            ``(3) Coordination with national clearinghouse.--The 
        Secretary shall coordinate the activities conducted under this 
        subsection with activities conducted by the National 
        Clearinghouse on Adolescent Pregnancy Prevention Programs under 
        section 2008(n).
    ``(g) Funding Period.--Each demonstration project supported under 
this section shall be conducted for a 5-year period; except that the 
Secretary may terminate a project before the end of such period if the 
Secretary determines that the grantee conducting the project has failed 
substantially to carry out the project as described in the approved 
application.
    ``(h) Definitions and Special Rules.--As used in this section:
            ``(1) Youth.--The term `youth' means an individual who has 
        attained 10 years of age but has not attained 22 years of age.
            ``(2) Use of census data.--Population and poverty rate 
        shall be determined by the most recent decennial census data 
        available.''.

                           TITLE IV--WAIVERS

SEC. 401. FUNDING FOR WAIVERS THAT ARE NOT COST NEUTRAL.

    (a) In General.--Section 1115 (42 U.S.C. 1315) is amended by adding 
at the end the following:
    ``(e)(1) Any State seeking a waiver under subsection (a) of this 
section of compliance with a requirement of section 402 may apply to 
the Secretary for the waiver, and the Secretary may approve the waiver, 
without regard to the cost neutrality of the waiver, and for payment 
of--
            ``(A) a percentage of State expenditures to carry out the 
        activities under the waiver that is greater than the otherwise 
        applicable percentage of such expenditures for which payment 
        otherwise may be made;
            ``(B) 90 percent of the cost of evaluating activities 
        pursuant to applications approved under this subsection.
    ``(2)(A) After appropriate consultation with the Congress, the 
States, and representatives of interested groups, the Secretary shall 
annually issue an announcement of the availability of Federal funds to 
assist in operating State programs pursuant to waivers issued under 
this subsection, specify a timeframe within which applications for such 
waivers may be submitted, and specify areas of particular Federal 
interest with respect to such waivers.
    ``(B) At the end of the annual period for submitting applications 
under this subsection, the Secretary shall publish in the Federal 
Register a notice that--
            ``(i) describes the waivers proposed in applications so 
        submitted, including estimated costs; and
            ``(ii) provides for a period during which members of the 
        public may comment on the applications.
    ``(C) The Secretary may not approve an application submitted under 
this subsection before the end of the comment period provided pursuant 
to subparagraph (B)(ii) with respect to the application.
    ``(3) The Secretary shall establish an advisory committee to review 
and comment on pending applications under this subsection.
    ``(4) For waivers under this subsection, there are authorized to be 
appropriated to the Secretary not more than--
            ``(A) $100,000,000 for fiscal year 1996;
            ``(B) $200,000,000 for fiscal year 1997;
            ``(C) $300,000,000 for fiscal year 1998; and
            ``(D) $400,000,000 for fiscal year 1999.''.
    (b) Annual Waiver Status Reports.--
            (1) In general.--Section 1115 (42 U.S.C. 1315), as amended 
        by subsection (a) of this section, is amended by adding at the 
        end the following:
    ``(f) On January 1 of each fiscal year, the Secretary shall submit 
to the Congress a report that identifies each waiver approved under 
this section, describes the status of each such waiver, and summarizes 
the evaluation findings relating to activities under waivers issued 
under this section that became available during the immediately 
preceding fiscal year.''.
            (2) Applicability.--The amendment made by paragraph (1) 
        shall apply to fiscal year 1997 and each succeeding fiscal 
        year.
    (c) Notice and Comment Period.--Section 1115 (42 U.S.C. 1315), as 
amended by subsections (a) and (b) of this section, is amended by 
adding at the end the following:
    ``(g) The Secretary may not issue a waiver under this section 
before--
            ``(1) the Secretary has published in the Federal Register a 
        notice of the proposed waiver; and
            ``(2) 30 days have elapsed since the beginning of the 
        comment period with respect to the proposed waiver.''.
    (d) Prohibition Against Waivers Resulting in Reduction in AFDC 
Payments.--Section 1115 (42 U.S.C. 1315), as amended by subsections 
(a), (b), and (c) of this section, is amended by adding at the end the 
following:
    ``(h)(1) Notwithstanding any other provision of this section, the 
Secretary may not issue a waiver under this section that provides for 
reduction of the levels at which aid is payable to a family under a 
State plan approved under part A of title IV, unless the reduction is 
to be imposed for failure without good cause to comply with a rule 
imposed under the State program operated under part A or F of title IV.
    ``(2) Any reduced expenditures resulting from the reduction by a 
State of the levels at which aid to families with dependent children is 
payable shall not be considered in determining whether granting the 
waiver would be cost-neutral to the Federal Government.''.

                TITLE V--IMPROVING GOVERNMENT ASSISTANCE

                      Subtitle A--AFDC Amendments

SEC. 501. REQUIREMENT THAT NEEDS STANDARDS REFLECT THE COST OF 
              ESSENTIAL ITEMS.

    Section 402(h)(1) (42 U.S.C. 602(h)(1)) is amended to read as 
follows:
    ``(h)(1) Each State shall--
            ``(A) identify clearly the items provided for in the 
        State's standard of need to meet basic needs, the items 
        provided for in the State's standard of need to meet special 
        needs, and the amount allowed for each such item;
            ``(B) not less frequently than every 3 years, in accordance 
        with a schedule established by the Secretary, reexamine the 
        basis for such allowances in the State's standard of need, 
        including whether the items provided for are sufficient to meet 
        all essential needs and whether the allowances for the items 
        reflect prevailing prices; and
            ``(C) report to the Secretary and the public (at such time 
        and in such form and manner as the Secretary may require) the 
        conclusions resulting from the reexamination, any changes that 
        the State is considering making in the standard of need as a 
        result of the reexamination, and an explanation of how the 
        reexamination was conducted.''.

SEC. 502. MAINTENANCE OF MINIMUM BENEFIT LEVELS.

    (a) In General.--Section 402(a) (42 U.S.C. 602(a)), as amended by 
sections 104, 138, and 321(a) of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (47);
            (2) by striking the period at the end of paragraph (48) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (48) the following:
            ``(49) provide that the maximum amount of aid payable for 
        any month to a family under the State plan shall not be reduced 
        below the maximum amount of aid payable under the State plan in 
        effect for October 1994 to a family of the same size.''.

SEC. 503. OPTIONAL SUPPLEMENTATION OF BENEFITS FOR FAMILIES SUBJECT TO 
              RETROSPECTIVE BUDGETING.

    (a) In General.--Section 402(a)(13) (42 U.S.C. 602(a)(13)) is 
amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by adding ``and'' at the end of subparagraph (B); and
            (3) by adding at the end the following:
                    ``(C) the State may increase the amount of aid 
                otherwise payable under the State plan to a family to 
                whom the State applies this paragraph for any month if, 
                due to changed circumstances, the sum of such otherwise 
                payable aid and the other income of the family for the 
                month would be less than the maximum amount of aid 
                otherwise payable under the State plan to a family of 
                the same size;''.
    (b) Conforming Amendment.--Section 403(a) (42 U.S.C. 603(a)) is 
amended by striking the 2nd sentence.

SEC. 504. INCOME DISREGARDS.

    (a) Student Earnings.--
            (1) In general.--Section 402(a)(8)(A)(i) (42 U.S.C. 
        602(a)(8)(A)(i)) is amended by striking ``dependent child'' and 
        all that follows and inserting ``individual who has not 
        attained 20 years of age and is an elementary or secondary 
        school student''.
            (2) Conforming amendments.--Section 402(a) (42 U.S.C. 
        602(a)) is amended--
                    (A) in paragraph (8)(A)(vii)--
                            (i) by striking ``a dependent child who is 
                        a full-time student'' and inserting ``an 
                        individual who has not attained 20 years of 
                        age, who is an elementary or secondary school 
                        student or is participating in a program 
                        intended to lead to a certificate of high 
                        school equivalency or in other State-approved 
                        education or training in accordance with an 
                        employability plan developed under section 
                        482(b),''; and
                            (ii) by striking ``such child'' and 
                        inserting ``the individual''; and
                    (B) in paragraph (18), by striking ``of a dependent 
                child who'' and inserting ``of an individual who has 
                not attained 20 years of age and''.
    (b) Training Stipends.--Section 402(a)(8)(A)(v) (42 U.S.C. 
602(a)(8)(A)(v)) is amended to read as follows:
                    ``(v) shall disregard from the income of any 
                individual applying for or receiving aid to families 
                with dependent children any amount received as a 
                stipend or allowance under the Job Training Partnership 
                Act or under any other training or similar program;''.
    (c) Lump-Sum Income.--
            (1) In general.--Section 402(a)(8)(A) (42 U.S.C. 
        602(a)(8)(A)), as amended by section 312(b) of this Act, is 
        amended--
                    (A) by striking ``and'' at the end of clause 
                (viii); and
                    (B) by adding at the end the following:
                    ``(x) shall disregard from the income of any family 
                member any amounts of income received in the form of 
                nonrecurring lump-sum payments;''.
            (2) Repeal.--Section 402(a) (42 U.S.C. 602(a)) is amended 
        by striking paragraph (17).
    (d) Educational Assistance.--Section 402(a)(8)(A) (42 U.S.C. 
602(a)(8)(A)), as amended by section 312(b) of this Act and subsection 
(c)(1) of this section, is amended--
            (1) by striking ``and'' at the end of clause (ix); and
            (2) by adding at the end the following:
                    ``(xi) shall disregard all educational assistance 
                provided to a family member;''.
    (e) In-Kind Income.--Section 402(a)(8)(A) (42 U.S.C. 602(a)(8)(A)), 
as amended by section 312(b) of this Act and subsections (c)(1) and (d) 
of this section, is amended--
            (1) by striking ``and'' at the end of clause (x); and
            (2) by adding at the end the following:
                    ``(xii) shall disregard all in-kind income provided 
                to a family member;''.
    (f) Benefits Under the National and Community Service Act.--Section 
402(a)(8)(A) (42 U.S.C. 602(a)(8)(A)), as amended by section 312(b) of 
this Act and subsections (c)(1), (d), and (e) of the section, is 
amended--
            (1) by striking ``and'' at the end of clause (xi); and
            (2) by adding at the end the following:
                    ``(xiii) shall disregard any living allowance, 
                child care allowance, stipend, or educational award 
                paid under section 140 of the National and Community 
                Service Act of 1990 to a family member participating in 
                a national service program carried out with assistance 
                from the Corporation for National and Community 
                Service;''.
    (g) ``Fill-the-Gap'' Disregards.--Section 402(a)(8)(A) (42 U.S.C. 
602(a)(8)(A)), as amended by section 312(b) of this Act and subsections 
(c)(1), (d), (e), and (f) of this section, is amended--
            (1) by striking ``and'' at the end of clause (xii); and
            (2) by adding at the end the following:
                    ``(xiv) after applying paragraph (28) and the other 
                clauses of this subparagraph, may disregard such 
                categories of income as are provided for in the State 
                plan in an amount not exceeding the difference between 
                the State's standard of need applicable to the family 
                involved and the State's payment amount for a family of 
                the same size with no other income;''.

SEC. 505. INCREASE IN RESOURCE LIMIT.

    Section 402(a)(7)(B) (42 U.S.C. 602(a)(7)(B)) is amended by 
striking ``$1000 or such lower amount as the State may determine'' and 
inserting ``$2000 (or, in the case of a family with a member who has 
attained 60 years of age, $3000)''.

SEC. 506. EXCLUSIONS FROM RESOURCES.

    (a) Life Insurance.--Section 402(a)(7)(B)(ii) (42 U.S.C. 
602(a)(7)(B)(ii)) is amended by striking ``and funeral agreements'' and 
inserting ``funeral agreements, and the cash value of life insurance 
policies,''.
    (b) Real Property Which Must Be Disposed of.--Section 
402(a)(7)(B)(iii) (42 U.S.C. 602(a)(7)(B)(iii)) is amended to read as 
follows: ``(iii) real property which the family is making a good faith 
effort to dispose of at a reasonable price, or''.
    (c) Exclusion of EITC Payments.--Section 402(a)(7)(B)(iv) (42 
U.S.C. 602(a)(7)(B)) is amended--
            (1) by inserting ``12-month period that begins with'' 
        before ``the month of receipt''; and
            (2) by inserting ``and any lump-sum payment of State earned 
        income tax credits and any payments described in this clause 
        are deemed to be expended before other resources that are so 
        included'' before the semicolon.
    (d) Lump-Sum Payments for Medical Expenses or Replacement of Lost 
Resources.--Section 402(a)(7)(B) (42 U.S.C. 602(a)(7)(B)), as amended 
by subsections (b) and (c) of this section, is amended--
            (1) by striking ``or'' at the end of clause (iii); and
            (2) by inserting ``, or (v) for the month of receipt and 
        the following 11-month period, amounts that have been paid as 
        reimbursement (or payment in advance) for medical expenses or 
        for the cost of repairing or replacing resources of the 
        family'' before the semicolon.
    (e) Resources for Self-Employment.--Section 402(a)(7)(B) (42 U.S.C. 
602(a)(7)(B)), as amended by subsections (b), (c), and (d) of this 
section, is amended--
            (1) by striking ``or'' at the end of clause (v); and
            (2) by inserting ``, or (vii) liquid and nonliquid 
        resources that are or will be used for the self-employment of a 
        family member, to the extent and under the circumstances 
        allowed by the State agency in accordance with regulations 
        issued by the Secretary after consultation with the Secretary 
        of Agriculture'' before the semicolon.

SEC. 507. VERIFICATION OF STATUS OF CITIZENS AND ALIENS.

    Section 1137(d) (42 U.S.C. 1320b-7(d)) is amended by adding at the 
end the following:
            ``(6) A State is deemed to meet the requirements of 
        paragraph (1) with respect to the eligibility of each member of 
        a family applying for aid under the State plan approved under 
        part A of title IV, if the State requires, as a condition for 
        such eligibility, a declaration in writing by an adult member 
        of the family, under penalty of perjury, that each family 
        member is a citizen of the United States or an alien eligible 
        for aid under the State plan (and, with respect to a child born 
        into a family receiving such aid, the declaration must be made 
        no later than the next redetermination of the eligibility of 
        the family after the birth of the child).''.

SEC. 508. CALCULATION OF 185 PERCENT OF NEED STANDARD.

    Section 402(a)(18) (42 U.S.C. 602(a)(18)) is amended by striking 
``without application'' and all that follows through ``exceeds'' and 
inserting ``after applying clauses (v), (viii), (x), (xi), (xii), and 
(xiii) of paragraph (8)(A)''.

SEC. 509. PAYMENTS TO THE TERRITORIES.

    (a) In General.--Section 1108(a) (42 U.S.C. 1308(a)) is amended in 
the 1st sentence by striking all that follows ``--'' and inserting the 
following:
            ``(1) for payment to Puerto Rico shall not exceed--
                    ``(A) $82,000,000 with respect to fiscal years 
                1994, 1995, and 1996; and
                    ``(B) $102,500,000 for fiscal year 1997, and 
                $102,500,000 (adjusted pursuant to subsection (f)) for 
                each fiscal year thereafter;
            ``(2) for payment to the Virgin Islands shall not exceed--
                    ``(A) $2,800,000 with respect to fiscal years 1994, 
                1995, and 1996; and
                    ``(B) $3,500,000 for fiscal year 1997, and 
                $3,500,000 (adjusted pursuant to subsection (f)) for 
                each fiscal year thereafter; and
            ``(3) for payment to Guam shall not exceed--
                    ``(A) $3,800,000 with respect to fiscal year 1994, 
                1995, and 1996; and
                    ``(B) $4,750,000 for fiscal year 1997, and 
                $4,750,000 (adjusted pursuant to subsection (f)) for 
                each fiscal year thereafter.''.
    (b) Inflation Adjustment.--Section 406 (42 U.S.C. 606) is amended 
by adding at the end the following:
    ``(f) The Secretary shall adjust each dollar amount required to be 
adjusted pursuant to this subsection for any fiscal year by--
            ``(1) multiplying the amount by the ratio of--
                    ``(A) the Consumer Price Index (as prepared by the 
                Department of Labor) for the 3rd quarter of the 
                calendar year in which the fiscal year begins, to
                    ``(B) the Consumer Price Index for the 3rd quarter 
                of calendar year 1996; and
            ``(2) rounding the product, if not a multiple of $10,000, 
        to the nearer multiple of $10,000.''.

                 Subtitle B--Food Stamp Act Amendments

SEC. 511. INCONSEQUENTIAL INCOME.

    Section 5(d)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(2)) 
is amended to read as follows: ``(2) any inconsequential payments, as 
defined by the Secretary, received during the certification period, but 
not to exceed a total of such payments of $30 per household member in 
any quarter, whether the household's income is calculated on a 
prospective or retrospective basis,''.

SEC. 512. EDUCATIONAL ASSISTANCE.

    Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is 
amended--
            (1) by striking clause (3) of subsection (d) and inserting 
        the following:
            ``(3) all educational assistance provided to a household 
        member,'';
            (2) in the proviso of clause (5) of subsection (d), by 
        striking ``and no portion of any educational loan'' and all 
        that follows through ``provided for living expenses,''; and
            (3) striking clause (3) of subsection (k).

SEC. 513. TRAINING STIPENDS AND ALLOWANCES; INCOME FROM ON-THE-JOB 
              TRAINING PROGRAMS.

    Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is 
amended--
            (1) by striking ``and (16)'' in subsection (d) and 
        inserting ``(16)'';
            (2) by inserting before the period at the end of subsection 
        (d) ``, and (17) any amount received by any member of a 
        household as a stipend or allowance under the Job Training 
        Partnership Act (29 U.S.C. 1501 et seq.) or under any other 
        training or similar program''; and
            (3) by striking subsection (l).

SEC. 514. EARNED INCOME TAX CREDITS.

    Effective on and after September 1, 1994, the second sentence of 
section (5)(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(3)) 
is amended--
            (1) by inserting ``Federal or State lump-sum'' immediately 
        preceding ``earned income tax credits''; and
            (2) by striking ``if such member was participating'' and 
        all that follows through ``the 12-month period''.

SEC. 515. RESOURCES NECESSARY FOR SELF-EMPLOYMENT.

    Section 5(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(3)) 
is amended by adding at the end the following: ``The Secretary shall 
also exclude from financial resources loans obtained for the purposes 
of starting or operating a business. The Secretary may exclude from 
financial resources liquid or nonliquid resources that are or will be 
used for the self-employment of any member of a household to the extent 
and under the circumstances allowed in regulations issued by the 
Secretary after consultation with and the Secretary of Health and Human 
Services.''.

SEC. 516. LUMP-SUM PAYMENTS FOR MEDICAL EXPENSES OR REPLACEMENT OF LOST 
              RESOURCES.

    Section 5(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(g)(3)), as amended by the preceding provisions of this subtitle, 
is amended by adding at the end the following: ``The Secretary shall 
also exclude from financial resources, for a period of one year from 
their receipt, amounts that have been paid as reimbursements (or 
payment in advance) for medical expenses or for the cost of repairing 
or replacing resources of the family.''.

SEC. 517. CONFORMING AMENDMENT.

    Section 5(d)(8) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(8)) 
is amended in the proviso by inserting ``paragraph (3) of subsection 
(g) of this section or'' before ``other laws''.

                        TITLE VI--EFFECTIVE DATE

SEC. 601. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act shall take effect on October 1, 1995.
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