[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3734 Engrossed Amendment Senate (EAS)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

                  In the Senate of the United States,

                                                         July 23, 1996.
      Resolved, That the bill from the House of Representatives (H.R. 
3734) entitled ``An Act to provide for reconciliation pursuant to 
section 201(a)(1) of the concurrent resolution on the budget for fiscal 
year 1997'', do pass with the following

                               AMENDMENT:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Personal Responsibility, Work 
Opportunity, and Medicaid Restructuring Act of 1996''.

              TITLE I--AGRICULTURE AND RELATED PROVISIONS

SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Agricultural 
Reconciliation Act of 1996''.
    (b) Table of Contents.--The table of contents of this title is as 
follows:

              TITLE I--AGRICULTURE AND RELATED PROVISIONS

Sec. 1001. Short title; table of contents.

           Subtitle A--Food Stamps and Commodity Distribution

                     Chapter 1--Food Stamp Program

Sec. 1111. Definition of certification period.
Sec. 1112. Definition of coupon.
Sec. 1113. Treatment of children living at home.
Sec. 1114. Adjustment of thrifty food plan.
Sec. 1115. Definition of homeless individual.
Sec. 1116. State option for eligibility standards.
Sec. 1117. Earnings of students.
Sec. 1118. Energy assistance.
Sec. 1119. Deductions from income.
Sec. 1120. Vehicle allowance.
Sec. 1121. Vendor payments for transitional housing counted as income.
Sec. 1122. Simplified calculation of income for the self-employed.
Sec. 1123. Doubled penalties for violating food stamp program 
                            requirements.
Sec. 1124. Disqualification of convicted individuals.
Sec. 1125. Disqualification.
Sec. 1126. Employment and training.
Sec. 1127. Food stamp eligibility.
Sec. 1128. Comparable treatment for disqualification.
Sec. 1129. Disqualification for receipt of multiple food stamp 
                            benefits.
Sec. 1130. Disqualification of fleeing felons.
Sec. 1131. Cooperation with child support agencies.
Sec. 1132. Disqualification relating to child support arrears.
Sec. 1133. Work requirement.
Sec. 1134. Encouragement of electronic benefit transfer systems.
Sec. 1135. Value of minimum allotment.
Sec. 1136. Benefits on recertification.
Sec. 1137. Optional combined allotment for expedited households.
Sec. 1138. Failure to comply with other means-tested public assistance 
                            programs.
Sec. 1139. Allotments for households residing in centers.
Sec. 1140. Condition precedent for approval of retail food stores and 
                            wholesale food concerns.
Sec. 1141. Authority to establish authorization periods.
Sec. 1142. Information for verifying eligibility for authorization.
Sec. 1143. Waiting period for stores that fail to meet authorization 
                            criteria.
Sec. 1144. Operation of food stamp offices.
Sec. 1145. State employee and training standards.
Sec. 1146. Exchange of law enforcement information.
Sec. 1147. Withdrawing fair hearing requests.
Sec. 1148. Income, eligibility, and immigration status verification 
                            systems.
Sec. 1149. Disqualification of retailers who intentionally submit 
                            falsified applications.
Sec. 1150. Disqualification of retailers who are disqualified under the 
                            WIC program.
Sec. 1151. Collection of overissuances.
Sec. 1152. Authority to suspend stores violating program requirements 
                            pending administrative and judicial review.
Sec. 1153. Expanded criminal forfeiture for violations.
Sec. 1154. Limitation on Federal match.
Sec. 1155. Standards for administration.
Sec. 1156. Work supplementation or support program.
Sec. 1157. Response to waivers.
Sec. 1158. Employment initiatives program.
Sec. 1159. Reauthorization.
Sec. 1160. Simplified food stamp program.

               Chapter 2--Commodity Distribution Programs

Sec. 1171. Emergency food assistance program.
Sec. 1172. Food bank demonstration project.
Sec. 1173. Hunger prevention programs.
Sec. 1174. Report on entitlement commodity processing.

                  Subtitle B--Child Nutrition Programs

         Chapter 1--Amendments to the National School Lunch Act

Sec. 1201. State disbursement to schools.
Sec. 1202. Nutritional and other program requirements.
Sec. 1203. Free and reduced price policy statement.
Sec. 1204. Special assistance.
Sec. 1205. Miscellaneous provisions and definitions.
Sec. 1206. Commodity distribution.
Sec. 1207. Child and adult care food program.
Sec. 1208. Pilot projects.
Sec. 1209. Reduction of paperwork.
Sec. 1210. Information on income eligibility.
Sec. 1211. Nutrition guidance for child nutrition programs.

        Chapter 2--Amendments to the Child Nutrition Act of 1966

Sec. 1251. Special milk program.
Sec. 1252. Free and reduced price policy statement.
Sec. 1253. School breakfast program authorization.
Sec. 1254. State administrative expenses.
Sec. 1255. Regulations.
Sec. 1256. Prohibitions.
Sec. 1257. Miscellaneous provisions and definitions.
Sec. 1258. Accounts and records.
Sec. 1259. Special supplemental nutrition program for women, infants, 
                            and children.
Sec. 1260. Cash grants for nutrition education.
Sec. 1261. Nutrition education and training.
Sec. 1262. Rounding rules.

           Subtitle A--Food Stamps and Commodity Distribution

                     CHAPTER 1--FOOD STAMP PROGRAM

SEC. 1111. DEFINITION OF CERTIFICATION PERIOD.

    Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is 
amended by striking ``Except as provided'' and all that follows and 
inserting the following: ``The certification period shall not exceed 12 
months, except that the certification period may be up to 24 months if 
all adult household members are elderly or disabled. A State agency 
shall have at least 1 contact with each certified household every 12 
months.''.

SEC. 1112. DEFINITION OF COUPON.

    Section 3(d) of the Food Stamp Act of 1977 (7 U.S.C. 2012(d)) is 
amended by striking ``or type of certificate'' and inserting ``type of 
certificate, authorization card, cash or check issued in lieu of a 
coupon, or access device, including an electronic benefit transfer card 
or personal identification number,''.

SEC. 1113. TREATMENT OF CHILDREN LIVING AT HOME.

    The second sentence of section 3(i) of the Food Stamp Act of 1977 
(7 U.S.C. 2012(i)) is amended by striking ``(who are not themselves 
parents living with their children or married and living with their 
spouses)''.

SEC. 1114. ADJUSTMENT OF THRIFTY FOOD PLAN.

    The second sentence of section 3(o) of the Food Stamp Act of 1977 
(7 U.S.C. 2012(o)) is amended--
            (1) by striking ``shall (1) make'' and inserting the 
        following: ``shall--
            ``(1) make'';
            (2) by striking ``scale, (2) make'' and inserting the 
        following: ``scale;
            ``(2) make'';
            (3) by striking ``Alaska, (3) make'' and inserting the 
        following: ``Alaska;
            ``(3) make''; and
            (4) by striking ``Columbia, (4) through'' and all that 
        follows through the end of the subsection and inserting the 
        following: ``Columbia; and
            ``(4) on October 1, 1996, and each October 1 thereafter, 
        adjust the cost of the diet to reflect the cost of the diet in 
        the preceding June, and round the result to the nearest lower 
        dollar increment for each household size, except that on 
        October 1, 1996, the Secretary may not reduce the cost of the 
        diet in effect on September 30, 1996.''.

SEC. 1115. DEFINITION OF HOMELESS INDIVIDUAL.

    Section 3(s)(2)(C) of the Food Stamp Act of 1977 (7 U.S.C. 
2012(s)(2)(C)) is amended by inserting ``for not more than 90 days'' 
after ``temporary accommodation''.

SEC. 1116. STATE OPTION FOR ELIGIBILITY STANDARDS.

    Section 5(b) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is 
amended by striking ``(b) The Secretary'' and inserting the following:
    ``(b) Eligibility Standards.--Except as otherwise provided in this 
Act, the Secretary''.

SEC. 1117. EARNINGS OF STUDENTS.

    Section 5(d)(7) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(7)) 
is amended by striking ``21 years of age or younger'' and inserting 
``19 years of age or younger (17 years of age or younger in fiscal year 
2002)''.

SEC. 1118. ENERGY ASSISTANCE.

    (a) In General.--Section 5(d) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(d)) is amended by striking paragraph (11) and inserting the 
following: ``(11)(A) any payments or allowances made for the purpose of 
providing energy assistance under any Federal law, or (B) a 1-time 
payment or allowance made under a Federal or State law for the costs of 
weatherization or emergency repair or replacement of an unsafe or 
inoperative furnace or other heating or cooling device,''.
    (b) Conforming Amendments.--Section 5(k) of the Food Stamp Act of 
1977 (7 U.S.C. 2014(k)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by striking ``plan for aid 
                to families with dependent children approved'' and 
                inserting ``program funded''; and
                    (B) in subparagraph (B), by striking ``, not 
                including energy or utility-cost assistance,'';
            (2) in paragraph (2), by striking subparagraph (C) and 
        inserting the following:
            ``(C) a payment or allowance described in subsection 
        (d)(11);''; and
            (3) by adding at the end the following:
            ``(4) Third party energy assistance payments.--
                    ``(A) Energy assistance payments.--For purposes of 
                subsection (d)(1), a payment made under a State law to 
                provide energy assistance to a household shall be 
                considered money payable directly to the household.
                    ``(B) Energy assistance expenses.--For purposes of 
                subsection (e)(7), an expense paid on behalf of a 
                household under a State law to provide energy 
                assistance shall be considered an out-of-pocket expense 
                incurred and paid by the household.''.

SEC. 1119. DEDUCTIONS FROM INCOME.

    (a) In General.--Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 
2014) is amended by striking subsection (e) and inserting the 
following:
    ``(e) Deductions From Income.--
            ``(1) Standard deduction.--
                    ``(A) In general.--The Secretary shall allow a 
                standard deduction for each household in the 48 
                contiguous States and the District of Columbia, Alaska, 
                Hawaii, Guam, and the Virgin Islands of the United 
                States of--
                            ``(i) for the period beginning October 1, 
                        1995, and ending November 30, 1996, $134, $229, 
                        $189, $269, and $118, respectively;
                            ``(ii) for the period beginning December 1, 
                        1996, and ending September 30, 2001, $120, 
                        $206, $170, $242, and $106, respectively;
                            ``(iii) for the period beginning October 1, 
                        2001, and ending August 31, 2002, $113, $193, 
                        $159, $227, and $100, respectively; and
                            ``(iv) for the period beginning September 
                        1, 2002, and ending September 30, 2002, $120, 
                        $206, $170, $242, and $106, respectively.
                    ``(B) Adjustment for inflation.--On October 1, 
                2002, and each October 1 thereafter, the Secretary 
                shall adjust the standard deduction to the nearest 
                lower dollar increment to reflect changes in the 
                Consumer Price Index for all urban consumers published 
                by the Bureau of Labor Statistics, for items other than 
                food, for the 12-month period ending the preceding June 
                30.
            ``(2) Earned income deduction.--
                    ``(A) Definition of earned income.--In this 
                paragraph, the term `earned income' does not include--
                            ``(i) income excluded by subsection (d); or
                            ``(ii) any portion of income earned under a 
                        work supplementation or support program, as 
                        defined under section 16(b), that is 
                        attributable to public assistance.
                    ``(B) Deduction.--Except as provided in 
                subparagraph (C), a household with earned income shall 
                be allowed a deduction of 20 percent of all earned 
                income to compensate for taxes, other mandatory 
                deductions from salary, and work expenses.
                    ``(C) Exception.--The deduction described in 
                subparagraph (B) shall not be allowed with respect to 
                determining an overissuance due to the failure of a 
                household to report earned income in a timely manner.
            ``(3) Dependent care deduction.--
                    ``(A) In general.--A household shall be entitled, 
                with respect to expenses (other than excluded expenses 
                described in subparagraph (B)) for dependent care, to a 
                dependent care deduction, the maximum allowable level 
                of which shall be $200 per month for each dependent 
                child under 2 years of age and $175 per month for each 
                other dependent, for the actual cost of payments 
                necessary for the care of a dependent if the care 
                enables a household member to accept or continue 
                employment, or training or education that is 
                preparatory for employment.
                    ``(B) Excluded expenses.--The excluded expenses 
                referred to in subparagraph (A) are--
                            ``(i) expenses paid on behalf of the 
                        household by a third party;
                            ``(ii) amounts made available and excluded, 
                        for the expenses referred to in subparagraph 
                        (A), under subsection (d)(3); and
                            ``(iii) expenses that are paid under 
                        section 6(d)(4).
            ``(4) Deduction for child support payments.--
                    ``(A) In general.--A household shall be entitled to 
                a deduction for child support payments made by a 
                household member to or for an individual who is not a 
                member of the household if the household member is 
                legally obligated to make the payments.
                    ``(B) Methods for determining amount.--The 
                Secretary may prescribe by regulation the methods, 
                including calculation on a retrospective basis, that a 
                State agency shall use to determine the amount of the 
                deduction for child support payments.
            ``(5) Homeless shelter allowance.--Under rules prescribed 
        by the Secretary, a State agency may develop a standard 
        homeless shelter allowance, which shall not exceed $143 per 
        month, for such expenses as may reasonably be expected to be 
        incurred by households in which all members are homeless 
        individuals but are not receiving free shelter throughout the 
        month. A State agency that develops the allowance may use the 
        allowance in determining eligibility and allotments for the 
        households. The State agency may make a household with 
        extremely low shelter costs ineligible for the allowance.
            ``(6) Excess medical expense deduction.--
                    ``(A) In general.--A household containing an 
                elderly or disabled member shall be entitled, with 
                respect to expenses other than expenses paid on behalf 
                of the household by a third party, to an excess medical 
                expense deduction for the portion of the actual costs 
                of allowable medical expenses, incurred by the elderly 
                or disabled member, exclusive of special diets, that 
                exceeds $35 per month.
                    ``(B) Method of claiming deduction.--
                            ``(i) In general.--A State agency shall 
                        offer an eligible household under subparagraph 
                        (A) a method of claiming a deduction for 
                        recurring medical expenses that are initially 
                        verified under the excess medical expense 
                        deduction in lieu of submitting information on, 
                        or verification of, actual expenses on a 
                        monthly basis.
                            ``(ii) Method.--The method described in 
                        clause (i) shall--
                                    ``(I) be designed to minimize the 
                                burden for the eligible elderly or 
                                disabled household member choosing to 
                                deduct the recurrent medical expenses 
                                of the member pursuant to the method;
                                    ``(II) rely on reasonable estimates 
                                of the expected medical expenses of the 
                                member for the certification period 
                                (including changes that can be 
                                reasonably anticipated based on 
                                available information about the medical 
                                condition of the member, public or 
                                private medical insurance coverage, and 
                                the current verified medical expenses 
                                incurred by the member); and
                                    ``(III) not require further 
                                reporting or verification of a change 
                                in medical expenses if such a change 
                                has been anticipated for the 
                                certification period.
            ``(7) Excess shelter expense deduction.--
                    ``(A) In general.--A household shall be entitled, 
                with respect to expenses other than expenses paid on 
                behalf of the household by a third party, to an excess 
                shelter expense deduction to the extent that the 
                monthly amount expended by a household for shelter 
                exceeds an amount equal to 50 percent of monthly 
                household income after all other applicable deductions 
                have been allowed.
                    ``(B) Maximum amount of deduction.--
                            ``(i) Through december 31, 1996.--In the 
                        case of a household that does not contain an 
                        elderly or disabled individual, during the 15-
                        month period ending December 31, 1996, the 
                        excess shelter expense deduction shall not 
                        exceed--
                                    ``(I) in the 48 contiguous States 
                                and the District of Columbia, $247 per 
                                month; and
                                    ``(II) in Alaska, Hawaii, Guam, and 
                                the Virgin Islands of the United 
                                States, $429, $353, $300, and $182 per 
                                month, respectively.
                            ``(i) After december 31, 1996.--In the case 
                        of a household that does not contain an elderly 
                        or disabled individual, after December 31, 
                        1996, the excess shelter expense deduction 
                        shall not exceed--
                                    ``(I) in the 48 contiguous States 
                                and the District of Columbia, $342 per 
                                month; and
                                    ``(II) in Alaska, Hawaii, Guam, and 
                                the Virgin Islands of the United 
                                States, $594, $489, $415, and $252 per 
                                month, respectively.
                    ``(C) Standard utility allowance.--
                            ``(i) In general.--In computing the excess 
                        shelter expense deduction, a State agency may 
                        use a standard utility allowance in accordance 
                        with regulations promulgated by the Secretary, 
                        except that a State agency may use an allowance 
                        that does not fluctuate within a year to 
                        reflect seasonal variations.
                            ``(ii) Restrictions on heating and cooling 
                        expenses.--An allowance for a heating or 
                        cooling expense may not be used in the case of 
                        a household that--
                                    ``(I) does not incur a heating or 
                                cooling expense, as the case may be;
                                    ``(II) does incur a heating or 
                                cooling expense but is located in a 
                                public housing unit that has central 
                                utility meters and charges households, 
                                with regard to the expense, only for 
                                excess utility costs; or
                                    ``(III) shares the expense with, 
                                and lives with, another individual not 
                                participating in the food stamp 
                                program, another household 
                                participating in the food stamp 
                                program, or both, unless the allowance 
                                is prorated between the household and 
                                the other individual, household, or 
                                both.
                            ``(iii) Mandatory allowance.--
                                    ``(I) In general.--A State agency 
                                may make the use of a standard utility 
                                allowance mandatory for all households 
                                with qualifying utility costs if--
                                            ``(aa) the State agency has 
                                        developed 1 or more standards 
                                        that include the cost of 
                                        heating and cooling and 1 or 
                                        more standards that do not 
                                        include the cost of heating and 
                                        cooling; and
                                            ``(bb) the Secretary finds 
                                        that the standards will not 
                                        result in an increased cost to 
                                        the Secretary.
                                    ``(II) Household election.--A State 
                                agency that has not made the use of a 
                                standard utility allowance mandatory 
                                under subclause (I) shall allow a 
                                household to switch, at the end of a 
                                certification period, between the 
                                standard utility allowance and a 
                                deduction based on the actual utility 
                                costs of the household.
                            ``(iv) Availability of allowance to 
                        recipients of energy assistance.--
                                    ``(I) In general.--Subject to 
                                subclause (II), if a State agency 
                                elects to use a standard utility 
                                allowance that reflects heating or 
                                cooling costs, the standard utility 
                                allowance shall be made available to 
                                households receiving a payment, or on 
                                behalf of which a payment is made, 
                                under the Low-Income Home Energy 
                                Assistance Act of 1981 (42 U.S.C. 8621 
                                et seq.) or other similar energy 
                                assistance program, if the household 
                                still incurs out-of-pocket heating or 
                                cooling expenses in excess of any 
                                assistance paid on behalf of the 
                                household to an energy provider.
                                    ``(II) Separate allowance.--A State 
                                agency may use a separate standard 
                                utility allowance for households on 
                                behalf of which a payment described in 
                                subclause (I) is made, but may not be 
                                required to do so.
                                    ``(III) States not electing to use 
                                separate allowance.--A State agency 
                                that does not elect to use a separate 
                                allowance but makes a single standard 
                                utility allowance available to 
                                households incurring heating or cooling 
                                expenses (other than a household 
                                described in subclause (I) or (II) of 
                                clause (ii)) may not be required to 
                                reduce the allowance due to the 
                                provision (directly or indirectly) of 
                                assistance under the Low-Income Home 
                                Energy Assistance Act of 1981 (42 
                                U.S.C. 8621 et seq.).
                                    ``(IV) Proration of assistance.--
                                For the purpose of the food stamp 
                                program, assistance provided under the 
                                Low-Income Home Energy Assistance Act 
                                of 1981 (42 U.S.C. 8621 et seq.) shall 
                                be considered to be prorated over the 
                                entire heating or cooling season for 
                                which the assistance was provided.''.
    (b) Conforming Amendment.--Section 11(e)(3) of the Food Stamp Act 
of 1977 (7 U.S.C. 2020(e)(3)) is amended by striking ``. Under rules 
prescribed'' and all that follows through ``verifies higher expenses''.

SEC. 1120. VEHICLE ALLOWANCE.

    Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is 
amended by striking paragraph (2) and inserting the following:
            ``(2) Included assets.--
                    ``(A) In general.--Subject to the other provisions 
                of this paragraph, the Secretary shall, in prescribing 
                inclusions in, and exclusions from, financial 
                resources, follow the regulations in force as of June 
                1, 1982 (other than those relating to licensed vehicles 
                and inaccessible resources).
                    ``(B) Additional included assets.--The Secretary 
                shall include in financial resources--
                            ``(i) any boat, snowmobile, or airplane 
                        used for recreational purposes;
                            ``(ii) any vacation home;
                            ``(iii) any mobile home used primarily for 
                        vacation purposes;
                            ``(iv) subject to subparagraph (C), any 
                        licensed vehicle that is used for household 
                        transportation or to obtain or continue 
                        employment to the extent that the fair market 
                        value of the vehicle exceeds $4,600 through 
                        September 30, 1996, and $4,650 beginning 
                        October 1, 1996; and
                            ``(v) any savings or retirement account 
                        (including an individual account), regardless 
                        of whether there is a penalty for early 
                        withdrawal.
                    ``(C) Excluded vehicles.--A vehicle (and any other 
                property, real or personal, to the extent the property 
                is directly related to the maintenance or use of the 
                vehicle) shall not be included in financial resources 
                under this paragraph if the vehicle is--
                            ``(i) used to produce earned income;
                            ``(ii) necessary for the transportation of 
                        a physically disabled household member; or
                            ``(iii) depended on by a household to carry 
                        fuel for heating or water for home use and 
                        provides the primary source of fuel or water, 
                        respectively, for the household.''.

SEC. 1121. VENDOR PAYMENTS FOR TRANSITIONAL HOUSING COUNTED AS INCOME.

    Section 5(k)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2014(k)(2)) 
is amended--
            (1) by striking subparagraph (F); and
            (2) by redesignating subparagraphs (G) and (H) as 
        subparagraphs (F) and (G), respectively.

SEC. 1122. SIMPLIFIED CALCULATION OF INCOME FOR THE SELF-EMPLOYED.

    Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended 
by adding at the end the following:
    ``(n) Simplified Calculation of Income for the Self-Employed.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this subsection, the Secretary shall establish a 
        procedure, designed to not increase Federal costs, by which a 
        State may use a reasonable estimate of income excluded under 
        subsection (d)(9) in lieu of calculating the actual cost of 
        producing self-employment income.
            ``(2) Inclusive of all types of income.--The procedure 
        established under paragraph (1) shall allow a State to estimate 
        income for all types of self-employment income.
            ``(3) Differences for different types of income.--The 
        procedure established under paragraph (1) may differ for 
        different types of self-employment income.''.

SEC. 1123. DOUBLED PENALTIES FOR VIOLATING FOOD STAMP PROGRAM 
              REQUIREMENTS.

    Section 6(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2015(b)(1)) 
is amended--
            (1) in clause (i), by striking ``six months'' and inserting 
        ``1 year''; and
            (2) in clause (ii), by striking ``1 year'' and inserting 
        ``2 years''.

SEC. 1124. DISQUALIFICATION OF CONVICTED INDIVIDUALS.

    Section 6(b)(1)(iii) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(b)(1)(iii)) is amended--
            (1) in subclause (II), by striking ``or'' at the end;
            (2) in subclause (III), by striking the period at the end 
        and inserting ``; or''; and
            (3) by inserting after subclause (III) the following:
                    ``(IV) a conviction of an offense under subsection 
                (b) or (c) of section 15 involving an item covered by 
                subsection (b) or (c) of section 15 having a value of 
                $500 or more.''.

SEC. 1125. DISQUALIFICATION.

    (a) In General.--Section 6(d) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(d)) is amended by striking ``(d)(1) Unless otherwise 
exempted by the provisions'' and all that follows through the end of 
paragraph (1) and inserting the following:
    ``(d) Conditions of Participation.--
            ``(1) Work requirements.--
                    ``(A) In general.--No physically and mentally fit 
                individual over the age of 15 and under the age of 60 
                shall be eligible to participate in the food stamp 
                program if the individual--
                            ``(i) refuses, at the time of application 
                        and every 12 months thereafter, to register for 
                        employment in a manner prescribed by the 
                        Secretary;
                            ``(ii) refuses without good cause to 
                        participate in an employment and training 
                        program established under paragraph (4), to the 
                        extent required by the State agency;
                            ``(iii) refuses without good cause to 
                        accept an offer of employment, at a site or 
                        plant not subject to a strike or lockout at the 
                        time of the refusal, at a wage not less than 
                        the higher of--
                                    ``(I) the applicable Federal or 
                                State minimum wage; or
                                    ``(II) 80 percent of the wage that 
                                would have governed had the minimum 
                                hourly rate under section 6(a)(1) of 
                                the Fair Labor Standards Act of 1938 
                                (29 U.S.C. 206(a)(1)) been applicable 
                                to the offer of employment;
                            ``(iv) refuses without good cause to 
                        provide a State agency with sufficient 
                        information to allow the State agency to 
                        determine the employment status or the job 
                        availability of the individual;
                            ``(v) voluntarily and without good cause--
                                    ``(I) quits a job; or
                                    ``(II) reduces work effort and, 
                                after the reduction, the individual is 
                                working less than 30 hours per week; or
                            ``(vi) fails to comply with section 20.
                    ``(B) Household ineligibility.--If an individual 
                who is the head of a household becomes ineligible to 
                participate in the food stamp program under 
                subparagraph (A), the household shall, at the option of 
                the State agency, become ineligible to participate in 
                the food stamp program for a period, determined by the 
                State agency, that does not exceed the lesser of--
                            ``(i) the duration of the ineligibility of 
                        the individual determined under subparagraph 
                        (C); or
                            ``(ii) 180 days.
                    ``(C) Duration of ineligibility.--
                            ``(i) First violation.--The first time that 
                        an individual becomes ineligible to participate 
                        in the food stamp program under subparagraph 
                        (A), the individual shall remain ineligible 
                        until the later of--
                                    ``(I) the date the individual 
                                becomes eligible under subparagraph 
                                (A);
                                    ``(II) the date that is 1 month 
                                after the date the individual became 
                                ineligible; or
                                    ``(III) a date determined by the 
                                State agency that is not later than 3 
                                months after the date the individual 
                                became ineligible.
                            ``(ii) Second violation.--The second time 
                        that an individual becomes ineligible to 
                        participate in the food stamp program under 
                        subparagraph (A), the individual shall remain 
                        ineligible until the later of--
                                    ``(I) the date the individual 
                                becomes eligible under subparagraph 
                                (A);
                                    ``(II) the date that is 3 months 
                                after the date the individual became 
                                ineligible; or
                                    ``(III) a date determined by the 
                                State agency that is not later than 6 
                                months after the date the individual 
                                became ineligible.
                            ``(iii) Third or subsequent violation.--The 
                        third or subsequent time that an individual 
                        becomes ineligible to participate in the food 
                        stamp program under subparagraph (A), the 
                        individual shall remain ineligible until the 
                        later of--
                                    ``(I) the date the individual 
                                becomes eligible under subparagraph 
                                (A);
                                    ``(II) the date that is 6 months 
                                after the date the individual became 
                                ineligible;
                                    ``(III) a date determined by the 
                                State agency; or
                                    ``(IV) at the option of the State 
                                agency, permanently.
                    ``(D) Administration.--
                            ``(i) Good cause.--The Secretary shall 
                        determine the meaning of good cause for the 
                        purpose of this paragraph.
                            ``(ii) Voluntary quit.--The Secretary shall 
                        determine the meaning of voluntarily quitting 
                        and reducing work effort for the purpose of 
                        this paragraph.
                            ``(iii) Determination by state agency.--
                                    ``(I) In general.--Subject to 
                                subclause (II) and clauses (i) and 
                                (ii), a State agency shall determine--
                                            ``(aa) the meaning of any 
                                        term used in subparagraph (A);
                                            ``(bb) the procedures for 
                                        determining whether an 
                                        individual is in compliance 
                                        with a requirement under 
                                        subparagraph (A); and
                                            ``(cc) whether an 
                                        individual is in compliance 
                                        with a requirement under 
                                        subparagraph (A).
                                    ``(II) Not less restrictive.--A 
                                State agency may not use a meaning, 
                                procedure, or determination under 
                                subclause (I) that is less restrictive 
                                on individuals receiving benefits under 
                                this Act than a comparable meaning, 
                                procedure, or determination under a 
                                State program funded under part A of 
                                title IV of the Social Security Act (42 
                                U.S.C. 601 et seq.).
                            ``(iv) Strike against the government.--For 
                        the purpose of subparagraph (A)(v), an employee 
                        of the Federal Government, a State, or a 
                        political subdivision of a State, who is 
                        dismissed for participating in a strike against 
                        the Federal Government, the State, or the 
                        political subdivision of the State shall be 
                        considered to have voluntarily quit without 
                        good cause.
                            ``(v) Selecting a head of household.--
                                    ``(I) In general.--For purposes of 
                                this paragraph, the State agency shall 
                                allow the household to select any adult 
                                parent of a child in the household as 
                                the head of the household if all adult 
                                household members making application 
                                under the food stamp program agree to 
                                the selection.
                                    ``(II) Time for making 
                                designation.--A household may designate 
                                the head of the household under 
                                subclause (I) each time the household 
                                is certified for participation in the 
                                food stamp program, but may not change 
                                the designation during a certification 
                                period unless there is a change in the 
                                composition of the household.
                            ``(vi) Change in head of household.--If the 
                        head of a household leaves the household during 
                        a period in which the household is ineligible 
                        to participate in the food stamp program under 
                        subparagraph (B)--
                                    ``(I) the household shall, if 
                                otherwise eligible, become eligible to 
                                participate in the food stamp program; 
                                and
                                    ``(II) if the head of the household 
                                becomes the head of another household, 
                                the household that becomes headed by 
                                the individual shall become ineligible 
                                to participate in the food stamp 
                                program for the remaining period of 
                                ineligibility.''.
    (b) Conforming Amendment.--
            (1) The second sentence of section 17(b)(2) of the Food 
        Stamp Act of 1977 (7 U.S.C. 2026(b)(2)) is amended by striking 
        ``6(d)(1)(i)'' and inserting ``6(d)(1)(A)(i)''.
            (2) Section 20 of the Food Stamp Act of 1977 (7 U.S.C. 
        2029) is amended by striking subsection (f) and inserting the 
        following:
    ``(f) Disqualification.--An individual or a household may become 
ineligible under section 6(d)(1) to participate in the food stamp 
program for failing to comply with this section.''.

SEC. 1126. EMPLOYMENT AND TRAINING.

    (a) In General.--Section 6(d)(4) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(d)(4)) is amended--
            (1) by striking ``(4)(A) Not later than April 1, 1987, 
        each'' and inserting the following:
            ``(4) Employment and training.--
                    ``(A) In general.--
                            ``(i) Implementation.--Each'';
            (2) in subparagraph (A)--
                    (A) by inserting ``work,'' after ``skills, 
                training,''; and
                    (B) by adding at the end the following:
                            ``(ii) Statewide workforce development 
                        system.--Each component of an employment and 
                        training program carried out under this 
                        paragraph shall be delivered through a 
                        statewide workforce development system, unless 
                        the component is not available locally through 
                        such a system.'';
            (3) in subparagraph (B)--
                    (A) in the matter preceding clause (i), by striking 
                the colon at the end and inserting the following: ``, 
                except that the State agency shall retain the option to 
                apply employment requirements prescribed under this 
                subparagraph to a program applicant at the time of 
                application:'';
                    (B) in clause (i), by striking ``with terms and 
                conditions'' and all that follows through ``time of 
                application''; and
                    (C) in clause (iv)--
                            (i) by striking subclauses (I) and (II); 
                        and
                            (ii) by redesignating subclauses (III) and 
                        (IV) as subclauses (I) and (II), respectively;
            (4) in subparagraph (D)--
                    (A) in clause (i), by striking ``to which the 
                application'' and all that follows through ``30 days or 
                less'';
                    (B) in clause (ii), by striking ``but with 
                respect'' and all that follows through ``child care''; 
                and
                    (C) in clause (iii), by striking ``, on the basis 
                of'' and all that follows through ``clause (ii)'' and 
                inserting ``the exemption continues to be valid'';
            (5) in subparagraph (E), by striking the third sentence;
            (6) in subparagraph (G)--
                    (A) by striking ``(G)(i) The State'' and inserting 
                ``(G) The State''; and
                    (B) by striking clause (ii);
            (7) in subparagraph (H), by striking ``(H)(i) The 
        Secretary'' and all that follows through ``(ii) Federal funds'' 
        and inserting ``(H) Federal funds'';
            (8) in subparagraph (I)(i)(II), by striking ``, or was in 
        operation,'' and all that follows through ``Social Security 
        Act'' and inserting the following: ``), except that no such 
        payment or reimbursement shall exceed the applicable local 
        market rate'';
            (9)(A) by striking subparagraphs (K) and (L) and inserting 
        the following:
                    ``(K) Limitation on funding.--Notwithstanding any 
                other provision of this paragraph, the amount of funds 
                a State agency uses to carry out this paragraph 
                (including funds used to carry out subparagraph (I)) 
                for participants who are receiving benefits under a 
                State program funded under part A of title IV of the 
                Social Security Act (42 U.S.C. 601 et seq.) shall not 
                exceed the amount of funds the State agency used in 
                fiscal year 1995 to carry out this paragraph for 
                participants who were receiving benefits in fiscal year 
                1995 under a State program funded under part A of title 
                IV of the Act (42 U.S.C. 601 et seq.).''; and
            (B) by redesignating subparagraphs (M) and (N) as 
        subparagraphs (L) and (M), respectively; and
            (10) in subparagraph (L), as so redesignated--
                    (A) by striking ``(L)(i) The Secretary'' and 
                inserting ``(L) The Secretary''; and
                    (B) by striking clause (ii).
    (b) Funding.--Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(h)) is amended by striking ``(h)(1)(A) The Secretary'' and all 
that follows through the end of paragraph (1) and inserting the 
following:
    ``(h) Funding of Employment and Training Programs.--
            ``(1) In general.--
                    ``(A) Amounts.--To carry out employment and 
                training programs, the Secretary shall reserve for 
                allocation to State agencies from funds made available 
                for each fiscal year under section 18(a)(1) the amount 
                of--
                            ``(i) for fiscal year 1996, $75,000,000; 
                        and
                            ``(ii) for each of fiscal years 1997 
                        through 2002, $85,000,000.
                    ``(B) Allocation.--The Secretary shall allocate the 
                amounts reserved under subparagraph (A) among the State 
                agencies using a reasonable formula (as determined by 
                the Secretary) that gives consideration to the 
                population in each State affected by section 6(o).
                    ``(C) Reallocation.--
                            ``(i) Notification.--A State agency shall 
                        promptly notify the Secretary if the State 
                        agency determines that the State agency will 
                        not expend all of the funds allocated to the 
                        State agency under subparagraph (B).
                            ``(ii) Reallocation.--On notification under 
                        clause (i), the Secretary shall reallocate the 
                        funds that the State agency will not expend as 
                        the Secretary considers appropriate and 
                        equitable.
                    ``(D) Minimum allocation.--Notwithstanding 
                subparagraphs (A) through (C), the Secretary shall 
                ensure that each State agency operating an employment 
                and training program shall receive not less than 
                $50,000 for each fiscal year.''.
    (c) Additional Matching Funds.--Section 16(h)(2) of the Food Stamp 
Act of 1977 (7 U.S.C. 2025(h)(2)) is amended by inserting before the 
period at the end the following: ``, including the costs for case 
management and casework to facilitate the transition from economic 
dependency to self-sufficiency through work''.
    (d) Reports.--Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(h)) is amended--
            (1) in paragraph (5)--
                    (A) by striking ``(5)(A) The Secretary'' and 
                inserting ``(5) The Secretary''; and
                    (B) by striking subparagraph (B); and
            (2) by striking paragraph (6).

SEC. 1127. FOOD STAMP ELIGIBILITY.

    The third sentence of section 6(f) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(f)) is amended by inserting ``, at State option,'' after 
``less''.

SEC. 1128. COMPARABLE TREATMENT FOR DISQUALIFICATION.

    (a) In General.--Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 
2015) is amended by adding at the end the following:
    ``(i) Comparable Treatment for Disqualification.--
            ``(1) In general.--If a disqualification is imposed on a 
        member of a household for a failure of the member to perform an 
        action required under a Federal, State, or local law relating 
        to a means-tested public assistance program, the State agency 
        may impose the same disqualification on the member of the 
        household under the food stamp program.
            ``(2) Rules and procedures.--If a disqualification is 
        imposed under paragraph (1) for a failure of an individual to 
        perform an action required under part A of title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.), the State agency 
        may use the rules and procedures that apply under part A of 
        title IV of the Act to impose the same disqualification under 
        the food stamp program.
            ``(3) Application after disqualification period.--A member 
        of a household disqualified under paragraph (1) may, after the 
        disqualification period has expired, apply for benefits under 
        this Act and shall be treated as a new applicant, except that a 
        prior disqualification under subsection (d) shall be considered 
        in determining eligibility.''.
    (b) State Plan Provisions.--Section 11(e) of the Food Stamp Act of 
1977 (7 U.S.C. 2020(e)) is amended--
            (1) in paragraph (24), by striking ``and'' at the end;
            (2) in paragraph (25), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
            ``(26) the guidelines the State agency uses in carrying out 
        section 6(i); and''.
    (c) Conforming Amendment.--Section 6(d)(2)(A) of the Food Stamp Act 
of 1977 (7 U.S.C. 2015(d)(2)(A)) is amended by striking ``that is 
comparable to a requirement of paragraph (1)''.

SEC. 1129. DISQUALIFICATION FOR RECEIPT OF MULTIPLE FOOD STAMP 
              BENEFITS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 1129, is amended by adding at the end the following:
    ``(j) Disqualification for Receipt of Multiple Food Stamp 
Benefits.--An individual shall be ineligible to participate in the food 
stamp program as a member of any household for a 10-year period if the 
individual is found by a State agency to have made, or is convicted in 
a Federal or State court of having made, a fraudulent statement or 
representation with respect to the identity or place of residence of 
the individual in order to receive multiple benefits simultaneously 
under the food stamp program.''.

SEC. 1130. DISQUALIFICATION OF FLEEING FELONS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 1130, is amended by adding at the end the following:
    ``(k) Disqualification of Fleeing Felons.--No member of a household 
who is otherwise eligible to participate in the food stamp program 
shall be eligible to participate in the program as a member of that or 
any other household during any period during which the individual is--
            ``(1) fleeing to avoid prosecution, or custody or 
        confinement after conviction, under the law of the place from 
        which the individual is fleeing, for a crime, or attempt to 
        commit a crime, that is a felony under the law of the place 
        from which the individual is fleeing or that, in the case of 
        New Jersey, is a high misdemeanor under the law of New Jersey; 
        or
            ``(2) violating a condition of probation or parole imposed 
        under a Federal or State law.''.

SEC. 1131. COOPERATION WITH CHILD SUPPORT AGENCIES.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 1131, is amended by adding at the end the following:
    ``(l) Custodial Parent's Cooperation With Child Support Agencies.--
            ``(1) In general.--At the option of a State agency, subject 
        to paragraphs (2) and (3), no natural or adoptive parent or 
        other individual (collectively referred to in this subsection 
        as `the individual') who is living with and exercising parental 
        control over a child under the age of 18 who has an absent 
        parent shall be eligible to participate in the food stamp 
        program unless the individual cooperates with the State agency 
        administering the program established under part D of title IV 
        of the Social Security Act (42 U.S.C. 651 et seq.)--
                    ``(A) in establishing the paternity of the child 
                (if the child is born out of wedlock); and
                    ``(B) in obtaining support for--
                            ``(i) the child; or
                            ``(ii) the individual and the child.
            ``(2) Good cause for noncooperation.--Paragraph (1) shall 
        not apply to the individual if good cause is found for refusing 
        to cooperate, as determined by the State agency in accordance 
        with standards prescribed by the Secretary in consultation with 
        the Secretary of Health and Human Services. The standards shall 
        take into consideration circumstances under which cooperation 
        may be against the best interests of the child.
            ``(3) Fees.--Paragraph (1) shall not require the payment of 
        a fee or other cost for services provided under part D of title 
        IV of the Social Security Act (42 U.S.C. 651 et seq.).
    ``(m) Noncustodial Parent's Cooperation With Child Support 
Agencies.--
            ``(1) In general.--At the option of a State agency, subject 
        to paragraphs (2) and (3), a putative or identified 
        noncustodial parent of a child under the age of 18 (referred to 
        in this subsection as `the individual') shall not be eligible 
        to participate in the food stamp program if the individual 
        refuses to cooperate with the State agency administering the 
        program established under part D of title IV of the Social 
        Security Act (42 U.S.C. 651 et seq.)--
                    ``(A) in establishing the paternity of the child 
                (if the child is born out of wedlock); and
                    ``(B) in providing support for the child.
            ``(2) Refusal to cooperate.--
                    ``(A) Guidelines.--The Secretary, in consultation 
                with the Secretary of Health and Human Services, shall 
                develop guidelines on what constitutes a refusal to 
                cooperate under paragraph (1).
                    ``(B) Procedures.--The State agency shall develop 
                procedures, using guidelines developed under 
                subparagraph (A), for determining whether an individual 
                is refusing to cooperate under paragraph (1).
            ``(3) Fees.--Paragraph (1) shall not require the payment of 
        a fee or other cost for services provided under part D of title 
        IV of the Social Security Act (42 U.S.C. 651 et seq.).
            ``(4) Privacy.--The State agency shall provide safeguards 
        to restrict the use of information collected by a State agency 
        administering the program established under part D of title IV 
        of the Social Security Act (42 U.S.C. 651 et seq.) to purposes 
        for which the information is collected.''.

SEC. 1132. DISQUALIFICATION RELATING TO CHILD SUPPORT ARREARS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 1132, is amended by adding at the end the following:
    ``(n) Disqualification for Child Support Arrears.--
            ``(1) In general.--At the option of a State agency, no 
        individual shall be eligible to participate in the food stamp 
        program as a member of any household during any month that the 
        individual is delinquent in any payment due under a court order 
        for the support of a child of the individual.
            ``(2) Exceptions.--Paragraph (1) shall not apply if--
                    ``(A) a court is allowing the individual to delay 
                payment; or
                    ``(B) the individual is complying with a payment 
                plan approved by a court or the State agency designated 
                under part D of title IV of the Social Security Act (42 
                U.S.C. 651 et seq.) to provide support for the child of 
                the individual.''.

SEC. 1133. WORK REQUIREMENT.

    (a) In General.--Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 
2015), as amended by section 1133, is amended by adding at the end the 
following:
    ``(o) Work Requirement.--
            ``(1) Definition of work program.--In this subsection, the 
        term `work program' means--
                    ``(A) a program under the Job Training Partnership 
                Act (29 U.S.C. 1501 et seq.);
                    ``(B) a program under section 236 of the Trade Act 
                of 1974 (19 U.S.C. 2296); or
                    ``(C) a program of employment or training operated 
                or supervised by a State or political subdivision of a 
                State that meets standards approved by the Governor of 
                the State, including a program under subsection (d)(4), 
                other than a job search program or a job search 
                training program.
            ``(2) Work requirement.--Subject to the other provisions of 
        this subsection, no individual shall be eligible to participate 
        in the food stamp program as a member of any household if, 
        during the preceding 12-month period, the individual received 
        food stamp benefits for not less than 4 months during which the 
        individual did not--
                    ``(A) work 20 hours or more per week, averaged 
                monthly;
                    ``(B) participate in and comply with the 
                requirements of a work program for 20 hours or more per 
                week, as determined by the State agency;
                    ``(C) participate in and comply with the 
                requirements of a program under section 20 or a 
                comparable program established by a State or political 
                subdivision of a State; or
                    ``(D) receive an exemption under paragraph (6).
            ``(3) Exception.--Paragraph (2) shall not apply to an 
        individual if the individual is--
                    ``(A) under 18 or over 50 years of age;
                    ``(B) medically certified as physically or mentally 
                unfit for employment;
                    ``(C) a parent or other member of a household with 
                responsibility for a dependent child;
                    ``(D) otherwise exempt under subsection (d)(2); or
                    ``(E) a pregnant woman.
            ``(4) Waiver.--
                    ``(A) In general.--On the request of a State 
                agency, the Secretary may waive the applicability of 
                paragraph (2) to any group of individuals in the State 
                if the Secretary makes a determination that the area in 
                which the individuals reside--
                            ``(i) has an unemployment rate of over 10 
                        percent; or
                            ``(ii) does not have a sufficient number of 
                        jobs to provide employment for the individuals.
                    ``(B) Response.--The Secretary shall respond to a 
                request made pursuant to subparagraph (A) not later 
                than 15 days after the State agency makes the request.
                    ``(C) Report.--The Secretary shall report the basis 
                for a waiver under subparagraph (A) to the Committee on 
                Agriculture of the House of Representatives and the 
                Committee on Agriculture, Nutrition, and Forestry of 
                the Senate.
            ``(5) Subsequent eligibility.--
                    ``(A) In general.--An individual shall become 
                eligible to participate in the food stamp program if, 
                during a 30-day period, the individual--
                            ``(i) works 80 or more hours;
                            ``(ii) participates in and complies with 
                        the requirements of a work program for 80 or 
                        more hours, as determined by a State agency; or
                            ``(iii) participates in and complies with 
                        the requirements of a program under section 20 
                        or a comparable program established by a State 
                        or political subdivision of a State.
                    ``(B) After becoming eligible.--An individual shall 
                remain subject to paragraph (2) during any 12-month 
                period subsequent to becoming eligible to participate 
                in the food stamp program under subparagraph (A), 
                except that the term `preceding 12-month period' in 
                paragraph (2) shall mean the preceding period beginning 
                on the date the individual most recently satisfied the 
                requirements of subparagraph (A).
            ``(6) State agency exemptions.--
                    ``(A) In general.--A State agency may exempt an 
                individual for purposes of paragraph (2)(D)--
                            ``(i) by reason of hardship; or
                            ``(ii) if the individual participates in 
                        and complies with the requirements of a program 
                        of job search or job search training under 
                        clauses (i) or (ii) of subsection (d)(4)(B) 
                        that requires an average of not less than 20 
                        hours per week of participation.
                    ``(B) Limitation on hardship exemption.--The 
                average monthly number of individuals receiving 
                benefits due to a hardship exemption granted by a State 
                agency under subparagraph (A)(i) for a fiscal year may 
                not exceed 20 percent of the average monthly number of 
                individuals receiving allotments during the fiscal year 
                in the State who are not exempt from the requirements 
                of this subsection under paragraph (3) or (4).
                    ``(C) Limitation on job search exemption.--A State 
                agency may not exempt an individual under subparagraph 
                (A)(ii) for more than 2 months during any 12-month 
                period.''.
    (b) Transition Provision.--During the 1-year period beginning on 
the date of enactment of this Act, the term ``preceding 12-month 
period'' in section 6(o) of the Food Stamp Act of 1977, as added by 
subsection (a), means the preceding period that begins on the date of 
enactment of this Act.

SEC. 1134. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) In General.--Section 7(i) of the Food Stamp Act of 1977 (7 
U.S.C. 2016(i)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) Electronic benefit transfers.--
                    ``(A) Implementation.--Not later than October 1, 
                2002, each State agency shall implement an electronic 
                benefit transfer system under which household benefits 
                determined under section 8(a) or 26 are issued from and 
                stored in a central databank, unless the Secretary 
                provides a waiver for a State agency that faces unusual 
                barriers to implementing an electronic benefit transfer 
                system.
                    ``(B) Timely implementation.--Each State agency is 
                encouraged to implement an electronic benefit transfer 
                system under subparagraph (A) as soon as practicable.
                    ``(C) State flexibility.--Subject to paragraph (2), 
                a State agency may procure and implement an electronic 
                benefit transfer system under the terms, conditions, 
                and design that the State agency considers appropriate.
                    ``(D) Operation.--An electronic benefit transfer 
                system should take into account generally accepted 
                standard operating rules based on--
                            ``(i) commercial electronic funds transfer 
                        technology;
                            ``(ii) the need to permit interstate 
                        operation and law enforcement monitoring; and
                            ``(iii) the need to permit monitoring and 
                        investigations by authorized law enforcement 
                        agencies.'';
            (2) in paragraph (2)--
                    (A) by striking ``effective no later than April 1, 
                1992,'';
                    (B) in subparagraph (A)--
                            (i) by striking ``, in any 1 year,''; and
                            (ii) by striking ``on-line'';
                    (C) by striking subparagraph (D) and inserting the 
                following:
                    ``(D)(i) measures to maximize the security of a 
                system using the most recent technology available that 
                the State agency considers appropriate and cost 
                effective and which may include personal identification 
                numbers, photographic identification on electronic 
                benefit transfer cards, and other measures to protect 
                against fraud and abuse; and
                    ``(ii) effective not later than 2 years after the 
                date of enactment of this clause, to the extent 
                practicable, measures that permit a system to 
                differentiate items of food that may be acquired with 
                an allotment from items of food that may not be 
                acquired with an allotment;'';
                    (D) in subparagraph (G), by striking ``and'' at the 
                end;
                    (E) in subparagraph (H), by striking the period at 
                the end and inserting ``; and''; and
                    (F) by adding at the end the following:
            ``(I) procurement standards.''; and
            (3) by adding at the end the following:
            ``(7) Replacement of benefits.--Regulations issued by the 
        Secretary regarding the replacement of benefits and liability 
        for replacement of benefits under an electronic benefit 
        transfer system shall be similar to the regulations in effect 
        for a paper-based food stamp issuance system.
            ``(8) Replacement card fee.--A State agency may collect a 
        charge for replacement of an electronic benefit transfer card 
        by reducing the monthly allotment of the household receiving 
        the replacement card.
            ``(9) Optional photographic identification.--
                    ``(A) In general.--A State agency may require that 
                an electronic benefit card contain a photograph of 1 or 
                more members of a household.
                    ``(B) Other authorized users.--If a State agency 
                requires a photograph on an electronic benefit card 
                under subparagraph (A), the State agency shall 
                establish procedures to ensure that any other 
                appropriate member of the household or any authorized 
                representative of the household may utilize the card.
            ``(10) Applicable law.--Disclosures, protections, 
        responsibilities, and remedies established by the Federal 
        Reserve Board under section 904 of the Electronic Fund Transfer 
        Act (15 U.S.C. 1693b) shall not apply to benefits under this 
        Act delivered through any electronic benefit transfer 
        system.''.
    (b) Sense of Congress.--It is the sense of Congress that a State 
that operates an electronic benefit transfer system under the Food 
Stamp Act of 1977 (7 U.S.C. 2011 et seq.) should operate the system in 
a manner that is compatible with electronic benefit transfer systems 
operated by other States.

SEC. 1135. VALUE OF MINIMUM ALLOTMENT.

    The proviso in section 8(a) of the Food Stamp Act of 1977 (7 U.S.C. 
2017(a)) is amended by striking ``, and shall be adjusted'' and all 
that follows through ``$5''.

SEC. 1136. BENEFITS ON RECERTIFICATION.

    Section 8(c)(2)(B) of the Food Stamp Act of 1977 (7 U.S.C. 
2017(c)(2)(B)) is amended by striking ``of more than one month''.

SEC. 1137. OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED HOUSEHOLDS.

    Section 8(c) of the Food Stamp Act of 1977 (7 U.S.C. 2017(c)) is 
amended by striking paragraph (3) and inserting the following:
            ``(3) Optional combined allotment for expedited 
        households.--A State agency may provide to an eligible 
        household applying after the 15th day of a month, in lieu of 
        the initial allotment of the household and the regular 
        allotment of the household for the following month, an 
        allotment that is equal to the total amount of the initial 
        allotment and the first regular allotment. The allotment shall 
        be provided in accordance with section 11(e)(3) in the case of 
        a household that is not entitled to expedited service and in 
        accordance with paragraphs (3) and (9) of section 11(e) in the 
        case of a household that is entitled to expedited service.''.

SEC. 1138. FAILURE TO COMPLY WITH OTHER MEANS-TESTED PUBLIC ASSISTANCE 
              PROGRAMS.

    Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended 
by striking subsection (d) and inserting the following:
    ``(d) Reduction of Public Assistance Benefits.--
            ``(1) In general.--If the benefits of a household are 
        reduced under a Federal, State, or local law relating to a 
        means-tested public assistance program for the failure of a 
        member of the household to perform an action required under the 
        law or program, for the duration of the reduction--
                    ``(A) the household may not receive an increased 
                allotment as the result of a decrease in the income of 
                the household to the extent that the decrease is the 
                result of the reduction; and
                    ``(B) the State agency may reduce the allotment of 
                the household by not more than 25 percent.
            ``(2) Rules and procedures.--If the allotment of a 
        household is reduced under this subsection for a failure to 
        perform an action required under part A of title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.), the State agency 
        may use the rules and procedures that apply under part A of 
        title IV of the Act to reduce the allotment under the food 
        stamp program.''.

SEC. 1139. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN CENTERS.

    Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended 
by adding at the end the following:
    ``(f) Allotments for Households Residing in Centers.--
            ``(1) In general.--In the case of an individual who resides 
        in a center for the purpose of a drug or alcoholic treatment 
        program described in the last sentence of section 3(i), a State 
        agency may provide an allotment for the individual to--
                    ``(A) the center as an authorized representative of 
                the individual for a period that is less than 1 month; 
                and
                    ``(B) the individual, if the individual leaves the 
                center.
            ``(2) Direct payment.--A State agency may require an 
        individual referred to in paragraph (1) to designate the center 
        in which the individual resides as the authorized 
        representative of the individual for the purpose of receiving 
        an allotment.''.

SEC. 1140. CONDITION PRECEDENT FOR APPROVAL OF RETAIL FOOD STORES AND 
              WHOLESALE FOOD CONCERNS.

    Section 9(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)(1)) 
is amended by adding at the end the following: ``No retail food store 
or wholesale food concern of a type determined by the Secretary, based 
on factors that include size, location, and type of items sold, shall 
be approved to be authorized or reauthorized for participation in the 
food stamp program unless an authorized employee of the Department of 
Agriculture, a designee of the Secretary, or, if practicable, an 
official of the State or local government designated by the Secretary 
has visited the store or concern for the purpose of determining whether 
the store or concern should be approved or reauthorized, as 
appropriate.''.

SEC. 1141. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

    Section 9(a) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)) is 
amended by adding at the end the following:
            ``(3) Authorization periods.--The Secretary shall establish 
        specific time periods during which authorization to accept and 
        redeem coupons, or to redeem benefits through an electronic 
        benefit transfer system, shall be valid under the food stamp 
        program.''.

SEC. 1142. INFORMATION FOR VERIFYING ELIGIBILITY FOR AUTHORIZATION.

    Section 9(c) of the Food Stamp Act of 1977 (7 U.S.C. 2018(c)) is 
amended--
            (1) in the first sentence, by inserting ``, which may 
        include relevant income and sales tax filing documents,'' after 
        ``submit information''; and
            (2) by inserting after the first sentence the following: 
        ``The regulations may require retail food stores and wholesale 
        food concerns to provide written authorization for the 
        Secretary to verify all relevant tax filings with appropriate 
        agencies and to obtain corroborating documentation from other 
        sources so that the accuracy of information provided by the 
        stores and concerns may be verified.''.

SEC. 1143. WAITING PERIOD FOR STORES THAT FAIL TO MEET AUTHORIZATION 
              CRITERIA.

    Section 9(d) of the Food Stamp Act of 1977 (7 U.S.C. 2018(d)) is 
amended by adding at the end the following: ``A retail food store or 
wholesale food concern that is denied approval to accept and redeem 
coupons because the store or concern does not meet criteria for 
approval established by the Secretary may not, for at least 6 months, 
submit a new application to participate in the program. The Secretary 
may establish a longer time period under the preceding sentence, 
including permanent disqualification, that reflects the severity of the 
basis of the denial.''.

SEC. 1144. OPERATION OF FOOD STAMP OFFICES.

    Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020), as 
amended by sections 1119(b) and 1129(b), is amended--
            (1) in subsection (e)--
                    (A) by striking paragraph (2) and inserting the 
                following:
            ``(2)(A) that the State agency shall establish procedures 
        governing the operation of food stamp offices that the State 
        agency determines best serve households in the State, including 
        households with special needs, such as households with elderly 
        or disabled members, households in rural areas with low-income 
        members, homeless individuals, households residing on 
        reservations, and households in areas in which a substantial 
        number of members of low-income households speak a language 
        other than English.
            ``(B) In carrying out subparagraph (A), a State agency--
                    ``(i) shall provide timely, accurate, and fair 
                service to applicants for, and participants in, the 
                food stamp program;
                    ``(ii) shall develop an application containing the 
                information necessary to comply with this Act;
                    ``(iii) shall permit an applicant household to 
                apply to participate in the program on the same day 
                that the household first contacts a food stamp office 
                in person during office hours;
                    ``(iv) shall consider an application that contains 
                the name, address, and signature of the applicant to be 
                filed on the date the applicant submits the 
                application;
                    ``(v) shall require that an adult representative of 
                each applicant household certify in writing, under 
                penalty of perjury, that--
                            ``(I) the information contained in the 
                        application is true; and
                            ``(II) all members of the household are 
                        citizens or are aliens eligible to receive food 
                        stamps under section 6(f);
                    ``(vi) shall provide a method of certifying and 
                issuing coupons to eligible homeless individuals, to 
                ensure that participation in the food stamp program is 
                limited to eligible households; and
                    ``(vii) may establish operating procedures that 
                vary for local food stamp offices to reflect regional 
                and local differences within the State.
            ``(C) Nothing in this Act shall prohibit the use of 
        signatures provided and maintained electronically, storage of 
        records using automated retrieval systems only, or any other 
        feature of a State agency's application system that does not 
        rely exclusively on the collection and retention of paper 
        applications or other records.
            ``(D) The signature of any adult under this paragraph shall 
        be considered sufficient to comply with any provision of 
        Federal law requiring a household member to sign an application 
        or statement.'';
                    (B) in paragraph (3)--
                            (i) by striking ``shall--'' and all that 
                        follows through ``provide each'' and inserting 
                        ``shall provide each''; and
                            (ii) by striking ``(B) assist'' and all 
                        that follows through ``representative of the 
                        State agency;'';
                    (C) by striking paragraphs (14) and (25);
                    (D)(i) by redesignating paragraphs (15) through 
                (24) as paragraphs (14) through (23), respectively; and
                    (ii) by redesignating paragraph (26), as paragraph 
                (24); and
            (2) in subsection (i)--
                    (A) by striking ``(i) Notwithstanding'' and all 
                that follows through ``(2)'' and inserting the 
                following:
    ``(i) Application and Denial Procedures.--
            ``(1) Application procedures.--Notwithstanding any other 
        provision of law,''; and
                    (B) by striking ``; (3) households'' and all that 
                follows through ``title IV of the Social Security Act. 
                No'' and inserting a period and the following:
            ``(2) Denial and termination.--Except in a case of 
        disqualification as a penalty for failure to comply with a 
        public assistance program rule or regulation, no''.

SEC. 1145. STATE EMPLOYEE AND TRAINING STANDARDS.

    Section 11(e)(6) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(6)) is amended--
            (1) by striking ``that (A) the'' and inserting ``that--
                    ``(A) the'';
            (2) by striking ``Act; (B) the'' and inserting ``Act; and
                    ``(B) the'';
            (3) in subparagraph (B), by striking ``United States Civil 
        Service Commission'' and inserting ``Office of Personnel 
        Management''; and
            (4) by striking subparagraphs (C) through (E).

SEC. 1146. EXCHANGE OF LAW ENFORCEMENT INFORMATION.

    Section 11(e)(8) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(8)) is amended--
            (1) by striking ``that (A) such'' and inserting the 
        following: ``that--
                    ``(A) the'';
            (2) by striking ``law, (B) notwithstanding'' and inserting 
        the following: ``law;
                    ``(B) notwithstanding'';
            (3) by striking ``Act, and (C) such'' and inserting the 
        following: ``Act;
                    ``(C) the''; and
            (4) by adding at the end the following:
                    ``(D) notwithstanding any other provision of law, 
                the address, social security number, and, if available, 
                photograph of any member of a household shall be made 
                available, on request, to any Federal, State, or local 
                law enforcement officer if the officer furnishes the 
                State agency with the name of the member and notifies 
                the agency that--
                            ``(i) the member--
                                    ``(I) is fleeing to avoid 
                                prosecution, or custody or confinement 
                                after conviction, for a crime (or 
                                attempt to commit a crime) that, under 
                                the law of the place the member is 
                                fleeing, is a felony (or, in the case 
                                of New Jersey, a high misdemeanor), or 
                                is violating a condition of probation 
                                or parole imposed under Federal or 
                                State law; or
                                    ``(II) has information that is 
                                necessary for the officer to conduct an 
                                official duty related to subclause (I);
                            ``(ii) locating or apprehending the member 
                        is an official duty; and
                            ``(iii) the request is being made in the 
                        proper exercise of an official duty; and
                    ``(E) the safeguards shall not prevent compliance 
                with paragraph (16);''.

SEC. 1147. WITHDRAWING FAIR HEARING REQUESTS.

    Section 11(e)(10) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(10)) is amended by inserting before the semicolon at the end a 
period and the following: ``At the option of a State, at any time prior 
to a fair hearing determination under this paragraph, a household may 
withdraw, orally or in writing, a request by the household for the fair 
hearing. If the withdrawal request is an oral request, the State agency 
shall provide a written notice to the household confirming the 
withdrawal request and providing the household with an opportunity to 
request a hearing''.

SEC. 1148. INCOME, ELIGIBILITY, AND IMMIGRATION STATUS VERIFICATION 
              SYSTEMS.

    Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is 
amended--
            (1) in subsection (e)(18), as redesignated by section 
        1145(1)(D)--
                    (A) by striking ``that information is'' and 
                inserting ``at the option of the State agency, that 
                information may be''; and
                    (B) by striking ``shall be requested'' and 
                inserting ``may be requested''; and
            (2) by adding at the end the following:
    ``(p) State Verification Option.--Notwithstanding any other 
provision of law, in carrying out the food stamp program, a State 
agency shall not be required to use an income and eligibility or an 
immigration status verification system established under section 1137 
of the Social Security Act (42 U.S.C. 1320b-7).''.

SEC. 1149. DISQUALIFICATION OF RETAILERS WHO INTENTIONALLY SUBMIT 
              FALSIFIED APPLICATIONS.

    Section 12(b) of the Food Stamp Act of 1977 (7 U.S.C. 2021(b)) is 
amended--
            (1) in paragraph (2), by striking ``and'' at the end;
            (2) in paragraph (3), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(4) for a reasonable period of time to be determined by 
        the Secretary, including permanent disqualification, on the 
        knowing submission of an application for the approval or 
        reauthorization to accept and redeem coupons that contains 
        false information about a substantive matter that was a part of 
        the application.''.

SEC. 1150. DISQUALIFICATION OF RETAILERS WHO ARE DISQUALIFIED UNDER THE 
              WIC PROGRAM.

    Section 12 of the Food Stamp Act of 1977 (7 U.S.C. 2021) is amended 
by adding at the end the following:
    ``(g) Disqualification of Retailers Who Are Disqualified Under the 
WIC Program.--
            ``(1) In general.--The Secretary shall issue regulations 
        providing criteria for the disqualification under this Act of 
        an approved retail food store and a wholesale food concern that 
        is disqualified from accepting benefits under the special 
        supplemental nutrition program for women, infants, and children 
        established under section 17 of the Child Nutrition Act of 1966 
        (7 U.S.C. 1786).
            ``(2) Terms.--A disqualification under paragraph (1)--
                    ``(A) shall be for the same length of time as the 
                disqualification from the program referred to in 
                paragraph (1);
                    ``(B) may begin at a later date than the 
                disqualification from the program referred to in 
                paragraph (1); and
                    ``(C) notwithstanding section 14, shall not be 
                subject to judicial or administrative review.''.

SEC. 1151. COLLECTION OF OVERISSUANCES.

    (a) Collection of Overissuances.--Section 13 of the Food Stamp Act 
of 1977 (7 U.S.C. 2022) is amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Collection of Overissuances.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, a State agency shall collect any overissuance of 
        coupons issued to a household by--
                    ``(A) reducing the allotment of the household;
                    ``(B) withholding amounts from unemployment 
                compensation from a member of the household under 
                subsection (c);
                    ``(C) recovering from Federal pay or a Federal 
                income tax refund under subsection (d); or
                    ``(D) any other means.
            ``(2) Cost effectiveness.--Paragraph (1) shall not apply if 
        the State agency demonstrates to the satisfaction of the 
        Secretary that all of the means referred to in paragraph (1) 
        are not cost effective.
            ``(3) Maximum reduction absent fraud.--If a household 
        received an overissuance of coupons without any member of the 
        household being found ineligible to participate in the program 
        under section 6(b)(1) and a State agency elects to reduce the 
        allotment of the household under paragraph (1)(A), the State 
        agency shall not reduce the monthly allotment of the household 
        under paragraph (1)(A) by an amount in excess of the greater 
        of--
                    ``(A) 10 percent of the monthly allotment of the 
                household; or
                    ``(B) $10.
            ``(4) Procedures.--A State agency shall collect an 
        overissuance of coupons issued to a household under paragraph 
        (1) in accordance with the requirements established by the 
        State agency for providing notice, electing a means of payment, 
        and establishing a time schedule for payment.''; and
            (2) in subsection (d)--
                    (A) by striking ``as determined under subsection 
                (b) and except for claims arising from an error of the 
                State agency,'' and inserting ``, as determined under 
                subsection (b)(1),''; and
                    (B) by inserting before the period at the end the 
                following: ``or a Federal income tax refund as 
                authorized by section 3720A of title 31, United States 
                Code''.
    (b) Conforming Amendments.--Section 11(e)(8)(C) of the Food Stamp 
Act of 1977 (7 U.S.C. 2020(e)(8)(C)) is amended--
            (1) by striking ``and excluding claims'' and all that 
        follows through ``such section''; and
            (2) by inserting before the semicolon at the end the 
        following: ``or a Federal income tax refund as authorized by 
        section 3720A of title 31, United States Code''.
    (c) Retention Rate.--The proviso of the first sentence of section 
16(a) of the Food Stamp Act of 1977 (7 U.S.C. 2025(a)) is amended by 
striking ``25 percent during the period beginning October 1, 1990'' and 
all that follows through ``section 13(b)(2) of this Act'' and inserting 
``35 percent of the value of all funds or allotments recovered or 
collected pursuant to subsections (b)(1) and (c) of section 13 and 20 
percent of the value of all funds or allotments recovered or collected 
pursuant to section 13(b)(2) of this Act''.

SEC. 1152. AUTHORITY TO SUSPEND STORES VIOLATING PROGRAM REQUIREMENTS 
              PENDING ADMINISTRATIVE AND JUDICIAL REVIEW.

    Section 14(a) of the Food Stamp Act of 1977 (7 U.S.C. 2023(a)) is 
amended--
            (1) by redesignating the first through seventeenth 
        sentences as paragraphs (1) through (17), respectively; and
            (2) by adding at the end the following:
            ``(18) Suspension of stores pending review.--
        Notwithstanding any other provision of this subsection, any 
        permanent disqualification of a retail food store or wholesale 
        food concern under paragraph (3) or (4) of section 12(b) shall 
        be effective from the date of receipt of the notice of 
        disqualification. If the disqualification is reversed through 
        administrative or judicial review, the Secretary shall not be 
        liable for the value of any sales lost during the 
        disqualification period.''.

SEC. 1153. EXPANDED CRIMINAL FORFEITURE FOR VIOLATIONS.

    (a) Forfeiture of Items Exchanged in Food Stamp Trafficking.--The 
first sentence of section 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 
2024(g)) is amended by striking ``or intended to be furnished''.
    (b) Criminal Forfeiture.--Section 15 of the Food Stamp Act of 1977 
(7 U.S.C. 2024) is amended by adding at the end the following:
    ``(h) Criminal Forfeiture.--
            ``(1) In general.--In imposing a sentence on a person 
        convicted of an offense in violation of subsection (b) or (c), 
        a court shall order, in addition to any other sentence imposed 
        under this section, that the person forfeit to the United 
        States all property described in paragraph (2).
            ``(2) Property subject to forfeiture.--All property, real 
        and personal, used in a transaction or attempted transaction, 
        to commit, or to facilitate the commission of, a violation 
        (other than a misdemeanor) of subsection (b) or (c), or 
        proceeds traceable to a violation of subsection (b) or (c), 
        shall be subject to forfeiture to the United States under 
        paragraph (1).
            ``(3) Interest of owner.--No interest in property shall be 
        forfeited under this subsection as the result of any act or 
        omission established by the owner of the interest to have been 
        committed or omitted without the knowledge or consent of the 
        owner.
            ``(4) Proceeds.--The proceeds from any sale of forfeited 
        property and any monies forfeited under this subsection shall 
        be used--
                    ``(A) first, to reimburse the Department of Justice 
                for the costs incurred by the Department to initiate 
                and complete the forfeiture proceeding;
                    ``(B) second, to reimburse the Department of 
                Agriculture Office of Inspector General for any costs 
                the Office incurred in the law enforcement effort 
                resulting in the forfeiture;
                    ``(C) third, to reimburse any Federal or State law 
                enforcement agency for any costs incurred in the law 
                enforcement effort resulting in the forfeiture; and
                    ``(D) fourth, by the Secretary to carry out the 
                approval, reauthorization, and compliance 
                investigations of retail stores and wholesale food 
                concerns under section 9.''.

SEC. 1154. LIMITATION ON FEDERAL MATCH.

    Section 16(a)(4) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(a)(4)) is amended by inserting after the comma at the end the 
following: ``but not including recruitment activities,''.

SEC. 1155. STANDARDS FOR ADMINISTRATION.

    (a) In General.--Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 
2025) is amended by striking subsection (b).
    (b) Conforming Amendments.--
            (1) The first sentence of section 11(g) of the Food Stamp 
        Act of 1977 (7 U.S.C. 2020(g)) is amended by striking ``the 
        Secretary's standards for the efficient and effective 
        administration of the program established under section 
        16(b)(1) or''.
            (2) Section 16(c)(1)(B) of the Food Stamp Act of 1977 (7 
        U.S.C. 2025(c)(1)(B)) is amended by striking ``pursuant to 
        subsection (b)''.

SEC. 1156. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

    Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025), as 
amended by section 1157(a), is amended by inserting after subsection 
(a) the following:
    ``(b) Work Supplementation or Support Program.--
            ``(1) Definition of work supplementation or support 
        program.--In this subsection, the term `work supplementation or 
        support program' means a program under which, as determined by 
        the Secretary, public assistance (including any benefits 
        provided under a program established by the State and the food 
        stamp program) is provided to an employer to be used for hiring 
        and employing a public assistance recipient who was not 
        employed by the employer at the time the public assistance 
        recipient entered the program.
            ``(2) Program.--A State agency may elect to use an amount 
        equal to the allotment that would otherwise be issued to a 
        household under the food stamp program, but for the operation 
        of this subsection, for the purpose of subsidizing or 
        supporting a job under a work supplementation or support 
        program established by the State.
            ``(3) Procedure.--If a State agency makes an election under 
        paragraph (2) and identifies each household that participates 
        in the food stamp program that contains an individual who is 
        participating in the work supplementation or support program--
                    ``(A) the Secretary shall pay to the State agency 
                an amount equal to the value of the allotment that the 
                household would be eligible to receive but for the 
                operation of this subsection;
                    ``(B) the State agency shall expend the amount 
                received under subparagraph (A) in accordance with the 
                work supplementation or support program in lieu of 
                providing the allotment that the household would 
                receive but for the operation of this subsection;
                    ``(C) for purposes of--
                            ``(i) sections 5 and 8(a), the amount 
                        received under this subsection shall be 
                        excluded from household income and resources; 
                        and
                            ``(ii) section 8(b), the amount received 
                        under this subsection shall be considered to be 
                        the value of an allotment provided to the 
                        household; and
                    ``(D) the household shall not receive an allotment 
                from the State agency for the period during which the 
                member continues to participate in the work 
                supplementation or support program.
            ``(4) Other work requirements.--No individual shall be 
        excused, by reason of the fact that a State has a work 
        supplementation or support program, from any work requirement 
        under section 6(d), except during the periods in which the 
        individual is employed under the work supplementation or 
        support program.
            ``(5) Length of participation.--A State agency shall 
        provide a description of how the public assistance recipients 
        in the program shall, within a specific period of time, be 
        moved from supplemented or supported employment to employment 
        that is not supplemented or supported.
            ``(6) Displacement.--A work supplementation or support 
        program shall not displace the employment of individuals who 
        are not supplemented or supported.''.

SEC. 1157. RESPONSE TO WAIVERS.

    Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
2026(b)(1)), as amended by section 1159, is amended by adding at the 
end the following:
                    ``(D) Response to waivers.--
                            ``(i) Response.--Not later than 60 days 
                        after the date of receiving a request for a 
                        waiver under subparagraph (A), the Secretary 
                        shall provide a response that--
                                    ``(I) approves the waiver request;
                                    ``(II) denies the waiver request 
                                and describes any modification needed 
                                for approval of the waiver request;
                                    ``(III) denies the waiver request 
                                and describes the grounds for the 
                                denial; or
                                    ``(IV) requests clarification of 
                                the waiver request.
                            ``(ii) Failure to respond.--If the 
                        Secretary does not provide a response in 
                        accordance with clause (i), the waiver shall be 
                        considered approved, unless the approval is 
                        specifically prohibited by this Act.
                            ``(iii) Notice of denial.--On denial of a 
                        waiver request under clause (i)(III), the 
                        Secretary shall provide a copy of the waiver 
                        request and a description of the reasons for 
                        the denial to the Committee on Agriculture of 
                        the House of Representatives and the Committee 
                        on Agriculture, Nutrition, and Forestry of the 
                        Senate.''.

SEC. 1158. EMPLOYMENT INITIATIVES PROGRAM.

    Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended 
by striking subsection (d) and inserting the following:
    ``(d) Employment Initiatives Program.--
            ``(1) Election to participate.--
                    ``(A) In general.--Subject to the other provisions 
                of this subsection, a State may elect to carry out an 
                employment initiatives program under this subsection.
                    ``(B) Requirement.--A State shall be eligible to 
                carry out an employment initiatives program under this 
                subsection only if not less than 50 percent of the 
                households in the State that received food stamp 
                benefits during the summer of 1993 also received 
                benefits under a State program funded under part A of 
                title IV of the Social Security Act (42 U.S.C. 601 et 
                seq.) during the summer of 1993.
            ``(2) Procedure.--
                    ``(A) In general.--A State that has elected to 
                carry out an employment initiatives program under 
                paragraph (1) may use amounts equal to the food stamp 
                allotments that would otherwise be issued to a 
                household under the food stamp program, but for the 
                operation of this subsection, to provide cash benefits 
                in lieu of the food stamp allotments to the household 
                if the household is eligible under paragraph (3).
                    ``(B) Payment.--The Secretary shall pay to each 
                State that has elected to carry out an employment 
                initiatives program under paragraph (1) an amount equal 
                to the value of the allotment that each household 
                participating in the program in the State would be 
                eligible to receive under this Act but for the 
                operation of this subsection.
                    ``(C) Other provisions.--For purposes of the food 
                stamp program (other than this subsection)--
                            ``(i) cash assistance under this subsection 
                        shall be considered to be an allotment; and
                            ``(ii) each household receiving cash 
                        benefits under this subsection shall not 
                        receive any other food stamp benefit during the 
                        period for which the cash assistance is 
                        provided.
                    ``(D) Additional payments.--Each State that has 
                elected to carry out an employment initiatives program 
                under paragraph (1) shall--
                            ``(i) increase the cash benefits provided 
                        to each household participating in the program 
                        in the State under this subsection to 
                        compensate for any State or local sales tax 
                        that may be collected on purchases of food by 
                        the household, unless the Secretary determines 
                        on the basis of information provided by the 
                        State that the increase is unnecessary on the 
                        basis of the limited nature of the items 
                        subject to the State or local sales tax; and
                            ``(ii) pay the cost of any increase in cash 
                        benefits required by clause (i).
            ``(3) Eligibility.--A household shall be eligible to 
        receive cash benefits under paragraph (2) if an adult member of 
        the household--
                    ``(A) has worked in unsubsidized employment for not 
                less than the preceding 90 days;
                    ``(B) has earned not less than $350 per month from 
                the employment referred to in subparagraph (A) for not 
                less than the preceding 90 days;
                    ``(C)(i) is receiving benefits under a State 
                program funded under part A of title IV of the Social 
                Security Act (42 U.S.C. 601 et seq.); or
                    ``(ii) was receiving benefits under a State program 
                funded under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.) at the time the member 
                first received cash benefits under this subsection and 
                is no longer eligible for the State program because of 
                earned income;
                    ``(D) is continuing to earn not less than $350 per 
                month from the employment referred to in subparagraph 
                (A); and
                    ``(E) elects to receive cash benefits in lieu of 
                food stamp benefits under this subsection.
            ``(4) Evaluation.--A State that operates a program under 
        this subsection for 2 years shall provide to the Secretary a 
        written evaluation of the impact of cash assistance under this 
        subsection. The State agency, with the concurrence of the 
        Secretary, shall determine the content of the evaluation.''.

SEC. 1159. REAUTHORIZATION.

    The first sentence of section 18(a)(1) of the Food Stamp Act of 
1977 (7 U.S.C. 2027(a)(1)) is amended by striking ``1991 through 1997'' 
and inserting ``1996 through 2002''.

SEC. 1160. SIMPLIFIED FOOD STAMP PROGRAM.

    (a) In General.--The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) 
is amended by adding at the end the following:

``SEC. 26. SIMPLIFIED FOOD STAMP PROGRAM.

    ``(a) Definition of Federal Costs.--In this section, the term 
`Federal costs' does not include any Federal costs incurred under 
section 17.
    ``(b) Election.--Subject to subsection (d), a State may elect to 
carry out a Simplified Food Stamp Program (referred to in this section 
as a `Program'), statewide or in a political subdivision of the State, 
in accordance with this section.
    ``(c) Operation of Program.--If a State elects to carry out a 
Program, within the State or a political subdivision of the State--
            ``(1) only households in which all members receive 
        assistance under a State program funded under part A of title 
        IV of the Social Security Act (42 U.S.C. 601 et seq.) shall 
        receive benefits under the Program;
            ``(2) a household in which all members receive assistance 
        under a State program funded under part A of title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.) shall automatically 
        be eligible to participate in the Program; and
            ``(3) subject to subsection (f), benefits under the Program 
        shall be determined under rules and procedures established by 
        the State under--
                    ``(A) a State program funded under part A of title 
                IV of the Social Security Act (42 U.S.C. 601 et seq.);
                    ``(B) the food stamp program (other than section 
                27); or
                    ``(C) a combination of a State program funded under 
                part A of title IV of the Social Security Act (42 
                U.S.C. 601 et seq.) and the food stamp program (other 
                than section 27).
    ``(d) Approval of Program.--
            ``(1) State plan.--A State agency may not operate a Program 
        unless the Secretary approves a State plan for the operation of 
        the Program under paragraph (2).
            ``(2) Approval of plan.--The Secretary shall approve any 
        State plan to carry out a Program if the Secretary determines 
        that the plan--
                    ``(A) complies with this section; and
                    ``(B) contains sufficient documentation that the 
                plan will not increase Federal costs for any fiscal 
                year.
    ``(e) Increased Federal Costs.--
            ``(1) Determination.--
                    ``(A) In general.--The Secretary shall determine 
                whether a Program being carried out by a State agency 
                is increasing Federal costs under this Act.
                    ``(B) No excluded households.--In making a 
                determination under subparagraph (A), the Secretary 
                shall not require the State agency to collect or report 
                any information on households not included in the 
                Program.
                    ``(C) Alternative accounting periods.--The 
                Secretary may approve the request of a State agency to 
                apply alternative accounting periods to determine if 
                Federal costs do not exceed the Federal costs had the 
                State agency not elected to carry out the Program.
            ``(2) Notification.--If the Secretary determines that the 
        Program has increased Federal costs under this Act for any 
        fiscal year or any portion of any fiscal year, the Secretary 
        shall notify the State not later than 30 days after the 
        Secretary makes the determination under paragraph (1).
            ``(3) Enforcement.--
                    ``(A) Corrective action.--Not later than 90 days 
                after the date of a notification under paragraph (2), 
                the State shall submit a plan for approval by the 
                Secretary for prompt corrective action that is designed 
                to prevent the Program from increasing Federal costs 
                under this Act.
                    ``(B) Termination.--If the State does not submit a 
                plan under subparagraph (A) or carry out a plan 
                approved by the Secretary, the Secretary shall 
                terminate the approval of the State agency operating 
                the Program and the State agency shall be ineligible to 
                operate a future Program.
    ``(f) Rules and Procedures.--
            ``(1) In general.--In operating a Program, a State or 
        political subdivision of a State may follow the rules and 
        procedures established by the State or political subdivision 
        under a State program funded under part A of title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.) or under the food 
        stamp program.
            ``(2) Standardized deductions.--In operating a Program, a 
        State or political subdivision of a State may standardize the 
        deductions provided under section 5(e). In developing the 
        standardized deduction, the State shall consider the work 
        expenses, dependent care costs, and shelter costs of 
        participating households.
            ``(3) Requirements.--In operating a Program, a State or 
        political subdivision shall comply with the requirements of--
                    ``(A) subsections (a) through (g) of section 7;
                    ``(B) section 8(a) (except that the income of a 
                household may be determined under a State program 
                funded under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.));
                    ``(C) subsection (b) and (d) of section 8;
                    ``(D) subsections (a), (c), (d), and (n) of section 
                11;
                    ``(E) paragraph (3) of section 11(e), to the extent 
                that the paragraph requires that an eligible household 
                be certified and receive an allotment for the period of 
                application not later than 30 days after filing an 
                application;
                    ``(F) paragraphs (8), (12), (16), (18), (20), (24), 
                and (25) of section 11(e);
                    ``(G) section 11(e)(10) (or a comparable 
                requirement established by the State under a State 
                program funded under part A of title IV of the Social 
                Security Act (42 U.S.C. 601 et seq.)); and
                    ``(H) section 16.
            ``(4) Limitation on eligibility.--Notwithstanding any other 
        provision of this section, a household may not receive benefits 
        under this section as a result of the eligibility of the 
        household under a State program funded under part A of title IV 
        of the Social Security Act (42 U.S.C. 601 et seq.), unless the 
        Secretary determines that any household with income above 130 
        percent of the poverty guidelines is not eligible for the 
        program.''.
    (b) State Plan Provisions.--Section 11(e) of the Food Stamp Act of 
1977 (7 U.S.C. 2020(e)), as amended by sections 1129(b) and 1145, is 
amended by adding at the end the following:
            ``(25) if a State elects to carry out a Simplified Food 
        Stamp Program under section 26, the plans of the State agency 
        for operating the program, including--
                    ``(A) the rules and procedures to be followed by 
                the State agency to determine food stamp benefits;
                    ``(B) how the State agency will address the needs 
                of households that experience high shelter costs in 
                relation to the incomes of the households; and
                    ``(C) a description of the method by which the 
                State agency will carry out a quality control system 
                under section 16(c).''.
    (c) Conforming Amendments.--
            (1) Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 
        2017), as amended by section 1140, is amended--
                    (A) by striking subsection (e); and
                    (B) by redesignating subsection (f) as subsection 
                (e).
            (2) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 
        2026) is amended--
                    (A) by striking subsection (i); and
                    (B) by redesignating subsections (j) through (l) as 
                subsections (i) through (k), respectively.

               CHAPTER 2--COMMODITY DISTRIBUTION PROGRAMS

SEC. 1171. EMERGENCY FOOD ASSISTANCE PROGRAM.

    (a) Definitions.--Section 201A of the Emergency Food Assistance Act 
of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended to read as 
follows:

``SEC. 201A. DEFINITIONS.

    ``In this Act:
            ``(1) Additional commodities.--The term `additional 
        commodities' means commodities made available under section 214 
        in addition to the commodities made available under sections 
        202 and 203D.
            ``(2) Average monthly number of unemployed persons.--The 
        term `average monthly number of unemployed persons' means the 
        average monthly number of unemployed persons in each State 
        during the most recent fiscal year for which information 
        concerning the number of unemployed persons is available, as 
        determined by the Bureau of Labor Statistics of the Department 
        of Labor.
            ``(3) Eligible recipient agency.--The term `eligible 
        recipient agency' means a public or nonprofit organization 
        that--
                    ``(A) administers--
                            ``(i) an emergency feeding organization;
                            ``(ii) a charitable institution (including 
                        a hospital and a retirement home, but excluding 
                        a penal institution) to the extent that the 
                        institution serves needy persons;
                            ``(iii) a summer camp for children, or a 
                        child nutrition program providing food service;
                            ``(iv) a nutrition project operating under 
                        the Older Americans Act of 1965 (42 U.S.C. 3001 
                        et seq.), including a project that operates a 
                        congregate nutrition site and a project that 
                        provides home-delivered meals; or
                            ``(v) a disaster relief program;
                    ``(B) has been designated by the appropriate State 
                agency, or by the Secretary; and
                    ``(C) has been approved by the Secretary for 
                participation in the program established under this 
                Act.
            ``(4) Emergency feeding organization.--The term `emergency 
        feeding organization' means a public or nonprofit organization 
        that administers activities and projects (including the 
        activities and projects of a charitable institution, a food 
        bank, a food pantry, a hunger relief center, a soup kitchen, or 
        a similar public or private nonprofit eligible recipient 
        agency) providing nutrition assistance to relieve situations of 
        emergency and distress through the provision of food to needy 
        persons, including low-income and unemployed persons.
            ``(5) Food bank.--The term `food bank' means a public or 
        charitable institution that maintains an established operation 
        involving the provision of food or edible commodities, or the 
        products of food or edible commodities, to food pantries, soup 
        kitchens, hunger relief centers, or other food or feeding 
        centers that, as an integral part of their normal activities, 
        provide meals or food to feed needy persons on a regular basis.
            ``(6) Food pantry.--The term `food pantry' means a public 
        or private nonprofit organization that distributes food to low-
        income and unemployed households, including food from sources 
        other than the Department of Agriculture, to relieve situations 
        of emergency and distress.
            ``(7) Poverty line.--The term `poverty line' has the 
        meaning provided in section 673(2) of the Community Services 
        Block Grant Act (42 U.S.C. 9902(2)).
            ``(8) Soup kitchen.--The term `soup kitchen' means a public 
        or charitable institution that, as an integral part of the 
        normal activities of the institution, maintains an established 
        feeding operation to provide food to needy homeless persons on 
        a regular basis.
            ``(9) Total value of additional commodities.--The term 
        `total value of additional commodities' means the actual cost 
        of all additional commodities that are paid by the Secretary 
        (including the distribution and processing costs incurred by 
        the Secretary).
            ``(10) Value of additional commodities allocated to each 
        state.--The term `value of additional commodities allocated to 
        each State' means the actual cost of additional commodities 
        allocated to each State that are paid by the Secretary 
        (including the distribution and processing costs incurred by 
        the Secretary).''.
    (b) State Plan.--Section 202A of the Emergency Food Assistance Act 
of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended to read as 
follows:

``SEC. 202A. STATE PLAN.

    ``(a) In General.--To receive commodities under this Act, a State 
shall submit a plan of operation and administration every 4 years to 
the Secretary for approval. The plan may be amended at any time, with 
the approval of the Secretary.
    ``(b) Requirements.--Each plan shall--
            ``(1) designate the State agency responsible for 
        distributing the commodities received under this Act;
            ``(2) set forth a plan of operation and administration to 
        expeditiously distribute commodities under this Act;
            ``(3) set forth the standards of eligibility for recipient 
        agencies; and
            ``(4) set forth the standards of eligibility for individual 
        or household recipients of commodities, which shall require--
                    ``(A) individuals or households to be comprised of 
                needy persons; and
                    ``(B) individual or household members to be 
                residing in the geographic location served by the 
                distributing agency at the time of applying for 
                assistance.
    ``(c) State Advisory Board.--The Secretary shall encourage each 
State receiving commodities under this Act to establish a State 
advisory board consisting of representatives of all entities in the 
State, both public and private, interested in the distribution of 
commodities received under this Act.''.
    (c) Authorization of Appropriations for Administrative Funds.--
Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (Public 
Law 98-8; 7 U.S.C. 612c note) is amended--
            (1) in the first sentence, by striking ``for State and 
        local'' and all that follows through ``under this title'' and 
        inserting ``to pay for the direct and indirect administrative 
        costs of the States related to the processing, transporting, 
        and distributing to eligible recipient agencies of commodities 
        provided by the Secretary under this Act and commodities 
        secured from other sources''; and
            (2) by striking the fourth sentence.
    (d) Delivery of Commodities.--Section 214 of the Emergency Food 
Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is 
amended--
            (1) by striking subsections (a) through (e) and (j);
            (2) by redesignating subsections (f) through (i) as 
        subsections (a) through (d), respectively;
            (3) in subsection (b), as redesignated by paragraph (2)--
                    (A) in the first sentence, by striking ``subsection 
                (f) or subsection (j) if applicable,'' and inserting 
                ``subsection (a),''; and
                    (B) in the second sentence, by striking 
                ``subsection (f)'' and inserting ``subsection (a)'';
            (4) by striking subsection (c), as redesignated by 
        paragraph (2), and inserting the following:
    ``(c) Administration.--
            ``(1) In general.--Commodities made available for each 
        fiscal year under this section shall be delivered at reasonable 
        intervals to States based on the grants calculated under 
        subsection (a), or reallocated under subsection (b), before 
        December 31 of the following fiscal year.
            ``(2) Entitlement.--Each State shall be entitled to receive 
        the value of additional commodities determined under subsection 
        (a).''; and
            (5) in subsection (d), as redesignated by paragraph (2), by 
        striking ``or reduce'' and all that follows through ``each 
        fiscal year''.
    (e) Technical Amendments.--The Emergency Food Assistance Act of 
1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended--
            (1) in the first sentence of section 203B(a), by striking 
        ``203 and 203A of this Act'' and inserting ``203A'';
            (2) in section 204(a), by striking ``title'' each place it 
        appears and inserting ``Act'';
            (3) in the first sentence of section 210(e), by striking 
        ``(except as otherwise provided for in section 214(j))''; and
            (4) by striking section 212.
    (f) Report on EFAP.--Section 1571 of the Food Security Act of 1985 
(Public Law 99-198; 7 U.S.C. 612c note) is repealed.
    (g) Availability of Commodities Under the Food Stamp Program.--The 
Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), as amended by section 
1164(a), is amended by adding at the end the following:

``SEC. 28. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD 
              ASSISTANCE PROGRAM.

    ``(a) Purchase of Commodities.--From amounts appropriated under 
this Act, for each of fiscal years 1997 through 2002, the Secretary 
shall purchase $100,000,000 of a variety of nutritious and useful 
commodities of the types that the Secretary has the authority to 
acquire through the Commodity Credit Corporation or under section 32 of 
the Act entitled `An Act to amend the Agricultural Adjustment Act, and 
for other purposes', approved August 24, 1935 (7 U.S.C. 612c), and 
distribute the commodities to States for distribution in accordance 
with section 214 of the Emergency Food Assistance Act of 1983 (Public 
Law 98-8; 7 U.S.C. 612c note).
    ``(b) Basis for Commodity Purchases.--In purchasing commodities 
under subsection (a), the Secretary shall, to the extent practicable 
and appropriate, make purchases based on--
            ``(1) agricultural market conditions;
            ``(2) preferences and needs of States and distributing 
        agencies; and
            ``(3) preferences of recipients.''.
    (h) Effective Date.--The amendments made by subsection (d) shall 
become effective on October 1, 1996.

SEC. 1172. FOOD BANK DEMONSTRATION PROJECT.

    Section 3 of the Charitable Assistance and Food Bank Act of 1987 
(Public Law 100-232; 7 U.S.C. 612c note) is repealed.

SEC. 1173. HUNGER PREVENTION PROGRAMS.

    The Hunger Prevention Act of 1988 (Public Law 100-435; 7 U.S.C. 
612c note) is amended--
            (1) by striking section 110;
            (2) by striking subtitle C of title II; and
            (3) by striking section 502.

SEC. 1174. REPORT ON ENTITLEMENT COMMODITY PROCESSING.

    Section 1773 of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (Public Law 101-624; 7 U.S.C. 612c note) is amended by striking 
subsection (f).

                  Subtitle B--Child Nutrition Programs

         CHAPTER 1--AMENDMENTS TO THE NATIONAL SCHOOL LUNCH ACT

SEC. 1201. STATE DISBURSEMENT TO SCHOOLS.

    (a) In General.--Section 8 of the National School Lunch Act (42 
U.S.C. 1757) is amended--
            (1) in the third sentence, by striking ``Nothing'' and all 
        that follows through ``educational agency to'' and inserting 
        ``The State educational agency may'';
            (2) by striking the fourth and fifth sentences;
            (3) by redesignating the first through seventh sentences, 
        as amended by paragraph (2), as subsections (a) through (g), 
        respectively;
            (4) in subsection (b), as redesignated by paragraph (3), by 
        striking ``the preceding sentence'' and inserting ``subsection 
        (a)''; and
            (5) in subsection (d), as redesignated by paragraph (3), by 
        striking ``Such food costs'' and inserting ``Use of funds paid 
        to States''.
    (b) Definition of Child.--Section 12(d) of the National School 
Lunch Act (42 U.S.C. 1760(d)) is amended by adding at the end the 
following:
            ``(9) Child.--
                    ``(A) In general.--The term `child' includes an 
                individual, regardless of age, who--
                            ``(i) is determined by a State educational 
                        agency, in accordance with regulations 
                        prescribed by the Secretary, to have 1 or more 
                        mental or physical disabilities; and
                            ``(ii) is attending any institution, as 
                        defined in section 17(a), or any nonresidential 
                        public or nonprofit private school of high 
                        school grade or under, for the purpose of 
                        participating in a school program established 
                        for individuals with mental or physical 
                        disabilities.
                    ``(B) Relationship to child and adult care food 
                program.--No institution that is not otherwise eligible 
                to participate in the program under section 17 shall be 
                considered eligible because of this paragraph.''.

SEC. 1202. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

    (a) Nutritional Standards.--Section 9(a) of the National School 
Lunch Act (42 U.S.C. 1758(a)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``(2)(A) Lunches'' and inserting 
                ``(2) Lunches'';
                    (B) by striking subparagraph (B); and
                    (C) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B), respectively;
            (2) by striking paragraph (3); and
            (3) by redesignating paragraph (4) as paragraph (3).
    (b) Utilization of Agricultural Commodities.--Section 9(c) of the 
National School Lunch Act (42 U.S.C. 1758(c)) is amended--
            (1) in the fifth sentence, by striking ``of the provisions 
        of law referred to in the preceding sentence'' and inserting 
        ``provision of law''; and
            (2) by striking the second, fourth, and sixth sentences.
    (c) Conforming Amendment.--The last sentence of section 9(d)(1) of 
the National School Lunch Act (42 U.S.C. 1758(d)(1)) is amended by 
striking ``subsection (b)(2)(C)'' and inserting ``subsection 
(b)(2)(B)''.
    (d) Nutritional Information.--Section 9(f) of the National School 
Lunch Act (42 U.S.C. 1758(f)) is amended--
            (1) by striking paragraph (1);
            (2) by striking ``(2)'';
            (3) by redesignating subparagraphs (A) through (D) as 
        paragraphs (1) through (4), respectively;
            (4) by striking paragraph (1), as redesignated by paragraph 
        (3), and inserting the following:
            ``(1) Nutritional requirements.--Except as provided in 
        paragraph (2), not later than the first day of the 1996-1997 
        school year, each school that is participating in the school 
        lunch or school breakfast program shall serve lunches and 
        breakfasts under the program that--
                    ``(A) are consistent with the goals of the most 
                recent Dietary Guidelines for Americans published under 
                section 301 of the National Nutrition Monitoring and 
                Related Research Act of 1990 (7 U.S.C. 5341); and
                    ``(B) provide, on the average over each week, at 
                least--
                            ``(i) with respect to school lunches, \1/3\ 
                        of the daily recommended dietary allowance 
                        established by the Food and Nutrition Board of 
                        the National Research Council of the National 
                        Academy of Sciences; and
                            ``(ii) with respect to school breakfasts, 
                        \1/4\ of the daily recommended dietary 
                        allowance established by the Food and Nutrition 
                        Board of the National Research Council of the 
                        National Academy of Sciences.'';
            (5) in paragraph (3), as redesignated by paragraph (3)--
                    (A) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B), respectively; and
                    (B) in subparagraph (A), as so redesignated, by 
                redesignating subclauses (I) and (II) as clauses (i) 
                and (ii), respectively; and
            (6) in paragraph (4), as redesignated by paragraph (3)--
                    (A) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B), respectively; and
                    (B) in subparagraph (A), as so redesignated--
                            (i) by redesignating subclauses (I) and 
                        (II) as clauses (i) and (ii), respectively; and
                            (ii) in clause (ii), as so redesignated, by 
                        striking ``subparagraph (C)'' and inserting 
                        ``paragraph (3)''.
    (e) Use of Resources.--Section 9 of the National School Lunch Act 
(42 U.S.C. 1758) is amended by striking subsection (h).

SEC. 1203. FREE AND REDUCED PRICE POLICY STATEMENT.

    Section 9(b)(2) of the National School Lunch Act (42 U.S.C. 
1758(b)(2)), as amended by section 1202(b)(1), is amended by adding at 
the end the following:
                    ``(C) Free and reduced price policy statement.--
                After the initial submission, a school food authority 
                shall not be required to submit a free and reduced 
                price policy statement to a State educational agency 
                under this Act unless there is a substantive change in 
                the free and reduced price policy of the school food 
                authority. A routine change in the policy of a school 
                food authority, such as an annual adjustment of the 
                income eligibility guidelines for free and reduced 
                price meals, shall not be sufficient cause for 
                requiring the school food authority to submit a policy 
                statement.''.

SEC. 1204. SPECIAL ASSISTANCE.

    (a) Extension of Payment Period.--Section 11(a)(1)(D)(i) of the 
National School Lunch Act (42 U.S.C. 1759a(a)(1)(D)(i)) is amended by 
striking ``, on the date of enactment of this subparagraph,''.
    (b) Applicability of Other Provisions.--Section 11 of the National 
School Lunch Act (42 U.S.C. 1759a) is amended--
            (1) by striking subsection (d);
            (2) in subsection (e)(2)--
                    (A) by striking ``The'' and inserting ``On request 
                of the Secretary, the''; and
                    (B) by striking ``each month''; and
            (3) by redesignating subsections (e) and (f) as subsections 
        (d) and (e), respectively.

SEC. 1205. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

    (a) Accounts and Records.--The second sentence of section 12(a) of 
the National School Lunch Act (42 U.S.C. 1760(a)) is amended by 
striking ``at all times be available'' and inserting ``be available at 
any reasonable time''.
    (b) Restriction on Requirements.--Section 12(c) of the National 
School Lunch Act (42 U.S.C. 1760(c)) is amended by striking ``neither 
the Secretary nor the State shall'' and inserting ``the Secretary shall 
not''.
    (c) Definitions.--Section 12(d) of the National School Lunch Act 
(42 U.S.C. 1760(d)), as amended by section 1201(b), is amended--
            (1) in paragraph (1), by striking ``the Trust Territory of 
        the Pacific Islands'' and inserting ``the Commonwealth of the 
        Northern Mariana Islands'';
            (2) by striking paragraphs (3) and (4); and
            (3) by redesignating paragraphs (1), (2), and (5) through 
        (9) as paragraphs (6), (7), (3), (4), (2), (5), and (1), 
        respectively, and rearranging the paragraphs so as to appear in 
        numerical order.
    (d) Adjustments to National Average Payment Rates.--Section 12(f) 
of the National School Lunch Act (42 U.S.C. 1760(f)) is amended by 
striking ``the Trust Territory of the Pacific Islands,''.
    (e) Expedited Rulemaking.--Section 12(k) of the National School 
Lunch Act (42 U.S.C. 1760(k)) is amended--
            (1) by striking paragraphs (1), (2), and (5); and
            (2) by redesignating paragraphs (3) and (4) as paragraphs 
        (1) and (2), respectively.
    (f) Waiver.--Section 12(l) of the National School Lunch Act (42 
U.S.C. 1760(l)) is amended--
            (1) in paragraph (2)(A)--
                    (A) in clause (iii), by adding ``and'' at the end;
                    (B) in clause (iv), by striking the semicolon at 
                the end and inserting a period; and
                    (C) by striking clauses (v) through (vii);
            (2) in paragraph (3)--
                    (A) in subparagraph (A), by striking ``(A)''; and
                    (B) by striking subparagraphs (B) through (D);
            (3) in paragraph (4)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``of any requirement relating'' and inserting 
                ``that increases Federal costs or that relates'';
                    (B) by striking subparagraph (D);
                    (C) by redesignating subparagraphs (E) through (N) 
                as subparagraphs (D) through (M), respectively; and
                    (D) in subparagraph (L), as redesignated by 
                subparagraph (C), by striking ``and'' at the end and 
                inserting ``or''; and
            (4) in paragraph (6)--
                    (A) by striking ``(A)(i)'' and all that follows 
                through ``(B)''; and
                    (B) by redesignating clauses (i) through (iv) as 
                subparagraphs (A) through (D), respectively.
    (g) Simplified Administration of School Meal and Other Nutrition 
Programs.--Section 12 of the National School Lunch Act (42 U.S.C. 
1760), as amended by subsection (g), is amended by adding at the end 
the following:
    ``(m) Simplified Administration of School Meal and Other Nutrition 
Programs.--Notwithstanding any other provision of law, no assistance or 
benefits provided under the programs established under the following 
provisions of law shall be contingent on the citizenship or immigration 
status of any applicant or recipient:
            ``(1) This Act.
            ``(2) The Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
        seq.);
            ``(3) Section 4 of the Agriculture and Consumer Protection 
        Act of 1973 (Public Law 93-86; 7 U.S.C. 612c note).
            ``(4) The Emergency Food Assistance Act of 1983 (Public Law 
        98-8; 7 U.S.C. 612c note).
            ``(5) The food distribution program on Indian reservations 
        established under section 4(b) of Public Law 88-525 (7 U.S.C. 
        2013(b)).''.

SEC. 1206. COMMODITY DISTRIBUTION.

    (a) Cereal and Shortening in Commodity Donations.--Section 14(b) of 
the National School Lunch Act (42 U.S.C. 1762a(b)) is amended--
            (1) by striking paragraph (1); and
            (2) by redesignating paragraphs (2) and (3) as paragraphs 
        (1) and (2), respectively.
    (b) Advisory Council.--Section 14(e) of the National School Lunch 
Act (42 U.S.C. 1762a(e)) is amended by striking ``educational''.
    (c) Cash Compensation for Pilot Project Schools.--Section 14(g) of 
the National School Lunch Act (42 U.S.C. 1762a(g)) is amended by 
striking paragraph (3).

SEC. 1207. CHILD AND ADULT CARE FOOD PROGRAM.

    (a) Establishment of Program.--Section 17 of the National School 
Lunch Act (42 U.S.C. 1766) is amended in the first sentence of 
subsection (a), by striking ``initiate, maintain, and expand'' and 
inserting ``initiate and maintain''.
    (b) Payments to Sponsor Employees.--Paragraph (2) of the last 
sentence of section 17(a) of the National School Lunch Act (42 U.S.C. 
1766(a)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(D) in the case of a family or group day care 
                home sponsoring organization that employs more than 1 
                employee, the organization does not base payments to an 
                employee of the organization on the number of family or 
                group day care homes recruited.''.
    (c) Technical Assistance.--The last sentence of section 17(d)(1) of 
the National School Lunch Act (42 U.S.C. 1766(d)(1)) is amended by 
striking ``, and shall provide technical assistance'' and all that 
follows through ``its application''.
    (d) Reimbursement of Child Care Institutions.--Section 17(f)(2)(B) 
of the National School Lunch Act (42 U.S.C. 1766(f)(2)(B)) is amended 
by striking ``two meals and two supplements or three meals and one 
supplement'' and inserting ``2 meals and 1 supplement''.
    (e) Improved Targeting of Day Care Home Reimbursements.--
            (1) Restructured day care home reimbursements.--Section 
        17(f)(3) of the National School Lunch Act (42 U.S.C. 
        1766(f)(3)) is amended by striking ``(3)(A) Institutions'' and 
        all that follows through the end of subparagraph (A) and 
        inserting the following:
            ``(3) Reimbursement of family or group day care home 
        sponsoring organizations.--
                    ``(A) Reimbursement factor.--
                            ``(i) In general.--An institution that 
                        participates in the program under this section 
                        as a family or group day care home sponsoring 
                        organization shall be provided, for payment to 
                        a home sponsored by the organization, 
                        reimbursement factors in accordance with this 
                        subparagraph for the cost of obtaining and 
                        preparing food and prescribed labor costs 
                        involved in providing meals under this section.
                            ``(ii) Tier i family or group day care 
                        homes.--
                                    ``(I) Definition of tier i family 
                                or group day care home.--In this 
                                paragraph, the term `tier I family or 
                                group day care home' means--
                                            ``(aa) a family or group 
                                        day care home that is located 
                                        in a geographic area, as 
                                        defined by the Secretary based 
                                        on census data, in which at 
                                        least 50 percent of the 
                                        children residing in the area 
                                        are members of households whose 
                                        incomes meet the income 
                                        eligibility guidelines for free 
                                        or reduced price meals under 
                                        section 9;
                                            ``(bb) a family or group 
                                        day care home that is located 
                                        in an area served by a school 
                                        enrolling elementary students 
                                        in which at least 50 percent of 
                                        the total number of children 
                                        enrolled are certified eligible 
                                        to receive free or reduced 
                                        price school meals under this 
                                        Act or the Child Nutrition Act 
                                        of 1966 (42 U.S.C. 1771 et 
                                        seq.); or
                                            ``(cc) a family or group 
                                        day care home that is operated 
                                        by a provider whose household 
                                        meets the income eligibility 
                                        guidelines for free or reduced 
                                        price meals under section 9 and 
                                        whose income is verified by the 
                                        sponsoring or organization of 
                                        the home under regulations 
                                        established by the Secretary.
                                    ``(II) Reimbursement.--Except as 
                                provided in subclause (III), a tier I 
                                family or group day care home shall be 
                                provided reimbursement factors under 
                                this clause without a requirement for 
                                documentation of the costs described in 
                                clause (i), except that reimbursement 
                                shall not be provided under this 
                                subclause for meals or supplements 
                                served to the children of a person 
                                acting as a family or group day care 
                                home provider unless the children meet 
                                the income eligibility guidelines for 
                                free or reduced price meals under 
                                section 9.
                                    ``(III) Factors.--Except as 
                                provided in subclause (IV), the 
                                reimbursement factors applied to a home 
                                referred to in subclause (II) shall be 
                                the factors in effect on July 1, 1996.
                                    ``(IV) Adjustments.--The 
                                reimbursement factors under this 
                                subparagraph shall be adjusted on July 
                                1, 1997, and each July 1 thereafter, to 
                                reflect changes in the Consumer Price 
                                Index for food at home for the most 
                                recent 12-month period for which the 
                                data are available. The reimbursement 
                                factors under this subparagraph shall 
                                be rounded to the nearest lower cent 
                                increment and based on the unrounded 
                                adjustment in effect on June 30 of the 
                                preceding school year.
                            ``(iii) Tier ii family or group day care 
                        homes.--
                                    ``(I) In general.--
                                            ``(aa) Factors.--Except as 
                                        provided in subclause (II), 
                                        with respect to meals or 
                                        supplements served under this 
                                        clause by a family or group day 
                                        care home that does not meet 
                                        the criteria set forth in 
                                        clause (ii)(I), the 
                                        reimbursement factors shall be 
                                        $1 for lunches and suppers, 30 
                                        cents for breakfasts, and 15 
                                        cents for supplements.
                                            ``(bb) Adjustments.--The 
                                        factors shall be adjusted on 
                                        July 1, 1997, and each July 1 
                                        thereafter, to reflect changes 
                                        in the Consumer Price Index for 
                                        food at home for the most 
                                        recent 12-month period for 
                                        which the data are available. 
                                        The reimbursement factors under 
                                        this item shall be rounded down 
                                        to the nearest lower cent 
                                        increment and based on the 
                                        unrounded adjustment for the 
                                        preceding 12-month period.
                                            ``(cc) Reimbursement.--A 
                                        family or group day care home 
                                        shall be provided reimbursement 
                                        factors under this subclause 
                                        without a requirement for 
                                        documentation of the costs 
                                        described in clause (i), except 
                                        that reimbursement shall not be 
                                        provided under this subclause 
                                        for meals or supplements served 
                                        to the children of a person 
                                        acting as a family or group day 
                                        care home provider unless the 
                                        children meet the income 
                                        eligibility guidelines for free 
                                        or reduced price meals under 
                                        section 9.
                                    ``(II) Other factors.--A family or 
                                group day care home that does not meet 
                                the criteria set forth in clause 
                                (ii)(I) may elect to be provided 
                                reimbursement factors determined in 
                                accordance with the following 
                                requirements:
                                            ``(aa) Children eligible 
                                        for free or reduced price 
                                        meals.--In the case of meals or 
                                        supplements served under this 
                                        subsection to children who are 
                                        members of households whose 
                                        incomes meet the income 
                                        eligibility guidelines for free 
                                        or reduced price meals under 
                                        section 9, the family or group 
                                        day care home shall be provided 
                                        reimbursement factors set by 
                                        the Secretary in accordance 
                                        with clause (ii)(III).
                                            ``(bb) Ineligible 
                                        children.--In the case of meals 
                                        or supplements served under 
                                        this subsection to children who 
                                        are members of households whose 
                                        incomes do not meet the income 
                                        eligibility guidelines, the 
                                        family or group day care home 
                                        shall be provided reimbursement 
                                        factors in accordance with 
                                        subclause (I).
                                    ``(III) Information and 
                                determinations.--
                                            ``(aa) In general.--If a 
                                        family or group day care home 
                                        elects to claim the factors 
                                        described in subclause (II), 
                                        the family or group day care 
                                        home sponsoring organization 
                                        serving the home shall collect 
                                        the necessary income 
                                        information, as determined by 
                                        the Secretary, from any parent 
                                        or other caretaker to make the 
                                        determinations specified in 
                                        subclause (II) and shall make 
                                        the determinations in 
                                        accordance with rules 
                                        prescribed by the Secretary.
                                            ``(bb) Categorical 
                                        eligibility.--In making a 
                                        determination under item (aa), 
                                        a family or group day care home 
                                        sponsoring organization may 
                                        consider a child participating 
                                        in or subsidized under, or a 
                                        child with a parent 
                                        participating in or subsidized 
                                        under, a federally or State 
                                        supported child care or other 
                                        benefit program with an income 
                                        eligibility limit that does not 
                                        exceed the eligibility standard 
                                        for free or reduced price meals 
                                        under section 9 to be a child 
                                        who is a member of a household 
                                        whose income meets the income 
                                        eligibility guidelines under 
                                        section 9.
                                            ``(cc) Factors for children 
                                        only.--A family or group day 
                                        care home may elect to receive 
                                        the reimbursement factors 
                                        prescribed under clause 
                                        (ii)(III) solely for the 
                                        children participating in a 
                                        program referred to in item 
                                        (bb) if the home elects not to 
                                        have income statements 
                                        collected from parents or other 
                                        caretakers.
                                    ``(IV) Simplified meal counting and 
                                reporting procedures.--The Secretary 
                                shall prescribe simplified meal 
                                counting and reporting procedures for 
                                use by a family or group day care home 
                                that elects to claim the factors under 
                                subclause (II) and by a family or group 
                                day care home sponsoring organization 
                                that sponsors the home. The procedures 
                                the Secretary prescribes may include 1 
                                or more of the following:
                                            ``(aa) Setting an annual 
                                        percentage for each home of the 
                                        number of meals served that are 
                                        to be reimbursed in accordance 
                                        with the reimbursement factors 
                                        prescribed under clause 
                                        (ii)(III) and an annual 
                                        percentage of the number of 
                                        meals served that are to be 
                                        reimbursed in accordance with 
                                        the reimbursement factors 
                                        prescribed under subclause (I), 
                                        based on the family income of 
                                        children enrolled in the home 
                                        in a specified month or other 
                                        period.
                                            ``(bb) Placing a home into 
                                        1 of 2 or more reimbursement 
                                        categories annually based on 
                                        the percentage of children in 
                                        the home whose households have 
                                        incomes that meet the income 
                                        eligibility guidelines under 
                                        section 9, with each such 
                                        reimbursement category carrying 
                                        a set of reimbursement factors 
                                        such as the factors prescribed 
                                        under clause (ii)(III) or 
                                        subclause (I) or factors 
                                        established within the range of 
                                        factors prescribed under clause 
                                        (ii)(III) and subclause (I).
                                            ``(cc) Such other 
                                        simplified procedures as the 
                                        Secretary may prescribe.
                                    ``(V) Minimum verification 
                                requirements.--The Secretary may 
                                establish any minimum verification 
                                requirements that are necessary to 
                                carry out this clause.''.
            (2) Grants to states to provide assistance to family or 
        group day care homes.--Section 17(f)(3) of the National School 
        Lunch Act (42 U.S.C. 1766(f)(3)) is amended by adding at the 
        end the following:
                    ``(D) Grants to states to provide assistance to 
                family or group day care homes.--
                            ``(i) In general.--
                                    ``(I) Reservation.--From amounts 
                                made available to carry out this 
                                section, the Secretary shall reserve 
                                $5,000,000 of the amount made available 
                                for fiscal year 1997.
                                    ``(II) Purpose.--The Secretary 
                                shall use the funds made available 
                                under subclause (I) to provide grants 
                                to States for the purpose of 
                                providing--
                                            ``(aa) assistance, 
                                        including grants, to family and 
                                        day care home sponsoring 
                                        organizations and other 
                                        appropriate organizations, in 
                                        securing and providing 
                                        training, materials, automated 
                                        data processing assistance, and 
                                        other assistance for the staff 
                                        of the sponsoring 
                                        organizations; and
                                            ``(bb) training and other 
                                        assistance to family and group 
                                        day care homes in the 
                                        implementation of the amendment 
                                        to subparagraph (A) made by 
                                        section 1208(e)(1) of the 
                                        Agricultural Reconciliation Act 
                                        of 1996.
                            ``(ii) Allocation.--The Secretary shall 
                        allocate from the funds reserved under clause 
                        (i)(I)--
                                    ``(I) $30,000 in base funding to 
                                each State; and
                                    ``(II) any remaining amount among 
                                the States, based on the number of 
                                family day care homes participating in 
                                the program in a State during fiscal 
                                year 1995 as a percentage of the number 
                                of all family day care homes 
                                participating in the program during 
                                fiscal year 1995.
                            ``(iii) Retention of funds.--Of the amount 
                        of funds made available to a State for fiscal 
                        year 1997 under clause (i), the State may 
                        retain not to exceed 30 percent of the amount 
                        to carry out this subparagraph.
                            ``(iv) Additional payments.--Any payments 
                        received under this subparagraph shall be in 
                        addition to payments that a State receives 
                        under subparagraph (A).''.
            (3) Provision of data.--Section 17(f)(3) of the National 
        School Lunch Act (42 U.S.C. 1766(f)(3)), as amended by 
        paragraph (2), is amended by adding at the end the following:
                    ``(E) Provision of data to family or group day care 
                home sponsoring organizations.--
                            ``(i) Census data.--The Secretary shall 
                        provide to each State agency administering a 
                        child and adult care food program under this 
                        section data from the most recent decennial 
                        census survey or other appropriate census 
                        survey for which the data are available showing 
                        which areas in the State meet the requirements 
                        of subparagraph (A)(ii)(I)(aa). The State 
                        agency shall provide the data to family or 
                        group day care home sponsoring organizations 
                        located in the State.
                            ``(ii) School data.--
                                    ``(I) In general.--A State agency 
                                administering the school lunch program 
                                under this Act or the school breakfast 
                                program under the Child Nutrition Act 
                                of 1966 (42 U.S.C. 1771 et seq.) shall 
                                provide to approved family or group day 
                                care home sponsoring organizations a 
                                list of schools serving elementary 
                                school children in the State in which 
                                not less than \1/2\ of the children 
                                enrolled are certified to receive free 
                                or reduced price meals. The State 
                                agency shall collect the data necessary 
                                to create the list annually and provide 
                                the list on a timely basis to any 
                                approved family or group day care home 
                                sponsoring organization that requests 
                                the list.
                                    ``(II) Use of data from preceding 
                                school year.--In determining for a 
                                fiscal year or other annual period 
                                whether a home qualifies as a tier I 
                                family or group day care home under 
                                subparagraph (A)(ii)(I), the State 
                                agency administering the program under 
                                this section, and a family or group day 
                                care home sponsoring organization, 
                                shall use the most current available 
                                data at the time of the determination.
                            ``(iii) Duration of determination.--For 
                        purposes of this section, a determination that 
                        a family or group day care home is located in 
                        an area that qualifies the home as a tier I 
                        family or group day care home (as the term is 
                        defined in subparagraph (A)(ii)(I)), shall be 
                        in effect for 3 years (unless the determination 
                        is made on the basis of census data, in which 
                        case the determination shall remain in effect 
                        until more recent census data are available) 
                        unless the State agency determines that the 
                        area in which the home is located no longer 
                        qualifies the home as a tier I family or group 
                        day care home.''.
            (4) Conforming amendments.--Section 17(c) of the National 
        School Lunch Act (42 U.S.C. 1766(c)) is amended by inserting 
        ``except as provided in subsection (f)(3),'' after ``For 
        purposes of this section,'' each place it appears in paragraphs 
        (1), (2), and (3).
    (f) Reimbursement.--Section 17(f) of the National School Lunch Act 
(42 U.S.C. 1766(f)) is amended--
            (1) in paragraph (3)--
                    (A) in subparagraph (B), by striking the third and 
                fourth sentences; and
                    (B) in subparagraph (C)(ii), by striking ``conduct 
                outreach'' and all that follows through ``may become'' 
                and inserting ``assist unlicensed family or group day 
                care homes in becoming''; and
            (2) in the first sentence of paragraph (4), by striking 
        ``shall'' and inserting ``may''.
    (g) Nutritional Requirements.--Section 17(g)(1) of the National 
School Lunch Act (42 U.S.C. 1766(g)(1)) is amended--
            (1) in subparagraph (A), by striking the second sentence; 
        and
            (2) in subparagraph (B), by striking the second sentence.
    (h) Elimination of State Paperwork and Outreach Burden.--Section 17 
of the National School Lunch Act (42 U.S.C. 1766) is amended by 
striking subsection (k) and inserting the following:
    ``(k) Training and Technical Assistance.--A State participating in 
the program established under this section shall provide sufficient 
training, technical assistance, and monitoring to facilitate effective 
operation of the program. The Secretary shall assist the State in 
developing plans to fulfill the requirements of this subsection.''.
    (i) Records.--The second sentence of section 17(m) of the National 
School Lunch Act (42 U.S.C. 1766(m)) is amended by striking ``at all 
times'' and inserting ``at any reasonable time''.
    (j) Information for Parents.--Section 17 of the National School 
Lunch Act (42 U.S.C. 1766) is amended by striking subsection (q) and 
inserting the following:
    ``(q) Information for Parents.--The State agency shall ensure that, 
at least once a year, child care institutions provide written 
information to parents that includes--
            ``(1) basic information on the benefits of the special 
        supplemental nutrition program for women, infants, and children 
        authorized under section 17 of the Child Nutrition Act of 1966 
        (42 U.S.C. 1786);
            ``(2) information on the maximum income limits, according 
        to family size, applicable to the program; and
            ``(3) information on where parents may apply to participate 
        in the program.''.
    (k) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall become effective on the 
        date of enactment of this Act.
            (2) Improved targeting of day care home reimbursements.--
        The amendments made by paragraphs (1) and (4) of subsection (e) 
        shall become effective on July 1, 1997.
            (3) Regulations.--
                    (A) Interim regulations.--Not later than January 1, 
                1997, the Secretary of Agriculture shall issue interim 
                regulations to implement--
                            (i) the amendments made by paragraphs (1), 
                        (3), and (4) of subsection (e); and
                            (ii) section 17(f)(3)(C) of the National 
                        School Lunch Act (42 U.S.C. 1766(f)(3)(C)).
                    (B) Final regulations.--Not later than July 1, 
                1997, the Secretary of Agriculture shall issue final 
                regulations to implement the provisions of law referred 
                to in subparagraph (A).
    (l) Study of Impact of Amendments on Program Participation and 
Family Day Care Licensing.--
            (1) In general.--The Secretary of Agriculture, in 
        conjunction with the Secretary of Health and Human Services, 
        shall study the impact of the amendments made by this section 
        on--
                    (A) the number of family day care homes 
                participating in the child and adult care food program 
                established under section 17 of the National School 
                Lunch Act (42 U.S.C. 1766);
                    (B) the number of day care home sponsoring 
                organizations participating in the program;
                    (C) the number of day care homes that are licensed, 
                certified, registered, or approved by each State in 
                accordance with regulations issued by the Secretary;
                    (D) the rate of growth of the numbers referred to 
                in subparagraphs (A) through (C);
                    (E) the nutritional adequacy and quality of meals 
                served in family day care homes that--
                            (i) received reimbursement under the 
                        program prior to the amendments made by this 
                        section but do not receive reimbursement after 
                        the amendments made by this section; or
                            (ii) received full reimbursement under the 
                        program prior to the amendments made by this 
                        section but do not receive full reimbursement 
                        after the amendments made by this section; and
                    (F) the proportion of low-income children 
                participating in the program prior to the amendments 
                made by this section and the proportion of low-income 
                children participating in the program after the 
                amendments made by this section.
            (2) Required data.--Each State agency participating in the 
        child and adult care food program under section 17 of the 
        National School Lunch Act (42 U.S.C. 1766) shall submit to the 
        Secretary of Agriculture data on--
                    (A) the number of family day care homes 
                participating in the program on June 30, 1997, and June 
                30, 1998;
                    (B) the number of family day care homes licensed, 
                certified, registered, or approved for service on June 
                30, 1997, and June 30, 1998; and
                    (C) such other data as the Secretary may require to 
                carry out this subsection.
            (3) Submission of report.--Not later than 2 years after the 
        date of enactment of this section, the Secretary of Agriculture 
        shall submit the study required under this subsection to the 
        Committee on Economic and Educational Opportunities of the 
        House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate.

SEC. 1208. PILOT PROJECTS.

    (a) Universal Free Pilot.--Section 18(d) of the National School 
Lunch Act (42 U.S.C. 1769(d)) is amended--
            (1) by striking paragraph (3); and
            (2) by redesignating paragraphs (4) and (5) as paragraphs 
        (3) and (4), respectively.
    (b) Demonstration Project Outside School Hours.--Section 18(e) of 
the National School Lunch Act (42 U.S.C. 1769(e)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) by striking ``(A)''; and
                            (ii) by striking ``shall'' and inserting 
                        ``may''; and
                    (B) by striking subparagraph (B); and
            (2) by striking paragraph (5) and inserting the following:
            ``(5) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection such 
        sums as are necessary for each of fiscal years 1997 and 
        1998.''.
    (c) Conforming Amendment.--Section 17B(d)(1)(A) of the National 
School Lunch Act (42 U.S.C. 1766b(d)(1)(A)) is amended by striking 
``18(c)'' and inserting ``18(b)''.

SEC. 1209. REDUCTION OF PAPERWORK.

    Section 19 of the National School Lunch Act (42 U.S.C. 1769a) is 
repealed.

SEC. 1210. INFORMATION ON INCOME ELIGIBILITY.

    Section 23 of the National School Lunch Act (42 U.S.C. 1769d) is 
repealed.

SEC. 1211. NUTRITION GUIDANCE FOR CHILD NUTRITION PROGRAMS.

    Section 24 of the National School Lunch Act (42 U.S.C. 1769e) is 
repealed.

        CHAPTER 2--AMENDMENTS TO THE CHILD NUTRITION ACT OF 1966

SEC. 1251. SPECIAL MILK PROGRAM.

    Section 3(a)(3) of the Child Nutrition Act of 1966 (42 U.S.C. 
1772(a)(3)) is amended by striking ``the Trust Territory of the Pacific 
Islands'' and inserting ``the Commonwealth of the Northern Mariana 
Islands''.

SEC. 1252. FREE AND REDUCED PRICE POLICY STATEMENT.

    Section 4(b)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 
1773(b)(1)) is amended by adding at the end the following:
                    ``(E) Free and reduced price policy statement.--
                After the initial submission, a school food authority 
                shall not be required to submit a free and reduced 
                price policy statement to a State educational agency 
                under this Act unless there is a substantive change in 
                the free and reduced price policy of the school food 
                authority. A routine change in the policy of a school 
                food authority, such as an annual adjustment of the 
                income eligibility guidelines for free and reduced 
                price meals, shall not be sufficient cause for 
                requiring the school food authority to submit a policy 
                statement.''.

SEC. 1253. SCHOOL BREAKFAST PROGRAM AUTHORIZATION.

    (a) Training and Technical Assistance in Food Preparation.--Section 
4(e)(1)(B) of the Child Nutrition Act of 1966 (42 U.S.C. 1773(e)(1)(B)) 
is amended by striking the second sentence.
    (b) Expansion of Program; Startup and Expansion Costs.--
            (1) In general.--Section 4 of the Child Nutrition Act of 
        1966 (42 U.S.C. 1773) is amended by striking subsections (f) 
        and (g).
            (2) Effective date.--The amendments made by paragraph (1) 
        shall become effective on October 1, 1996.

SEC. 1254. STATE ADMINISTRATIVE EXPENSES.

    (a) Use of Funds for Commodity Distribution Administration; 
Studies.--Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 1776) 
is amended--
            (1) by striking subsections (e) and (h); and
            (2) by redesignating subsections (f), (g), and (i) as 
        subsections (e), (f), and (g), respectively.
    (b) Approval of Changes.--Section 7(e) of the Child Nutrition Act 
of 1966 (42 U.S.C. 1776(e)), as so redesignated, is amended--
            (1) by striking ``each year an annual plan'' and inserting 
        ``the initial fiscal year a plan''; and
            (2) by adding at the end the following: ``After submitting 
        the initial plan, a State shall be required to submit to the 
        Secretary for approval only a substantive change in the 
        plan.''.

SEC. 1255. REGULATIONS.

    Section 10(b) of the Child Nutrition Act of 1966 (42 U.S.C. 
1779(b)) is amended--
            (1) in paragraph (1), by striking ``(1)''; and
            (2) by striking paragraphs (2) through (4).

SEC. 1256. PROHIBITIONS.

    Section 11(a) of the Child Nutrition Act of 1966 (42 U.S.C. 
1780(a)) is amended by striking ``neither the Secretary nor the State 
shall'' and inserting ``the Secretary shall not''.

SEC. 1257. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

    Section 15 of the Child Nutrition Act of 1966 (42 U.S.C. 1784) is 
amended--
            (1) in paragraph (1), by striking ``the Trust Territory of 
        the Pacific Islands'' and inserting ``the Commonwealth of the 
        Northern Mariana Islands''; and
            (2) in the first sentence of paragraph (3)--
                    (A) in subparagraph (A), by inserting ``and'' at 
                the end; and
                    (B) by striking ``, and (C)'' and all that follows 
                through ``Governor of Puerto Rico''.

SEC. 1258. ACCOUNTS AND RECORDS.

    The second sentence of section 16(a) of the Child Nutrition Act of 
1966 (42 U.S.C. 1785(a)) is amended by striking ``at all times be 
available'' and inserting ``be available at any reasonable time''.

SEC. 1259. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, 
              AND CHILDREN.

    (a) Definitions.--Section 17(b) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(b)) is amended--
            (1) in paragraph (15)(B)(iii), by inserting ``of not more 
        than 365 days'' after ``accommodation''; and
            (2) in paragraph (16)--
                    (A) in subparagraph (A), by adding ``and'' at the 
                end; and
                    (B) in subparagraph (B), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking subparagraph (C).
    (b) Secretary's Promotion of WIC.--Section 17(c) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786(c)) is amended by striking 
paragraph (5).
    (c) Eligible Participants.--Section 17(d) of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786(d)) is amended by striking paragraph (4).
    (d) State Plan.--Section 17(f) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(f)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) by striking ``annually to the 
                        Secretary, by a date specified by the 
                        Secretary, a'' and inserting ``to the 
                        Secretary, by a date specified by the 
                        Secretary, an initial''; and
                            (ii) by adding at the end the following: 
                        ``After submitting the initial plan, a State 
                        shall be required to submit to the Secretary 
                        for approval only a substantive change in the 
                        plan.'';
                    (B) in subparagraph (C)--
                            (i) by striking clause (iii) and inserting 
                        the following:
            ``(iii) a plan to coordinate operations under the program 
        with other services or programs that may benefit participants 
        in, and applicants for, the program;'';
                            (ii) in clause (vi), by inserting after 
                        ``in the State'' the following: ``(including a 
                        plan to improve access to the program for 
                        participants and prospective applicants who are 
                        employed, or who reside, in rural areas)'';
                            (iii) in clause (vii), by striking ``to 
                        provide program benefits'' and all that follows 
                        through ``emphasis on'' and inserting ``for'';
                            (iv) by striking clauses (ix), (x), and 
                        (xii);
                            (v) in clause (xiii), by striking ``may 
                        require'' and inserting ``may reasonably 
                        require'';
                            (vi) by redesignating clauses (xi) and 
                        (xiii), as so amended, as clauses (ix) and (x), 
                        respectively; and
                            (vii) in clause (ix), as so redesignated, 
                        by adding ``and'' at the end;
                    (C) by striking subparagraph (D); and
                    (D) by redesignating subparagraph (E) as 
                subparagraph (D);
            (2) in the second sentence of paragraph (5), by striking 
        ``at all times be available'' and inserting ``be available at 
        any reasonable time'';
            (3) in paragraph (9)(B), by striking the second sentence;
            (4) in the first sentence of paragraph (11), by striking 
        ``, including standar5s that will ensure sufficient State 
        agency staff'';
            (5) in paragraph (12), by striking the third sentence;
            (6) in paragraph (17), by striking ``and to accommodate'' 
        and all that follows through ``facilities'';
            (7) in paragraph (19), by striking ``shall'' and inserting 
        ``may''; and
            (8) by redesignating paragraphs (3), (4), (5), (7), (9) 
        through (21), (23), and (24) as paragraphs (2), (3), (4), (5), 
        (6) through (18), (19), and (20), respectively.
    (e) Information.--Section 17(g) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(g)) is amended--
            (1) in paragraph (5), by striking ``the report required 
        under subsection (d)(4)'' and inserting ``reports on program 
        participant characteristics''; and
            (2) by striking paragraph (6).
    (f) Procurement of Infant Formula.--
            (1) In general.--Section 17(h) of the Child Nutrition Act 
        of 1966 (42 U.S.C. 1786(h)) is amended--
                    (A) in paragraph (4)(E), by striking ``and, on'' 
                and all that follows through ``(d)(4)'';
                    (B) in paragraph (8)--
                            (i) by striking subparagraphs (A), (C), and 
                        (M);
                            (ii) in subparagraph (G)--
                                    (I) in clause (i), by striking 
                                ``(i)''; and
                                    (II) by striking clauses (ii) 
                                through (ix);
                            (iii) in subparagraph (I), by striking 
                        ``Secretary--'' and all that follows through 
                        ``(v) may'' and inserting ``Secretary may'';
                            (iv) by redesignating subparagraphs (B) and 
                        (D) through (L) as subparagraphs (A) and (B) 
                        through (J), respectively;
                            (v) in subparagraph (A)(i), as so 
                        redesignated, by striking ``subparagraphs (C), 
                        (D), and (E)(iii), in carrying out subparagraph 
                        (A),'' and inserting ``subparagraphs (B) and 
                        (C)(iii),'';
                            (vi) in subparagraph (B)(i), as so 
                        redesignated, by striking ``subparagraph (B)'' 
                        each place it appears and inserting 
                        ``subparagraph (A)''; and
                            (vii) in subparagraph (C)(iii), as so 
                        redesignated, by striking ``subparagraph (B)'' 
                        and inserting ``subparagraph (A)''; and
            (2) Application.--The amendments made by paragraph (1) 
        shall not apply to a contract for the procurement of infant 
        formula under section 17(h)(8) of the Child Nutrition Act of 
        1966 (42 U.S.C. 1786(h)(8)) that is in effect on the date of 
        enactment of this subsection.
    (g) National Advisory Council on Maternal, Infant, and Fetal 
Nutrition.--Section 17(k)(3) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(k)(3)) is amended by striking ``Secretary shall designate'' 
and inserting ``Council shall elect''.
    (h) Completed Study; Community College Demonstration; Grants for 
Information and Data System.--Section 17 of the Child Nutrition Act of 
1966 (42 U.S.C. 1786) is amended by striking subsections (n), (o), and 
(p).
    (i) Disqualification of Vendors Who Are Disqualified Under the Food 
Stamp Program.--Section 17 of the Child Nutrition Act of 1966 (42 
U.S.C. 1786), as amended by subsection (i), is amended by adding at the 
end the following:
    ``(n) Disqualification of Vendors Who Are Disqualified Under the 
Food Stamp Program.--
            ``(1) In general.--The Secretary shall issue regulations 
        providing criteria for the disqualification under this section 
        of an approved vendor that is disqualified from accepting 
        benefits under the food stamp program established under the 
        Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
            ``(2) Terms.--A disqualification under paragraph (1)--
                    ``(A) shall be for the same period as the 
                disqualification from the program referred to in 
                paragraph (1);
                    ``(B) may begin at a later date than the 
                disqualification from the program referred to in 
                paragraph (1); and
                    ``(C) shall not be subject to judicial or 
                administrative review.''.

SEC. 1260. CASH GRANTS FOR NUTRITION EDUCATION.

    Section 18 of the Child Nutrition Act of 1966 (42 U.S.C. 1787) is 
repealed.

SEC. 1261. NUTRITION EDUCATION AND TRAINING.

    (a) Findings.--Section 19 of the Child Nutrition Act of 1966 (42 
U.S.C. 1788) is amended--
            (1) in subsection (a), by striking ``that--'' and all that 
        follows through the period at the end and inserting ``that 
        effective dissemination of scientifically valid information to 
        children participating or eligible to participate in the school 
        lunch and related child nutrition programs should be 
        encouraged.''; and
            (2) in the first sentence of subsection (b), by striking 
        ``encourage'' and all that follows through ``establishing'' and 
        inserting ``establish''.
    (b) Use of Funds.--Section 19(f) of the Child Nutrition Act of 1966 
(42 U.S.C. 1788(f)) is amended--
            (1) in paragraph (1)--
                    (A) by striking subparagraph (B); and
                    (B) in subparagraph (A)--
                            (i) by striking ``(A)'';
                            (ii) by striking clauses (ix) through 
                        (xix);
                            (iii) by redesignating clauses (i) through 
                        (viii) and (xx) as subparagraphs (A) through 
                        (H) and (I), respectively;
                            (iv) in subparagraph (I), as so 
                        redesignated, by striking the period at the end 
                        and inserting ``; and''; and
                            (v) by adding at the end the following:
            ``(J) other appropriate related activities, as determined 
        by the State.'';
            (2) by striking paragraphs (2) and (4); and
            (3) by redesignating paragraph (3) as paragraph (2).
    (c) Accounts, Records, and Reports.--The second sentence of section 
19(g)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(g)(1)) is 
amended by striking ``at all times be available'' and inserting ``be 
available at any reasonable time''.
    (d) State Coordinators for Nutrition; State Plan.--Section 19(h) of 
the Child Nutrition Act of 1966 (42 U.S.C. 1788(h)) is amended--
            (1) in the second sentence of paragraph (1)--
                    (A) by striking ``as provided in paragraph (2) of 
                this subsection''; and
                    (B) by striking ``as provided in paragraph (3) of 
                this subsection'';
            (2) in paragraph (2), by striking the second and third 
        sentences; and
            (3) by striking paragraph (3).
    (e) Authorization of Appropriations.--Section 19(i) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1788(i)) is amended--
            (1) in the first sentence of paragraph (2)(A), by striking 
        ``and each succeeding fiscal year'';
            (2) by redesignating paragraphs (3) and (4) as paragraphs 
        (4) and (5), respectively; and
            (3) by inserting after paragraph (2) the following:
            ``(3) Fiscal years 1997 through 2002.--
                    ``(A) In general.--There are authorized to be 
                appropriated to carry out this section $10,000,000 for 
                each of fiscal years 1997 through 2002.
                    ``(B) Grants.--
                            ``(i) In general.--Grants to each State 
                        from the amounts made available under 
                        subparagraph (A) shall be based on a rate of 50 
                        cents for each child enrolled in schools or 
                        institutions within the State, except that no 
                        State shall receive an amount less than $75,000 
                        per fiscal year.
                            ``(ii) Insufficient funds.--If the amount 
                        made available for any fiscal year is 
                        insufficient to pay the amount to which each 
                        State is entitled under clause (i), the amount 
                        of each grant shall be ratably reduced.''.
    (f) Assessment.--Section 19 of the Child Nutrition Act of 1966 (42 
U.S.C. 1788) is amended by striking subsection (j).
    (g) Effective Date.--The amendments made by subsection (e) shall 
become effective on October 1, 1996.

SEC. 1262. ROUNDING RULES.

    (a) Special Milk Price Program Rates.--Section 3(a)(8) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1772(a)(8)) is amended by striking 
``one-fourth cent'' and inserting ``lower cent increment''.
    (b) Reduced Price Breakfast Rates.--Section 4(b) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1773(b)) is amended--
            (1) in the second sentence of paragraph (1)(B), by striking 
        ``one-fourth cent'' and inserting ``lower cent increment''; and
            (2) in paragraph (2)(B)(ii), by striking ``one-fourth 
        cent'' and inserting ``lower cent increment''.
    (c) Commodity Rate.--The second sentence of section 6(e)(1)(B) of 
the National School Lunch Act (42 U.S.C. 1755(e)(1)(B)) is amended by 
striking ``\1/4\ cent'' and inserting ``lower cent increment''.
    (d) Lunch, Breakfast, and Supplement Rates.--The third sentence of 
section 11(a)(3)(B) of the National School Lunch Act (42 U.S.C. 
1759a(a)(3)(B)) is amended by striking ``one-fourth cent'' and 
inserting ``lower cent increment''.
    (e) Effective Date.--The amendments made by this section shall 
become effective on July 1, 1996.

                     TITLE II--COMMITTEE ON FINANCE

                       Subtitle A--Welfare Reform

SEC. 2001. SHORT TITLE OF SUBTITLE.

    This subtitle may be cited as the ``Personal Responsibility and 
Work Opportunity Act of 1996''.

SEC. 2002. TABLE OF CONTENTS OF SUBTITLE.

    The table of contents for this subtitle is as follows:

                     TITLE II--COMMITTEE ON FINANCE

                       Subtitle A--Welfare Reform

Sec. 2001. Short title.
Sec. 2002. Table of contents.

  Chapter 1--Block Grants for Temporary Assistance for Needy Families

Sec. 2101. Findings.
Sec. 2102. Reference to Social Security Act.
Sec. 2103. Block grants to States.
Sec. 2104. Services provided by charitable, religious, or private 
                            organizations.
Sec. 2105. Census data on grandparents as primary caregivers for their 
                            grandchildren.
Sec. 2106. Report on data processing.
Sec. 2107. Study on alternative outcomes measures.
Sec. 2108. Welfare Formula Fairness Commission.
Sec. 2109. Conforming amendments to the Social Security Act.
Sec. 2110. Conforming amendments to the Food Stamp Act of 1977 and 
                            related provisions.
Sec. 2111. Conforming amendments to other laws.
Sec. 2112. Development of prototype of counterfeit-resistant social 
                            security card required.
Sec. 2113. Modifications to the job opportunities for certain low-
                            income individuals program.
Sec. 2114. Secretarial submission of legislative proposal for technical 
                            and conforming amendments.
Sec. 2115. Effective date; transition rule.
Sec. 2116. Community Steering Committees demonstration projects.
Sec. 2117. Denial of benefits for certain drug related convictions.

                Chapter 2--Supplemental Security Income

Sec. 2200. Referesubchapter a--eligibility restrictions
Sec. 2201. Denial of SSI benefits for 10 years to individuals found to 
                            have fraudulently misrepresented residence 
                            in order to obtain benefits simultaneously 
                            in 2 or more States.
Sec. 2202. Denial of SSI benefits for fugitive felons and probation and 
                            parole violators.
Sec. 2203. Treatment of prisoners.
Sec. 2204. Effsubchapter b--benefits for disabled children
Sec. 2211. Definition and eligibility rules.
Sec. 2212. Eligibility redeterminations and continuing disability 
                            reviews.
Sec. 2213. Additional accountability requirements.
Sec. 2214. Reduction in cash benefits payable to institutionalized 
                            individuals whose medical costs are covered 
                            by private insurance.
Sec. 2215. Resubchapter c--additional enforcement provision
Sec. 2221. Installment payment of large past-due supplemental security 
                            income benefits.
Sesubchapter d--studies regarding supplemental security income program
Sec. 2231. Annual report on the supplemental security income program.
Sec. 2232. Study by General Accounting Office.

                        Chapter 3--Child Support

Sec.subchapter a--eligibility for services; distribution of payments
Sec. 2301. State obligation to provide child support enforcement 
                            services.
Sec. 2302. Distribution of child support collections.
Sec. 2303. Privacy safeguards.
Sec. 2304. Rightssubchapter b--locate and case tracking
Sec. 2311. State case registry.
Sec. 2312. Collection and disbursement of support payments.
Sec. 2313. State directory of new hires.
Sec. 2314. Amendments concerning income withholding.
Sec. 2315. Locator information from interstate networks.
Sec. 2316. Expansion of the Federal Parent Locator Service.
Sec. 2317. Collection and use of social security numbers for use in 
        subchapter c--streamlining and uniformity of procedures
Sec. 2321. Adoption of uniform State laws.
Sec. 2322. Improvements to full faith and credit for child support 
                            orders.
Sec. 2323. Administrative enforcement in interstate cases.
Sec. 2324. Use of forms in interstate enforcement.
Sec. 2325. State subchapter d--paternity establishment
Sec. 2331. State laws concerning paternity establishment.
Sec. 2332. Outreach for voluntary paternity establishment.
Sec. 2333. Cooperation by applicants for and recipients of part A 
            subchapter e--program administration and funding
Sec. 2341. Performance-based incentives and penalties.
Sec. 2342. Federal and State reviews and audits.
Sec. 2343. Required reporting procedures.
Sec. 2344. Automated data processing requirements.
Sec. 2345. Technical assistance.
Sec. subchapter f--establishment and modification of support orders
Sec. 2351. Simplified process for review and adjustment of child 
                            support orders.
Sec. 2352. Furnishing consumer reports for certain purposes relating to 
                            child support.
Sec. 2353. Nonliability for financial institutions providing financial 
                            records to State child support enforcement 
              subchapter g--enforcement of support orderses.
Sec. 2361. Internal Revenue Service collection of arrearages.
Sec. 2362. Authority to collect support from Federal employees.
Sec. 2363. Enforcement of child support obligations of members of the 
                            Armed Forces.
Sec. 2364. Voiding of fraudulent transfers.
Sec. 2365. Work requirement for persons owing past-due child support.
Sec. 2366. Definition of support order.
Sec. 2367. Reporting arrearages to credit bureaus.
Sec. 2368. Liens.
Sec. 2369. State law authorizing suspension of licenses.
Sec. 2370. Denial of passports for nonpayment of child support.
Sec. 2371. International support enforcement.
Sec. 2372. Financial institution data matches.
Sec. 2373. Enforcement of orders against paternal or maternal 
                            grandparents in cases of minor parents.
Sec. 2374. Nondischargeability in bankruptcy of certain debts for the 
                            support of a child.
Sec. 2375. Child suppsubchapter h--medical supportibes.
Sec. 2376. Correction to ERISA definition of medical child support 
                            order.
Sec.subchapter i--enhancing responsibility and opportunity for non-
                          residential parents
Sec. 238subchapter j--effective dates and conforming amendments
Sec. 2391. Effective dates and conforming amendments.

     Chapter 4--Restricting Welfare and Public Benefits for Aliens

Sec. 2400. Statements of national policy concerning welfare and 
             subchapter a--eligibility for federal benefits
Sec. 2401. Aliens who are not qualified aliens ineligible for Federal 
                            public benefits.
Sec. 2402. Limited eligibility of qualified aliens for certain Federal 
                            programs.
Sec. 2403. Five-year limited eligibility of qualified aliens for 
                            Federal means-tested public benefit.
Ssubchapter b--eligibility for state and local public benefits programs
Sec. 2411. Aliens who are not qualified aliens or nonimmigrants 
                            ineligible for State and local public 
                            benefits.
Sec. 2412. State authority to limit eligibility of qualified aliens for 
     subchapter c--attribution of income and affidavits of support
Sec. 2421. Federal attribution of sponsor's income and resources to 
                            alien.
Sec. 2422. Authority for States to provide for attribution of sponsors 
                            income and resources to the alien with 
                            respect to State programs.
Sec. 2423. Requiremesubchapter d--general provisionsupport.
Sec. 2431. Definitions.
Sec. 2432. Verification of eligibility for Federal public benefits.
Sec. 2433. Statutory construction.
Sec. 2434. Communication between State and local government agencies 
                            and the Immigration and Naturalization 
                            Service.
Sec.subchapter e--conforming amendments relating to assisted housing
Sesubchapter f--earned income credit denied to unauthorized employees
Sec. 2451. Earned income credit denied to individuals not authorized to 
                            be employed in the United States.

                  Chapter 5--Reform of Public Housing

Sec. 2501. Failure to comply with other welfare and public assistance 
                            programs.
Sec. 2502. Fraud under means-tested welfare and public assistance 
                            programs.

 Chapter 6--Technical Amendments Relating to Child Protection Programs

Sec. 2601. Extension of enhanced funding for implementation of 
                            statewide automated child welfare 
                            information systems.
Sec. 2602. Redesignation of section 1123.
Sec. 2603. Kinship care.

                         Chapter 7--Child Care

Sec. 2701. Short title and references.
Sec. 2702. Goals.
Sec. 2703. Authorization of appropriations and entitlement authority.
Sec. 2704. Lead agency.
Sec. 2705. Application and plan.
Sec. 2706. Limitation on State allotments.
Sec. 2707. Activities to improve the quality of child care.
Sec. 2708. Repeal of early childhood development and before- and after-
                            school care requirement.
Sec. 2709. Administration and enforcement.
Sec. 2710. Payments.
Sec. 2711. Annual report and audits.
Sec. 2712. Report by the Secretary.
Sec. 2713. Allotments.
Sec. 2714. Definitions.
Sec. 2715. Effective date.

                        Chapter 8--Miscellaneous

Sec. 2801. Appropriation by State legislatures.
Sec. 2802. Sanctioning for testing positive for controlled substances.
Sec. 2803. Reduction in block grants to States for social services.
Sec. 2804. Elimination of housing assistance with respect to fugitive 
                            felons and probation and parole violators.
Sec. 2805. Sense of the Senate regarding enterprise zones.
Sec. 2806. Sense of the Senate regarding the inability of the non-
                            custodial parent to pay child support.
Sec. 2807. Establishing national goals to prevent teenage pregnancies.
Sec. 2808. Sense of the Senate regarding enforcement of statutory rape 
                            laws.
Sec. 2809. Provisions to encourage electronic benefit transfer systems.
Sec. 2810. Rules relating to denial of earned income credit on basis of 
                            disqualified income.
Sec. 2811. Modification of adjusted gross income definition for earned 
                            income credit.
Sec. 2812. Suspension of inflation adjustments for individuals with no 
                            qualifying children.
Sec. 2813. Refundable credit for adoption expenses.
Sec. 2814. Exclusion of adoption assistance.
Sec. 2815. Withdrawal from IRA for adoption expenses.

  CHAPTER 1--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

SEC. 2101. FINDINGS.

    The Congress makes the following findings:
            (1) Marriage is the foundation of a successful society.
            (2) Marriage is an essential institution of a successful 
        society which promotes the interests of children.
            (3) Promotion of responsible fatherhood and motherhood is 
        integral to successful child rearing and the well-being of 
        children.
            (4) In 1992, only 54 percent of single-parent families with 
        children had a child support order established and, of that 54 
        percent, only about one-half received the full amount due. Of 
        the cases enforced through the public child support enforcement 
        system, only 18 percent of the caseload has a collection.
            (5) The number of individuals receiving aid to families 
        with dependent children (in this section referred to as 
        ``AFDC'') has more than tripled since 1965. More than two-
        thirds of these recipients are children. Eighty-nine percent of 
        children receiving AFDC benefits now live in homes in which no 
        father is present.
                    (A)(i) The average monthly number of children 
                receiving AFDC benefits--
                            (I) was 3,300,000 in 1965;
                            (II) was 6,200,000 in 1970;
                            (III) was 7,400,000 in 1980; and
                            (IV) was 9,300,000 in 1992.
                    (ii) While the number of children receiving AFDC 
                benefits increased nearly threefold between 1965 and 
                1992, the total number of children in the United States 
                aged 0 to 18 has declined by 5.5 percent.
                    (B) The Department of Health and Human Services has 
                estimated that 12,000,000 children will receive AFDC 
                benefits within 10 years.
                    (C) The increase in the number of children 
                receiving public assistance is closely related to the 
                increase in births to unmarried women. Between 1970 and 
                1991, the percentage of live births to unmarried women 
                increased nearly threefold, from 10.7 percent to 29.5 
                percent.
            (6) The increase of out-of-wedlock pregnancies and births 
        is well documented as follows:
                    (A) It is estimated that the rate of nonmarital 
                teen pregnancy rose 23 percent from 54 pregnancies per 
                1,000 unmarried teenagers in 1976 to 66.7 pregnancies 
                in 1991. The overall rate of nonmarital pregnancy rose 
                14 percent from 90.8 pregnancies per 1,000 unmarried 
                women in 1980 to 103 in both 1991 and 1992. In 
                contrast, the overall pregnancy rate for married 
                couples decreased 7.3 percent between 1980 and 1991, 
                from 126.9 pregnancies per 1,000 married women in 1980 
                to 117.6 pregnancies in 1991.
                    (B) The total of all out-of-wedlock births between 
                1970 and 1991 has risen from 10.7 percent to 29.5 
                percent and if the current trend continues, 50 percent 
                of all births by the year 2015 will be out-of-wedlock.
            (7) An effective strategy to combat teenage pregnancy must 
        address the issue of male responsibility, including statutory 
        rape culpability and prevention. The increase of teenage 
        pregnancies among the youngest girls is particularly severe and 
        is linked to predatory sexual practices by men who are 
        significantly older.
                    (A) It is estimated that in the late 1980's, the 
                rate for girls age 14 and under giving birth increased 
                26 percent.
                    (B) Data indicates that at least half of the 
                children born to teenage mothers are fathered by adult 
                men. Available data suggests that almost 70 percent of 
                births to teenage girls are fathered by men over age 
                20.
                    (C) Surveys of teen mothers have revealed that a 
                majority of such mothers have histories of sexual and 
                physical abuse, primarily with older adult men.
            (8) The negative consequences of an out-of-wedlock birth on 
        the mother, the child, the family, and society are well 
        documented as follows:
                    (A) Young women 17 and under who give birth outside 
                of marriage are more likely to go on public assistance 
                and to spend more years on welfare once enrolled. These 
                combined effects of ``younger and longer'' increase 
                total AFDC costs per household by 25 percent to 30 
                percent for 17-year-olds.
                    (B) Children born out-of-wedlock have a 
                substantially higher risk of being born at a very low 
                or moderately low birth weight.
                    (C) Children born out-of-wedlock are more likely to 
                experience low verbal cognitive attainment, as well as 
                more child abuse, and neglect.
                    (D) Children born out-of-wedlock were more likely 
                to have lower cognitive scores, lower educational 
                aspirations, and a greater likelihood of becoming 
                teenage parents themselves.
                    (E) Being born out-of-wedlock significantly reduces 
                the chances of the child growing up to have an intact 
                marriage.
                    (F) Children born out-of-wedlock are 3 times more 
                likely to be on welfare when they grow up.
            (9) Currently 35 percent of children in single-parent homes 
        were born out-of-wedlock, nearly the same percentage as that of 
        children in single-parent homes whose parents are divorced (37 
        percent). While many parents find themselves, through divorce 
        or tragic circumstances beyond their control, facing the 
        difficult task of raising children alone, nevertheless, the 
        negative consequences of raising children in single-parent 
        homes are well documented as follows:
                    (A) Only 9 percent of married-couple families with 
                children under 18 years of age have income below the 
                national poverty level. In contrast, 46 percent of 
                female-headed households with children under 18 years 
                of age are below the national poverty level.
                    (B) Among single-parent families, nearly \1/2\ of 
                the mothers who never married received AFDC while only 
                \1/5\ of divorced mothers received AFDC.
                    (C) Children born into families receiving welfare 
                assistance are 3 times more likely to be on welfare 
                when they reach adulthood than children not born into 
                families receiving welfare.
                    (D) Mothers under 20 years of age are at the 
                greatest risk of bearing low-birth-weight babies.
                    (E) The younger the single parent mother, the less 
                likely she is to finish high school.
                    (F) Young women who have children before finishing 
                high school are more likely to receive welfare 
                assistance for a longer period of time.
                    (G) Between 1985 and 1990, the public cost of 
                births to teenage mothers under the aid to families 
                with dependent children program, the food stamp 
                program, and the medicaid program has been estimated at 
                $120,000,000,000.
                    (H) The absence of a father in the life of a child 
                has a negative effect on school performance and peer 
                adjustment.
                    (I) Children of teenage single parents have lower 
                cognitive scores, lower educational aspirations, and a 
                greater likelihood of becoming teenage parents 
                themselves.
                    (J) Children of single-parent homes are 3 times 
                more likely to fail and repeat a year in grade school 
                than are children from intact 2-parent families.
                    (K) Children from single-parent homes are almost 4 
                times more likely to be expelled or suspended from 
                school.
                    (L) Neighborhoods with larger percentages of youth 
                aged 12 through 20 and areas with higher percentages of 
                single-parent households have higher rates of violent 
                crime.
                    (M) Of those youth held for criminal offenses 
                within the State juvenile justice system, only 29.8 
                percent lived primarily in a home with both parents. In 
                contrast to these incarcerated youth, 73.9 percent of 
                the 62,800,000 children in the Nation's resident 
                population were living with both parents.
            (10) Therefore, in light of this demonstration of the 
        crisis in our Nation, it is the sense of the Congress that 
        prevention of out-of-wedlock pregnancy and reduction in out-of-
        wedlock birth and protection of teenage girls from pregnancy as 
        well as predatory sexual behavior are very important Government 
        interests and the policy contained in part A of title IV of the 
        Social Security Act (as amended by section 2103(a) of this Act) 
        is intended to address the crisis.

SEC. 2102. REFERENCE TO SOCIAL SECURITY ACT.

    Except as otherwise specifically provided, wherever in this chapter 
an amendment is expressed in terms of an amendment to or repeal of a 
section or other provision, the reference shall be considered to be 
made to that section or other provision of the Social Security Act.

SEC. 2103. BLOCK GRANTS TO STATES.

    (a) In General.--Part A of title IV (42 U.S.C. 601 et seq.) is 
amended--
            (1) by striking all that precedes section 418 (as added by 
        section 2803(b)(2) of this Act) and inserting the following:

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

``SEC. 401. PURPOSE.

    ``(a) In General.--The purpose of this part is to increase the 
flexibility of States in operating a program designed to--
            ``(1) provide assistance to needy families so that children 
        may be cared for in their own homes or in the homes of 
        relatives;
            ``(2) end the dependence of needy parents on government 
        benefits by promoting job preparation, work, and marriage;
            ``(3) prevent and reduce the incidence of out-of-wedlock 
        pregnancies and establish annual numerical goals for preventing 
        and reducing the incidence of these pregnancies; and
            ``(4) encourage the formation and maintenance of two-parent 
        families.
    ``(b) No Individual Entitlement.--This part shall not be 
interpreted to entitle any individual or family to assistance under any 
State program funded under this part.

``SEC. 402. ELIGIBLE STATES; STATE PLAN.

    ``(a) In General.--As used in this part, the term `eligible State' 
means, with respect to a fiscal year, a State that, during the 2-year 
period immediately preceding the fiscal year, has submitted to the 
Secretary a plan that the Secretary has found includes the following:
            ``(1) Outline of family assistance program.--
                    ``(A) General provisions.--A written document that 
                outlines how the State intends to do the following:
                            ``(i) Conduct a program, designed to serve 
                        all political subdivisions in the State (not 
                        necessarily in a uniform manner), that provides 
                        assistance to needy families with (or 
                        expecting) children and provides parents with 
                        job preparation, work, and support services to 
                        enable them to leave the program and become 
                        self-sufficient.
                            ``(ii) Require a parent or caretaker 
                        receiving assistance under the program to 
                        engage in work (as defined by the State) once 
                        the State determines the parent or caretaker is 
                        ready to engage in work, or once the parent or 
                        caretaker has received assistance under the 
                        program for 24 months (whether or not 
                        consecutive), whichever is earlier.
                            ``(iii) Ensure that parents and caretakers 
                        receiving assistance under the program engage 
                        in work activities in accordance with section 
                        407.
                            ``(iv) Take such reasonable steps as the 
                        State deems necessary to restrict the use and 
                        disclosure of information about individuals and 
                        families receiving assistance under the program 
                        attributable to funds provided by the Federal 
                        Government.
                            ``(v) Establish goals and take action to 
                        prevent and reduce the incidence of out-of-
                        wedlock pregnancies, with special emphasis on 
                        teenage pregnancies, and establish numerical 
                        goals for reducing the illegitimacy ratio of 
                        the State (as defined in section 403(a)(2)(B)) 
                        for calendar years 1996 through 2005.
                            ``(vi) Conduct a program, designed to reach 
                        State and local law enforcement officials, the 
                        education system, and relevant counseling 
                        services, that provides education and training 
                        on the problem of statutory rape so that 
                        teenage pregnancy prevention programs may be 
                        expanded in scope to include men.
                            ``(vii) Determine, on an objective and 
                        equitable basis, the needs of and the amount of 
                        assistance to be provided to needy families, 
                        and, except as provided in subparagraph (B), 
                        treat families of similar needs and 
                        circumstances similarly.
                            ``(viii) Grant an opportunity for a fair 
                        hearing before the appropriate State agency to 
                        any individual to whom assistance under the 
                        program has been denied, reduced, or 
                        terminated, or whose request for such 
                        assistance is not acted on with reasonable 
                        promptness.
                    ``(B) Special provisions.--
                            ``(i) The document shall indicate whether 
                        the State intends to treat families moving into 
                        the State from another State differently than 
                        other families under the program, and if so, 
                        how the State intends to treat such families 
                        under the program.
                            ``(ii) The document shall indicate whether 
                        the State intends to provide assistance under 
                        the program to individuals who are not citizens 
                        of the United States, and if so, shall include 
                        an overview of such assistance.
                            ``(iii) Not later than one year after the 
                        date of enactment of this Act, unless the State 
                        opts out of this provision by notifying the 
                        Secretary, a State shall, consistent with the 
                        exception provided in section 407(e)(2), 
                        require a parent or caretaker receiving 
                        assistance under the program who, after 
                        receiving such assistance for two months is not 
                        exempt from work requirements and is not 
                        engaged in work, as determined under section 
                        407(c), to participate in community service 
                        employment, with minimum hours per week and 
                        tasks to be determined by the State.
            ``(2) Certification that the state will operate a child 
        support enforcement program.--A certification by the chief 
        executive officer of the State that, during the fiscal year, 
        the State will operate a child support enforcement program 
        under the State plan approved under part D.
            ``(3) Certification that the state will operate a foster 
        care and adoption assistance program.--A certification by the 
        chief executive officer of the State that, during the fiscal 
        year, the State will operate a foster care and adoption 
        assistance program under the State plan approved under part E, 
        and that the State will take such actions as are necessary to 
        ensure that children receiving assistance under such part are 
        eligible for medical assistance under the State plan under 
        title XIX (or XV, if applicable).
            ``(4) Certification of the administration of the program.--
        A certification by the chief executive officer of the State 
        specifying which State agency or agencies will administer and 
        supervise the program referred to in paragraph (1) for the 
        fiscal year, which shall include assurances that local 
        governments and private sector organizations--
                    ``(A) have been consulted regarding the plan and 
                design of welfare services in the State so that 
                services are provided in a manner appropriate to local 
                populations; and
                    ``(B) have had at least 45 days to submit comments 
                on the plan and the design of such services.
            ``(5) Certification that the state will provide indians 
        with equitable access to assistance.--A certification by the 
        chief executive officer of the State that, during the fiscal 
        year, the State will provide each Indian who is a member of an 
        Indian tribe in the State that does not have a tribal family 
        assistance plan approved under section 412 with equitable 
        access to assistance under the State program funded under this 
        part attributable to funds provided by the Federal Government.
            ``(6) Certification of standards and procedures to ensure 
        against program fraud and abuse.--A certification by the chief 
        executive officer of the State that the State has established 
        and is enforcing standards and procedures to ensure against 
        program fraud and abuse, including standards and procedures 
        concerning nepotism, conflicts of interest among individuals 
        responsible for the administration and supervision of the State 
        program, kickbacks, and the use of political patronage.
            ``(7) Certification of standards and procedures to ensure 
        that the state will screen for and identify domestic 
        violence.--
                    ``(A) In general.--A certification by the chief 
                executive officer of the State that the State has 
                established and is enforcing standards and procedures 
                to--
                            ``(i) screen and identify individuals 
                        receiving assistance under this part with a 
                        history of domestic violence while maintaining 
                        the confidentiality of such individuals;
                            ``(ii) refer such individuals to counseling 
                        and supportive services; and
                            ``(iii) waive, pursuant to a determination 
                        of good cause, other program requirements such 
                        as time limits (for so long as necessary) for 
                        individuals receiving assistance, residency 
                        requirements, child support cooperation 
                        requirements, and family cap provisions, in 
                        cases where compliance with such requirements 
                        would make it more difficult for individuals 
                        receiving assistance under this part to escape 
                        domestic violence or unfairly penalize such 
                        individuals who are or have been victimized by 
                        such violence, or individuals who are at risk 
                        of further domestic violence.
                    ``(B) Domestic violence defined.--For purposes of 
                this paragraph, the term `domestic violence' has the 
                same meaning as the term `battered or subjected to 
                extreme cruelty', as defined in section 
                408(a)(8)(C)(iii).
            ``(8) Certification regarding eligibility of individual who 
        has been battered or subjected to extreme cruelty.--A 
        certification by the chief executive officer of the State that 
        the State has established and is enforcing standards and 
        procedures to ensure that in the case of an individual who has 
        been battered or subjected to extreme cruelty, as determined 
        under section 408(a)(8)(C)(iii), the State will determine the 
        eligibility of such individual for assistance under this part 
        based solely on such individual's income.
    ``(b) Public Availability of State Plan Summary.--The State shall 
make available to the public a summary of any plan submitted by the 
State under this section.

``SEC. 403. GRANTS TO STATES.

    ``(a) Grants.--
            ``(1) Family assistance grant.--
                    ``(A) In general.--Each eligible State shall be 
                entitled to receive from the Secretary, for each of 
                fiscal years 1996, 1997, 1998, 1999, 2000, and 2001 a 
                grant in an amount equal to the State family assistance 
                grant.
                    ``(B) State family assistance grant defined.--As 
                used in this part, the term `State family assistance 
                grant' means the greatest of--
                            ``(i) \1/3\ of the total amount required to 
                        be paid to the State under former section 403 
                        (as in effect on September 30, 1995) for fiscal 
                        years 1992, 1993, and 1994 (other than with 
                        respect to amounts expended by the State for 
                        child care under subsection (g) or (i) of 
                        former section 402 (as so in effect));
                            ``(ii)(I) the total amount required to be 
                        paid to the State under former section 403 for 
                        fiscal year 1994 (other than with respect to 
                        amounts expended by the State for child care 
                        under subsection (g) or (i) of former section 
                        402 (as so in effect)); plus
                            ``(II) an amount equal to 85 percent of the 
                        amount (if any) by which the total amount 
                        required to be paid to the State under former 
                        section 403(a)(5) for emergency assistance for 
                        fiscal year 1995 exceeds the total amount 
                        required to be paid to the State under former 
                        section 403(a)(5) for fiscal year 1994, if, 
                        during fiscal year 1994 or 1995, the Secretary 
                        approved under former section 402 an amendment 
                        to the former State plan to allow the provision 
                        of emergency assistance in the context of 
                        family preservation; or
                            ``(iii) \4/3\ of the total amount required 
                        to be paid to the State under former section 
                        403 (as in effect on September 30, 1995) for 
                        the 1st 3 quarters of fiscal year 1995 (other 
                        than with respect to amounts expended by the 
                        State under the State plan approved under part 
                        F (as so in effect) or for child care under 
                        subsection (g) or (i) of former section 402 (as 
                        so in effect)), plus the total amount required 
                        to be paid to the State for fiscal year 1995 
                        under former section 403(l) (as so in effect).
                    ``(C) Total amount required to be paid to the state 
                under former section 403 defined.--As used in this 
                part, the term `total amount required to be paid to the 
                State under former section 403' means, with respect to 
                a fiscal year--
                            ``(i) in the case of a State to which 
                        section 1108 does not apply, the sum of--
                                    ``(I) the Federal share of 
                                maintenance assistance expenditures for 
                                the fiscal year, before reduction 
                                pursuant to subparagraph (B) or (C) of 
                                section 403(b)(2) (as in effect on 
                                September 30, 1995), as reported by the 
                                State on ACF Form 231;
                                    ``(II) the Federal share of 
                                administrative expenditures (including 
                                administrative expenditures for the 
                                development of management information 
                                systems) for the fiscal year, as 
                                reported by the State on ACF Form 231;
                                    ``(III) the Federal share of 
                                emergency assistance expenditures for 
                                the fiscal year, as reported by the 
                                State on ACF Form 231;
                                    ``(IV) the Federal share of 
                                expenditures for the fiscal year with 
                                respect to child care pursuant to 
                                subsections (g) and (i) of former 
                                section 402 (as in effect on September 
                                30, 1995), as reported by the State on 
                                ACF Form 231; and
                                    ``(V) the aggregate amount required 
                                to be paid to the State for the fiscal 
                                year with respect to the State program 
                                operated under part F (as in effect on 
                                September 30, 1995), as determined by 
                                the Secretary, including additional 
                                obligations or reductions in 
                                obligations made after the close of the 
                                fiscal year; and
                            ``(ii) in the case of a State to which 
                        section 1108 applies, the lesser of--
                                    ``(I) the sum described in clause 
                                (i); or
                                    ``(II) the total amount certified 
                                by the Secretary under former section 
                                403 (as in effect during the fiscal 
                                year) with respect to the territory.
                    ``(D) Information to be used in determining 
                amounts.--
                            ``(i) For fiscal years 1992 and 1993.--
                                    ``(I) In determining the amounts 
                                described in subclauses (I) through 
                                (IV) of subparagraph (C)(i) for any 
                                State for each of fiscal years 1992 and 
                                1993, the Secretary shall use 
                                information available as of April 28, 
                                1995.
                                    ``(II) In determining the amount 
                                described in subparagraph (C)(i)(V) for 
                                any State for each of fiscal years 1992 
                                and 1993, the Secretary shall use 
                                information available as of January 6, 
                                1995.
                            ``(ii) For fiscal year 1994.--In 
                        determining the amounts described in 
                        subparagraph (C)(i) for any State for fiscal 
                        year 1994, the Secretary shall use information 
                        available as of April 28, 1995.
                            ``(iii) For fiscal year 1995.--
                                    ``(I) In determining the amount 
                                described in subparagraph (B)(ii)(II) 
                                for any State for fiscal year 1995, the 
                                Secretary shall use the information 
                                which was reported by the States and 
                                estimates made by the States with 
                                respect to emergency assistance 
                                expenditures and was available as of 
                                August 11, 1995.
                                    ``(II) In determining the amounts 
                                described in subclauses (I) through 
                                (III) of subparagraph (C)(i) for any 
                                State for fiscal year 1995, the 
                                Secretary shall use information 
                                available as of October 2, 1995.
                                    ``(III) In determining the amount 
                                described in subparagraph (C)(i)(IV) 
                                for any State for fiscal year 1995, the 
                                Secretary shall use information 
                                available as of February 28, 1996.
                                    ``(IV) In determining the amount 
                                described in subparagraph (C)(i)(V) for 
                                any State for fiscal year 1995, the 
                                Secretary shall use information 
                                available as of October 5, 1995.
                    ``(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal years 
                1996, 1997, 1998, 1999, 2000, and 2001 such sums as are 
                necessary for grants under this paragraph.
            ``(2) Grant to reward states that reduce out-of-wedlock 
        births.--
                    ``(A) In general.--Each eligible State shall be 
                entitled to receive from the Secretary for fiscal year 
                1998 or any succeeding fiscal year, an illegitimacy 
                reduction bonus if--
                            ``(i) the State demonstrates that the 
                        number of out-of-wedlock births that occurred 
                        in the State during the most recent 2-year 
                        period for which such information is available 
                        decreased as compared to the number of such 
                        births that occurred during the previous 2-year 
                        period; and
                            ``(ii) the rate of induced pregnancy 
                        terminations in the State for the fiscal year 
                        is less than the rate of induced pregnancy 
                        terminations in the State for fiscal year 1995.
                    ``(B) Participation in illegitimacy bonus.--A State 
                that demonstrates a decrease under subparagraph (A)(i) 
                shall be eligible for a grant under paragraph (5).
                                    ``(II) the rate of induced 
                                pregnancy terminations in the State for 
                                the fiscal year is less than the rate 
                                of induced pregnancy terminations in 
                                the State for fiscal year 1995.
                    ``(C) Illegitimacy ratio.--As used in this 
                paragraph, the term `illegitimacy ratio' means, with 
                respect to a State and a fiscal year--
                            ``(i) the number of out-of-wedlock births 
                        that occurred in the State during the most 
                        recent fiscal year for which such information 
                        is available; divided by
                            ``(ii) the number of births that occurred 
                        in the State during the most recent fiscal year 
                        for which such information is available.
                    ``(D) Disregard of changes in data due to changed 
                reporting methods.--For purposes of subparagraph (A), 
                the Secretary shall disregard--
                            ``(i) any difference between the 
                        illegitimacy ratio of a State for a fiscal year 
                        and the illegitimacy ratio of the State the 
                        preceding 2 fiscal years which is attributable 
                        to a change in State methods of reporting data 
                        used to calculate the illegitimacy ratio; and
                            ``(ii) any difference between the rate of 
                        induced pregnancy terminations in a State for a 
                        fiscal year and such rate for fiscal year 1995 
                        which is attributable to a change in State 
                        methods of reporting data used to calculate 
                        such rate.
                    ``(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal year 
                1998 and for each succeeding fiscal year such sums as 
                are necessary for grants under this paragraph.
            ``(3) Supplemental grant for population increases in 
        certain states.--
                    ``(A) In general.--Each qualifying State shall, 
                subject to subparagraph (F), be entitled to receive 
                from the Secretary--
                            ``(i) for fiscal year 1998 a grant in an 
                        amount equal to 2.5 percent of the total amount 
                        required to be paid to the State under former 
                        section 403 (as in effect during fiscal year 
                        1994) for fiscal year 1994; and
                            ``(ii) for each of fiscal years 1999, 2000, 
                        and 2001, a grant in an amount equal to the sum 
                        of--
                                    ``(I) the amount (if any) required 
                                to be paid to the State under this 
                                paragraph for the immediately preceding 
                                fiscal year; and
                                    ``(II) 2.5 percent of the sum of--
                                            ``(aa) the total amount 
                                        required to be paid to the 
                                        State under former section 403 
                                        (as in effect during fiscal 
                                        year 1994) for fiscal year 
                                        1994; and
                                            ``(bb) the amount (if any) 
                                        required to be paid to the 
                                        State under this paragraph for 
                                        the fiscal year preceding the 
                                        fiscal year for which the grant 
                                        is to be made.
                    ``(B) Preservation of grant without increases for 
                states failing to remain qualifying states.--Each State 
                that is not a qualifying State for a fiscal year 
                specified in subparagraph (A)(ii) but was a qualifying 
                State for a prior fiscal year shall, subject to 
                subparagraph (F), be entitled to receive from the 
                Secretary for the specified fiscal year, a grant in an 
                amount equal to the amount required to be paid to the 
                State under this paragraph for the most recent fiscal 
                year for which the State was a qualifying State.
                    ``(C) Qualifying state.--
                            ``(i) In general.--For purposes of this 
                        paragraph, a State is a qualifying State for a 
                        fiscal year if--
                                    ``(I) the level of welfare spending 
                                per poor person by the State for the 
                                immediately preceding fiscal year is 
                                less than the national average level of 
                                State welfare spending per poor person 
                                for such preceding fiscal year; and
                                    ``(II) the population growth rate 
                                of the State (as determined by the 
                                Bureau of the Census) for the most 
                                recent fiscal year for which 
                                information is available exceeds the 
                                average population growth rate for all 
                                States (as so determined) for such most 
                                recent fiscal year.
                            ``(ii) State must qualify in fiscal year 
                        1998.--Notwithstanding clause (i), a State 
                        shall not be a qualifying State for any fiscal 
                        year after 1998 by reason of clause (i) if the 
                        State is not a qualifying State for fiscal year 
                        1998 by reason of clause (i).
                            ``(iii) Certain states deemed qualifying 
                        states.--For purposes of this paragraph, a 
                        State is deemed to be a qualifying State for 
                        fiscal years 1998, 1999, 2000, and 2001 if--
                                    ``(I) the level of welfare spending 
                                per poor person by the State for fiscal 
                                year 1997 is less than 35 percent of 
                                the national average level of State 
                                welfare spending per poor person for 
                                fiscal year 1996; or
                                    ``(II) the population of the State 
                                increased by more than 10 percent from 
                                April 1, 1990 to July 1, 1994, 
                                according to the population estimates 
                                in publication CB94-204 of the Bureau 
                                of the Census.
                    ``(D) Definitions.--As used in this paragraph:
                            ``(i) Level of welfare spending per poor 
                        person.--The term `level of State welfare 
                        spending per poor person' means, with respect 
                        to a State and a fiscal year--
                                    ``(I) the sum of--
                                            ``(aa) the total amount 
                                        required to be paid to the 
                                        State under former section 403 
                                        (as in effect during fiscal 
                                        year 1994) for fiscal year 
                                        1994; and
                                            ``(bb) the amount (if any) 
                                        paid to the State under this 
                                        paragraph for the immediately 
                                        preceding fiscal year; divided 
                                        by
                                    ``(II) the number of individuals, 
                                according to the 1990 decennial census, 
                                who were residents of the State and 
                                whose income was below the poverty 
                                line.
                            ``(ii) National average level of state 
                        welfare spending per poor person.--The term 
                        `national average level of State welfare 
                        spending per poor person' means, with respect 
                        to a fiscal year, an amount equal to--
                                    ``(I) the total amount required to 
                                be paid to the States under former 
                                section 403 (as in effect during fiscal 
                                year 1994) for fiscal year 1994; 
                                divided by
                                    ``(II) the number of individuals, 
                                according to the 1990 decennial census, 
                                who were residents of any State and 
                                whose income was below the poverty 
                                line.
                            ``(iii) State.--The term `State' means each 
                        of the 50 States of the United States and the 
                        District of Columbia.
                    ``(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal years 
                1998, 1999, 2000, and 2001 such sums as are necessary 
                for grants under this paragraph, in a total amount not 
                to exceed $800,000,000.
                    ``(F) Grants reduced pro rata if insufficient 
                appropriations.--If the amount appropriated pursuant to 
                this paragraph for a fiscal year is less than the total 
                amount of payments otherwise required to be made under 
                this paragraph for the fiscal year, then the amount 
                otherwise payable to any State for the fiscal year 
                under this paragraph shall be reduced by a percentage 
                equal to the amount so appropriated divided by such 
                total amount.
                    ``(G) Budget scoring.--Notwithstanding section 
                257(b)(2) of the Balanced Budget and Emergency Deficit 
                Control Act of 1985, the baseline shall assume that no 
                grant shall be made under this paragraph after fiscal 
                year 2000.
            ``(4) Bonus to reward high performance states.--
                    ``(A) In general.--The Secretary shall make a grant 
                pursuant to this paragraph to each State for each bonus 
                year for which the State is a high performing State.
                    ``(B) Amount of grant.--
                            ``(i) In general.--Subject to clause (ii) 
                        of this subparagraph, the Secretary shall 
                        determine the amount of the grant payable under 
                        this paragraph to a high performing State for a 
                        bonus year, which shall be based on the score 
                        assigned to the State under subparagraph (D)(i) 
                        for the fiscal year that immediately precedes 
                        the bonus year.
                            ``(ii) Limitation.--The amount payable to a 
                        State under this paragraph for a bonus year 
                        shall not exceed 5 percent of the State family 
                        assistance grant.
                    ``(C) Formula for measuring state performance.--Not 
                later than 1 year after the date of the enactment of 
                the Personal Responsibility and Work Opportunity Act of 
                1996, the Secretary, in consultation with the National 
                Governors' Association and the American Public Welfare 
                Association, shall develop a formula for measuring 
                State performance in operating the State program funded 
                under this part so as to achieve the goals set forth in 
                section 401(a). Such formula shall emphasize the extent 
                to which the State increases the number of families 
                that become ineligible for assistance under the State 
                program funded under this part as a result of 
                unsubsidized employment.
                    ``(D) Scoring of state performance; setting of 
                performance thresholds.--For each bonus year, the 
                Secretary shall--
                            ``(i) use the formula developed under 
                        subparagraph (C) to assign a score to each 
                        eligible State for the fiscal year that 
                        immediately precedes the bonus year; and
                            ``(ii) prescribe a performance threshold in 
                        such a manner so as to ensure that--
                                    ``(I) the average annual total 
                                amount of grants to be made under this 
                                paragraph for each bonus year equals 
                                the amount specified for such bonus 
                                year in subparagraph (E)(ii); and
                                    ``(II) the total amount of grants 
                                to be made under this paragraph for all 
                                bonus years equals $1,000,000,000.
                    ``(E) Definitions.--As used in this paragraph:
                            ``(i) Bonus year.--The term `bonus year' 
                        means fiscal years 1999, 2000, 2001, 2002, and 
                        2003.
                            ``(ii) The amount specified for such bonus 
                        year.--The term `the amount specified for such 
                        bonus year' means the following:
                                    ``(I) For fiscal years 1999, 2000, 
                                2001, and 2002, $175,000,000.
                                    ``(II) For fiscal year 2003, 
                                $300,000,000.
                            ``(iii) High performing state.--The term 
                        `high performing State' means, with respect a 
                        bonus year, an eligible State whose score 
                        assigned pursuant to subparagraph (D)(i) for 
                        the fiscal year immediately preceding the bonus 
                        year equals or exceeds the performance 
                        threshold prescribed under subparagraph (D)(ii) 
                        for such preceding fiscal year.
                    ``(F) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal years 
                1999 through 2003 $1,000,000,000 for grants under this 
                paragraph.
            ``(5) Bonus to reward decrease in illegitimacy.--
                    ``(A) In general.--The Secretary shall make a grant 
                pursuant to this paragraph to each State determined 
                eligible under paragraph (2)(B) for each bonus year for 
                which the State demonstrates a net decrease in out-of-
                wedlock births.
                    ``(B) Amount of grant.--
                            ``(i) In general.--Subject to this 
                        subparagraph, the Secretary shall determine the 
                        amount of the grant payable under this 
                        paragraph to a low illegitimacy State for a 
                        bonus year.
                            ``(ii) Top five states.--With respect to 
                        States determined eligible under paragraph 
                        (2)(B) for a fiscal year, the Secretary shall 
                        determine which five of such States 
                        demonstrated the greatest decrease in out-of-
                        wedlock births under such paragraph for the 
                        period involved. Each of such five States shall 
                        receive a grant of equal amount under this 
                        paragraph for such fiscal year but such amount 
                        shall not exceed $20,000,000 for any single 
                        State.
                            ``(iii) Less than five states.--With 
                        respect to a fiscal year, if the Secretary 
                        determines that there are less than five States 
                        eligible under paragraph (2)(B) for a fiscal 
                        year, the grants under this paragraph shall be 
                        awarded to each such State in an equal amount 
                        but such amount shall not exceed $25,000,000 
                        for any single State.
                    ``(C) Bonus year.--The term `bonus year' means 
                fiscal years 1999, 2000, 2001, 2002, and 2003.
                    ``(D) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal years 
                1999 through 2003, such sums as are necessary for 
                grants under this paragraph.
    ``(b) Contingency Fund.--
            ``(1) Establishment.--There is hereby established in the 
        Treasury of the United States a fund which shall be known as 
        the `Contingency Fund for State Welfare Programs' (in this 
        section referred to as the `Fund').
            ``(2) Deposits into fund.--Out of any money in the Treasury 
        of the United States not otherwise appropriated, there are 
        appropriated for fiscal years 1998, 1999, 2000, and 2001 such 
        sums as are necessary for payment to the Fund in a total amount 
        not to exceed $2,000,000,000.
            ``(3) Grants.--
                    ``(A) Provisional payments.--If an eligible State 
                submits to the Secretary a request for funds under this 
                paragraph during an eligible month, the Secretary 
                shall, subject to this paragraph, pay to the State, 
                from amounts appropriated pursuant to paragraph (2), an 
                amount equal to the amount of funds so requested.
                    ``(B) Payment priority.--The Secretary shall make 
                payments under subparagraph (A) in the order in which 
                the Secretary receives requests for such payments.
                    ``(C) Limitations.--
                            ``(i) Monthly payment to a state.--The 
                        total amount paid to a single State under 
                        subparagraph (A) during a month shall not 
                        exceed \1/12\ of 20 percent of the State family 
                        assistance grant.
                            ``(ii) Payments to all states.--The total 
                        amount paid to all States under subparagraph 
                        (A) during fiscal years 1998 through 2001 shall 
                        not exceed the total amount appropriated 
                        pursuant to paragraph (2).
            ``(4) Annual reconciliation.--Notwithstanding paragraph 
        (3), at the end of each fiscal year, each State shall remit to 
        the Secretary an amount equal to the amount (if any) by which 
        the total amount paid to the State under paragraph (3) during 
        the fiscal year exceeds--
                    ``(A) the Federal medical assistance percentage for 
                the State for the fiscal year (as defined in section 
                1905(b), as in effect on September 30, 1995) of the 
                amount (if any) by which the expenditures under the 
                State program funded under this part for the fiscal 
                year exceed historic State expenditures (as defined in 
                section 409(a)(7)(B)(iii)); multiplied by
                    ``(B) \1/12\ times the number of months during the 
                fiscal year for which the Secretary makes a payment to 
                the State under this subsection.
            ``(5) Eligible month.--As used in paragraph (3)(A), the 
        term `eligible month' means, with respect to a State, a month 
        in the 2-month period that begins with any month for which the 
        State is a needy State.
            ``(6) Needy state.--For purposes of paragraph (5), a State 
        is a needy State for a month if--
                    ``(A) the average rate of--
                            ``(i) total unemployment in such State 
                        (seasonally adjusted) for the period consisting 
                        of the most recent 3 months for which data for 
                        all States are published equals or exceeds 6.5 
                        percent; and
                            ``(ii) total unemployment in such State 
                        (seasonally adjusted) for the 3-month period 
                        equals or exceeds 110 percent of such average 
                        rate for either (or both) of the corresponding 
                        3-month periods ending in the 2 preceding 
                        calendar years; or
                    ``(B) as determined by the Secretary of Agriculture 
                (in the discretion of the Secretary of Agriculture), 
                the monthly average number of individuals (as of the 
                last day of each month) participating in the food stamp 
                program in the State in the then most recently 
                concluded 3-month period for which data are available 
                exceeds by not less than 10 percent the lesser of--
                            ``(i) the monthly average number of 
                        individuals (as of the last day of each month) 
                        in the State that would have participated in 
                        the food stamp program in the corresponding 3-
                        month period in fiscal year 1994 if the 
                        amendments made by chapter 4 of the Personal 
                        Responsibility and Work Opportunity Act of 1996 
                        and the amendments made by chapter 1 of 
                        subtitle A of title I of the Agricultural 
                        Reconciliation Act of 1996 had been in effect 
                        throughout fiscal year 1994; or
                            ``(ii) the monthly average number of 
                        individuals (as of the last day of each month) 
                        in the State that would have participated in 
                        the food stamp program in the corresponding 3-
                        month period in fiscal year 1995 if the 
                        amendments made by chapter 4 of the Personal 
                        Responsibility and Work Opportunity Act of 1996 
                        and the amendments made by chapter 1 of 
                        subtitle A of title I of the Agricultural 
                        Reconciliation Act of 1996 had been in effect 
                        throughout fiscal year 1995.
            ``(7) Other terms defined.--As used in this subsection:
                    ``(A) State.--The term `State' means each of the 50 
                States of the United States and the District of 
                Columbia.
                    ``(B) Secretary.--The term `Secretary' means the 
                Secretary of the Treasury.
            ``(8) Annual reports.--The Secretary shall annually report 
        to the Congress on the status of the Fund.

``SEC. 404. USE OF GRANTS.

    ``(a) General Rules.--Subject to this part, a State to which a 
grant is made under section 403 may use the grant--
            ``(1) in any manner that is reasonably calculated to 
        accomplish the purpose of this part, including to provide low 
        income households with assistance in meeting home heating and 
        cooling costs; or
            ``(2) in any manner that the State was authorized to use 
        amounts received under part A or F, as such parts were in 
        effect on September 30, 1995.
    ``(b) Limitation on Use of Grant for Administrative Purposes.--
            ``(1) Limitation.--A State to which a grant is made under 
        section 403 shall not expend more than 15 percent of the grant 
        for administrative purposes.
            ``(2) Exception.--Paragraph (1) shall not apply to the use 
        of a grant for information technology and computerization 
        needed for tracking or monitoring required by or under this 
        part.
    ``(c) Authority To Treat Interstate Immigrants Under Rules of 
Former State.--A State operating a program funded under this part may 
apply to a family the rules (including benefit amounts) of the program 
funded under this part of another State if the family has moved to the 
State from the other State and has resided in the State for less than 
12 months.
    ``(d) Authority To Use Portion of Grant for Other Purposes.--
            ``(1) In general.--A State may use not more than 30 percent 
        of the amount of the grant made to the State under section 403 
        for a fiscal year to carry out a State program pursuant to the 
        Child Care and Development Block Grant Act of 1990.
            ``(2) Applicable rules.--Any amount paid to the State under 
        this part that is used to carry out a State program pursuant to 
        a provision of law specified or described in paragraph (1) 
        shall not be subject to the requirements of this part, but 
        shall be subject to the requirements that apply to Federal 
        funds provided directly under the provision of law to carry out 
        the program.
    ``(e) Authority To Reserve Certain Amounts for Assistance.--A State 
may reserve amounts paid to the State under this part for any fiscal 
year for the purpose of providing, without fiscal year limitation, 
assistance under the State program funded under this part.
    ``(f) Authority To Operate Employment Placement Program.--A State 
to which a grant is made under section 403 may use the grant to make 
payments (or provide job placement vouchers) to State-approved public 
and private job placement agencies that provide employment placement 
services to individuals who receive assistance under the State program 
funded under this part.
    ``(g) Implementation of Electronic Benefit Transfer System.--A 
State to which a grant is made under section 403 is encouraged to 
implement an electronic benefit transfer system for providing 
assistance under the State program funded under this part, and may use 
the grant for such purpose.
    ``(h) Use of Funds for Individual Development Accounts.--
            ``(1) In General.--A State operating a program funded under 
        this part may use amounts received under a grant under section 
        403 to carry out a program to fund individual development 
        accounts (as defined in paragraph (2)) established by 
        individuals eligible for assistance under the State program 
        under this part.
            ``(2) Individual development accounts.--
                    ``(A) Establishment.--Under a State program carried 
                out under paragraph (1), an individual development 
                account may be established by or on behalf of an 
                individual eligible for assistance under the State 
                program operated under this part for the purpose of 
                enabling the individual to accumulate funds to for a 
                qualified purpose described in subparagraph (B).
                    ``(B) Qualified purpose.--A qualified purpose 
                described in this subparagraph is 1 or more of the 
                following, as provided by the qualified entity 
                providing assistance to the individual under this 
                subsection:
                            ``(i) Postsecondary educational expenses.--
                        Postsecondary educational expenses paid from an 
                        individual development account directly to an 
                        eligible educational institution.
                            ``(ii) First-home purchase.--Qualified 
                        acquisition costs with respect to a qualified 
                        principal residence for a qualified first-time 
                        homebuyer, if paid from an individual 
                        development account directly to the persons to 
                        whom the amounts are due.
                            ``(iii) Business capitalization.--Amounts 
                        paid from an individual development account 
                        directly to a business capitalization account 
                        which is established in a federally insured 
                        financial institution and is restricted to use 
                        solely for qualified business capitalization 
                        expenses.
                    ``(C) Contributions to be from earned income.--An 
                individual may only contribute to an individual 
                development account such amounts as are derived from 
                earned income, as defined in section 911(d)(2) of the 
                Internal Revenue Code of 1986.
                    ``(D) Withdrawal of funds.--The Secretary shall 
                establish such regulations as may be necessary to 
                ensure that funds held in an individual development 
                account are not withdrawn except for 1 or more of the 
                qualified purposes described in subparagraph (B).
            ``(3) Requirements.--
                    ``(A) In general.--An individual development 
                account established under this subsection shall be a 
                trust created or organized in the United States and 
                funded through periodic contributions by the 
                establishing individual and matched by or through a 
                qualified entity for a qualified purpose (as described 
                in paragraph (2)(B).
                    ``(B) Qualified entity.--For purposes of this 
                subsection, the term `qualified entity' means either--
                            ``(i) a not-for-profit organization 
                        described in section 501(c)(3) of the Internal 
                        Revenue Code of 1986 and exempt from taxation 
                        under section 501(a) of such Code; or
                            ``(ii) a State or local government agency 
                        acting in cooperation with an organization 
                        described in clause (i).
            ``(4) No reduction in benefits.--Notwithstanding any other 
        provision of Federal law (other than the Internal Revenue Code 
        of 1986) that requires consideration of 1 or more financial 
        circumstances of an individual, for the purpose of determining 
        eligibility to receive, or the amount of, any assistance or 
        benefit authorized by such law to be provided to or for the 
        benefit of such individual, funds (including interest accruing) 
        in an individual development account under this subsection 
        shall be disregarded for such purpose with respect to any 
        period during which such individual maintains or makes 
        contributions into such an account.
            ``(5) Definitions.--For purposes of this subsection--
                    ``(A) Eligible educational institution.--The term 
                `eligible educational institution' means the following:
                            ``(i) An institution described in section 
                        481(a)(1) or 1201(a) of the Higher Education 
                        Act of 1965 (20 U.S.C. 1088(a)(1) or 1141(a)), 
                        as such sections are in effect on the date of 
                        the enactment of this subsection.
                            ``(ii) An area vocational education school 
                        (as defined in subparagraph (C) or (D) of 
                        section 521(4) of the Carl D. Perkins 
                        Vocational and Applied Technology Education Act 
                        (20 U.S.C. 2471(4))) which is in any State (as 
                        defined in section 521(33) of such Act), as 
                        such sections are in effect on the date of the 
                        enactment of this subsection.
                    ``(B) Post-secondary educational expenses.--The 
                term `post-secondary educational expenses' means--
                            ``(i) tuition and fees required for the 
                        enrollment or attendance of a student at an 
                        eligible educational institution, and
                            ``(ii) fees, books, supplies, and equipment 
                        required for courses of instruction at an 
                        eligible educational institution.
                    ``(C) Qualified acquisition costs.--The term 
                `qualified acquisition costs' means the costs of 
                acquiring, constructing, or reconstructing a residence. 
                The term includes any usual or reasonable settlement, 
                financing, or other closing costs.
                    ``(D) Qualified business.--The term `qualified 
                business' means any business that does not contravene 
                any law or public policy (as determined by the 
                Secretary).
                    ``(E) Qualified business capitalization expenses.--
                The term `qualified business capitalization expenses' 
                means qualified expenditures for the capitalization of 
                a qualified business pursuant to a qualified plan.
                    ``(F) Qualified expenditures.--The term `qualified 
                expenditures' means expenditures included in a 
                qualified plan, including capital, plant, equipment, 
                working capital, and inventory expenses.
                    ``(G) Qualified first-time homebuyer.--
                            ``(i) In general.--The term `qualified 
                        first-time homebuyer' means a taxpayer (and, if 
                        married, the taxpayer's spouse) who has no 
                        present ownership interest in a principal 
                        residence during the 3-year period ending on 
                        the date of acquisition of the principal 
                        residence to which this subsection applies.
                            ``(ii) Date of acquisition.--The term `date 
                        of acquisition' means the date on which a 
                        binding contract to acquire, construct, or 
                        reconstruct the principal residence to which 
                        this subparagraph applies is entered into.
                    ``(H) Qualified plan.--The term `qualified plan' 
                means a business plan which--
                            ``(i) is approved by a financial 
                        institution, or by a nonprofit loan fund having 
                        demonstrated fiduciary integrity,
                            ``(ii) includes a description of services 
                        or goods to be sold, a marketing plan, and 
                        projected financial statements, and
                            ``(iii) may require the eligible individual 
                        to obtain the assistance of an experienced 
                        entrepreneurial advisor.
                    ``(I) Qualified principal residence.--The term 
                `qualified principal residence' means a principal 
                residence (within the meaning of section 1034 of the 
                Internal Revenue Code of 1986), the qualified 
                acquisition costs of which do not exceed 100 percent of 
                the average area purchase price applicable to such 
                residence (determined in accordance with paragraphs (2) 
                and (3) of section 143(e) of such Code).

``SEC. 405. ADMINISTRATIVE PROVISIONS.

    ``(a) Quarterly.--The Secretary shall pay each grant payable to a 
State under section 403 in quarterly installments.
    ``(b) Notification.--Not later than 3 months before the payment of 
any such quarterly installment to a State, the Secretary shall notify 
the State of the amount of any reduction determined under section 
412(a)(1)(B) with respect to the State.
    ``(c) Computation and Certification of Payments to States.--
            ``(1) Computation.--The Secretary shall estimate the amount 
        to be paid to each eligible State for each quarter under this 
        part, such estimate to be based on a report filed by the State 
        containing an estimate by the State of the total sum to be 
        expended by the State in the quarter under the State program 
        funded under this part and such other information as the 
        Secretary may find necessary.
            ``(2) Certification.--The Secretary of Health and Human 
        Services shall certify to the Secretary of the Treasury the 
        amount estimated under paragraph (1) with respect to a State, 
        reduced or increased to the extent of any overpayment or 
        underpayment which the Secretary of Health and Human Services 
        determines was made under this part to the State for any prior 
        quarter and with respect to which adjustment has not been made 
        under this paragraph.
    ``(d) Payment Method.--Upon receipt of a certification under 
subsection (c)(2) with respect to a State, the Secretary of the 
Treasury shall, through the Fiscal Service of the Department of the 
Treasury and before audit or settlement by the General Accounting 
Office, pay to the State, at the time or times fixed by the Secretary 
of Health and Human Services, the amount so certified.

``SEC. 406. FEDERAL LOANS FOR STATE WELFARE PROGRAMS.

    ``(a) Loan Authority.--
            ``(1) In general.--The Secretary shall make loans to any 
        loan-eligible State, for a period to maturity of not more than 
        3 years.
            ``(2) Loan-eligible state.--As used in paragraph (1), the 
        term `loan-eligible State' means a State against which a 
        penalty has not been imposed under section 409(a)(1).
    ``(b) Rate of Interest.--The Secretary shall charge and collect 
interest on any loan made under this section at a rate equal to the 
current average market yield on outstanding marketable obligations of 
the United States with remaining periods to maturity comparable to the 
period to maturity of the loan.
    ``(c) Use of Loan.--A State shall use a loan made to the State 
under this section only for any purpose for which grant amounts 
received by the State under section 403(a) may be used, including--
            ``(1) welfare anti-fraud activities; and
            ``(2) the provision of assistance under the State program 
        to Indian families that have moved from the service area of an 
        Indian tribe with a tribal family assistance plan approved 
        under section 412.
    ``(d) Limitation on Total Amount of Loans to a State.--The 
cumulative dollar amount of all loans made to a State under this 
section during fiscal years 1997 through 2001 shall not exceed 10 
percent of the State family assistance grant.
    ``(e) Limitation on Total Amount of Outstanding Loans.--The total 
dollar amount of loans outstanding under this section may not exceed 
$1,700,000,000.
    ``(f) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are appropriated such 
sums as may be necessary for the cost of loans under this section.

``SEC. 407. MANDATORY WORK REQUIREMENTS.

    ``(a) Participation Rate Requirements.--
            ``(1) All families.--A State to which a grant is made under 
        section 403 for a fiscal year shall achieve the minimum 
        participation rate specified in the following table for the 
        fiscal year with respect to all families receiving assistance 
        under the State program funded under this part:

                    
                                                            The minimum
                    
                                                          participation
                    ``If the fiscal year is:
                                                               rate is:
                          1996.......................             15   
                          1997.......................             25   
                          1998.......................             30   
                          1999.......................             35   
                          2000.......................             40   
                          2001.......................             45   
                          2002 and thereafter........             50.  

            ``(2) 2-parent families.--A State to which a grant is made 
        under section 403 for a fiscal year shall achieve the minimum 
        participation rate specified in the following table for the 
        fiscal year with respect to 2-parent families receiving 
        assistance under the State program funded under this part:

                    
                                                            The minimum
                    
                                                          participation
                    ``If the fiscal year is:
                                                               rate is:
                          1996.......................             50   
                          1997.......................             75   
                          1998.......................             75   
                          1999 and thereafter........             90.  

    ``(b) Calculation of Participation Rates.--
            ``(1) All families.--
                    ``(A) Average monthly rate.--For purposes of 
                subsection (a)(1), the participation rate for all 
                families of a State for a fiscal year is the average of 
                the participation rates for all families of the State 
                for each month in the fiscal year.
                    ``(B) Monthly participation rates.--The 
                participation rate of a State for all families of the 
                State for a month, expressed as a percentage, is--
                            ``(i) the number of families receiving 
                        assistance under the State program funded under 
                        this part that include an adult who is engaged 
                        in work for the month; divided by
                            ``(ii) the amount by which--
                                    ``(I) the number of families 
                                receiving such assistance during the 
                                month that include an adult receiving 
                                such assistance; exceeds
                                    ``(II) the number of families 
                                receiving such assistance that are 
                                subject in such month to a penalty 
                                described in subsection (e)(1) but have 
                                not been subject to such penalty for 
                                more than 3 months within the preceding 
                                12-month period (whether or not 
                                consecutive).
            ``(2) 2-parent families.--
                    ``(A) Average monthly rate.--For purposes of 
                subsection (a)(2), the participation rate for 2-parent 
                families of a State for a fiscal year is the average of 
                the participation rates for 2-parent families of the 
                State for each month in the fiscal year.
                    ``(B) Monthly participation rates.--The 
                participation rate of a State for 2-parent families of 
                the State for a month shall be calculated by use of the 
                formula set forth in paragraph (1)(B), except that in 
                the formula the term `number of 2-parent families' 
                shall be substituted for the term `number of families' 
                each place such latter term appears.
            ``(3) Pro rata reduction of participation rate due to 
        caseload reductions not required by federal law.--
                    ``(A) In general.--The Secretary shall prescribe 
                regulations for reducing the minimum participation rate 
                otherwise required by this section for a fiscal year by 
                the number of percentage points equal to the number of 
                percentage points (if any) by which--
                            ``(i) the average monthly number of 
                        families receiving assistance during the fiscal 
                        year under the State program funded under this 
                        part is less than
                            ``(ii) the average monthly number of 
                        families that received aid under the State plan 
                        approved under part A (as in effect on 
                        September 30, 1995) during fiscal year 1995.
                The minimum participation rate shall not be reduced to 
                the extent that the Secretary determines that the 
                reduction in the number of families receiving such 
                assistance is required by Federal law.
                    ``(B) Eligibility changes not counted.--The 
                regulations described in subparagraph (A) shall not 
                take into account families that are diverted from a 
                State program funded under this part as a result of 
                differences in eligibility criteria under a State 
                program funded under this part and eligibility criteria 
                under the State program operated under the State plan 
                approved under part A (as such plan and such part were 
                in effect on September 30, 1995). Such regulations 
                shall place the burden on the Secretary to prove that 
                such families were diverted as a direct result of 
                differences in such eligibility criteria.
            ``(4) State option to include individuals receiving 
        assistance under a tribal family assistance plan.--For purposes 
        of paragraphs (1)(B) and (2)(B), a State may, at its option, 
        include families receiving assistance under a tribal family 
        assistance plan approved under section 412.
            ``(5) State option for participation requirement 
        exemptions.--
                    ``(A) In general.--For any fiscal year, a State 
                may, at its option, not require an individual who is a 
                single custodial parent caring for a child who has not 
                attained 12 months of age to engage in work and may 
                disregard such an individual in determining the 
                participation rates under subsection (a).
                    ``(B) Limitation.--The exemption described in 
                subparagraph (A) may only be applied to a single 
                custodial parent for a total of 12 months (whether or 
                not consecutive).
    ``(c) Engaged in Work.--
            ``(1) All families.--For purposes of subsection 
        (b)(1)(B)(i), a recipient is engaged in work for a month in a 
        fiscal year if the recipient is participating in work 
        activities for at least the minimum average number of hours per 
        week specified in the following table during the month, not 
        fewer than 20 hours per week of which are attributable to an 
        activity described in paragraph (1), (2), (3), (4), (5), (6), 
        (7), or (8) of subsection (d):

                   
                                                            The minimum
                  ``If the month is
                                                      average number of
                    in fiscal year:
                                                     hours per week is:
                          1996.......................             20   
                          1997.......................             20   
                          1998.......................             20   
                          1999.......................             25   
                          2000.......................             30   
                          2001.......................             30   
                          2002 and thereafter........             35.  

            ``(2) 2-parent families.--For purposes of subsection 
        (b)(2)(B)(i)--
                    ``(A) an adult is engaged in work for a month in a 
                fiscal year if the adult is making progress in work 
                activities for at least 35 hours per week during the 
                month, not fewer than 30 hours per week of which are 
                attributable to an activity described in paragraph (1), 
                (2), (3), (4), (5), (6), (7), or (8) of subsection (d); 
                and
                    ``(B) if the family of such adult receives 
                federally-funded child care assistance, if the adult's 
                spouse is making progress in work activities for at 
                least 20 hours per week during the month which are 
                attributable to an activity described in paragraph (1), 
                (2), (3), (4), (5), or (7) of subsection (d).
            ``(3) Limitation on number of weeks for which job search 
        counts as work.--Notwithstanding paragraphs (1) and (2), an 
        individual shall not be considered to be engaged in work by 
        virtue of participation in an activity described in subsection 
        (d)(6), after the individual has participated in such an 
        activity for 4 weeks (except if the unemployment rate in the 
        State is above the national average, in which case, 12 weeks) 
        in a fiscal year. An individual shall be considered to be 
        participating in such an activity for a week if the individual 
        participates in such an activity at any time during the week.
            ``(4) Limitation on education activities counted as work.--
        For purposes of determining monthly participation rates under 
        paragraphs (1)(B)(i) and (2)(B)(i) of subsection (b), not more 
        than 30 percent of adults in all families and in 2-parent 
        families determined to be engaged in work in the State for a 
        month may meet the work activity requirement through 
        participation in vocational educational training.
            ``(5) Single parent with child under age 6 deemed to be 
        meeting work participation requirements if parent is engaged in 
        work for 20 hours per week.--For purposes of determining 
        monthly participation rates under subsection (b)(1)(B)(i), a 
        recipient in a 1-parent family who is the parent of a child who 
        has not attained 6 years of age is deemed to be engaged in work 
        for a month if the recipient is engaged in work for an average 
        of at least 20 hours per week during the month.
            ``(6) Teen head of household who maintains satisfactory 
        school attendance deemed to be meeting work participation 
        requirements.--For purposes of determining monthly 
        participation rates under subsection (b)(1)(B)(i), a recipient 
        who is a single head of household and has not attained 20 years 
        of age is deemed to be engaged in work for a month in a fiscal 
        year if the recipient--
                    ``(A) maintains satisfactory attendance at 
                secondary school or the equivalent during the month; or
                    ``(B) participates in education directly related to 
                employment for at least the minimum average number of 
                hours per week specified in the table set forth in 
                paragraph (1).
    ``(d) Work Activities Defined.--As used in this section, the term 
`work activities' means--
            ``(1) unsubsidized employment;
            ``(2) subsidized private sector employment;
            ``(3) subsidized public sector employment;
            ``(4) work experience (including work associated with the 
        refurbishing of publicly assisted housing) if sufficient 
        private sector employment is not available;
            ``(5) on-the-job training;
            ``(6) job search and job readiness assistance;
            ``(7) community service programs;
            ``(8) educational training (not to exceed 24 months with 
        respect to any individual);
            ``(9) job skills training directly related to employment;
            ``(10) education directly related to employment, in the 
        case of a recipient who has not attained 20 years of age, and 
        has not received a high school diploma or a certificate of high 
        school equivalency; and
            ``(11) satisfactory attendance at secondary school, in the 
        case of a recipient who--
                    ``(A) has not completed secondary school; and
                    ``(B) is a dependent child, or a head of household 
                who has not attained 20 years of age.
    ``(e) Penalties Against Individuals.--
            ``(1) In general.--Except as provided in paragraph (2), if 
        an adult in a family receiving assistance under the State 
        program funded under this part refuses to engage in work 
        required in accordance with this section, the State shall--
                    ``(A) reduce the amount of assistance otherwise 
                payable to the family pro rata (or more, at the option 
                of the State) with respect to any period during a month 
                in which the adult so refuses; or
                    ``(B) terminate such assistance,
        subject to such good cause and other exceptions as the State 
        may establish.
            ``(2) Exception.--
                    ``(A) In general.--Notwithstanding paragraph (1), a 
                State may not reduce or terminate assistance under the 
                State program funded under this part based on a refusal 
                of an adult to work if the adult is a single custodial 
                parent caring for a child who has not attained 11 years 
                of age, and the adult proves that the adult has a 
                demonstrated inability (as determined by the State) to 
                obtain needed child care, for 1 or more of the 
                following reasons:
                            ``(i) Unavailability of appropriate child 
                        care within a reasonable distance from the 
                        individual's home or work site.
                            ``(ii) Unavailability or unsuitability of 
                        informal child care by a relative or under 
                        other arrangements.
                            ``(iii) Unavailability of appropriate and 
                        affordable formal child care arrangements.
                    ``(B) Included in determination of participation 
                rates.--A State may not disregard an adult for which 
                the exception described in subparagraph (A) applies 
                from determination of the participation rates under 
                subsection (a).
    ``(f) Nondisplacement in Work Activities.--
            ``(1) In general.--Subject to paragraph (2), an adult in a 
        family receiving assistance under a State program funded under 
        this part attributable to funds provided by the Federal 
        Government may fill a vacant employment position in order to 
        engage in a work activity described in subsection (d).
            ``(2) No filling of certain vacancies.--No work assignment 
        to an adult in a family receiving assistance under a State 
        program funded under this part shall result in--
                    ``(A) the displacement of any currently employed 
                worker (including any temporary layoffs and any partial 
                displacement of such worker through such matters as a 
                reduction in the hours of nonovertime work, wages, or 
                employment benefits; and
                    ``(B) the termination of the employment of any 
                regular employee or any other involuntary reduction of 
                an employer's workforce in order to fill the vacancy so 
                created with an adult described in paragraph (1).
            ``(3) Grievance procedure.--A State with a program funded 
        under this part shall establish and maintain a grievance 
        procedure for resolving complaints of alleged violations of the 
        provisions of paragraph (2) and for providing adequate remedies 
        for any such violations established. The grievance procedure 
        established under this paragraph shall include an opportunity 
        for a hearing.
            ``(4) No preemption.--Nothing in this subsection shall 
        preempt or supersede any provision of State or local law that 
        provides greater protection for employees from displacement.
    ``(g) Sense of the Congress.--It is the sense of the Congress that 
in complying with this section, each State that operates a program 
funded under this part is encouraged to assign the highest priority to 
requiring adults in 2-parent families and adults in single-parent 
families that include older preschool or school-age children to be 
engaged in work activities.
    ``(h) Sense of the Congress That States Should Impose Certain 
Requirements on Noncustodial, Nonsupporting Minor Parents.--It is the 
sense of the Congress that the States should require noncustodial, 
nonsupporting parents who have not attained 18 years of age to fulfill 
community work obligations and attend appropriate parenting or money 
management classes after school.
    ``(i) Encouragement To Provide Child Care Services.--An individual 
participating in a State community service program may be treated as 
being engaged in work under subsection (c) if such individual provides 
child care services to other individuals participating in the community 
service program in the manner, and for the period of time each week, 
determined appropriate by the State.

``SEC. 408. PROHIBITIONS; REQUIREMENTS.

    ``(a) In General.--
            ``(1) No assistance for families without a minor child.--A 
        State to which a grant is made under section 403 shall not use 
        any part of the grant to provide assistance to a family--
                    ``(A) unless the family includes--
                            ``(i) a minor child who resides with a 
                        custodial parent or other adult caretaker 
                        relative of the child; or
                            ``(ii) a pregnant individual; and
                    ``(B) if such family includes an adult who has 
                received assistance under any State program funded 
                under this part attributable to funds provided by the 
                Federal Government, for 60 months (whether or not 
                consecutive) after the date the State program funded 
                under this part commences (unless an exception 
                described in subparagraph (B) or (C) of paragraph (8) 
                applies).
            ``(2) Reduction or elimination of assistance for 
        noncooperation in establishing paternity or obtaining child 
        support.--If the agency responsible for administering the State 
        plan approved under part D determines that an individual is not 
        cooperating with the State in establishing paternity or in 
        establishing, modifying, or enforcing a support order with 
        respect to a child of the individual, and the individual does 
        not qualify for any good cause or other exception established 
        by the State pursuant to section 454(29), then the State--
                    ``(A) shall deduct not less than 25 percent of the 
                assistance that would otherwise be provided to the 
                family of the individual under the State program funded 
                under this part; and
                    ``(B) may deny the family any assistance under the 
                State program.
            ``(3) No assistance for families not assigning certain 
        support rights to the state.--
                    ``(A) In general.--A State to which a grant is made 
                under section 403 shall require, as a condition of 
                providing assistance to a family under the State 
                program funded under this part, that a member of the 
                family assign to the State any rights the family member 
                may have (on behalf of the family member or of any 
                other person for whom the family member has applied for 
                or is receiving such assistance) to support from any 
                other person, not exceeding the total amount of 
                assistance so provided to the family, which accrue (or 
                have accrued) before the date the family leaves the 
                program, which assignment, on and after the date the 
                family leaves the program, shall not apply with respect 
                to any support (other than support collected pursuant 
                to section 464) which accrued before the family 
                received such assistance and which the State has not 
                collected by--
                            ``(i) September 30, 2000, if the assignment 
                        is executed on or after October 1, 1997, and 
                        before October 1, 2000; or
                            ``(ii) the date the family leaves the 
                        program, if the assignment is executed on or 
                        after October 1, 2000.
                    ``(B) Limitation.--A State to which a grant is made 
                under section 403 shall not require, as a condition of 
                providing assistance to any family under the State 
                program funded under this part, that a member of the 
                family assign to the State any rights to support 
                described in subparagraph (A) which accrue after the 
                date the family leaves the program.
            ``(4) No assistance for teenage parents who do not attend 
        high school or other equivalent training program.--A State to 
        which a grant is made under section 403 shall not use any part 
        of the grant to provide assistance to an individual who has not 
        attained 18 years of age, is not married, has a minor child at 
        least 12 weeks of age in his or her care, and has not 
        successfully completed a high-school education (or its 
        equivalent), if the individual does not participate in--
                    ``(A) educational activities directed toward the 
                attainment of a high school diploma or its equivalent; 
                or
                    ``(B) an alternative educational or training 
                program that has been approved by the State.
            ``(5) No assistance for teenage parents not living in 
        adult-supervised settings.--
                    ``(A) In general.--
                            ``(i) Requirement.--Except as provided in 
                        subparagraph (B), a State to which a grant is 
                        made under section 403 shall not use any part 
                        of the grant to provide assistance to an 
                        individual described in clause (ii) of this 
                        subparagraph if the individual and the minor 
                        child referred to in clause (ii)(II) do not 
                        reside in a place of residence maintained by a 
                        parent, legal guardian, or other adult relative 
                        of the individual as such parent's, guardian's, 
                        or adult relative's own home.
                            ``(ii) Individual described.--For purposes 
                        of clause (i), an individual described in this 
                        clause is an individual who--
                                    ``(I) has not attained 18 years of 
                                age; and
                                    ``(II) is not married, and has a 
                                minor child in his or her care.
                    ``(B) Exception.--
                            ``(i) Provision of, or assistance in 
                        locating, adult-supervised living 
                        arrangement.--In the case of an individual who 
                        is described in clause (ii), the State agency 
                        referred to in section 402(a)(4) shall provide, 
                        or assist the individual in locating, a second 
                        chance home, maternity home, or other 
                        appropriate adult-supervised supportive living 
                        arrangement, taking into consideration the 
                        needs and concerns of the individual, and 
                        thereafter shall require that the individual 
                        and the minor child referred to in subparagraph 
                        (A)(ii)(II) reside in such living arrangement 
                        as a condition of the continued receipt of 
                        assistance under the State program funded under 
                        this part attributable to funds provided by the 
                        Federal Government (or in an alternative 
                        appropriate arrangement, should circumstances 
                        change and the current arrangement cease to be 
                        appropriate).
                            ``(ii) Individual described.--For purposes 
                        of clause (i), an individual is described in 
                        this clause if the individual is described in 
                        subparagraph (A)(ii), and--
                                    ``(I) the individual has no parent, 
                                legal guardian or other appropriate 
                                adult relative described in subclause 
                                (II) of his or her own who is living or 
                                whose whereabouts are known;
                                    ``(II) no living parent, legal 
                                guardian, or other appropriate adult 
                                relative, who would otherwise meet 
                                applicable State criteria to act as the 
                                individual's legal guardian, of such 
                                individual allows the individual to 
                                live in the home of such parent, 
                                guardian, or relative;
                                    ``(III) the State agency determines 
                                that--
                                            ``(aa) the individual or 
                                        the minor child referred to in 
                                        subparagraph (A)(ii)(II) is 
                                        being or has been subjected to 
                                        serious physical or emotional 
                                        harm, sexual abuse, or 
                                        exploitation in the residence 
                                        of the individual's own parent 
                                        or legal guardian; or
                                            ``(bb) substantial evidence 
                                        exists of an act or failure to 
                                        act that presents an imminent 
                                        or serious harm if the 
                                        individual and the minor child 
                                        lived in the same residence 
                                        with the individual's own 
                                        parent or legal guardian; or
                                    ``(IV) the State agency otherwise 
                                determines that it is in the best 
                                interest of the minor child to waive 
                                the requirement of subparagraph (A) 
                                with respect to the individual or the 
                                minor child.
                            ``(iii) Second-chance home.--For purposes 
                        of this subparagraph, the term `second-chance 
                        home' means an entity that provides individuals 
                        described in clause (ii) with a supportive and 
                        supervised living arrangement in which such 
                        individuals are required to learn parenting 
                        skills, including child development, family 
                        budgeting, health and nutrition, and other 
                        skills to promote their long-term economic 
                        independence and the well-being of their 
                        children.
            ``(6) No medical services.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a State to which a grant is made 
                under section 403 shall not use any part of the grant 
                to provide medical services.
                    ``(B) Exception for family planning services.--As 
                used in subparagraph (A), the term `medical services' 
                does not include family planning services.
            ``(7) Sanction welfare recipients for failing to ensure 
        that minor dependent children attend school.--
                    ``(A) In general.--A State to which a grant is made 
                under section 403 shall not be prohibited from 
                sanctioning a family that includes an adult who has 
                received assistance under any State program funded 
                under this part attributable to funds provided by the 
                Federal Government or under the food stamp program, as 
                defined in section 3(h) of the Food Stamp Act of 1977, 
                if such adult fails to ensure that the minor dependent 
                children of such adult attend school as required by the 
                law of the State in which the minor children reside.
            ``(8) Denial of assistance for 10 years to a person found 
        to have fraudulently misrepresented residence in order to 
        obtain assistance in 2 or more states.--A State to which a 
        grant is made under section 403 shall not use any part of the 
        grant to provide cash assistance to an individual during the 
        10-year period that begins on the date the individual is 
        convicted in Federal or State court of having made a fraudulent 
        statement or representation with respect to the place of 
        residence of the individual in order to receive assistance 
        simultaneously from 2 or more States under programs that are 
        funded under this title, title XV or XIX, or the Food Stamp Act 
        of 1977, or benefits in 2 or more States under the supplemental 
        security income program under title XVI. The preceding sentence 
        shall not apply with respect to a conviction of an individual, 
        for any month beginning after the President of the United 
        States grants a pardon with respect to the conduct which was 
        the subject of the conviction.
            ``(9) Denial of assistance for fugitive felons and 
        probation and parole violators.--
                    ``(A) In general.--A State to which a grant is made 
                under section 403 shall not use any part of the grant 
                to provide assistance to any individual who is--
                            ``(i) fleeing to avoid prosecution, or 
                        custody or confinement after conviction, under 
                        the laws of the place from which the individual 
                        flees, for a crime, or an attempt to commit a 
                        crime, which is a felony under the laws of the 
                        place from which the individual flees, or 
                        which, in the case of the State of New Jersey, 
                        is a high misdemeanor under the laws of such 
                        State; or
                            ``(ii) violating a condition of probation 
                        or parole imposed under Federal or State law.
                The preceding sentence shall not apply with respect to 
                conduct of an individual, for any month beginning after 
                the President of the United States grants a pardon with 
                respect to the conduct.
                    ``(B) Exchange of information with law enforcement 
                agencies.--If a State to which a grant is made under 
                section 403 establishes safeguards against the use or 
                disclosure of information about applicants or 
                recipients of assistance under the State program funded 
                under this part, the safeguards shall not prevent the 
                State agency administering the program from furnishing 
                a Federal, State, or local law enforcement officer, 
                upon the request of the officer, with the current 
                address of any recipient if the officer furnishes the 
                agency with the name of the recipient and notifies the 
                agency that--
                            ``(i) the recipient--
                                    ``(I) is described in subparagraph 
                                (A); or
                                    ``(II) has information that is 
                                necessary for the officer to conduct 
                                the official duties of the officer; and
                            ``(ii) the location or apprehension of the 
                        recipient is within such official duties.
            ``(10) Denial of assistance for minor children who are 
        absent from the home for a significant period.--
                    ``(A) In general.--A State to which a grant is made 
                under section 403 shall not use any part of the grant 
                to provide assistance for a minor child who has been, 
                or is expected by a parent (or other caretaker 
                relative) of the child to be, absent from the home for 
                a period of 45 consecutive days or, at the option of 
                the State, such period of not less than 30 and not more 
                than 180 consecutive days as the State may provide for 
                in the State plan submitted pursuant to section 402.
                    ``(B) State authority to establish good cause 
                exceptions.--The State may establish such good cause 
                exceptions to subparagraph (A) as the State considers 
                appropriate if such exceptions are provided for in the 
                State plan submitted pursuant to section 402.
                    ``(C) Denial of assistance for relative who fails 
                to notify state agency of absence of child.--A State to 
                which a grant is made under section 403 shall not use 
                any part of the grant to provide assistance for an 
                individual who is a parent (or other caretaker 
                relative) of a minor child and who fails to notify the 
                agency administering the State program funded under 
                this part of the absence of the minor child from the 
                home for the period specified in or provided for 
                pursuant to subparagraph (A), by the end of the 5-day 
                period that begins with the date that it becomes clear 
                to the parent (or relative) that the minor child will 
                be absent for such period so specified or provided for.
            ``(11) Assuring medicaid coverage for low-income 
        families.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this Act, subject to the succeeding 
                provisions of this paragraph, with respect to a State 
                any reference in title XIX (or other provision of law 
                in relation to the operation of such title) to a 
                provision of this part, or a State plan under this part 
                (or a provision of such a plan), including standards 
                and methodologies for determining income and resources 
                under this part or such plan, shall be considered a 
                reference to such a provision or plan as in effect as 
                of July 1, 1996, with respect to the State.
                    ``(B) Constructions.--
                            ``(i) In applying section 1925(a)(1), the 
                        reference to `section 402(a)(8)(B)(ii)(II)' is 
                        deemed a reference to a corresponding earning 
                        disregard rule (if any) established under a 
                        State program funded under this part (as in 
                        effect on or after October 1, 1996).
                            ``(ii) The provisions of former section 
                        406(h) (as in effect on July 1, 1996) shall 
                        apply, in relation to title XIX, with respect 
                        to individuals who receive assistance under a 
                        State program funded under this part (as in 
                        effect on or after October 1, 1996) and are 
                        eligible for medical assistance under title XIX 
                        or who are described in subparagraph (C)(i) in 
                        the same manner as they apply as of July 1, 
                        1996, with respect to individuals who become 
                        ineligible for aid to families with dependent 
                        children as a result (wholly or partly) of the 
                        collection or increased collection of child or 
                        spousal support under part D of this title.
                            ``(iii) With respect to the reference in 
                        section 1902(a)(5) to a State plan approved 
                        under this part, a State may treat such 
                        reference as a reference either to a State 
                        program funded under this part (as in effect on 
                        or after October 1, 1996) or to the State plan 
                        under title XIX.
                    ``(C) Eligibility criteria.--
                            ``(i) In general.--For purposes of title 
                        XIX, subject to clause (ii), in determining 
                        eligibility for medical assistance under such 
                        title, an individual shall be treated as 
                        receiving aid or assistance under a State plan 
                        approved under this part (and shall be treated 
                        as meeting the income and resource standards 
                        under this part) only if the individual meets--
                                    ``(I) the income and resource 
                                standards for determining eligibility 
                                under such plan; and
                                    ``(II) the eligibility requirements 
                                of such plan under subsections (a) 
                                through (c) of former section 406 and 
                                former section 407(a),
                        as in effect as of July 1, 1996. Subject to 
                        clause (ii)(II), the income and resource 
                        methodologies under such plan as of such date 
                        shall be used in the determination of whether 
                        any individual meets income and resource 
                        standards under such plan.
                            ``(ii) State option.--For purposes of 
                        applying this paragraph, a State may--
                                    ``(I) lower its income standards 
                                applicable with respect to this part, 
                                but not below the income standards 
                                applicable under its State plan under 
                                this part on May 1, 1988; and
                                    ``(II) use income and resource 
                                standards or methodologies that are 
                                less restrictive than the standards or 
                                methodologies used under the State plan 
                                under this part as of July 1, 1996.
                            ``(iii) Transitional coverage.--For 
                        purposes of section 1925, an individual who is 
                        receiving assistance under the State program 
                        funded under this part (as in effect on or 
                        after October 1, 1996) and is eligible for 
                        medical assistance under title XIX shall be 
                        treated as an individual receiving aid or 
                        assistance pursuant to a State plan approved 
                        under this part (as in effect as of July 1, 
                        1996) (and thereby eligible for continuation of 
                        medical assistance under such section 1925).
                    ``(D) Waivers.--In the case of a waiver of a 
                provision of this part in effect with respect to a 
                State as of July 1, 1996, if the waiver affects 
                eligibility of individuals for medical assistance under 
                title XIX, such waiver may (but need not) continue to 
                be applied, at the option of the State, in relation to 
                such title after the date the waiver would otherwise 
                expire. If a State elects not to continue to apply such 
                a waiver, then, after the date of the expiration of the 
                waiver, subparagraphs (A), (B), and (C) shall be 
                applied as if any provisions so waived had not been 
                waived.
                    ``(E) State option to use 1 application form.--
                Nothing in this paragraph, this part, or title XIX, 
                shall be construed as preventing a State from providing 
                for the same application form for assistance under a 
                State program funded under this part (on or after 
                October 1, 1996) and for medical assistance under title 
                XIX.
                    ``(F) Requirement for receipt of funds.--A State to 
                which a grant is made under section 403 shall take such 
                action as may be necessary to ensure that the 
                provisions of this paragraph are carried out: Provided, 
                That the State is otherwise participating in title XIX 
                of this Act.
    ``(b) Aliens.--For special rules relating to the treatment of 
aliens, see section 2402 of the Personal Responsibility and Work 
Opportunity Act of 1996.
    ``(c) Nondiscrimination Provisions.--Any program or activity that 
receives funds under this part shall be subject to enforcement 
authorized under the following provisions of law:
            ``(1) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et 
        seq.).
            ``(2) Section 504 of the Rehabilitation Act of 1973 (29 
        U.S.C. 794).
            ``(3) The Americans with Disabilities Act of 1990 (42 
        U.S.C. 12101 et seq.).
            ``(4) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
        2000d et seq.).
    ``(d) State Required To Enter Into a Personal Responsibility 
Agreement With Each Family Receiving Assistance.--
            ``(1) In general.--Each State to which a grant is made 
        under section 403 shall require each family receiving 
        assistance under the State program funded under this part to 
        enter into a personal responsibility agreement (as developed by 
        the State) with the State.
            ``(2) Personal responsibility agreement.--For purposes of 
        this subsection, the term `personal responsibility agreement' 
        means a binding contract between the State and each family 
        receiving assistance under the State program funded under this 
        part that--
                    ``(A) contains a statement that public assistance 
                is not intended to be a way of life, but is intended as 
                temporary assistance to help the family achieve self-
                sufficiency and personal independence;
                    ``(B) outlines the steps each family and the State 
                will take to get the family off of welfare and to 
                become self-sufficient, including an employment goal 
                for the individual and a plan for promptly moving the 
                individual into paid employment;
                    ``(C) specifies a negotiated time-limited period of 
                eligibility for receipt of assistance that is 
                consistent with unique family circumstances and is 
                based on a reasonable plan to facilitate the transition 
                of the family to self-sufficiency;
                    ``(D) provides for the imposition of sanctions if 
                the individual refuses to sign the agreement or does 
                not comply with the terms of the agreement, which may 
                include loss or reduction of cash benefits;
                    ``(E) provides that the contract shall be invalid 
                if the State agency fails to comply with the contract; 
                and
                    ``(F) provides that the individual agrees not to 
                abuse illegal drugs or other substances that would 
                interfere with the ability of the individual to become 
                self-sufficient, or provide for a referral for 
                substance abuse treatment if necessary to increase the 
                employability of the individual.
            ``(3) Assessment.--The State agency shall provide, through 
        a case manager, an initial and thorough assessment of the 
        skills, prior work experience, and employability of each parent 
        for use in developing and negotiating a personal responsibility 
        contract.
            ``(4) Dispute resolution.--The State agency shall establish 
        a dispute resolution procedure for disputes related to 
        participation in the personal responsibility contract that 
        provides the opportunity for a hearing.

``SEC. 409. PENALTIES.

    ``(a) In General.--Subject to this section:
            ``(1) Use of grant in violation of this part.--
                    ``(A) General penalty.--If an audit conducted under 
                chapter 75 of title 31, United States Code, finds that 
                an amount paid to a State under section 403 for a 
                fiscal year has been used in violation of this part, 
                the Secretary shall reduce the grant payable to the 
                State under section 403(a)(1) for the immediately 
                succeeding fiscal year quarter by the amount so used.
                    ``(B) Enhanced penalty for intentional 
                violations.--If the State does not prove to the 
                satisfaction of the Secretary that the State did not 
                intend to use the amount in violation of this part, the 
                Secretary shall further reduce the grant payable to the 
                State under section 403(a)(1) for the immediately 
                succeeding fiscal year quarter by an amount equal to 5 
                percent of the State family assistance grant.
            ``(2) Failure to submit required report.--
                    ``(A) In general.--If the Secretary determines that 
                a State has not, within 1 month after the end of a 
                fiscal quarter, submitted the report required by 
                section 411(a) for the quarter, the Secretary shall 
                reduce the grant payable to the State under section 
                403(a)(1) for the immediately succeeding fiscal year by 
                an amount equal to 4 percent of the State family 
                assistance grant.
                    ``(B) Rescission of penalty.--The Secretary shall 
                rescind a penalty imposed on a State under subparagraph 
                (A) with respect to a report if the State submits the 
                report before the end of the fiscal quarter that 
                immediately succeeds the fiscal quarter for which the 
                report was required.
            ``(3) Failure to satisfy minimum participation rates.--
                    ``(A) In general.--If the Secretary determines that 
                a State to which a grant is made under section 403 for 
                a fiscal year has failed to comply with section 407(a) 
                for the fiscal year, the Secretary shall reduce the 
                grant payable to the State under section 403(a)(1) for 
                the immediately succeeding fiscal year by an amount 
                equal to not more than 5 percent of the State family 
                assistance grant.
                    ``(B) Penalty based on severity of failure.--The 
                Secretary shall impose reductions under subparagraph 
                (A) based on the degree of noncompliance.
                    ``(C) Additional penalty for consecutive 
                noncompliance.--Notwithstanding the limitation 
                described in subparagraph (A), the Secretary shall 
                reduce the grant payable to the State under section 
                403(a)(1) for a fiscal year, in addition to the 
                reduction imposed under subparagraph (A), by an amount 
                equal to 5 percent of the State family assistance 
                grant, if the Secretary determines that the State 
                failed to comply with section 407(a) for 2 or more 
                consecutive preceding fiscal years.
            ``(4) Failure to participate in the income and eligibility 
        verification system.--If the Secretary determines that a State 
        program funded under this part is not participating during a 
        fiscal year in the income and eligibility verification system 
        required by section 1137, the Secretary shall reduce the grant 
        payable to the State under section 403(a)(1) for the 
        immediately succeeding fiscal year by an amount equal to not 
        more than 2 percent of the State family assistance grant.
            ``(5) Failure to comply with paternity establishment and 
        child support enforcement requirements under part d.--
        Notwithstanding any other provision of this Act, if the 
        Secretary determines that the State agency that administers a 
        program funded under this part does not enforce the penalties 
        requested by the agency administering part D against recipients 
        of assistance under the State program who fail to cooperate in 
        establishing paternity or in establishing, modifying, or 
        enforcing a child support order in accordance with such part 
        and who do not qualify for any good cause or other exception 
        established by the State under section 454(29), the Secretary 
        shall reduce the grant payable to the State under section 
        403(a)(1) for the immediately succeeding fiscal year (without 
        regard to this section) by not more than 5 percent.
            ``(6) Failure to timely repay a federal loan fund for state 
        welfare programs.--If the Secretary determines that a State has 
        failed to repay any amount borrowed from the Federal Loan Fund 
        for State Welfare Programs established under section 406 within 
        the period of maturity applicable to the loan, plus any 
        interest owed on the loan, the Secretary shall reduce the grant 
        payable to the State under section 403(a)(1) for the 
        immediately succeeding fiscal year quarter (without regard to 
        this section) by the outstanding loan amount, plus the interest 
        owed on the outstanding amount. The Secretary shall not forgive 
        any outstanding loan amount or interest owed on the outstanding 
        amount.
            ``(7) Failure of any state to maintain certain level of 
        historic effort.--
                    ``(A) In general.--The Secretary shall reduce the 
                grant payable to the State under section 403(a)(1) for 
                fiscal year 1998, 1999, 2000, 2001, or 2002 by the 
                amount (if any) by which qualified State expenditures 
                for the then immediately preceding fiscal year are less 
                than the applicable percentage of historic State 
                expenditures with respect to such preceding fiscal 
                year.
                    ``(B) Definitions.--As used in this paragraph:
                            ``(i) Qualified state expenditures.--
                                    ``(I) In general.--The term 
                                `qualified State expenditures' means, 
                                with respect to a State and a fiscal 
                                year, the total expenditures by the 
                                State during the fiscal year, under all 
                                State programs, for any of the 
                                following with respect to eligible 
                                families:
                                            ``(aa) Cash assistance.
                                            ``(bb) Child care 
                                        assistance.
                                            ``(cc) Educational 
                                        activities designed to increase 
                                        self-sufficiency, job training, 
                                        and work, excluding any 
                                        expenditure for public 
                                        education in the State except 
                                        expenditures which involve the 
                                        provision of services or 
                                        assistance to a member of an 
                                        eligible family which is not 
                                        generally available to persons 
                                        who are not members of an 
                                        eligible family.
                                            ``(dd) Administrative costs 
                                        in connection with the matters 
                                        described in items (aa), (bb), 
                                        (cc), and (ee), but only to the 
                                        extent that such costs do not 
                                        exceed 15 percent of the total 
                                        amount of qualified State 
                                        expenditures for the fiscal 
                                        year.
                                            ``(ee) Any other use of 
                                        funds allowable under section 
                                        404(a)(1).
                                    ``(II) Exclusion of transfers from 
                                other state and local programs.--Such 
                                term does not include expenditures 
                                under any State or local program during 
                                a fiscal year, except to the extent 
                                that--
                                            ``(aa) such expenditures 
                                        exceed the amount expended 
                                        under the State or local 
                                        program in the fiscal year most 
                                        recently ending before the date 
                                        of the enactment of the 
                                        Personal Responsibility and 
                                        Work Opportunity Act of 1996; 
                                        or
                                            ``(bb) the State is 
                                        entitled to a payment under 
                                        former section 403 (as in 
                                        effect immediately before such 
                                        date of enactment) with respect 
                                        to such expenditures.
                                    ``(III) Eligible families.--As used 
                                in subclause (I), the term `eligible 
                                families' means families eligible for 
                                assistance under the State program 
                                funded under this part, and families 
                                that would be eligible for such 
                                assistance but for the application of 
                                section 408(a)(8) of this Act or 
                                section 2402 of the Personal 
                                Responsibility and Work Opportunity Act 
                                of 1996.
                            ``(ii) Applicable percentage.--The term 
                        `applicable percentage' means for fiscal years 
                        1997 through 2001, 80 percent reduced (if 
                        appropriate) in accordance with subparagraph 
                        (C)(ii).
                            ``(iii) Historic state expenditures.--The 
                        term `historic State expenditures' means, with 
                        respect to a State, the lesser of--
                                    ``(I) the expenditures by the State 
                                under parts A and F (as in effect 
                                during fiscal year 1994) for fiscal 
                                year 1994; or
                                    ``(II) the amount which bears the 
                                same ratio to the amount described in 
                                subclause (I) as--
                                            ``(aa) the State family 
                                        assistance grant, plus the 
                                        total amount required to be 
                                        paid to the State under former 
                                        section 403 for fiscal year 
                                        1994 with respect to amounts 
                                        expended by the State for child 
                                        care under subsection (g) or 
                                        (i) of section 402 (as in 
                                        effect during fiscal year 
                                        1994); bears to
                                            ``(bb) the total amount 
                                        required to be paid to the 
                                        State under former section 403 
                                        (as in effect during fiscal 
                                        year 1994) for fiscal year 
                                        1994.
                        Such term does not include any expenditures 
                        under the State plan approved under part A (as 
                        so in effect) on behalf of individuals covered 
                        by a tribal family assistance plan approved 
                        under section 412, as determined by the 
                        Secretary.
                            ``(iv) Expenditures by the state.--The term 
                        `expenditures by the State' does not include--
                                    ``(I) any expenditures from amounts 
                                made available by the Federal 
                                Government;
                                    ``(II) State funds expended for the 
                                medicaid program under title XV or XIX; 
                                or
                                    ``(III) any State funds which are 
                                used to match Federal funds or are 
                                expended as a condition of receiving 
                                Federal funds under Federal programs 
                                other than under this part.
                    ``(C) Applicable percentage reduced for high 
                performance states.--
                            ``(i) Determination of high performance 
                        states.--The Secretary shall use the formula 
                        developed under section 403(a)(4)(C) to assign 
                        a score to each eligible State that represents 
                        the performance of the State program funded 
                        under this part for each fiscal year, and shall 
                        prescribe a performance threshold which the 
                        Secretary shall use to determine whether to 
                        reduce the applicable percentage with respect 
                        to any eligible State for a fiscal year.
                            ``(ii) Reduction proportional to 
                        performance.--The Secretary shall reduce the 
                        applicable percentage for a fiscal year with 
                        respect to each eligible State by an amount 
                        which is directly proportional to the amount 
                        (if any) by which the score assigned to the 
                        State under clause (i) for the immediately 
                        preceding fiscal year exceeds the performance 
                        threshold prescribed under clause (i) for such 
                        preceding fiscal year, subject to clause (iii).
                            ``(iii) Limitation on reduction.--The 
                        applicable percentage for a fiscal year with 
                        respect to a State may not be reduced by more 
                        than 8 percentage points under this 
                        subparagraph.
            ``(8) Substantial noncompliance of state child support 
        enforcement program with requirements of part d.--
                    ``(A) In general.--If a State program operated 
                under part D is found as a result of a review conducted 
                under section 452(a)(4) not to have complied 
                substantially with the requirements of such part for 
                any quarter, and the Secretary determines that the 
                program is not complying substantially with such 
                requirements at the time the finding is made, the 
                Secretary shall reduce the grant payable to the State 
                under section 403(a)(1) for the quarter and each 
                subsequent quarter that ends before the 1st quarter 
                throughout which the program is found to be in 
                substantial compliance with such requirements by--
                            ``(i) not less than 1 nor more than 2 
                        percent;
                            ``(ii) not less than 2 nor more than 3 
                        percent, if the finding is the 2nd consecutive 
                        such finding made as a result of such a review; 
                        or
                            ``(iii) not less than 3 nor more than 5 
                        percent, if the finding is the 3rd or a 
                        subsequent consecutive such finding made as a 
                        result of such a review.
                    ``(B) Disregard of noncompliance which is of a 
                technical nature.--For purposes of subparagraph (A) and 
                section 452(a)(4), a State which is not in full 
                compliance with the requirements of this part shall be 
                determined to be in substantial compliance with such 
                requirements only if the Secretary determines that any 
                noncompliance with such requirements is of a technical 
                nature which does not adversely affect the performance 
                of the State's program operated under part D.
            ``(9) Failure of state receiving amounts from contingency 
        fund to maintain 100 percent of historic effort.--If, at the 
        end of any fiscal year during which amounts from the 
        Contingency Fund for State Welfare Programs have been paid to a 
        State, the Secretary finds that the expenditures under the 
        State program funded under this part for the fiscal year are 
        less than 100 percent of historic State expenditures (as 
        defined in paragraph (7)(B)(iii) of this subsection), the 
        Secretary shall reduce the grant payable to the State under 
        section 403(a)(1) for the immediately succeeding fiscal year by 
        the total of the amounts so paid to the State.
            ``(10) Failure to comply with provisions of this part or 
        the state plan.--If, after reasonable notice and opportunity 
        for hearing, the Secretary determines that during a fiscal year 
        a State has not substantially complied with any provision of 
        this part or of the State plan, the Secretary shall, if a 
        preceding paragraph of this subsection does not apply to such 
        noncompliance, reduce the grant payable to the State under 
        section 403(a)(1) for the immediately succeeding fiscal year by 
        an amount equal to not more than 5 percent of the State family 
        assistance grant, and shall continue to impose such reduction 
        during each succeeding fiscal year until the Secretary 
        determines that the State no longer is in noncompliance with 
        such provision.
            ``(11) Failure to comply with 5-year limit on assistance.--
        If the Secretary determines that during a fiscal year a State 
        has not complied with the provisions of section 408(a)(1)(B), 
        the Secretary shall reduce the grant payable to the State under 
        section 403(a)(1) for the immediately succeeding fiscal year by 
        an amount equal to 5 percent of the State family assistance 
        grant.
            ``(12) Required replacement of grant fund reductions caused 
        by penalties.--If the grant payable to a State under section 
        403(a)(1) for a fiscal year is reduced by reason of this 
        subsection, the State shall, during the immediately succeeding 
        fiscal year, expend under the State program funded under this 
        part an amount equal to the total amount of such reductions.
    ``(b) Reasonable Cause Exception.--
            ``(1) In general.--The Secretary may not impose a penalty 
        on a State under subsection (a) with respect to a requirement 
        if the Secretary determines that the State has reasonable cause 
        for failing to comply with the requirement.
            ``(2) Exception.--Paragraph (1) of this subsection shall 
        not apply to any penalty under paragraph (6) or (7) of 
        subsection (a).
    ``(c) Corrective Compliance Plan.--
            ``(1) In general.--
                    ``(A) Notification of violation.--Before imposing a 
                penalty against a State under subsection (a) with 
                respect to a violation of this part, the Secretary 
                shall notify the State of the violation and allow the 
                State the opportunity to enter into a corrective 
                compliance plan in accordance with this subsection 
                which outlines how the State will correct the violation 
                and how the State will insure continuing compliance 
                with this part.
                    ``(B) 60-day period to propose a corrective 
                compliance plan.--During the 60-day period that begins 
                on the date the State receives a notice provided under 
                subparagraph (A) with respect to a violation, the State 
                may submit to the Federal Government a corrective 
                compliance plan to correct the violation.
                    ``(C) Consultation about modifications.--During the 
                60-day period that begins with the date the Secretary 
                receives a corrective compliance plan submitted by a 
                State in accordance with subparagraph (B), the 
                Secretary may consult with the State on modifications 
                to the plan.
                    ``(D) Acceptance of plan.-- A corrective compliance 
                plan submitted by a State in accordance with 
                subparagraph (B) is deemed to be accepted by the 
                Secretary if the Secretary does not accept or reject 
                the plan during 60-day period that begins on the date 
                the plan is submitted.
            ``(2) Effect of correcting violation.--The Secretary may 
        not impose any penalty under subsection (a) with respect to any 
        violation covered by a State corrective compliance plan 
        accepted by the Secretary if the State corrects the violation 
        pursuant to the plan.
            ``(3) Effect of failing to correct violation.--The 
        Secretary shall assess some or all of a penalty imposed on a 
        State under subsection (a) with respect to a violation if the 
        State does not, in a timely manner, correct the violation 
        pursuant to a State corrective compliance plan accepted by the 
        Secretary.
            ``(4) Inapplicability to failure to timely repay a federal 
        loan fund for a state welfare program.--This subsection shall 
        not apply to the imposition of a penalty against a State under 
        subsection (a)(6).
    ``(d) Limitation on Amount of Penalty.--
            ``(1) In general.--In imposing the penalties described in 
        subsection (a), the Secretary shall not reduce any quarterly 
        payment to a State by more than 25 percent.
            ``(2) Carryforward of unrecovered penalties.--To the extent 
        that paragraph (1) of this subsection prevents the Secretary 
        from recovering during a fiscal year the full amount of 
        penalties imposed on a State under subsection (a) of this 
        section for a prior fiscal year, the Secretary shall apply any 
        remaining amount of such penalties to the grant payable to the 
        State under section 403(a)(1) for the immediately succeeding 
        fiscal year.

``SEC. 410. APPEAL OF ADVERSE DECISION.

    ``(a) In General.--Within 5 days after the date the Secretary takes 
any adverse action under this part with respect to a State, the 
Secretary shall notify the chief executive officer of the State of the 
adverse action, including any action with respect to the State plan 
submitted under section 402 or the imposition of a penalty under 
section 409.
    ``(b) Administrative Review.--
            ``(1) In general.--Within 60 days after the date a State 
        receives notice under subsection (a) of an adverse action, the 
        State may appeal the action, in whole or in part, to the 
        Departmental Appeals Board established in the Department of 
        Health and Human Services (in this section referred to as the 
        `Board') by filing an appeal with the Board.
            ``(2) Procedural rules.--The Board shall consider an appeal 
        filed by a State under paragraph (1) on the basis of such 
        documentation as the State may submit and as the Board may 
        require to support the final decision of the Board. In deciding 
        whether to uphold an adverse action or any portion of such an 
        action, the Board shall conduct a thorough review of the issues 
        and take into account all relevant evidence. The Board shall 
        make a final determination with respect to an appeal filed 
        under paragraph (1) not less than 60 days after the date the 
        appeal is filed.
    ``(c) Judicial Review of Adverse Decision.--
            ``(1) In general.--Within 90 days after the date of a final 
        decision by the Board under this section with respect to an 
        adverse action taken against a State, the State may obtain 
        judicial review of the final decision (and the findings 
        incorporated into the final decision) by filing an action in--
                    ``(A) the district court of the United States for 
                the judicial district in which the principal or 
                headquarters office of the State agency is located; or
                    ``(B) the United States District Court for the 
                District of Columbia.
            ``(2) Procedural rules.--The district court in which an 
        action is filed under paragraph (1) shall review the final 
        decision of the Board on the record established in the 
        administrative proceeding, in accordance with the standards of 
        review prescribed by subparagraphs (A) through (E) of section 
        706(2) of title 5, United States Code. The review shall be on 
        the basis of the documents and supporting data submitted to the 
        Board.

``SEC. 411. DATA COLLECTION AND REPORTING.

    ``(a) Quarterly Reports by States.--
            ``(1) General reporting requirement.--
                    ``(A) Contents of report.--Each eligible State 
                shall collect on a monthly basis, and report to the 
                Secretary on a quarterly basis, the following 
                disaggregated case record information on the families 
                receiving assistance under the State program funded 
                under this part:
                            ``(i) The county of residence of the 
                        family.
                            ``(ii) Whether a child receiving such 
                        assistance or an adult in the family is 
                        disabled.
                            ``(iii) The ages of the members of such 
                        families.
                            ``(iv) The number of individuals in the 
                        family, and the relation of each family member 
                        to the youngest child in the family.
                            ``(v) The employment status and earnings of 
                        the employed adult in the family.
                            ``(vi) The marital status of the adults in 
                        the family, including whether such adults have 
                        never married, are widowed, or are divorced.
                            ``(vii) The race and educational status of 
                        each adult in the family.
                            ``(viii) The race and educational status of 
                        each child in the family.
                            ``(ix) Whether the family received 
                        subsidized housing, medical assistance under 
                        the State plan under title XV or the State plan 
                        approved under title XIX, food stamps, or 
                        subsidized child care, and if the latter 2, the 
                        amount received.
                            ``(x) The number of months that the family 
                        has received each type of assistance under the 
                        program.
                            ``(xi) If the adults participated in, and 
                        the number of hours per week of participation 
                        in, the following activities:
                                    ``(I) Education.
                                    ``(II) Subsidized private sector 
                                employment.
                                    ``(III) Unsubsidized employment.
                                    ``(IV) Public sector employment, 
                                work experience, or community service.
                                    ``(V) Job search.
                                    ``(VI) Job skills training or on-
                                the-job training.
                                    ``(VII) Vocational education.
                            ``(xii) Information necessary to calculate 
                        participation rates under section 407.
                            ``(xiii) The type and amount of assistance 
                        received under the program, including the 
                        amount of and reason for any reduction of 
                        assistance (including sanctions).
                            ``(xiv) Any amount of unearned income 
                        received by any member of the family.
                            ``(xv) The citizenship of the members of 
                        the family.
                            ``(xvi) From a sample of closed cases, 
                        whether the family left the program, and if so, 
                        whether the family left due to--
                                    ``(I) employment;
                                    ``(II) marriage;
                                    ``(III) the prohibition set forth 
                                in section 408(a)(8);
                                    ``(IV) sanction; or
                                    ``(V) State policy.
                    ``(B) Use of estimates.--
                            ``(i) Authority.--A State may comply with 
                        subparagraph (A) by submitting an estimate 
                        which is obtained through the use of 
                        scientifically acceptable sampling methods 
                        approved by the Secretary.
                            ``(ii) Sampling and other methods.--The 
                        Secretary shall provide the States with such 
                        case sampling plans and data collection 
                        procedures as the Secretary deems necessary to 
                        produce statistically valid estimates of the 
                        performance of State programs funded under this 
                        part. The Secretary may develop and implement 
                        procedures for verifying the quality of data 
                        submitted by the States.
            ``(2) Report on use of federal funds to cover 
        administrative costs and overhead.--The report required by 
        paragraph (1) for a fiscal quarter shall include a statement of 
        the percentage of the funds paid to the State under this part 
        for the quarter that are used to cover administrative costs or 
        overhead.
            ``(3) Report on state expenditures on programs for needy 
        families.--The report required by paragraph (1) for a fiscal 
        quarter shall include a statement of the total amount expended 
        by the State during the quarter on programs for needy families.
            ``(4) Report on noncustodial parents participating in work 
        activities.--The report required by paragraph (1) for a fiscal 
        quarter shall include the number of noncustodial parents in the 
        State who participated in work activities (as defined in 
        section 407(d)) during the quarter.
            ``(5) Report on transitional services.--The report required 
        by paragraph (1) for a fiscal quarter shall include the total 
        amount expended by the State during the quarter to provide 
        transitional services to a family that has ceased to receive 
        assistance under this part because of employment, along with a 
        description of such services.
            ``(6) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to define the data elements 
        with respect to which reports are required by this subsection.
    ``(b) Annual Reports to the Congress by the Secretary.--Not later 
than 6 months after the end of fiscal year 1997, and each fiscal year 
thereafter, the Secretary shall transmit to the Congress a report 
describing--
            ``(1) whether the States are meeting--
                    ``(A) the participation rates described in section 
                407(a); and
                    ``(B) the objectives of--
                            ``(i) increasing employment and earnings of 
                        needy families, and child support collections; 
                        and
                            ``(ii) decreasing out-of-wedlock 
                        pregnancies and child poverty;
            ``(2) the demographic and financial characteristics of 
        families applying for assistance, families receiving 
        assistance, and families that become ineligible to receive 
        assistance;
            ``(3) the characteristics of each State program funded 
        under this part; and
            ``(4) the trends in employment and earnings of needy 
        families with minor children living at home.

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

    ``(a) Grants for Indian Tribes.--
            ``(1) Tribal family assistance grant.--
                    ``(A) In general.--For each of fiscal years 1997, 
                1998, 1999, 2000, and 2001, the Secretary shall pay to 
                each Indian tribe that has an approved tribal family 
                assistance plan a tribal family assistance grant for 
                the fiscal year in an amount equal to the amount 
                determined under subparagraph (B), and shall reduce the 
                grant payable under section 403(a)(1) to any State in 
                which lies the service area or areas of the Indian 
                tribe by that portion of the amount so determined that 
                is attributable to expenditures by the State.
                    ``(B) Amount determined.--
                            ``(i) In general.--The amount determined 
                        under this subparagraph is an amount equal to 
                        the total amount of the Federal payments to a 
                        State or States under section 403 (as in effect 
                        during such fiscal year) for fiscal year 1994 
                        attributable to expenditures (other than child 
                        care expenditures) by the State or States under 
                        parts A and F (as so in effect) for fiscal year 
                        1994 for Indian families residing in the 
                        service area or areas identified by the Indian 
                        tribe pursuant to subsection (b)(1)(C) of this 
                        section.
                            ``(ii) Use of state submitted data.--
                                    ``(I) In general.--The Secretary 
                                shall use State submitted data to make 
                                each determination under clause (i).
                                    ``(II) Disagreement with 
                                determination.--If an Indian tribe or 
                                tribal organization disagrees with 
                                State submitted data described under 
                                subclause (I), the Indian tribe or 
                                tribal organization may submit to the 
                                Secretary such additional information 
                                as may be relevant to making the 
                                determination under clause (i) and the 
                                Secretary may consider such information 
                                before making such determination.
            ``(2) Grants for indian tribes that received jobs funds.--
                    ``(A) In general.--The Secretary shall pay to each 
                eligible Indian tribe for each of fiscal years 1996, 
                1997, 1998, 1999, 2000, and 2001 a grant in an amount 
                equal to the amount received by the Indian tribe in 
                fiscal year 1994 under section 482(i) (as in effect 
                during fiscal year 1994).
                    ``(B) Eligible indian tribe.--For purposes of 
                subparagraph (A), the term `eligible Indian tribe' 
                means an Indian tribe or Alaska Native organization 
                that conducted a job opportunities and basic skills 
                training program in fiscal year 1995 under section 
                482(i) (as in effect during fiscal year 1995).
                    ``(C) Use of grant.--Each Indian tribe to which a 
                grant is made under this paragraph shall use the grant 
                for the purpose of operating a program to make work 
                activities available to members of the Indian tribe.
                    ``(D) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated $7,638,474 for 
                each fiscal year specified in subparagraph (A) for 
                grants under subparagraph (A).
    ``(b) 3-Year Tribal Family Assistance Plan.--
            ``(1) In general.--Any Indian tribe that desires to receive 
        a tribal family assistance grant shall submit to the Secretary 
        a 3-year tribal family assistance plan that--
                    ``(A) outlines the Indian tribe's approach to 
                providing welfare-related services for the 3-year 
                period, consistent with this section;
                    ``(B) specifies whether the welfare-related 
                services provided under the plan will be provided by 
                the Indian tribe or through agreements, contracts, or 
                compacts with intertribal consortia, States, or other 
                entities;
                    ``(C) identifies the population and service area or 
                areas to be served by such plan;
                    ``(D) provides that a family receiving assistance 
                under the plan may not receive duplicative assistance 
                from other State or tribal programs funded under this 
                part;
                    ``(E) identifies the employment opportunities in or 
                near the service area or areas of the Indian tribe and 
                the manner in which the Indian tribe will cooperate and 
                participate in enhancing such opportunities for 
                recipients of assistance under the plan consistent with 
                any applicable State standards; and
                    ``(F) applies the fiscal accountability provisions 
                of section 5(f)(1) of the Indian Self-Determination and 
                Education Assistance Act (25 U.S.C. 450c(f)(1)), 
                relating to the submission of a single-agency audit 
                report required by chapter 75 of title 31, United 
                States Code.
            ``(2) Approval.--The Secretary shall approve each tribal 
        family assistance plan submitted in accordance with paragraph 
        (1).
            ``(3) Consortium of tribes.--Nothing in this section shall 
        preclude the development and submission of a single tribal 
        family assistance plan by the participating Indian tribes of an 
        intertribal consortium.
    ``(c) Minimum Work Participation Requirements and Time Limits.--The 
Secretary, with the participation of Indian tribes, shall establish for 
each Indian tribe receiving a grant under this section minimum work 
participation requirements, appropriate time limits for receipt of 
welfare-related services under the grant, and penalties against 
individuals--
            ``(1) consistent with the purposes of this section;
            ``(2) consistent with the economic conditions and resources 
        available to each tribe; and
            ``(3) similar to comparable provisions in section 407(d).
    ``(d) Emergency Assistance.--Nothing in this section shall preclude 
an Indian tribe from seeking emergency assistance from any Federal loan 
program or emergency fund.
    ``(e) Accountability.--Nothing in this section shall be construed 
to limit the ability of the Secretary to maintain program funding 
accountability consistent with--
            ``(1) generally accepted accounting principles; and
            ``(2) the requirements of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450 et seq.).
    ``(f) Penalties.--
            ``(1) Subsections (a)(1), (a)(6), and (b) of section 409, 
        shall apply to an Indian tribe with an approved tribal 
        assistance plan in the same manner as such subsections apply to 
        a State.
            ``(2) Section 409(a)(3) shall apply to an Indian tribe with 
        an approved tribal assistance plan by substituting `meet 
        minimum work participation requirements established under 
        section 412(c)' for `comply with section 407(a)'.
    ``(g) Data Collection and Reporting.--Section 411 shall apply to an 
Indian tribe with an approved tribal family assistance plan.
    ``(h) Special Rule for Indian Tribes in Alaska.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, and except as provided in paragraph (2), an 
        Indian tribe in the State of Alaska that receives a tribal 
        family assistance grant under this section shall use the grant 
        to operate a program in accordance with requirements comparable 
        to the requirements applicable to the program of the State of 
        Alaska funded under this part. Comparability of programs shall 
        be established on the basis of program criteria developed by 
        the Secretary in consultation with the State of Alaska and such 
        Indian tribes.
            ``(2) Waiver.--An Indian tribe described in paragraph (1) 
        may apply to the appropriate State authority to receive a 
        waiver of the requirement of paragraph (1).

``SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

    ``(a) Research.--The Secretary shall conduct research on the 
benefits, effects, and costs of operating different State programs 
funded under this part, including time limits relating to eligibility 
for assistance. The research shall include studies on the effects of 
different programs and the operation of such programs on welfare 
dependency, illegitimacy, teen pregnancy, employment rates, child well-
being, and any other area the Secretary deems appropriate. The 
Secretary shall also conduct research on the costs and benefits of 
State activities under section 409.
    ``(b) Development and Evaluation of Innovative Approaches To 
Reducing Welfare Dependency and Increasing Child Well-Being.--
            ``(1) In general.--The Secretary may assist States in 
        developing, and shall evaluate, innovative approaches for 
        reducing welfare dependency and increasing the well-being of 
        minor children living at home with respect to recipients of 
        assistance under programs funded under this part. The Secretary 
        may provide funds for training and technical assistance to 
        carry out the approaches developed pursuant to this paragraph.
            ``(2) Evaluations.--In performing the evaluations under 
        paragraph (1), the Secretary shall, to the maximum extent 
        feasible, use random assignment as an evaluation methodology.
    ``(c) Dissemination of Information.--The Secretary shall develop 
innovative methods of disseminating information on any research, 
evaluations, and studies conducted under this section, including the 
facilitation of the sharing of information and best practices among 
States and localities through the use of computers and other 
technologies.
    ``(d) Annual Ranking of States and Review of Most and Least 
Successful Work Programs.--
            ``(1) Annual ranking of states.--The Secretary shall rank 
        annually the States to which grants are paid under section 403 
        in the order of their success in placing recipients of 
        assistance under the State program funded under this part into 
        long-term private sector jobs, reducing the overall welfare 
        caseload, and, when a practicable method for calculating this 
        information becomes available, diverting individuals from 
        formally applying to the State program and receiving 
        assistance. In ranking States under this subsection, the 
        Secretary shall take into account the average number of minor 
        children living at home in families in the State that have 
        incomes below the poverty line and the amount of funding 
        provided each State for such families.
            ``(2) Annual review of most and least successful work 
        programs.--The Secretary shall review the programs of the 3 
        States most recently ranked highest under paragraph (1) and the 
        3 States most recently ranked lowest under paragraph (1) that 
        provide parents with work experience, assistance in finding 
        employment, and other work preparation activities and support 
        services to enable the families of such parents to leave the 
        program and become self-sufficient.
    ``(e) Annual Ranking of States and Review of Issues Relating to 
Out-of-Wedlock Births.--
            ``(1) Annual ranking of states.--
                    ``(A) In general.--The Secretary shall annually 
                rank States to which grants are made under section 403 
                based on the following ranking factors:
                            ``(i) Absolute out-of-wedlock ratios.--The 
                        ratio represented by--
                                    ``(I) the total number of out-of-
                                wedlock births in families receiving 
                                assistance under the State program 
                                under this part in the State for the 
                                most recent fiscal year for which 
                                information is available; over
                                    ``(II) the total number of births 
                                in families receiving assistance under 
                                the State program under this part in 
                                the State for such year.
                            ``(ii) Net changes in the out-of-wedlock 
                        ratio.--The difference between the ratio 
                        described in subparagraph (A)(i) with respect 
                        to a State for the most recent fiscal year for 
                        which such information is available and the 
                        ratio with respect to the State for the 
                        immediately preceding year.
            ``(2) Annual review.--The Secretary shall review the 
        programs of the 5 States most recently ranked highest under 
        paragraph (1) and the 5 States most recently ranked the lowest 
        under paragraph (1).
    ``(f) State-Initiated Evaluations.--A State shall be eligible to 
receive funding to evaluate the State program funded under this part 
if--
            ``(1) the State submits a proposal to the Secretary for the 
        evaluation;
            ``(2) the Secretary determines that the design and approach 
        of the evaluation is rigorous and is likely to yield 
        information that is credible and will be useful to other 
        States; and
            ``(3) unless otherwise waived by the Secretary, the State 
        contributes to the cost of the evaluation, from non-Federal 
        sources, an amount equal to at least 10 percent of the cost of 
        the evaluation.
    ``(g) Funding of Studies and Demonstrations.--
            ``(1) In general.--Out of any money in the Treasury of the 
        United States not otherwise appropriated, there are 
        appropriated $15,000,000 for each of fiscal years 1998 through 
        2001, for the purpose of paying--
                    ``(A) the cost of conducting the research described 
                in subsection (a);
                    ``(B) the cost of developing and evaluating 
                innovative approaches for reducing welfare dependency 
                and increasing the well-being of minor children under 
                subsection (b);
                    ``(C) the Federal share of any State-initiated 
                study approved under subsection (f); and
                    ``(D) an amount determined by the Secretary to be 
                necessary to operate and evaluate demonstration 
                projects, relating to this part, that are in effect or 
                approved under section 1115 as of September 30, 1995, 
                and are continued after such date.
            ``(2) Allocation.--Of the amount appropriated under 
        paragraph (1) for a fiscal year--
                    ``(A) 50 percent shall be allocated for the 
                purposes described in subparagraphs (A) and (B) of 
                paragraph (1), and
                    ``(B) 50 percent shall be allocated for the 
                purposes described in subparagraphs (C) and (D) of 
                paragraph (1).
            ``(3) Demonstrations of innovative strategies.--The 
        Secretary may implement and evaluate demonstrations of 
        innovative and promising strategies which--
                    ``(A) provide one-time capital funds to establish, 
                expand, or replicate programs;
                    ``(B) test performance-based grant-to-loan 
                financing in which programs meeting performance targets 
                receive grants while programs not meeting such targets 
                repay funding on a prorated basis; and
                    ``(C) test strategies in multiple States and types 
                of communities.
    ``(h) Child Poverty Rates.--
            ``(1) In general.--Not later than 90 days after the date of 
        the enactment of this part, and annually thereafter, the chief 
        executive officer of a State shall submit to the Secretary a 
        statement of the child poverty rate in the State as of such 
        date of enactment or the date of such subsequent statements. 
        Such subsequent statements shall include the change in such 
        rate from the previous statement, if any.
            ``(2) Increase in rate.--With respect to a State that 
        submits a statement under paragraph (1) that indicates an 
        increase of 5 percent or more in the child poverty rate of the 
        State from the previous statement as a result of the changes 
        made by the Act, the State shall, not later than 90 days after 
        the date of such statement, prepare and submit to the Secretary 
        a corrective action plan in accordance with paragraph (3).
            ``(3) Corrective action plan.--
                    ``(A) In general.--A corrective action plan 
                submitted under paragraph (2) shall outline that manner 
                in which the State will reduce the child poverty rate 
                within the State. The plan shall include a description 
                of the actions to be taken by the State under such 
                plan.
                    ``(B) Consultation about modifications.--During the 
                60-day period that begins with the date the Secretary 
                receives the corrective action plan of a State under 
                subparagraph (A), the Secretary may consult with the 
                State on modifications to the plan.
                    ``(C) Acceptance of plan.-- A corrective action 
                plan submitted by a State in accordance with 
                subparagraph (A) is deemed to be accepted by the 
                Secretary if the Secretary does not accept or reject 
                the plan during 60-day period that begins on the date 
                the plan is submitted.
            ``(4) Compliance with plan.--
                    ``(A) In general.--A State that submits a 
                corrective action plan under this subsection shall 
                continue to implement such plan until such time as the 
                Secretary makes the determination described in 
                subparagraph (B).
                    ``(B) Determination.--A determination described in 
                this subparagraph is a determination that the child 
                poverty rate for the State involved has fallen to, and 
                not exceeded for a period of 2-consecutive years, a 
                rate that is not greater than the rate contained in the 
                most recent statement submitted by the State under 
                paragraph (1) which did not trigger the application of 
                paragraph (2).
                    ``(C) Labor surplus area.--With respect to a State 
                that submits a corrective action plan under paragraph 
                (2), such plan shall continue to be implemented until 
                the area involved is no longer designated as a Labor 
                Surplus Area.
            ``(5) Methodology.--The Secretary shall promulgate 
        regulations establishing the methodology by which a States 
        shall determine the child poverty rate within such State. Such 
        methodology shall, with respect to a State, take into account 
        factors including the number of children who receive free or 
        reduced-price lunches, the number of food stamp households, and 
        the county by county estimates of children in poverty as 
        determined by the Census Bureau.

``SEC. 414. STUDY BY THE CENSUS BUREAU.

    ``(a) In General.--The Bureau of the Census shall expand the Survey 
of Income and Program Participation as necessary to obtain such 
information as will enable interested persons to evaluate the impact of 
the amendments made by chapter 1 of the Personal Responsibility and 
Work Opportunity Act of 1996 on a random national sample of recipients 
of assistance under State programs funded under this part and (as 
appropriate) other low income families, and in doing so, shall pay 
particular attention to the issues of out-of-wedlock birth, welfare 
dependency, the beginning and end of welfare spells, and the causes of 
repeat welfare spells.
    ``(b) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are appropriated 
$10,000,000 for each of fiscal years 1998, 1999, 2000, 2001, and 2002 
for payment to the Bureau of the Census to carry out subsection (a).

``SEC. 415. WAIVERS.

    ``(a) Continuation of Waivers.--
            ``(1) Waivers in effect on date of enactment of welfare 
        reform.--Except as provided in paragraph (3), if any waiver 
        granted to a State under section 1115 or otherwise which 
        relates to the provision of assistance under a State plan under 
        this part (as in effect on September 30, 1996) is in effect as 
        of the date of the enactment of the Personal Responsibility and 
        Work Opportunity Act of 1996, the amendments made by such Act 
        (other than by section 2103(d) of such Act) shall not apply 
        with respect to the State before the expiration (determined 
        without regard to any extensions) of the waiver to the extent 
        such amendments are inconsistent with the waiver.
            ``(2) Waivers granted subsequently.--Except as provided in 
        paragraph (3), if any waiver granted to a State under section 
        1115 or otherwise which relates to the provision of assistance 
        under a State plan under this part (as in effect on September 
        30, 1996) is submitted to the Secretary before the date of the 
        enactment of the Personal Responsibility and Work Opportunity 
        Act of 1996 and approved by the Secretary on or before July 1, 
        1997, and the State demonstrates to the satisfaction of the 
        Secretary that the waiver will not result in Federal 
        expenditures under title IV of this Act (as in effect without 
        regard to the amendments made by the Personal Responsibility 
        and Work Opportunity Act of 1996) that are greater than would 
        occur in the absence of the waiver, the amendments made by the 
        Personal Responsibility and Work Opportunity Act of 1996 (other 
        than by section 2103(d) of such Act) shall not apply with 
        respect to the State before the expiration (determined without 
        regard to any extensions) of the waiver to the extent the 
        amendments made by the Personal Responsibility and Work 
        Opportunity Act of 1996 are inconsistent with the waiver.
            ``(3) Financing limitation.--Notwithstanding any other 
        provision of law, beginning with fiscal year 1996, a State 
        operating under a waiver described in paragraph (1) shall be 
        entitled to payment under section 403 for the fiscal year, in 
        lieu of any other payment provided for in the waiver.
    ``(b) State Option To Terminate Waiver.--
            ``(1) In general.--A State may terminate a waiver described 
        in subsection (a) before the expiration of the waiver.
            ``(2) Report.--A State which terminates a waiver under 
        paragraph (1) shall submit a report to the Secretary 
        summarizing the waiver and any available information concerning 
        the result or effect of the waiver.
            ``(3) Hold harmless provision.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, a State that, not later than the date 
                described in subparagraph (B), submits a written 
                request to terminate a waiver described in subsection 
                (a) shall be held harmless for accrued cost neutrality 
                liabilities incurred under the waiver.
                    ``(B) Date described.--The date described in this 
                subparagraph is 90 days following the adjournment of 
                the first regular session of the State legislature that 
                begins after the date of the enactment of the Personal 
                Responsibility and Work Opportunity Act of 1996.
    ``(c) Secretarial Encouragement of Current Waivers.--The Secretary 
shall encourage any State operating a waiver described in subsection 
(a) to continue the waiver and to evaluate, using random sampling and 
other characteristics of accepted scientific evaluations, the result or 
effect of the waiver.
    ``(d) Continuation of Individual Waivers.--A State may elect to 
continue 1 or more individual waivers described in subsection (a).

``SEC. 416. ADMINISTRATION.

    ``The programs under this part and part D shall be administered by 
an Assistant Secretary for Family Support within the Department of 
Health and Human Services, who shall be appointed by the President, by 
and with the advice and consent of the Senate, and who shall be in 
addition to any other Assistant Secretary of Health and Human Services 
provided for by law, and the Secretary shall reduce the Federal 
workforce within the Department of Health and Human Services by an 
amount equal to the sum of 75 percent of the full-time equivalent 
positions at such Department that relate to any direct spending 
program, or any program funded through discretionary spending, that has 
been converted into a block grant program under the Personal 
Responsibility and Work Opportunity Act of 1996 and the amendments made 
by such Act, and by an amount equal to 75 percent of that portion of 
the total full-time equivalent departmental management positions at 
such Department that bears the same relationship to the amount 
appropriated for any direct spending program, or any program funded 
through discretionary spending, that has been converted into a block 
grant program under the Personal Responsibility and Work Opportunity 
Act of 1996 and the amendments made by such Act, as such amount relates 
to the total amount appropriated for use by such Department, and, 
notwithstanding any other provision of law, the Secretary shall take 
such actions as may be necessary, including reductions in force 
actions, consistent with sections 3502 and 3595 of title 5, United 
States Code, to reduce the full-time equivalent positions within the 
Department of Health and Human Services by 245 full-time equivalent 
positions related to the program converted into a block grant under the 
amendment made by section 2103 of the Personal Responsibility and Work 
Opportunity Act of 1996, and by 60 full-time equivalent managerial 
positions in the Department.

``SEC. 417. LIMITATION ON FEDERAL AUTHORITY.

    ``No officer or employee of the Federal Government may regulate the 
conduct of States under this part or enforce any provision of this 
part, except to the extent expressly provided in this part.''; and
            (2) by inserting after such section 418 the following:

``SEC. 419. DEFINITIONS.

    ``As used in this part:
            ``(1) Adult.--The term `adult' means an individual who is 
        not a minor child.
            ``(2) Minor child.--The term `minor child' means an 
        individual who--
                    ``(A) has not attained 18 years of age; or
                    ``(B) has not attained 19 years of age and is a 
                full-time student in a secondary school (or in the 
                equivalent level of vocational or technical training).
            ``(3) Fiscal year.--The term `fiscal year' means any 12-
        month period ending on September 30 of a calendar year.
            ``(4) Indian, indian tribe, and tribal organization.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the terms `Indian', `Indian tribe', 
                and `tribal organization' have the meaning given such 
                terms by section 4 of the Indian Self-Determination and 
                Education Assistance Act (25 U.S.C. 450b).
                    ``(B) Special rule for indian tribes in alaska.--
                The term `Indian tribe' means, with respect to the 
                State of Alaska, only the Metlakatla Indian Community 
                of the Annette Islands Reserve and the following Alaska 
                Native regional nonprofit corporations:
                            ``(i) Arctic Slope Native Association.
                            ``(ii) Kawerak, Inc.
                            ``(iii) Maniilaq Association.
                            ``(iv) Association of Village Council 
                        Presidents.
                            ``(v) Tanana Chiefs Conference.
                            ``(vi) Cook Inlet Tribal Council.
                            ``(vii) Bristol Bay Native Association.
                            ``(viii) Aleutian and Pribilof Island 
                        Association.
                            ``(ix) Chugachmuit.
                            ``(x) Tlingit Haida Central Council.
                            ``(xi) Kodiak Area Native Association.
                            ``(xii) Copper River Native Association.
            ``(5) State.--
                    ``(A) In general.--Except as otherwise specifically 
                provided, the term `State' means the 50 States of the 
                United States, the District of Columbia, the 
                Commonwealth of Puerto Rico, the United States Virgin 
                Islands, Guam, and American Samoa.
                    ``(B) State option to contract to provide 
                services.--The term `State' includes the--
                            ``(i) administration and provision of 
                        services under the program funded under this 
                        part, or under the programs funded under parts 
                        B and E of this title, through contracts with 
                        charitable, religious, or private 
                        organizations; and
                            ``(ii) provision to beneficiaries of 
                        assistance under such programs with 
                        certificates, vouchers, or other forms of 
                        disbursement which are redeemable with such 
                        organizations.''.
    (b) Grants to Outlying Areas.--Section 1108 (42 U.S.C. 1308) is 
amended--
            (1) by redesignating subsection (c) as subsection (g);
            (2) by striking all that precedes subsection (c) and 
        inserting the following:

``SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN ISLANDS, 
              GUAM, AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS.

    ``(a) Limitation on Total Payments to Each Territory.--
Notwithstanding any other provision of this Act, the total amount 
certified by the Secretary of Health and Human Services under titles I, 
X, XIV, and XVI, under parts A and E of title IV, and under subsection 
(b) of this section, for payment to any territory for a fiscal year 
shall not exceed the ceiling amount for the territory for the fiscal 
year.
    ``(b) Entitlement to Matching Grant.--
            ``(1) In general.--Each territory shall be entitled to 
        receive from the Secretary for each fiscal year a grant in an 
        amount equal to 75 percent of the amount (if any) by which--
                    ``(A) the total expenditures of the territory 
                during the fiscal year under the territory programs 
                funded under parts A and E of title IV; exceeds
                    ``(B) the sum of--
                            ``(i) the total amount required to be paid 
                        to the territory (other than with respect to 
                        child care) under former section 403 (as in 
                        effect on September 30, 1995) for fiscal year 
                        1995, which shall be determined by applying 
                        subparagraphs (C) and (D) of section 403(a)(1) 
                        to the territory;
                            ``(ii) the total amount required to be paid 
                        to the territory under former section 434 (as 
                        so in effect) for fiscal year 1995; and
                            ``(iii) the total amount expended by the 
                        territory during fiscal year 1995 pursuant to 
                        parts A and F of title IV (as so in effect), 
                        other than for child care.
            ``(2) Use of grant.--Any territory to which a grant is made 
        under paragraph (1) may expend the amount under any program 
        operated or funded under any provision of law specified in 
        subsection (a).
    ``(c) Definitions.--As used in this section:
            ``(1) Territory.--The term `territory' means Puerto Rico, 
        the Virgin Islands, Guam, and American Samoa.
            ``(2) Ceiling amount.--The term `ceiling amount' means, 
        with respect to a territory and a fiscal year, the mandatory 
        ceiling amount with respect to the territory, reduced for the 
        fiscal year in accordance with subsection (e).
            ``(3) Mandatory ceiling amount.--The term `mandatory 
        ceiling amount' means--
                    ``(A) $102,040,000 with respect to for Puerto Rico;
                    ``(B) $4,683,000 with respect to Guam;
                    ``(C) $3,554,000 with respect to the Virgin 
                Islands; and
                    ``(D) $1,000,000 with respect to American Samoa.
            ``(4) Total amount expended by the territory.--The term 
        `total amount expended by the territory'--
                    ``(A) does not include expenditures during the 
                fiscal year from amounts made available by the Federal 
                Government; and
                    ``(B) when used with respect to fiscal year 1995, 
                also does not include--
                            ``(i) expenditures during fiscal year 1995 
                        under subsection (g) or (i) of section 402 (as 
                        in effect on September 30, 1995); or
                            ``(ii) any expenditures during fiscal year 
                        1995 for which the territory (but for section 
                        1108, as in effect on September 30, 1995) would 
                        have received reimbursement from the Federal 
                        Government.
    ``(d) Authority to Transfer Funds Among Programs.--Notwithstanding 
any other provision of this Act, any territory to which an amount is 
paid under any provision of law specified in subsection (a) may use 
part or all of the amount to carry out any program operated by the 
territory, or funded, under any other such provision of law.
    ``(e) Maintenance of Effort.--The ceiling amount with respect to a 
territory shall be reduced for a fiscal year by an amount equal to the 
amount (if any) by which--
            ``(1) the total amount expended by the territory under all 
        programs of the territory operated pursuant to the provisions 
        of law specified in subsection (a) (as such provisions were in 
        effect for fiscal year 1995) for fiscal year 1995; exceeds
            ``(2) the total amount expended by the territory under all 
        programs of the territory that are funded under the provisions 
        of law specified in subsection (a) for the fiscal year that 
        immediately precedes the fiscal year referred to in the matter 
        preceding paragraph (1).''; and
            (3) by striking subsections (d) and (e).
    (c) Repeal of Provisions Requiring Reduction of Medicaid Payments 
to States That Reduce Welfare Payment Levels.--
            (1) Section 1903(i) (42 U.S.C. 1396b(i)) is amended by 
        striking paragraph (9).
            (2) Section 1902 (42 U.S.C. 1396a) is amended by striking 
        subsection (c).
    (d) Elimination of Child Care Programs Under the Social Security 
Act.--
            (1) AFDC and transitional child care programs.--Section 402 
        (42 U.S.C. 602) is amended by striking subsection (g).
            (2) At-risk child care program.--
                    (A) Authorization.--Section 402 (42 U.S.C. 602) is 
                amended by striking subsection (i).
                    (B) Funding provisions.--Section 403 (42 U.S.C. 
                603) is amended by striking subsection (n).

SEC. 2104. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, OR PRIVATE 
              ORGANIZATIONS.

    (a) In General.--
            (1) State options.--A State may--
                    (A) administer and provide services under the 
                programs described in subparagraphs (A) and (B)(i) of 
                paragraph (2) through contracts with charitable, 
                religious, or private organizations; and
                    (B) provide beneficiaries of assistance under the 
                programs described in subparagraphs (A) and (B)(ii) of 
                paragraph (2) with certificates, vouchers, or other 
                forms of disbursement which are redeemable with such 
                organizations.
            (2) Programs described.--The programs described in this 
        paragraph are the following programs:
                    (A) A State program funded under part A of title IV 
                of the Social Security Act (as amended by section 
                2103(a) of this Act).
                    (B) Any other program established or modified under 
                chapter 1 or 2 of this subtitle, that--
                            (i) permits contracts with organizations; 
                        or
                            (ii) permits certificates, vouchers, or 
                        other forms of disbursement to be provided to 
                        beneficiaries, as a means of providing 
                        assistance.
    (b) Religious Organizations.--The purpose of this section is to 
allow States to contract with religious organizations, or to allow 
religious organizations to accept certificates, vouchers, or other 
forms of disbursement under any program described in subsection (a)(2), 
on the same basis as any other nongovernmental provider without 
impairing the religious character of such organizations, and without 
diminishing the religious freedom of beneficiaries of assistance funded 
under such program.
    (c) Nondiscrimination Against Religious Organizations.--In the 
event a State exercises its authority under subsection (a), religious 
organizations are eligible, on the same basis as any other private 
organization, as contractors to provide assistance, or to accept 
certificates, vouchers, or other forms of disbursement, under any 
program described in subsection (a)(2) so long as the programs are 
implemented consistent with the Establishment Clause of the United 
States Constitution. Except as provided in subsection (k), neither the 
Federal Government nor a State receiving funds under such programs 
shall discriminate against an organization which is or applies to be a 
contractor to provide assistance, or which accepts certificates, 
vouchers, or other forms of disbursement, on the basis that the 
organization has a religious character.
    (d) Religious Character and Freedom.--
            (1) Religious organizations.--A religious organization with 
        a contract described in subsection (a)(1)(A), or which accepts 
        certificates, vouchers, or other forms of disbursement under 
        subsection (a)(1)(B), shall retain its independence from 
        Federal, State, and local governments, including such 
        organization's control over the definition, development, 
        practice, and expression of its religious beliefs.
            (2) Additional safeguards.--Neither the Federal Government 
        nor a State shall require a religious organization to--
                    (A) alter its form of internal governance; or
                    (B) remove religious art, icons, scripture, or 
                other symbols;
        in order to be eligible to contract to provide assistance, or 
        to accept certificates, vouchers, or other forms of 
        disbursement, funded under a program described in subsection 
        (a)(2).
    (e) Rights of Beneficiaries of Assistance.--
            (1) In general.--If an individual described in paragraph 
        (2) has an objection to the religious character of the 
        organization or institution from which the individual receives, 
        or would receive, assistance funded under any program described 
        in subsection (a)(2), the State in which the individual resides 
        shall provide such individual (if otherwise eligible for such 
        assistance) within a reasonable period of time after the date 
        of such objection with assistance from an alternative provider 
        that is accessible to the individual and the value of which is 
        not less than the value of the assistance which the individual 
        would have received from such organization.
            (2) Individual described.--An individual described in this 
        paragraph is an individual who receives, applies for, or 
        requests to apply for, assistance under a program described in 
        subsection (a)(2).
    (f) Employment Practices.--A religious organization's exemption 
provided under section 702 of the Civil Rights Act of 1964 (42 U.S.C. 
2000e-1a) regarding employment practices shall not be affected by its 
participation in, or receipt of funds from, programs described in 
subsection (a)(2).
    (g) Nondiscrimination Against Beneficiaries.--Except as otherwise 
provided in law, a religious organization shall not discriminate 
against an individual in regard to rendering assistance funded under 
any program described in subsection (a)(2) on the basis of religion, a 
religious belief, or refusal to actively participate in a religious 
practice.
    (h) Fiscal Accountability.--
            (1) In general.--Except as provided in paragraph (2), any 
        religious organization contracting to provide assistance funded 
        under any program described in subsection (a)(2) shall be 
        subject to the same regulations as other contractors to account 
        in accord with generally accepted auditing principles for the 
        use of such funds provided under such programs.
            (2) Limited audit.--If such organization segregates Federal 
        funds provided under such programs into separate accounts, then 
        only the financial assistance provided with such funds shall be 
        subject to audit.
    (i) Compliance.--Any party which seeks to enforce its rights under 
this section may assert a civil action for injunctive relief 
exclusively in an appropriate State court against the entity or agency 
that allegedly commits such violation.
    (j) Limitations on Use of Funds for Certain Purposes.--No funds 
provided directly to institutions or organizations to provide services 
and administer programs under subsection (a)(1)(A) shall be expended 
for sectarian worship, instruction, or proselytization.
    (k) Preemption.--Nothing in this section shall be construed to 
preempt any provision of a State constitution or State statute that 
prohibits or restricts the expenditure of State funds in or by 
religious organizations.

SEC. 2105. CENSUS DATA ON GRANDPARENTS AS PRIMARY CAREGIVERS FOR THEIR 
              GRANDCHILDREN.

    (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the Secretary of Commerce, in carrying out 
section 141 of title 13, United States Code, shall expand the data 
collection efforts of the Bureau of the Census (in this section 
referred to as the ``Bureau'') to enable the Bureau to collect 
statistically significant data, in connection with its decennial census 
and its mid-decade census, concerning the growing trend of grandparents 
who are the primary caregivers for their grandchildren.
    (b) Expanded Census Question.--In carrying out subsection (a), the 
Secretary of Commerce shall expand the Bureau's census question that 
details households which include both grandparents and their 
grandchildren. The expanded question shall be formulated to distinguish 
between the following households:
            (1) A household in which a grandparent temporarily provides 
        a home for a grandchild for a period of weeks or months during 
        periods of parental distress.
            (2) A household in which a grandparent provides a home for 
        a grandchild and serves as the primary caregiver for the 
        grandchild.

SEC. 2106. REPORT ON DATA PROCESSING.

    (a) In General.--Within 6 months after the date of the enactment of 
this Act, the Secretary of Health and Human Services shall prepare and 
submit to the Congress a report on--
            (1) the status of the automated data processing systems 
        operated by the States to assist management in the 
        administration of State programs under part A of title IV of 
        the Social Security Act (whether in effect before or after 
        October 1, 1995); and
            (2) what would be required to establish a system capable 
        of--
                    (A) tracking participants in public programs over 
                time; and
                    (B) checking case records of the States to 
                determine whether individuals are participating in 
                public programs of 2 or more States.
    (b) Preferred Contents.--The report required by subsection (a) 
should include--
            (1) a plan for building on the automated data processing 
        systems of the States to establish a system with the 
        capabilities described in subsection (a)(2); and
            (2) an estimate of the amount of time required to establish 
        such a system and of the cost of establishing such a system.

SEC. 2107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.

    (a) Study.--The Secretary shall, in cooperation with the States, 
study and analyze outcomes measures for evaluating the success of the 
States in moving individuals out of the welfare system through 
employment as an alternative to the minimum participation rates 
described in section 407 of the Social Security Act. The study shall 
include a determination as to whether such alternative outcomes 
measures should be applied on a national or a State-by-State basis and 
a preliminary assessment of the effects of section 409(a)(7)(C) of such 
Act.
    (b) Report.--Not later than September 30, 1998, the Secretary shall 
submit to the Committee on Finance of the Senate and the Committee on 
Ways and Means of the House of Representatives a report containing the 
findings of the study required by subsection (a).

SEC. 2108. WELFARE FORMULA FAIRNESS COMMISSION.

    (a) Establishment.--There is established a commission to be known 
as the Welfare Formula Fairness Commission (in this section referred to 
as the ``Commission'').
    (b) Membership.--
            (1) Composition.--The Commission shall be composed of 13 
        members, of whom--
                    (A) 3 shall be appointed by the President, of whom 
                not more than 2 shall be of the same political party;
                    (B) 3 shall be appointed by the Majority Leader of 
                the Senate;
                    (C) 2 shall be appointed by the Minority Leader of 
                the Senate;
                    (D) 3 shall be appointed by the Speaker of the 
                House of Representatives; and
                    (E) 2 shall be appointed by the Minority Leader of 
                the House of Representatives.
            (2) Date.--The appointments of the members of the 
        Commission shall be made not later than 30 days after the date 
        of the enactment of this Act.
    (c) Period of Appointment; Vacancies.--Members shall be appointed 
for the life of the Commission. Any vacancy in the Commission shall not 
affect its powers, but shall be filled in the same manner as the 
original appointment.
    (d) Initial Meeting.--Not later than 30 days after the date on 
which all members of the Commission have been appointed, the Commission 
shall hold its first meeting.
    (e) Meetings.--The Commission shall meet at the call of the Chair.
    (f) Quorum.--A majority of the members of the Commission shall 
constitute a quorum, but a lesser number of members may hold hearings.
    (g) Chair and Vice Chair.--The Commission shall select a Chair and 
Vice Chair from among its members.
    (h) Duties of the Commission.--
            (1) Study.--The Commission shall study--
                    (A) the temporary assistance for needy families 
                block grant program established under part A of title 
                IV of the Social Security Act, as amended by section 
                2103 of this Act; and
                    (B) the funding formulas applied, the bonus 
                payments provided, and the work requirements 
                established under such program.
            (2) Report.--Not later than September 1, 1998, the 
        Commission shall submit a report to the Congress on the matters 
        studied under paragraph (1).
    (i) Powers of the Commission.--
            (1) Hearings.--The Commission may hold such hearings, sit 
        and act at such times and places, take such testimony, and 
        receive such evidence as the Commission considers advisable to 
        carry out the purposes of this section.
            (2) Information from federal agencies.--The Commission may 
        secure directly from any Federal department or agency such 
        information as the Commission considers necessary to carry out 
        the provisions of this section. Upon request of the Chair of 
        the Commission, the head of such department or agency shall 
        furnish such information to the Commission.
            (3) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as other departments and agencies of the Federal Government.
            (4) Gifts.--The Commission may accept, use, and dispose of 
        gifts or donations of services or property.
    (j) Personnel Matters.--
            (1) Compensation of members.--Each member of the Commission 
        who is not an officer or employee of the Federal Government 
        shall be compensated at a rate equal to the daily equivalent of 
        the annual rate of basic pay prescribed for level IV of the 
        Executive Schedule under section 5315 of title 5, United States 
        Code, for each day (including travel time) during which such 
        member is engaged in the performance of the duties of the 
        Commission. All members of the Commission who are officers or 
        employees of the United States shall serve without compensation 
        in addition to that received for their services as officers or 
        employees of the United States.
            (2) Travel expenses.--The members of the Commission shall 
        be allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Commission.
            (3) Staff.--
                    (A) In general.--The Chair of the Commission may, 
                without regard to the civil service laws and 
                regulations, appoint and terminate an executive 
                director and such other additional personnel as may be 
                necessary to enable the Commission to perform its 
                duties. The employment of an executive director shall 
                be subject to confirmation by the Commission.
                    (B) Compensation.--The Chair of the Commission may 
                fix the compensation of the executive director and 
                other personnel without regard to the provisions of 
                chapter 51 and subchapter III of chapter 53 of title 5, 
                United States Code, relating to classification of 
                positions and General Schedule pay rates, except that 
                the rate of pay for the executive director and other 
                personnel may not exceed the rate payable for level V 
                of the Executive Schedule under section 5316 of such 
                title.
            (4) Detail of government employees.--Any Federal Government 
        employee may be detailed to the Commission without 
        reimbursement, and such detail shall be without interruption or 
        loss of civil service status or privilege.
            (5) Procurement of temporary and intermittent services.--
        The Chair of the Commission may procure temporary and 
        intermittent services under section 3109(b) of title 5, United 
        States Code, at rates for individuals which do not exceed the 
        daily equivalent of the annual rate of basic pay prescribed for 
        level V of the Executive Schedule under section 5316 of such 
        title.
    (k) Termination of the Commission.--The Commission shall terminate 
not later than December 31, 1998.
    (l) Authorization of Appropriations.--There is authorized to be 
appropriated to the Commission such sums as are necessary to carry out 
the purposes of this section.

SEC. 2109. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT.

    (a) Amendments to Part D of Title IV.--
            (1) Section 451 (42 U.S.C. 651) is amended by striking 
        ``aid'' and inserting ``assistance under a State program 
        funded''.
            (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
        amended--
                    (A) by striking ``aid to families with dependent 
                children'' and inserting ``assistance under a State 
                program funded under part A'';
                    (B) by striking ``such aid'' and inserting ``such 
                assistance''; and
                    (C) by striking ``under section 402(a)(26) or'' and 
                inserting ``pursuant to section 408(a)(4) or under 
                section''.
            (3) Section 452(a)(10)(F) (42 U.S.C. 652(a)(10)(F)) is 
        amended--
                    (A) by striking ``aid under a State plan approved'' 
                and inserting ``assistance under a State program 
                funded''; and
                    (B) by striking ``in accordance with the standards 
                referred to in section 402(a)(26)(B)(ii)'' and 
                inserting ``by the State''.
            (4) Section 452(b) (42 U.S.C. 652(b)) is amended in the 
        first sentence by striking ``aid under the State plan approved 
        under part A'' and inserting ``assistance under the State 
        program funded under part A''.
            (5) Section 452(d)(3)(B)(i) (42 U.S.C. 652(d)(3)(B)(i)) is 
        amended by striking ``1115(c)'' and inserting ``1115(b)''.
            (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C. 
        652(g)(2)(A)(ii)(I)) is amended by striking ``aid is being paid 
        under the State's plan approved under part A or E'' and 
        inserting ``assistance is being provided under the State 
        program funded under part A''.
            (7) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is 
        amended in the matter following clause (iii) by striking ``aid 
        was being paid under the State's plan approved under part A or 
        E'' and inserting ``assistance was being provided under the 
        State program funded under part A''.
            (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended in 
        the matter following subparagraph (B)--
                    (A) by striking ``who is a dependent child'' and 
                inserting ``with respect to whom assistance is being 
                provided under the State program funded under part A'';
                    (B) by inserting ``by the State'' after ``found''; 
                and
                    (C) by striking ``to have good cause for refusing 
                to cooperate under section 402(a)(26)'' and inserting 
                ``to qualify for a good cause or other exception to 
                cooperation pursuant to section 454(29)''.
            (9) Section 452(h) (42 U.S.C. 652(h)) is amended by 
        striking ``under section 402(a)(26)'' and inserting ``pursuant 
        to section 408(a)(4)''.
            (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is amended by 
        striking ``aid under part A of this title'' and inserting 
        ``assistance under a State program funded under part A''.
            (11) Section 454(5)(A) (42 U.S.C. 654(5)(A))) is amended--
                    (A) by striking ``under section 402(a)(26)'' and 
                inserting ``pursuant to section 408(a)(4)''; and
                    (B) by striking ``; except that this paragraph 
                shall not apply to such payments for any month 
                following the first month in which the amount collected 
                is sufficient to make such family ineligible for 
                assistance under the State plan approved under part 
                A;'' and inserting a comma.
            (12) Section 454(6)(D) (42 U.S.C. 654(6)(D)) is amended by 
        striking ``aid under a State plan approved'' and inserting 
        ``assistance under a State program funded''.
            (13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is amended by 
        striking ``under section 402(a)(26)''.
            (14) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is 
        amended by striking ``402(a)(26)'' and inserting ``408(a)(3)''.
            (15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is amended by 
        striking ``aid'' and inserting ``assistance under a State 
        program funded''.
            (16) Section 469(a) (42 U.S.C. 669(a)) is amended--
                    (A) by striking ``aid under plans approved'' and 
                inserting ``assistance under State programs funded''; 
                and
                    (B) by striking ``such aid'' and inserting ``such 
                assistance''.
            (17) Section 472(c)(2) (42 U.S.C. 672(c)(2)) is amended by 
        striking ``nonprofit''.
    (b) Repeal of Part F of Title IV.--Part F of title IV (42 U.S.C. 
681-687) is repealed.
    (c) Amendment to Title X.--Section 1002(a)(7) (42 U.S.C. 
1202(a)(7)) is amended by striking ``aid to families with dependent 
children under the State plan approved under section 402 of this Act'' 
and inserting ``assistance under a State program funded under part A of 
title IV''.
    (d) Amendments to Title XI.--
            (1) Section 1109 (42 U.S.C. 1309) is amended by striking 
        ``or part A of title IV,''.
            (2) Section 1115 (42 U.S.C. 1315) is amended--
                    (A) in subsection (a)(2)--
                            (i) by inserting ``(A)'' after ``(2)'';
                            (ii) by striking ``403,'';
                            (iii) by striking the period at the end and 
                        inserting ``, and''; and
                            (iv) by adding at the end the following new 
                        subparagraph:
            ``(B) costs of such project which would not otherwise be a 
        permissible use of funds under part A of title IV and which are 
        not included as part of the costs of projects under section 
        1110, shall to the extent and for the period prescribed by the 
        Secretary, be regarded as a permissible use of funds under such 
        part.''; and
                    (B) in subsection (c)(3), by striking ``the program 
                of aid to families with dependent children'' and 
                inserting ``part A of such title''.
            (3) Section 1116 (42 U.S.C. 1316) is amended--
                    (A) in each of subsections (a)(1), (b), and (d), by 
                striking ``or part A of title IV,''; and
                    (B) in subsection (a)(3), by striking ``404,''.
            (4) Section 1118 (42 U.S.C. 1318) is amended--
                    (A) by striking ``403(a),'';
                    (B) by striking ``and part A of title IV,''; and
                    (C) by striking ``, and shall, in the case of 
                American Samoa, mean 75 per centum with respect to part 
                A of title IV''.
            (5) Section 1119 (42 U.S.C. 1319) is amended--
                    (A) by striking ``or part A of title IV''; and
                    (B) by striking ``403(a),''.
            (6) Section 1133(a) (42 U.S.C. 1320b-3(a)) is amended by 
        striking ``or part A of title IV,''.
            (7) Section 1136 (42 U.S.C. 1320b-6) is repealed.
            (8) Section 1137 (42 U.S.C. 1320b-7) is amended--
                    (A) in subsection (b), by striking paragraph (1) 
                and inserting the following:
            ``(1) any State program funded under part A of title IV of 
        this Act;''; and
                    (B) in subsection (d)(1)(B)--
                            (i) by striking ``In this subsection--'' 
                        and all that follows through ``(ii) in'' and 
                        inserting ``In this subsection, in'';
                            (ii) by redesignating subclauses (I), (II), 
                        and (III) as clauses (i), (ii), and (iii); and
                            (iii) by moving such redesignated material 
                        2 ems to the left.
    (e) Amendment to Title XIV.--Section 1402(a)(7) (42 U.S.C. 
1352(a)(7)) is amended by striking ``aid to families with dependent 
children under the State plan approved under section 402 of this Act'' 
and inserting ``assistance under a State program funded under part A of 
title IV''.
    (f) Amendment to Title XVI as in Effect With Respect to the 
Territories.--Section 1602(a)(11), as in effect without regard to the 
amendment made by section 301 of the Social Security Amendments of 1972 
(42 U.S.C. 1382 note), is amended by striking ``aid under the State 
plan approved'' and inserting ``assistance under a State program 
funded''.
    (g) Amendment to Title XVI as in Effect With Respect to the 
States.--Section 1611(c)(5)(A) (42 U.S.C. 1382(c)(5)(A)) is amended to 
read as follows: ``(A) a State program funded under part A of title 
IV,''.
    (h) Amendment to Title XIX.--Section 1902(j) (42 U.S.C. 1396a(j)) 
is amended by striking ``1108(c)'' and inserting ``1108(g)''.

SEC. 2110. CONFORMING AMENDMENTS TO THE FOOD STAMP ACT OF 1977 AND 
              RELATED PROVISIONS.

    (a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is 
amended--
            (1) in the second sentence of subsection (a), by striking 
        ``plan approved'' and all that follows through ``title IV of 
        the Social Security Act'' and inserting ``program funded under 
        part A of title IV of the Social Security Act (42 U.S.C. 601 et 
        seq.)'';
            (2) in subsection (d)--
                    (A) in paragraph (5), by striking ``assistance to 
                families with dependent children'' and inserting 
                ``assistance under a State program funded''; and
                    (B) by striking paragraph (13) and redesignating 
                paragraphs (14), (15), and (16) as paragraphs (13), 
                (14), and (15), respectively;
            (3) in subsection (j), by striking ``plan approved under 
        part A of title IV of such Act (42 U.S.C. 601 et seq.)'' and 
        inserting ``program funded under part A of title IV of the Act 
        (42 U.S.C. 601 et seq.)''; and
            (4) by striking subsection (m) and redesignating subsection 
        (n), as added by section 1122, as subsection (m).
    (b) Section 6 of such Act (7 U.S.C. 2015) is amended--
            (1) in subsection (c)(5), by striking ``the State plan 
        approved'' and inserting ``the State program funded''; and
            (2) in subsection (e)(6), by striking ``aid to families 
        with dependent children'' and inserting ``benefits under a 
        State program funded''.
    (c) Section 16(g)(4) of such Act (7 U.S.C. 2025(g)(4)) is amended 
by striking ``State plans under the Aid to Families with Dependent 
Children Program under'' and inserting ``State programs funded under 
part A of''.
    (d) Section 17(b)(3) of such Act (7 U.S.C. 2026(b)(3)) is amended 
by adding at the end the following new subparagraph:
    ``(I) The Secretary may not grant a waiver under this paragraph on 
or after October 1, 1995. Any reference in this paragraph to a 
provision of title IV of the Social Security Act shall be deemed to be 
a reference to such provision as in effect on September 30, 1995.''.
    (e) Section 20 of such Act (7 U.S.C. 2029) is amended--
            (1) in subsection (a)(2)(B) by striking ``operating--'' and 
        all that follows through ``(ii) any other'' and inserting 
        ``operating any''; and
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking ``(b)(1) A household'' and 
                        inserting ``(b) A household''; and
                            (ii) in subparagraph (B), by striking 
                        ``training program'' and inserting 
                        ``activity'';
                    (B) by striking paragraph (2); and
                    (C) by redesignating subparagraphs (A) through (F) 
                as paragraphs (1) through (6), respectively.
    (f) Section 5(h)(1) of the Agriculture and Consumer Protection Act 
of 1973 (Public Law 93-186; 7 U.S.C. 612c note) is amended by striking 
``the program for aid to families with dependent children'' and 
inserting ``the State program funded''.
    (g) Section 9 of the National School Lunch Act (42 U.S.C. 1758) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (2)(B)(ii)(II), as amended by 
                section 1202(b)--
                            (i) by striking ``program for aid to 
                        families with dependent children'' and 
                        inserting ``State program funded''; and
                            (ii) by inserting before the period at the 
                        end the following: ``(42 U.S.C. 601 et seq.) 
                        that the Secretary determines complies with 
                        standards established by the Secretary that 
                        ensure that the standards under the State 
                        program are comparable to or more restrictive 
                        than those in effect on June 1, 1995''; and
                    (B) in paragraph (6)--
                            (i) in subparagraph (A)(ii)--
                                    (I) by striking ``an AFDC 
                                assistance unit (under the aid to 
                                families with dependent children 
                                program authorized'' and inserting ``a 
                                family (under the State program 
                                funded''; and
                                    (II) by striking ``, in a State'' 
                                and all that follows through 
                                ``9902(2)))'' and inserting ``that the 
                                Secretary determines complies with 
                                standards established by the Secretary 
                                that ensure that the standards under 
                                the State program are comparable to or 
                                more restrictive than those in effect 
                                on June 1, 1995''; and
                            (ii) in subparagraph (B), by striking ``aid 
                        to families with dependent children'' and 
                        inserting ``assistance under the State program 
                        funded under part A of title IV of the Social 
                        Security Act (42 U.S.C. 601 et seq.) that the 
                        Secretary determines complies with standards 
                        established by the Secretary that ensure that 
                        the standards under the State program are 
                        comparable to or more restrictive than those in 
                        effect on June 1, 1995''; and
            (2) in subsection (d)(2)(C)--
                    (A) by striking ``program for aid to families with 
                dependent children'' and inserting ``State program 
                funded''; and
                    (B) by inserting before the period at the end the 
                following: ``(42 U.S.C. 601 et seq.) that the Secretary 
                determines complies with standards established by the 
                Secretary that ensure that the standards under the 
                State program are comparable to or more restrictive 
                than those in effect on June 1, 1995''.
    (h) Section 17(d)(2)(A)(ii)(II) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(d)(2)(A)(ii)(II)) is amended--
            (1) by striking ``program for aid to families with 
        dependent children established'' and inserting ``State program 
        funded''; and
            (2) by inserting before the semicolon the following: ``(42 
        U.S.C. 601 et seq.) that the Secretary determines complies with 
        standards established by the Secretary that ensure that the 
        standards under the State program are comparable to or more 
        restrictive than those in effect on June 1, 1995''.

SEC. 2111. CONFORMING AMENDMENTS TO OTHER LAWS.

    (a) Subsection (b) of section 508 of the Unemployment Compensation 
Amendments of 1976 (42 U.S.C. 603a; Public Law 94-566; 90 Stat. 2689) 
is amended to read as follows:
    ``(b) Provision for Reimbursement of Expenses.--For purposes of 
section 455 of the Social Security Act, expenses incurred to reimburse 
State employment offices for furnishing information requested of such 
offices--
            ``(1) pursuant to the third sentence of section 3(a) of the 
        Act entitled `An Act to provide for the establishment of a 
        national employment system and for cooperation with the States 
        in the promotion of such system, and for other purposes', 
        approved June 6, 1933 (29 U.S.C. 49b(a)), or
            ``(2) by a State or local agency charged with the duty of 
        carrying a State plan for child support approved under part D 
        of title IV of the Social Security Act,
shall be considered to constitute expenses incurred in the 
administration of such State plan.''.
    (b) Section 9121 of the Omnibus Budget Reconciliation Act of 1987 
(42 U.S.C. 602 note) is repealed.
    (c) Section 9122 of the Omnibus Budget Reconciliation Act of 1987 
(42 U.S.C. 602 note) is repealed.
    (d) Section 221 of the Housing and Urban-Rural Recovery Act of 1983 
(42 U.S.C. 602 note), relating to treatment under AFDC of certain 
rental payments for federally assisted housing, is repealed.
    (e) Section 159 of the Tax Equity and Fiscal Responsibility Act of 
1982 (42 U.S.C. 602 note) is repealed.
    (f) Section 202(d) of the Social Security Amendments of 1967 (81 
Stat. 882; 42 U.S.C. 602 note) is repealed.
    (g) Section 903 of the Stewart B. McKinney Homeless Assistance 
Amendments Act of 1988 (42 U.S.C. 11381 note), relating to 
demonstration projects to reduce number of AFDC families in welfare 
hotels, is amended--
            (1) in subsection (a), by striking ``aid to families with 
        dependent children under a State plan approved'' and inserting 
        ``assistance under a State program funded''; and
            (2) in subsection (c), by striking ``aid to families with 
        dependent children in the State under a State plan approved'' 
        and inserting ``assistance in the State under a State program 
        funded''.
    (h) The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is 
amended--
            (1) in section 404C(c)(3) (20 U.S.C. 1070a-23(c)(3)), by 
        striking ``(Aid to Families with Dependent Children)''; and
            (2) in section 480(b)(2) (20 U.S.C. 1087vv(b)(2)), by 
        striking ``aid to families with dependent children under a 
        State plan approved'' and inserting ``assistance under a State 
        program funded''.
    (i) The Carl D. Perkins Vocational and Applied Technology Education 
Act (20 U.S.C. 2301 et seq.) is amended--
            (1) in section 231(d)(3)(A)(ii) (20 U.S.C. 
        2341(d)(3)(A)(ii)), by striking ``The program for aid to 
        dependent children'' and inserting ``The State program 
        funded'';
            (2) in section 232(b)(2)(B) (20 U.S.C. 2341a(b)(2)(B)), by 
        striking ``the program for aid to families with dependent 
        children'' and inserting ``the State program funded''; and
            (3) in section 521(14)(B)(iii) (20 U.S.C. 
        2471(14)(B)(iii)), by striking ``the program for aid to 
        families with dependent children'' and inserting ``the State 
        program funded''.
    (j) The Elementary and Secondary Education Act of 1965 (20 U.S.C. 
2701 et seq.) is amended--
            (1) in section 1113(a)(5) (20 U.S.C. 6313(a)(5)), by 
        striking ``Aid to Families with Dependent Children program'' 
        and inserting ``State program funded under part A of title IV 
        of the Social Security Act'';
            (2) in section 1124(c)(5) (20 U.S.C. 6333(c)(5)), by 
        striking ``the program of aid to families with dependent 
        children under a State plan approved under'' and inserting ``a 
        State program funded under part A of''; and
            (3) in section 5203(b)(2) (20 U.S.C. 7233(b)(2))--
                    (A) in subparagraph (A)(xi), by striking ``Aid to 
                Families with Dependent Children benefits'' and 
                inserting ``assistance under a State program funded 
                under part A of title IV of the Social Security Act''; 
                and
                    (B) in subparagraph (B)(viii), by striking ``Aid to 
                Families with Dependent Children'' and inserting 
                ``assistance under the State program funded under part 
                A of title IV of the Social Security Act''.
    (k) The 4th proviso of chapter VII of title I of Public Law 99-88 
(25 U.S.C. 13d-1) is amended to read as follows: ``Provided further, 
That general assistance payments made by the Bureau of Indian Affairs 
shall be made--
            ``(1) after April 29, 1985, and before October 1, 1995, on 
        the basis of Aid to Families with Dependent Children (AFDC) 
        standards of need; and
            ``(2) on and after October 1, 1995, on the basis of 
        standards of need established under the State program funded 
        under part A of title IV of the Social Security Act,
except that where a State ratably reduces its AFDC or State program 
payments, the Bureau shall reduce general assistance payments in such 
State by the same percentage as the State has reduced the AFDC or State 
program payment.''.
    (l) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) is 
amended--
            (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by striking 
        all that follows ``agency as'' and inserting ``being eligible 
        for financial assistance under part A of title IV of the Social 
        Security Act and as having continually received such financial 
        assistance during the 90-day period which immediately precedes 
        the date on which such individual is hired by the employer.'';
            (2) in section 3304(a)(16) (26 U.S.C. 3304(a)(16)), by 
        striking ``eligibility for aid or services,'' and all that 
        follows through ``children approved'' and inserting 
        ``eligibility for assistance, or the amount of such assistance, 
        under a State program funded'';
            (3) in section 6103(l)(7)(D)(i) (26 U.S.C. 
        6103(l)(7)(D)(i)), by striking ``aid to families with dependent 
        children provided under a State plan approved'' and inserting 
        ``a State program funded'';
            (4) in section 6103(l)(10) (26 U.S.C. 6103(l)(10))--
                    (A) by striking ``(c) or (d)'' each place it 
                appears and inserting ``(c), (d), or (e)''; and
                    (B) by adding at the end of subparagraph (B) the 
                following new sentence: ``Any return information 
                disclosed with respect to section 6402(e) shall only be 
                disclosed to officers and employees of the State agency 
                requesting such information.'';
            (5) in section 6103(p)(4) (26 U.S.C. 6103(p)(4)), in the 
        matter preceding subparagraph (A)--
                    (A) by striking ``(5), (10)'' and inserting 
                ``(5)''; and
                    (B) by striking ``(9), or (12)'' and inserting 
                ``(9), (10), or (12)'';
            (6) in section 6334(a)(11)(A) (26 U.S.C. 6334(a)(11)(A)), 
        by striking ``(relating to aid to families with dependent 
        children)'';
            (7) in section 6402 (26 U.S.C. 6402)--
                    (A) in subsection (a), by striking ``(c) and (d)'' 
                and inserting ``(c), (d), and (e)'';
                    (B) by redesignating subsections (e) through (i) as 
                subsections (f) through (j), respectively; and
                    (C) by inserting after subsection (d) the 
                following:
    ``(e) Collection of Overpayments Under Title IV-A of the Social 
Security Act.--The amount of any overpayment to be refunded to the 
person making the overpayment shall be reduced (after reductions 
pursuant to subsections (c) and (d), but before a credit against future 
liability for an internal revenue tax) in accordance with section 
405(e) of the Social Security Act (concerning recovery of overpayments 
to individuals under State plans approved under part A of title IV of 
such Act).''; and
            (8) in section 7523(b)(3)(C) (26 U.S.C. 7523(b)(3)(C)), by 
        striking ``aid to families with dependent children'' and 
        inserting ``assistance under a State program funded under part 
        A of title IV of the Social Security Act''.
    (m) Section 3(b) of the Wagner-Peyser Act (29 U.S.C. 49b(b)) is 
amended by striking ``State plan approved under part A of title IV'' 
and inserting ``State program funded under part A of title IV''.
    (n) The Job Training Partnership Act (29 U.S.C. 1501 et seq.) is 
amended--
            (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by 
        striking ``(42 U.S.C. 601 et seq.)'';
            (2) in section 106(b)(6)(C) (29 U.S.C. 1516(b)(6)(C)), by 
        striking ``State aid to families with dependent children 
        records,'' and inserting ``records collected under the State 
        program funded under part A of title IV of the Social Security 
        Act,'';
            (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))--
                    (A) by striking ``the JOBS program'' and inserting 
                ``the work activities required under title IV of the 
                Social Security Act''; and
                    (B) by striking the second sentence;
            (4) in section 123(c) (29 U.S.C. 1533(c))--
                    (A) in paragraph (1)(E), by repealing clause (vi); 
                and
                    (B) in paragraph (2)(D), by repealing clause (v);
            (5) in section 203(b)(3) (29 U.S.C. 1603(b)(3)), by 
        striking ``, including recipients under the JOBS program'';
            (6) in subparagraphs (A) and (B) of section 204(a)(1) (29 
        U.S.C. 1604(a)(1) (A) and (B)), by striking ``(such as the JOBS 
        program)'' each place it appears;
            (7) in section 205(a) (29 U.S.C. 1605(a)), by striking 
        paragraph (4) and inserting the following:
            ``(4) the portions of title IV of the Social Security Act 
        relating to work activities;'';
            (8) in section 253 (29 U.S.C. 1632)--
                    (A) in subsection (b)(2), by repealing subparagraph 
                (C); and
                    (B) in paragraphs (1)(B) and (2)(B) of subsection 
                (c), by striking ``the JOBS program or'' each place it 
                appears;
            (9) in section 264 (29 U.S.C. 1644)--
                    (A) in subparagraphs (A) and (B) of subsection 
                (b)(1), by striking ``(such as the JOBS program)'' each 
                place it appears; and
                    (B) in subparagraphs (A) and (B) of subsection 
                (d)(3), by striking ``and the JOBS program'' each place 
                it appears;
            (10) in section 265(b) (29 U.S.C. 1645(b)), by striking 
        paragraph (6) and inserting the following:
            ``(6) the portion of title IV of the Social Security Act 
        relating to work activities;'';
            (11) in the second sentence of section 429(e) (29 U.S.C. 
        1699(e)), by striking ``and shall be in an amount that does not 
        exceed the maximum amount that may be provided by the State 
        pursuant to section 402(g)(1)(C) of the Social Security Act (42 
        U.S.C. 602(g)(1)(C))'';
            (12) in section 454(c) (29 U.S.C. 1734(c)), by striking 
        ``JOBS and'';
            (13) in section 455(b) (29 U.S.C. 1735(b)), by striking 
        ``the JOBS program,'';
            (14) in section 501(1) (29 U.S.C. 1791(1)), by striking 
        ``aid to families with dependent children under part A of title 
        IV of the Social Security Act (42 U.S.C. 601 et seq.)'' and 
        inserting ``assistance under the State program funded under 
        part A of title IV of the Social Security Act'';
            (15) in section 506(1)(A) (29 U.S.C. 1791e(1)(A)), by 
        striking ``aid to families with dependent children'' and 
        inserting ``assistance under the State program funded'';
            (16) in section 508(a)(2)(A) (29 U.S.C. 1791g(a)(2)(A)), by 
        striking ``aid to families with dependent children'' and 
        inserting ``assistance under the State program funded''; and
            (17) in section 701(b)(2)(A) (29 U.S.C. 1792(b)(2)(A))--
                    (A) in clause (v), by striking the semicolon and 
                inserting ``; and''; and
                    (B) by striking clause (vi).
    (o) Section 3803(c)(2)(C)(iv) of title 31, United States Code, is 
amended to read as follows:
            ``(iv) assistance under a State program funded under part A 
        of title IV of the Social Security Act;''.
    (p) Section 2605(b)(2)(A)(i) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)(i)) is amended to read 
as follows:
                            ``(i) assistance under the State program 
                        funded under part A of title IV of the Social 
                        Security Act;''.
    (q) Section 303(f)(2) of the Family Support Act of 1988 (42 U.S.C. 
602 note) is amended--
            (1) by striking ``(A)''; and
            (2) by striking subparagraphs (B) and (C).
    (r) The Balanced Budget and Emergency Deficit Control Act of 1985 
(2 U.S.C. 900 et seq.) is amended--
            (1) in the first section 255(h) (2 U.S.C. 905(h)), by 
        striking ``Aid to families with dependent children (75-0412-0-
        1-609);'' and inserting ``Block grants to States for temporary 
        assistance for needy families;''; and
            (2) in section 256 (2 U.S.C. 906)--
                    (A) by striking subsection (k); and
                    (B) by redesignating subsection (l) as subsection 
                (k).
    (s) The Immigration and Nationality Act (8 U.S.C. 1101 et seq.) is 
amended--
            (1) in section 210(f) (8 U.S.C. 1160(f)), by striking ``aid 
        under a State plan approved under'' each place it appears and 
        inserting ``assistance under a State program funded under'';
            (2) in section 245A(h) (8 U.S.C. 1255a(h))--
                    (A) in paragraph (1)(A)(i), by striking ``program 
                of aid to families with dependent children'' and 
                inserting ``State program of assistance''; and
                    (B) in paragraph (2)(B), by striking ``aid to 
                families with dependent children'' and inserting 
                ``assistance under a State program funded under part A 
                of title IV of the Social Security Act''; and
            (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)), by striking 
        ``State plan approved'' and inserting ``State program funded''.
    (t) Section 640(a)(4)(B)(i) of the Head Start Act (42 U.S.C. 
9835(a)(4)(B)(i)) is amended by striking ``program of aid to families 
with dependent children under a State plan approved'' and inserting 
``State program of assistance funded''.
    (u) Section 9 of the Act of April 19, 1950 (64 Stat. 47, chapter 
92; 25 U.S.C. 639) is repealed.
    (v) Subparagraph (E) of section 213(d)(6) of the School-To-Work 
Opportunities Act of 1994 (20 U.S.C. 6143(d)(6)) is amended to read as 
follows:
                    ``(E) part A of title IV of the Social Security Act 
                (42 U.S.C. 601 et seq.) relating to work activities;''.
    (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United States Code, 
is amended by striking ``section 464 or 1137 of the Social Security 
Act'' and inserting ``section 404(e), 464, or 1137 of the Social 
Security Act''.

SEC. 2112. DEVELOPMENT OF PROTOTYPE OF COUNTERFEIT-RESISTANT SOCIAL 
              SECURITY CARD REQUIRED.

    (a) Development.--
            (1) In general.--The Commissioner of Social Security (in 
        this section referred to as the ``Commissioner'') shall, in 
        accordance with this section, develop a prototype of a 
        counterfeit-resistant social security card. Such prototype card 
        shall--
                    (A) be made of a durable, tamper-resistant material 
                such as plastic or polyester,
                    (B) employ technologies that provide security 
                features, such as magnetic stripes, holograms, and 
                integrated circuits, and
                    (C) be developed so as to provide individuals with 
                reliable proof of citizenship or legal resident alien 
                status.
            (2) Assistance by attorney general.--The Attorney General 
        of the United States shall provide such information and 
        assistance as the Commissioner deems necessary to enable the 
        Commissioner to comply with this section.
    (b) Study and Report.--
            (1) In general.--The Commissioner shall conduct a study and 
        issue a report to the Congress which examines different methods 
        of improving the social security card application process.
            (2) Elements of study.--The study shall include an 
        evaluation of the cost and work load implications of issuing a 
        counterfeit-resistant social security card for all individuals 
        over a 3-, 5-, and 10-year period. The study shall also 
        evaluate the feasibility and cost implications of imposing a 
        user fee for replacement cards and cards issued to individuals 
        who apply for such a card prior to the scheduled 3-, 5-, and 
        10-year phase-in options.
            (3) Distribution of report.--The Commissioner shall submit 
        copies of the report described in this subsection along with a 
        facsimile of the prototype card as described in subsection (a) 
        to the Committees on Ways and Means and Judiciary of the House 
        of Representatives and the Committees on Finance and Judiciary 
        of the Senate within 1 year after the date of the enactment of 
        this Act.

SEC. 2113. MODIFICATIONS TO THE JOB OPPORTUNITIES FOR CERTAIN LOW-
              INCOME INDIVIDUALS PROGRAM.

    Section 505 of the Family Support Act of 1988 (42 U.S.C. 1315 note) 
is amended--
            (1) in the heading, by striking ``demonstration'';
            (2) by striking ``demonstration'' each place such term 
        appears;
            (3) in subsection (a), by striking ``in each of fiscal 
        years'' and all that follows through ``10'' and inserting 
        ``shall enter into agreements with'';
            (4) in subsection (b)(3), by striking ``aid to families 
        with dependent children under part A of title IV of the Social 
        Security Act'' and inserting ``assistance under the program 
        funded part A of title IV of the Social Security Act of the 
        State in which the individual resides'';
            (5) in subsection (c)--
                    (A) in paragraph (1)(C), by striking ``aid to 
                families with dependent children under title IV of the 
                Social Security Act'' and inserting ``assistance under 
                a State program funded part A of title IV of the Social 
                Security Act''; and
                    (B) in paragraph (2), by striking ``aid to families 
                with dependent children under title IV of such Act'' 
                and inserting ``assistance under a State program funded 
                part A of title IV of the Social Security Act'';
            (6) in subsection (d), by striking ``job opportunities and 
        basic skills training program (as provided for under title IV 
        of the Social Security Act)'' and inserting ``the State program 
        funded under part A of title IV of the Social Security Act''; 
        and
            (7) by striking subsections (e) through (g) and inserting 
        the following:
    ``(e) Authorization of Appropriations.--For the purpose of 
conducting projects under this section, there is authorized to be 
appropriated an amount not to exceed $25,000,000 for any fiscal 
year.''.

SEC. 2114. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR TECHNICAL 
              AND CONFORMING AMENDMENTS.

    Not later than 90 days after the date of the enactment of this Act, 
the Secretary of Health and Human Services and the Commissioner of 
Social Security, in consultation, as appropriate, with the heads of 
other Federal agencies, shall submit to the appropriate committees of 
the Congress a legislative proposal proposing such technical and 
conforming amendments as are necessary to bring the law into conformity 
with the policy embodied in this chapter.

SEC. 2115. EFFECTIVE DATE; TRANSITION RULE.

    (a) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        chapter, this chapter and the amendments made by this chapter 
        shall take effect on July 1, 1997.
            (2) Delayed effective date for certain provisions.--
        Notwithstanding any other provision of this section, paragraphs 
        (2), (3), (4), (5), (8), and (10) of section 409(a) and section 
        411(a) of the Social Security Act (as added by the amendments 
        made by section 2103(a) of this Act) shall not take effect with 
        respect to a State until, and shall apply only with respect to 
        conduct that occurs on or after, the later of--
                    (A) July 1, 1997; or
                    (B) the date that is 6 months after the date the 
                Secretary of Health and Human Services receives from 
                the State a plan described in section 402(a) of the 
                Social Security Act (as added by such amendment).
            (3) Elimination of child care programs.--The amendments 
        made by section 2103(d) shall take effect on October 1, 1996.
            (4) Definitions applicable to new child care entitlement.--
        Sections 403(a)(1)(C), 403(a)(1)(D), and 419(4) of the Social 
        Security Act, as added by the amendments made by section 
        2103(a) of this Act, shall take effect on October 1, 1996.
    (b) Transition Rules.--Effective on the date of the enactment of 
this Act:
            (1) State option to accelerate effective date.--
                    (A) In general.--If the Secretary of Health and 
                Human Services receives from a State a plan described 
                in section 402(a) of the Social Security Act (as added 
                by the amendment made by section 2103(a)(1) of this 
                Act), then--
                            (i) on and after the date of such receipt--
                                    (I) except as provided in clause 
                                (ii), this chapter and the amendments 
                                made by this chapter (other than by 
                                section 2103(d) of this Act) shall 
                                apply with respect to the State; and
                                    (II) the State shall be considered 
                                an eligible State for purposes of part 
                                A of title IV of the Social Security 
                                Act (as in effect pursuant to the 
                                amendments made by such section 
                                2103(a)); and
                            (ii) during the period that begins on the 
                        date of such receipt and ends on June 30, 1997, 
                        there shall remain in effect with respect to 
                        the State--
                                    (I) section 403(h) of the Social 
                                Security Act (as in effect on September 
                                30, 1995); and
                                    (II) all State reporting 
                                requirements under parts A and F of 
                                title IV of the Social Security Act (as 
                                in effect on September 30, 1995), 
                                modified by the Secretary as 
                                appropriate, taking into account the 
                                State program under part A of title IV 
                                of the Social Security Act (as in 
                                effect pursuant to the amendments made 
                                by such section 2103(a)).
                    (B) Limitations on federal obligations.--
                            (i) Under afdc program.--The total 
                        obligations of the Federal Government to a 
                        State under part A of title IV of the Social 
                        Security Act (as in effect on September 30, 
                        1995) with respect to expenditures in fiscal 
                        year 1997 shall not exceed an amount equal to 
                        the State family assistance grant.
                            (ii) Under temporary family assistance 
                        program.--Notwithstanding section 403(a)(1) of 
                        the Social Security Act (as in effect pursuant 
                        to the amendments made by section 2103(a) of 
                        this Act), the total obligations of the Federal 
                        Government to a State under such section 
                        403(a)(1)--
                                    (I) for fiscal year 1996, shall be 
                                an amount equal to--
                                            (aa) the State family 
                                        assistance grant; multiplied by
                                            (bb) \1/366\ of the number 
                                        of days during the period that 
                                        begins on the date the 
                                        Secretary of Health and Human 
                                        Services first receives from 
                                        the State a plan described in 
                                        section 402(a) of the Social 
                                        Security Act (as added by the 
                                        amendment made by section 
                                        2103(a)(1) of this Act) and 
                                        ends on September 30, 1996; and
                                    (II) for fiscal year 1997, shall be 
                                an amount equal to the lesser of--
                                            (aa) the amount (if any) by 
                                        which the State family 
                                        assistance grant exceeds the 
                                        total obligations of the 
                                        Federal Government to the State 
                                        under part A of title IV of the 
                                        Social Security Act (as in 
                                        effect on September 30, 1995) 
                                        with respect to expenditures in 
                                        fiscal year 1997; or
                                            (bb) the State family 
                                        assistance grant, multiplied by 
                                        \1/365\ of the number of days 
                                        during the period that begins 
                                        on October 1, 1996, or the date 
                                        the Secretary of Health and 
                                        Human Services first receives 
                                        from the State a plan described 
                                        in section 402(a) of the Social 
                                        Security Act (as added by the 
                                        amendment made by section 
                                        2103(a)(1) of this Act), 
                                        whichever is later, and ends on 
                                        September 30, 1997.
                            (iii) Child care obligations excluded in 
                        determining federal afdc obligations.--As used 
                        in this subparagraph, the term ``obligations of 
                        the Federal Government to the State under part 
                        A of title IV of the Social Security Act'' does 
                        not include any obligation of the Federal 
                        Government with respect to child care 
                        expenditures by the State.
                    (C) Submission of state plan for fiscal year 1996 
                or 1997 deemed acceptance of grant limitations and 
                formula and termination of afdc entitlement.--The 
                submission of a plan by a State pursuant to 
                subparagraph (A) is deemed to constitute--
                            (i) the State's acceptance of the grant 
                        reductions under subparagraph (B) (including 
                        the formula for computing the amount of the 
                        reduction); and
                            (ii) the termination of any entitlement of 
                        any individual or family to benefits or 
                        services under the State AFDC program.
                    (D) Definitions.--As used in this paragraph:
                            (i) State afdc program.--The term ``State 
                        AFDC program'' means the State program under 
                        parts A and F of title IV of the Social 
                        Security Act (as in effect on September 30, 
                        1995).
                            (ii) State.--The term ``State'' means the 
                        50 States and the District of Columbia.
                            (iii) State family assistance grant.--The 
                        term ``State family assistance grant'' means 
                        the State family assistance grant (as defined 
                        in section 403(a)(1)(B) of the Social Security 
                        Act, as added by the amendment made by section 
                        2103(a)(1) of this Act).
            (2) Claims, actions, and proceedings.--The amendments made 
        by this chapter shall not apply with respect to--
                    (A) powers, duties, functions, rights, claims, 
                penalties, or obligations applicable to aid, 
                assistance, or services provided before the effective 
                date of this chapter under the provisions amended; and
                    (B) administrative actions and proceedings 
                commenced before such date, or authorized before such 
                date to be commenced, under such provisions.
            (3) Closing out account for those programs terminated or 
        substantially modified by this chapter.--In closing out 
        accounts, Federal and State officials may use scientifically 
        acceptable statistical sampling techniques. Claims made with 
        respect to State expenditures under a State plan approved under 
        part A of title IV of the Social Security Act (as in effect on 
        September 30, 1995) with respect to assistance or services 
        provided on or before September 30, 1995, shall be treated as 
        claims with respect to expenditures during fiscal year 1995 for 
        purposes of reimbursement even if payment was made by a State 
        on or after October 1, 1995. Each State shall complete the 
        filing of all claims under the State plan (as so in effect) 
        within 2 years after the date of the enactment of this Act. The 
        head of each Federal department shall--
                    (A) use the single audit procedure to review and 
                resolve any claims in connection with the close out of 
                programs under such State plans; and
                    (B) reimburse States for any payments made for 
                assistance or services provided during a prior fiscal 
                year from funds for fiscal year 1995, rather than from 
                funds authorized by this chapter.
            (4) Continuance in office of assistant secretary for family 
        support.--The individual who, on the day before the effective 
        date of this chapter, is serving as Assistant Secretary for 
        Family Support within the Department of Health and Human 
        Services shall, until a successor is appointed to such 
        position--
                    (A) continue to serve in such position; and
                    (B) except as otherwise provided by law--
                            (i) continue to perform the functions of 
                        the Assistant Secretary for Family Support 
                        under section 417 of the Social Security Act 
                        (as in effect before such effective date); and
                            (ii) have the powers and duties of the 
                        Assistant Secretary for Family Support under 
                        section 416 of the Social Security Act (as in 
                        effect pursuant to the amendment made by 
                        section 2103(a)(1) of this Act).
    (c) Termination of Entitlement Under AFDC Program.--Effective 
October 1, 1996, no individual or family shall be entitled to any 
benefits or services under any State plan approved under part A or F of 
title IV of the Social Security Act (as in effect on September 30, 
1995).

SEC. 2116. COMMUNITY STEERING COMMITTEES DEMONSTRATION PROJECTS.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall enter into 
agreements with not more than 5 States that submit an application under 
this section, in such form and such manner as the Secretary may 
specify, for the purpose of conducting a demonstration project 
described in subsection (b).
    (b) Description of Project.--
            (1) Establishment.--A demonstration project conducted under 
        this section shall establish within a State in each 
        participating county a Community Steering Committee that shall 
        be designed to help recipients of temporary assistance to needy 
        families under a State program under part A of title IV of the 
        Social Security Act who are parents move into the non-
        subsidized workforce and to develop a holistic approach to the 
        development needs of such recipient's family.
            (2) Membership.--A Community Steering Committee shall 
        consist of local educators, business representatives, and 
        social service providers.
            (3) Goals and duties.--
                    (A) Goals.--The goals of a Community Steering 
                Committee are--
                            (i) to ensure that recipients of temporary 
                        assistance to needy families who are parents 
                        obtain and retain unsubsidized employment; and
                            (ii) to reduce the incidence of 
                        intergenerational receipt of welfare assistance 
                        by addressing the needs of children of 
                        recipients of temporary assistance to needy 
                        families.
                    (B) Duties.--A Community Steering Committee shall--
                            (i) identify and create unsubsidized 
                        employment positions for recipients of 
                        temporary assistance to needy families;
                            (ii) propose and implement solutions to 
                        barriers to unsubsidized employment of 
                        recipients of temporary assistance to needy 
                        families;
                            (iii) assess the needs of children of 
                        recipients of temporary assistance to needy 
                        families; and
                            (iv) provide services that are designed to 
                        ensure that children of recipients of temporary 
                        assistance to needy families enter school ready 
                        to learn and that, once enrolled, such children 
                        stay in school.
                    (C) Primary responsibility.--A primary 
                responsibility of a Community Steering Committee shall 
                be to work on an ongoing basis with parents who are 
                recipients of temporary assistance to needy families 
                and who have obtained nonsubsidized employment in order 
                to ensure that such recipients retain their employment. 
                Activities to carry out this responsibility may 
                include--
                            (i) counseling;
                            (ii) emergency day care;
                            (iii) sick day care;
                            (iv) transportation;
                            (v) provision of clothing;
                            (vi) housing assistance; or
                            (vii) any other assistance that may be 
                        necessary on an emergency and temporary basis 
                        to ensure that such parents can manage the 
                        responsibility of being employed and the 
                        demands of having a family.
                    (D) Follow-up services for children.--A Community 
                Steering Committee may provide special follow-up 
                services for children of recipients of temporary 
                assistance to needy families that are designed to 
                ensure that the children reach their fullest potential 
                and do not, as they mature, receive welfare assistance 
                as the head of their own household.
    (c) Report.--Not later than October 1, 2001, the Secretary shall 
submit a report to the Congress on the results of the demonstration 
projects conducted under this section.

SEC. 2117. DENIAL OF BENEFITS FOR CERTAIN DRUG RELATED CONVICTIONS.

    (a) In General.--An individual convicted (under Federal or State 
law) of any crime relating to the illegal possession, use, or 
distribution of a drug shall not be eligible for any Federal means-
tested public benefit, as defined in section 2403(c)(1) of this Act.
    (b) Family Members Exempt.--The prohibition contained under 
subsection (a) shall not apply to the family members or dependents of 
the convicted individual in a manner that would make such family 
members or dependents ineligible for welfare benefits that they would 
otherwise be eligible for. Any benefits provided to family members or 
dependents of a person described in subsection (a) shall be reduced by 
the amount which would have otherwise been made available to the 
convicted individual.
    (c) Period of Prohibition.--The prohibition under subsection (a) 
shall apply--
            (1) with respect to an individual convicted of a 
        misdemeanor, during the 5-year period beginning on the date of 
        the conviction or the 5-year period beginning on January 1, 
        1997, whichever is later; and
            (2) with respect to an individual convicted of a felony, 
        for the duration of the life of that individual.
    (d) Exceptions.--Subsection (a) shall not apply with respect to the 
following Federal benefits:
            (1) Emergency medical services under title XV or XIX of the 
        Social Security Act.
            (2) Short-term, non-cash, in-kind emergency disaster 
        relief.
            (3)(A) Public health assistance for immunizations.
            (B) Public health assistance for testing and treatment of 
        communicable diseases if the Secretary of Health and Human 
        Services determines that it is necessary to prevent the spread 
        of such disease.
    (e) Effective Date.--The denial of Federal benefits set forth in 
this section shall take effect for convictions occurring after the date 
of enactment.
    (f) Regulations.--Not later than December 31, 1996, the Attorney 
General shall promulgate regulations detailing the means by which 
Federal and State agencies, courts, and law enforcement agencies will 
exchange and share the data and information necessary to implement and 
enforce the withholding of Federal benefits.

                CHAPTER 2--SUPPLEMENTAL SECURITY INCOME

SEC. 2200. REFERENCE TO SOCIAL SECURITY ACT.

    Except as otherwise specifically provided, wherever in this chapter 
an amendment is expressed in terms of an amendment to or repeal of a 
section or other provision, the reference shall be considered to be 
made to that section or other provision of the Social Security Act.

                 Subchapter A--Eligibility Restrictions

SEC. 2201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDIVIDUALS FOUND TO 
              HAVE FRAUDULENTLY MISREPRESENTED RESIDENCE IN ORDER TO 
              OBTAIN BENEFITS SIMULTANEOUSLY IN 2 OR MORE STATES.

    (a) In General.--Section 1611(e) (42 U.S.C. 1382(e)), as amended by 
section 105(b)(4) of the Contract with America Advancement Act of 1996, 
is amended by redesignating paragraph (5) as paragraph (3) and by 
adding at the end the following new paragraph:
    ``(4)(A) No person shall be considered an eligible individual or 
eligible spouse for purposes of this title during the 10-year period 
that begins on the date the person is convicted in Federal or State 
court of having made a fraudulent statement or representation with 
respect to the place of residence of the person in order to receive 
assistance simultaneously from 2 or more States under programs that are 
funded under title IV, title XV, title XIX, or the Food Stamp Act of 
1977, or benefits in 2 or more States under the supplemental security 
income program under this title.
    ``(B) As soon as practicable after the conviction of a person in a 
Federal or State court as described in subparagraph (A), an official of 
such court shall notify the Commissioner of such conviction.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 2202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND PROBATION AND 
              PAROLE VIOLATORS.

    (a) In General.--Section 1611(e) (42 U.S.C. 1382(e)), as amended by 
section 2201(a) of this Act, is amended by adding at the end the 
following new paragraph:
    ``(5) No person shall be considered an eligible individual or 
eligible spouse for purposes of this title with respect to any month if 
during such month the person is--
            ``(A) fleeing to avoid prosecution, or custody or 
        confinement after conviction, under the laws of the place from 
        which the person flees, for a crime, or an attempt to commit a 
        crime, which is a felony under the laws of the place from which 
        the person flees, or which, in the case of the State of New 
        Jersey, is a high misdemeanor under the laws of such State; or
            ``(B) violating a condition of probation or parole imposed 
        under Federal or State law.''.
    (b) Exchange of Information.--Section 1611(e) (42 U.S.C. 1382(e)), 
as amended by section 2201(a) of this Act and subsection (a) of this 
section, is amended by adding at the end the following new paragraph:
    ``(6) Notwithstanding any other provision of law (other than 
section 6103 of the Internal Revenue Code of 1986), the Commissioner 
shall furnish any Federal, State, or local law enforcement officer, 
upon the written request of the officer, with the current address, 
Social Security number, and photograph (if applicable) of any recipient 
of benefits under this title, if the officer furnishes the Commissioner 
with the name of the recipient, and other identifying information as 
reasonably required by the Commissioner to establish the unique 
identity of the recipient, and notifies the Commissioner that--
            ``(A) the recipient--
                    ``(i) is described in subparagraph (A) or (B) of 
                paragraph (5); or
                    ``(ii) has information that is necessary for the 
                officer to conduct the officer's official duties; and
            ``(B) the location or apprehension of the recipient is 
        within the officer's official duties.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 2203. TREATMENT OF PRISONERS.

    (a) Implementation of Prohibition Against Payment of Benefits to 
Prisoners.--Section 1611(e)(1) (42 U.S.C. 1382(e)(1)) is amended by 
adding at the end the following new subparagraph:
    ``(I)(i) The Commissioner shall enter into a contract, with any 
interested State or local institution referred to in subparagraph (A), 
under which--
            ``(I) the institution shall provide to the Commissioner, on 
        a monthly basis, the names, social security account numbers, 
        dates of birth, and such other identifying information 
        concerning the inmates of the institution as the Commissioner 
        may require for the purpose of carrying out paragraph (1); and
            ``(II) the Commissioner shall pay to any such institution, 
        with respect to each inmate of the institution who is eligible 
        for a benefit under this title for the month preceding the 
        first month throughout which such inmate is in such institution 
        and becomes ineligible for such benefit (or becomes eligible 
        only for a benefit payable at a reduced rate) as a result of 
        the application of this paragraph, an amount not to exceed $400 
        if the institution furnishes the information described in 
        subclause (I) to the Commissioner within 30 days after such 
        individual becomes an inmate of such institution, or an amount 
        not to exceed $200 if the institution furnishes such 
        information after 30 days after such date but within 90 days 
        after such date.
    ``(ii) The provisions of section 552a of title 5, United States 
Code, shall not apply to any agreement entered into under clause (i) or 
to information exchanged pursuant to such agreement.
    ``(iii) Payments to institutions required by clause (i)(II) shall 
be made from funds otherwise available for the payment of benefits 
under this title and shall be treated as direct spending for purposes 
of the Balanced Budget and Emergency Deficit Control Act of 1985.''.
    (b) Denial of SSI Benefits for 10 Years to a Person Found To Have 
Fraudulently Obtained SSI Benefits While in Prison.--
            (1) In general.--Section 1611(e)(1) (42 U.S.C. 1382(e)(1)), 
        as amended by subsection (a) of this section, is amended by 
        adding at the end the following new subparagraph:
    ``(J) In any case in which the Commissioner of Social Security 
finds that a person has made a fraudulent statement or representation 
in order to obtain or to continue to receive benefits under this title 
while being an inmate in a penal institution, such person shall not be 
considered an eligible individual or eligible spouse for any month 
ending during the 10-year period beginning on the date on which such 
person ceases being such an inmate.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply with respect to statements or representations made 
        on or after the date of the enactment of this Act.
    (c) Study of Other Potential Improvements in the Collection of 
Information Respecting Public Inmates.--
            (1) Study.--The Commissioner of Social Security shall 
        conduct a study of the desirability, feasibility, and cost of--
                    (A) establishing a system under which Federal, 
                State, and local courts would furnish to the 
                Commissioner such information respecting court orders 
                by which individuals are confined in jails, prisons, or 
                other public penal, correctional, or medical facilities 
                as the Commissioner may require for the purpose of 
                carrying out section 1611(e)(1) of the Social Security 
                Act; and
                    (B) requiring that State and local jails, prisons, 
                and other institutions that enter into contracts with 
                the Commissioner under section 1611(e)(1)(I) of the 
                Social Security Act furnish the information required by 
                such contracts to the Commissioner by means of an 
                electronic or other sophisticated data exchange system.
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Commissioner of Social Security 
        shall submit a report on the results of the study conducted 
        pursuant to this subsection to the Committee on Finance of the 
        Senate and the Committee on Ways and Means of the House of 
        Representatives.

SEC. 2204. EFFECTIVE DATE OF APPLICATION FOR BENEFITS.

    (a) In General.--Subparagraphs (A) and (B) of section 1611(c)(7) 
(42 U.S.C. 1382(c)(7)) are amended to read as follows:
            ``(A) the first day of the month following the date such 
        application is filed, or
            ``(B) the first day of the month following the date such 
        individual becomes eligible for such benefits with respect to 
        such application.''.
    (b) Special Rule Relating to Emergency Advance Payments.--Section 
1631(a)(4)(A) (42 U.S.C. 1383(a)(4)(A)) is amended--
            (1) by inserting ``for the month following the date the 
        application is filed'' after ``is presumptively eligible for 
        such benefits''; and
            (2) by inserting ``, which shall be repaid through 
        proportionate reductions in such benefits over a period of not 
        more than 6 months'' before the semicolon.
    (c) Conforming Amendments.--
            (1) Section 1614(b) (42 U.S.C. 1382c(b)) is amended by 
        striking ``at the time the application or request is filed'' 
        and inserting ``on the first day of the month following the 
        date the application or request is filed''.
            (2) Section 1631(g)(3) (42 U.S.C. 1382j(g)(3)) is amended 
        by inserting ``following the month'' after ``beginning with the 
        month''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to applications for benefits under title XVI of the 
        Social Security Act filed on or after the date of the enactment 
        of this Act, without regard to whether regulations have been 
        issued to implement such amendments.
            (2) Benefits under title xvi.--For purposes of this 
        subsection, the term ``benefits under title XVI of the Social 
        Security Act'' includes supplementary payments pursuant to an 
        agreement for Federal administration under section 1616(a) of 
        the Social Security Act, and payments pursuant to an agreement 
        entered into under section 212(b) of Public Law 93-66.

              Subchapter B--Benefits for Disabled Children

SEC. 2211. DEFINITION AND ELIGIBILITY RULES.

    (a) Definition of Childhood Disability.--Section 1614(a)(3) (42 
U.S.C. 1382c(a)(3)), as amended by section 105(b)(1) of the Contract 
with America Advancement Act of 1996, is amended--
            (1) in subparagraph (A), by striking ``An individual'' and 
        inserting ``Except as provided in subparagraph (C), an 
        individual'';
            (2) in subparagraph (A), by striking ``(or, in the case of 
        an individual under the age of 18, if he suffers from any 
        medically determinable physical or mental impairment of 
        comparable severity)'';
            (3) by redesignating subparagraphs (C) through (I) as 
        subparagraphs (D) through (J), respectively;
            (4) by inserting after subparagraph (B) the following new 
        subparagraph:
    ``(C) An individual under the age of 18 shall be considered 
disabled for the purposes of this title if that individual has a 
medically determinable physical or mental impairment, which results in 
marked and severe functional limitations, and which can be expected to 
result in death or which has lasted or can be expected to last for a 
continuous period of not less than 12 months. Notwithstanding the 
preceding sentence, no individual under the age of 18 who engages in 
substantial gainful activity (determined in accordance with regulations 
prescribed pursuant to subparagraph (E)) may be considered to be 
disabled.''; and
            (5) in subparagraph (F), as redesignated by paragraph (3), 
        by striking ``(D)'' and inserting ``(E)''.
    (b) Request for Comments to Improve Disability Evaluation.--Not 
later than 60 days after the date of the enactment of this Act, and 
annually thereafter, the Commissioner of Social Security shall issue a 
request for comments in the Federal Register regarding improvements to 
the disability evaluation and determination procedures for individuals 
under age 18 to ensure the comprehensive assessment of such 
individuals, including--
            (1) additions to conditions which should be presumptively 
        disabling at birth or ages 0 through 3 years;
            (2) specific changes in individual listings in the Listing 
        of Impairments set forth in appendix 1 of subpart P of part 404 
        of title 20, Code of Federal Regulations;
            (3) improvements in regulations regarding determinations 
        based on regulations providing for medical and functional 
        equivalence to such Listing of Impairments, and consideration 
        of multiple impairments; and
            (4) any other changes to the disability determination 
        procedures.
    (c) Changes to Childhood SSI Regulations.--
            (1) Modification to medical criteria for evaluation of 
        mental and emotional disorders.--The Commissioner of Social 
        Security shall modify sections 112.00C.2. and 112.02B.2.c.(2) 
        of appendix 1 to subpart P of part 404 of title 20, Code of 
        Federal Regulations, to eliminate references to maladaptive 
        behavior in the domain of personal/behavorial function.
            (2) Discontinuance of individualized functional 
        assessment.--The Commissioner of Social Security shall 
        discontinue the individualized functional assessment for 
        children set forth in sections 416.924d and 416.924e of title 
        20, Code of Federal Regulations.
    (d) Medical Improvement Review Standard as it Applies to 
Individuals Under the Age of 18.--Section 1614(a)(4) (42 U.S.C. 
1382(a)(4)) is amended--
            (1) by redesignating subclauses (I) and (II) of clauses (i) 
        and (ii) of subparagraph (B) as items (aa) and (bb), 
        respectively;
            (2) by redesignating clauses (i) and (ii) of subparagraphs 
        (A) and (B) as subclauses (I) and (II), respectively;
            (3) by redesignating subparagraphs (A) through (C) as 
        clauses (i) through (iii), respectively;
            (4) by inserting before clause (i) (as redesignated by 
        paragraph (3)) the following new subparagraph:
            ``(A) in the case of an individual who is age 18 or older--
        '';
            (5) by inserting after and below subparagraph (A)(iii) (as 
        so redesignated) the following new subparagraph:
            ``(B) in the case of an individual who is under the age of 
        18--
                    ``(i) substantial evidence which demonstrates that 
                there has been medical improvement in the individual's 
                impairment or combination of impairments, and that such 
                impairment or combination of impairments no longer 
                results in marked and severe functional limitations; or
                    ``(ii) substantial evidence which demonstrates 
                that, as determined on the basis of new or improved 
                diagnostic techniques or evaluations, the individual's 
                impairment or combination of impairments, is not as 
                disabling as it was considered to be at the time of the 
                most recent prior decision that the individual was 
                under a disability or continued to be under a 
                disability, and such impairment or combination of 
                impairments does not result in marked and severe 
                functional limitations; or'';
            (6) by redesignating subparagraph (D) as subparagraph (C) 
        and by inserting in such subparagraph ``in the case of any 
        individual,'' before ``substantial evidence''; and
            (7) in the first sentence following subparagraph (C) (as 
        redesignated by paragraph (6)), by--
                    (A) inserting ``(i)'' before ``to restore''; and
                    (B) inserting ``, or (ii) in the case of an 
                individual under the age of 18, to eliminate or improve 
                the individual's impairment or combination of 
                impairments so that it no longer results in marked and 
                severe functional limitations'' immediately before the 
                period.
    (e) Effective Dates, Etc.--
            (1) Effective dates.--
                    (A) Subsections (a) and (c).--
                            (i) In general.--The provisions of, and 
                        amendments made by, subsections (a) and (c) 
                        shall apply to any individual who applies for, 
                        or whose claim is finally adjudicated with 
                        respect to, benefits under title XVI of the 
                        Social Security Act on or after the date of the 
                        enactment of this Act, without regard to 
                        whether regulations have been issued to 
                        implement such provisions and amendments.
                            (ii) Determination of final adjudication.--
                        For purposes of clause (i), no individual's 
                        claim with respect to such benefits may be 
                        considered to be finally adjudicated before 
                        such date of enactment if, on or after such 
                        date, there is pending a request for either 
                        administrative or judicial review with respect 
                        to such claim that has been denied in whole, or 
                        there is pending, with respect to such claim, 
                        readjudication by the Commissioner of Social 
                        Security pursuant to relief in a class action 
                        or implementation by the Commissioner of a 
                        court remand order.
                    (B) Subsection (d).--The amendments made by 
                subsection (d) shall apply with respect to benefits 
                under title XVI of the Social Security Act for months 
                beginning on or after the date of the enactment of this 
                Act, without regard to whether regulations have been 
                issued to implement such amendments.
            (2) Application to current recipients.--
                    (A) Eligibility redeterminations.--During the 
                period beginning on the date of the enactment of this 
                Act and ending on the date which is 1 year after such 
                date of enactment, the Commissioner of Social Security 
                shall redetermine the eligibility of any individual 
                under age 18 who is receiving supplemental security 
                income benefits by reason of disability under title XVI 
                of the Social Security Act as of the date of the 
                enactment of this Act and whose eligibility for such 
                benefits may terminate by reason of the provisions of, 
                or amendments made by, subsections (a) and (c) of this 
                section. With respect to any redetermination under this 
                subparagraph--
                            (i) section 1614(a)(4) of the Social 
                        Security Act (42 U.S.C. 1382c(a)(4)) shall not 
                        apply;
                            (ii) the Commissioner of Social Security 
                        shall apply the eligibility criteria for new 
                        applicants for benefits under title XVI of such 
                        Act;
                            (iii) the Commissioner shall give such 
                        redetermination priority over all continuing 
                        eligibility reviews and other reviews under 
                        such title; and
                            (iv) such redetermination shall be counted 
                        as a review or redetermination otherwise 
                        required to be made under section 208 of the 
                        Social Security Independence and Program 
                        Improvements Act of 1994 or any other provision 
                        of title XVI of the Social Security Act.
                    (B) Grandfather provision.--The provisions of, and 
                amendments made by, subsections (a) and (c) of this 
                section, and the redetermination under subparagraph 
                (A), shall only apply with respect to the benefits of 
                an individual described in subparagraph (A) for months 
                beginning on or after the later of July 1, 1997, or the 
                date of the redetermination with respect to such 
                individual.
                    (C) Notice.--Not later than January 1, 1997, the 
                Commissioner of Social Security shall notify an 
                individual described in subparagraph (A) of the 
                provisions of this paragraph.
            (3) Report.--The Commissioner of Social Security shall 
        report to the Congress regarding the progress made in 
        implementing the provisions of, and amendments made by, this 
        section on child disability evaluations not later than 180 days 
        after the date of the enactment of this Act.
            (4) Regulations.--Notwithstanding any other provision of 
        law, the Commissioner of Social Security shall submit for 
        review to the committees of jurisdiction in the Congress any 
        final regulation pertaining to the eligibility of individuals 
        under age 18 for benefits under title XVI of the Social 
        Security Act at least 45 days before the effective date of such 
        regulation. The submission under this paragraph shall include 
        supporting documentation providing a cost analysis, workload 
        impact, and projections as to how the regulation will effect 
        the future number of recipients under such title.
            (5) Appropriations.--
                    (A) In general.--Out of any money in the Treasury 
                not otherwise appropriated, there are authorized to be 
                appropriated and are hereby appropriated, to remain 
                available without fiscal year limitation, $200,000,000 
                for fiscal year 1997, $75,000,000 for fiscal year 1998, 
                and $25,000,000 for fiscal year 1999, for the 
                Commissioner of Social Security to utilize only for 
                continuing disability reviews and redeterminations 
                under title XVI of the Social Security Act, with 
                reviews and redeterminations for individuals affected 
                by the provisions of subsection (b) given highest 
                priority.
                    (B) Additional funds.--Amounts appropriated under 
                subparagraph (A) shall be in addition to any funds 
                otherwise appropriated for continuing disability 
                reviews and redeterminations under title XVI of the 
                Social Security Act.
            (6) Benefits under title xvi.--For purposes of this 
        subsection, the term ``benefits under title XVI of the Social 
        Security Act'' includes supplementary payments pursuant to an 
        agreement for Federal administration under section 1616(a) of 
        the Social Security Act, and payments pursuant to an agreement 
        entered into under section 212(b) of Public Law 93-66.

SEC. 2212. ELIGIBILITY REDETERMINATIONS AND CONTINUING DISABILITY 
              REVIEWS.

    (a) Continuing Disability Reviews Relating to Certain Children.--
Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as redesignated by 
section 2211(a)(3) of this Act, is amended--
            (1) by inserting ``(i)'' after ``(H)''; and
            (2) by adding at the end the following new clause:
    ``(ii)(I) Not less frequently than once every 3 years, the 
Commissioner shall review in accordance with paragraph (4) the 
continued eligibility for benefits under this title of each individual 
who has not attained 18 years of age and is eligible for such benefits 
by reason of an impairment (or combination of impairments) which is 
likely to improve (or, at the option of the Commissioner, which is 
unlikely to improve).
    ``(II) A representative payee of a recipient whose case is reviewed 
under this clause shall present, at the time of review, evidence 
demonstrating that the recipient is, and has been, receiving treatment, 
to the extent considered medically necessary and available, of the 
condition which was the basis for providing benefits under this title.
    ``(III) If the representative payee refuses to comply without good 
cause with the requirements of subclause (II), the Commissioner of 
Social Security shall, if the Commissioner determines it is in the best 
interest of the individual, promptly suspend payment of benefits to the 
representative payee, and provide for payment of benefits to an 
alternative representative payee of the individual or, if the interest 
of the individual under this title would be served thereby, to the 
individual.
    ``(IV) Subclause (II) shall not apply to the representative payee 
of any individual with respect to whom the Commissioner determines such 
application would be inappropriate or unnecessary. In making such 
determination, the Commissioner shall take into consideration the 
nature of the individual's impairment (or combination of impairments). 
Section 1631(c) shall not apply to a finding by the Commissioner that 
the requirements of subclause (II) should not apply to an individual's 
representative payee.''.
    (b) Disability Eligibility Redeterminations Required for SSI 
Recipients Who Attain 18 Years of Age.--
            (1) In general.--Section 1614(a)(3)(H) (42 U.S.C. 
        1382c(a)(3)(H)), as amended by subsection (a) of this section, 
        is amended by adding at the end the following new clause:
    ``(iii) If an individual is eligible for benefits under this title 
by reason of disability for the month preceding the month in which the 
individual attains the age of 18 years, the Commissioner shall 
redetermine such eligibility--
            ``(I) during the 1-year period beginning on the 
        individual's 18th birthday; and
            ``(II) by applying the criteria used in determining the 
        initial eligibility for applicants who are age 18 or older.
With respect to a redetermination under this clause, paragraph (4) 
shall not apply and such redetermination shall be considered a 
substitute for a review or redetermination otherwise required under any 
other provision of this subparagraph during that 1-year period.''.
            (2) Conforming repeal.--Section 207 of the Social Security 
        Independence and Program Improvements Act of 1994 (42 U.S.C. 
        1382 note; 108 Stat. 1516) is hereby repealed.
    (c) Continuing Disability Review Required for Low Birth Weight 
Babies.--Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as amended 
by subsections (a) and (b) of this section, is amended by adding at the 
end the following new clause:
    ``(iv)(I) Not later than 12 months after the birth of an 
individual, the Commissioner shall review in accordance with paragraph 
(4) the continuing eligibility for benefits under this title by reason 
of disability of such individual whose low birth weight is a 
contributing factor material to the Commissioner's determination that 
the individual is disabled.
    ``(II) A review under subclause (I) shall be considered a 
substitute for a review otherwise required under any other provision of 
this subparagraph during that 12-month period.
    ``(III) A representative payee of a recipient whose case is 
reviewed under this clause shall present, at the time of review, 
evidence demonstrating that the recipient is, and has been, receiving 
treatment, to the extent considered medically necessary and available, 
of the condition which was the basis for providing benefits under this 
title.
    ``(IV) If the representative payee refuses to comply without good 
cause with the requirements of subclause (III), the Commissioner of 
Social Security shall, if the Commissioner determines it is in the best 
interest of the individual, promptly suspend payment of benefits to the 
representative payee, and provide for payment of benefits to an 
alternative representative payee of the individual or, if the interest 
of the individual under this title would be served thereby, to the 
individual.
    ``(V) Subclause (III) shall not apply to the representative payee 
of any individual with respect to whom the Commissioner determines such 
application would be inappropriate or unnecessary. In making such 
determination, the Commissioner shall take into consideration the 
nature of the individual's impairment (or combination of impairments). 
Section 1631(c) shall not apply to a finding by the Commissioner that 
the requirements of subclause (III) should not apply to an individual's 
representative payee.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to benefits for months beginning on or after the date of the 
enactment of this Act, without regard to whether regulations have been 
issued to implement such amendments.

SEC. 2213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

    (a) Requirement To Establish Account.--Section 1631(a)(2) (42 
U.S.C. 1383(a)(2)) is amended--
            (1) by redesignating subparagraphs (F) and (G) as 
        subparagraphs (G) and (H), respectively; and
            (2) by inserting after subparagraph (E) the following new 
        subparagraph:
    ``(F)(i)(I) Each representative payee of an eligible individual 
under the age of 18 who is eligible for the payment of benefits 
described in subclause (II) shall establish on behalf of such 
individual an account in a financial institution into which such 
benefits shall be paid, and shall thereafter maintain such account for 
use in accordance with clause (ii).
    ``(II) Benefits described in this subclause are past-due monthly 
benefits under this title (which, for purposes of this subclause, 
include State supplementary payments made by the Commissioner pursuant 
to an agreement under section 1616 or section 212(b) of Public Law 93-
66) in an amount (after any withholding by the Commissioner for 
reimbursement to a State for interim assistance under subsection (g)) 
that exceeds the product of--
            ``(aa) 6, and
            ``(bb) the maximum monthly benefit payable under this title 
        to an eligible individual.
    ``(ii)(I) A representative payee may use funds in the account 
established under clause (i) to pay for allowable expenses described in 
subclause (II).
    ``(II) An allowable expense described in this subclause is an 
expense for--
            ``(aa) education or job skills training;
            ``(bb) personal needs assistance;
            ``(cc) special equipment;
            ``(dd) housing modification;
            ``(ee) medical treatment;
            ``(ff) therapy or rehabilitation; or
            ``(gg) any other item or service that the Commissioner 
        determines to be appropriate:
Provided, That such expense benefits such individual and, in the case 
of an expense described in item (cc), (dd), (ff), or (gg), is related 
to the impairment (or combination of impairments) of such individual.
    ``(III) The use of funds from an account established under clause 
(i) in any manner not authorized by this clause--
            ``(aa) by a representative payee shall be considered a 
        misapplication of benefits for all purposes of this paragraph, 
        and any representative payee who knowingly misapplies benefits 
        from such an account shall be liable to the Commissioner in an 
        amount equal to the total amount of such benefits; and
            ``(bb) by an eligible individual who is his or her own 
        payee shall be considered a misapplication of benefits for all 
        purposes of this paragraph and the total amount of such 
        benefits so used shall be considered to be the uncompensated 
        value of a disposed resource and shall be subject to the 
        provisions of section 1613(c).
    ``(IV) This clause shall continue to apply to funds in the account 
after the child has reached age 18, regardless of whether benefits are 
paid directly to the beneficiary or through a representative payee.
    ``(iii) The representative payee may deposit into the account 
established pursuant to clause (i)--
            ``(I) past-due benefits payable to the eligible individual 
        in an amount less than that specified in clause (i)(II), and
            ``(II) any other funds representing an underpayment under 
        this title to such individual, provided that the amount of such 
        underpayment is equal to or exceeds the maximum monthly benefit 
        payable under this title to an eligible individual.
    ``(iv) The Commissioner of Social Security shall establish a system 
for accountability monitoring whereby such representative payee shall 
report, at such time and in such manner as the Commissioner shall 
require, on activity respecting funds in the account established 
pursuant to clause (i).''.
    (b) Conforming Amendments.--
            (1) Exclusion from resources.--Section 1613(a) (42 U.S.C. 
        1382b(a)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (10);
                    (B) by striking the period at the end of paragraph 
                (11) and inserting ``; and''; and
                    (C) by inserting after paragraph (11) the following 
                new paragraph:
            ``(12) any account, including accrued interest or other 
        earnings thereon, established and maintained in accordance with 
        section 1631(a)(2)(F).''.
            (2) Exclusion from income.--Section 1612(b) (42 U.S.C. 
        1382a(b)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (19);
                    (B) by striking the period at the end of paragraph 
                (20) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(21) the interest or other earnings on any account 
        established and maintained in accordance with section 
        1631(a)(2)(F).''.
            (c) Effective Date.--The amendments made by this section 
        shall apply to payments made after the date of the enactment of 
        this Act.

SEC. 2214. REDUCTION IN CASH BENEFITS PAYABLE TO INSTITUTIONALIZED 
              INDIVIDUALS WHOSE MEDICAL COSTS ARE COVERED BY PRIVATE 
              INSURANCE.

    (a) In General.--Section 1611(e)(1)(B) (42 U.S.C. 1382(e)(1)(B)) is 
amended--
            (1) by striking ``title XIX, or'' and inserting ``title XV 
        or XIX,''; and
            (2) by inserting ``or, in the case of an eligible 
        individual under the age of 18, receiving payments (with 
        respect to such individual) under any health insurance policy 
        issued by a private provider of such insurance'' after 
        ``section 1614(f)(2)(B),''.
    (b) Effective Date.--The amendment made by this section shall apply 
to benefits for months beginning 90 or more days after the date of the 
enactment of this Act, without regard to whether regulations have been 
issued to implement such amendments.

SEC. 2215. REGULATIONS.

    Within 3 months after the date of the enactment of this Act, the 
Commissioner of Social Security shall prescribe such regulations as may 
be necessary to implement the amendments made by this subchapter.

             Subchapter C--Additional Enforcement Provision

SEC. 2221. INSTALLMENT PAYMENT OF LARGE PAST-DUE SUPPLEMENTAL SECURITY 
              INCOME BENEFITS.

    (a) In General.--Section 1631(a) (42 U.S.C. 1383) is amended by 
adding at the end the following new paragraph:
    ``(10)(A) If an individual is eligible for past-due monthly 
benefits under this title in an amount that (after any withholding for 
reimbursement to a State for interim assistance under subsection (g)) 
equals or exceeds the product of--
            ``(i) 12, and
            ``(ii) the maximum monthly benefit payable under this title 
        to an eligible individual (or, if appropriate, to an eligible 
        individual and eligible spouse),
then the payment of such past-due benefits (after any such 
reimbursement to a State) shall be made in installments as provided in 
subparagraph (B).
    ``(B)(i) The payment of past-due benefits subject to this 
subparagraph shall be made in not to exceed 3 installments that are 
made at 6-month intervals.
    ``(ii) Except as provided in clause (iii), the amount of each of 
the first and second installments may not exceed an amount equal to the 
product of clauses (i) and (ii) of subparagraph (A).
    ``(iii) In the case of an individual who has--
            ``(I) outstanding debt attributable to--
                    ``(aa) food,
                    ``(bb) clothing,
                    ``(cc) shelter, or
                    ``(dd) medically necessary services, supplies or 
                equipment, or medicine; or
            ``(II) current expenses or expenses anticipated in the near 
        term attributable to--
                    ``(aa) medically necessary services, supplies or 
                equipment, or medicine, or
                    ``(bb) the purchase of a home, and
such debt or expenses are not subject to reimbursement by a public 
assistance program, the Secretary under title XVIII, a State plan 
approved under title XV or XIX, or any private entity legally liable to 
provide payment pursuant to an insurance policy, pre-paid plan, or 
other arrangement, the limitation specified in clause (ii) may be 
exceeded by an amount equal to the total of such debt and expenses.
    ``(C) This paragraph shall not apply to any individual who, at the 
time of the Commissioner's determination that such individual is 
eligible for the payment of past-due monthly benefits under this 
title--
            ``(i) is afflicted with a medically determinable impairment 
        that is expected to result in death within 12 months; or
            ``(ii) is ineligible for benefits under this title and the 
        Commissioner determines that such individual is likely to 
        remain ineligible for the next 12 months.
    ``(D) For purposes of this paragraph, the term `benefits under this 
title' includes supplementary payments pursuant to an agreement for 
Federal administration under section 1616(a), and payments pursuant to 
an agreement entered into under section 212(b) of Public Law 93-66.''.
    (b) Conforming Amendment.--Section 1631(a)(1) (42 U.S.C. 
1383(a)(1)) is amended by inserting ``(subject to paragraph (10))'' 
immediately before ``in such installments''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section are 
        effective with respect to past-due benefits payable under title 
        XVI of the Social Security Act after the third month following 
        the month in which this Act is enacted.
            (2) Benefits payable under title xvi.--For purposes of this 
        subsection, the term ``benefits payable under title XVI of the 
        Social Security Act'' includes supplementary payments pursuant 
        to an agreement for Federal administration under section 
        1616(a) of the Social Security Act, and payments pursuant to an 
        agreement entered into under section 212(b) of Public Law 93-
        66.

SEC. 2222. REGULATIONS.

    Within 3 months after the date of the enactment of this Act, the 
Commissioner of Social Security shall prescribe such regulations as may 
be necessary to implement the amendments made by this subchapter.

  Subchapter D--Studies Regarding Supplemental Security Income Program

SEC. 2231. ANNUAL REPORT ON THE SUPPLEMENTAL SECURITY INCOME PROGRAM.

    Title XVI (42 U.S.C. 1381 et seq.), as amended by section 2201(c) 
of this Act, is amended by adding at the end the following new section:

                       ``annual report on program

    ``Sec. 1637. (a) Not later than May 30 of each year, the 
Commissioner of Social Security shall prepare and deliver a report 
annually to the President and the Congress regarding the program under 
this title, including--
            ``(1) a comprehensive description of the program;
            ``(2) historical and current data on allowances and 
        denials, including number of applications and allowance rates 
        for initial determinations, reconsideration determinations, 
        administrative law judge hearings, appeals council reviews, and 
        Federal court decisions;
            ``(3) historical and current data on characteristics of 
        recipients and program costs, by recipient group (aged, blind, 
        disabled adults, and disabled children);
            ``(4) historical and current data on prior enrollment by 
        recipients in public benefit programs, including State programs 
        funded under part A of title IV of the Social Security Act and 
        State general assistance programs;
            ``(5) projections of future number of recipients and 
        program costs, through at least 25 years;
            ``(6) number of redeterminations and continuing disability 
        reviews, and the outcomes of such redeterminations and reviews;
            ``(7) data on the utilization of work incentives;
            ``(8) detailed information on administrative and other 
        program operation costs;
            ``(9) summaries of relevant research undertaken by the 
        Social Security Administration, or by other researchers;
            ``(10) State supplementation program operations;
            ``(11) a historical summary of statutory changes to this 
        title; and
            ``(12) such other information as the Commissioner deems 
        useful.
    ``(b) Each member of the Social Security Advisory Board shall be 
permitted to provide an individual report, or a joint report if agreed, 
of views of the program under this title, to be included in the annual 
report required under this section.''.

SEC. 2232. STUDY BY GENERAL ACCOUNTING OFFICE.

    Not later than January 1, 1999, the Comptroller General of the 
United States shall study and report on--
            (1) the impact of the amendments made by, and the 
        provisions of, this chapter on the supplemental security income 
        program under title XVI of the Social Security Act; and
            (2) extra expenses incurred by families of children 
        receiving benefits under such title that are not covered by 
        other Federal, State, or local programs.

                        CHAPTER 3--CHILD SUPPORT

SEC. 2300. REFERENCE TO SOCIAL SECURITY ACT.

    Except as otherwise specifically provided, wherever in this chapter 
an amendment is expressed in terms of an amendment to or repeal of a 
section or other provision, the reference shall be considered to be 
made to that section or other provision of the Social Security Act.

    Subchapter A--Eligibility for Services; Distribution of Payments

SEC. 2301. STATE OBLIGATION TO PROVIDE CHILD SUPPORT ENFORCEMENT 
              SERVICES.

    (a) State Plan Requirements.--Section 454 (42 U.S.C. 654) is 
amended--
            (1) by striking paragraph (4) and inserting the following 
        new paragraph:
            ``(4) provide that the State will--
                    ``(A) provide services relating to the 
                establishment of paternity or the establishment, 
                modification, or enforcement of child support 
                obligations, as appropriate, under the plan with 
                respect to--
                            ``(i) each child for whom (I) assistance is 
                        provided under the State program funded under 
                        part A of this title, (II) benefits or services 
                        for foster care maintenance are provided under 
                        the State program funded under part E of this 
                        title, (III) medical assistance is provided 
                        under the State plan under title XV, or (IV) 
                        medical assistance is provided under the State 
                        plan approved under title XIX, unless, in 
                        accordance with paragraph (29), good cause or 
                        other exceptions exist;
                            ``(ii) any other child, if an individual 
                        applies for such services with respect to the 
                        child; and
                    ``(B) enforce any support obligation established 
                with respect to--
                            ``(i) a child with respect to whom the 
                        State provides services under the plan; or
                            ``(ii) the custodial parent of such a 
                        child;''; and
            (2) in paragraph (6)--
                    (A) by striking ``provide that'' and inserting 
                ``provide that--'';
                    (B) by striking subparagraph (A) and inserting the 
                following new subparagraph:
                    ``(A) services under the plan shall be made 
                available to residents of other States on the same 
                terms as to residents of the State submitting the 
                plan;'';
                    (C) in subparagraph (B), by inserting ``on 
                individuals not receiving assistance under any State 
                program funded under part A'' after ``such services 
                shall be imposed'';
                    (D) in each of subparagraphs (B), (C), (D), and 
                (E)--
                            (i) by indenting the subparagraph in the 
                        same manner as, and aligning the left margin of 
                        the subparagraph with the left margin of, the 
                        matter inserted by subparagraph (B) of this 
                        paragraph; and
                            (ii) by striking the final comma and 
                        inserting a semicolon; and
                    (E) in subparagraph (E), by indenting each of 
                clauses (i) and (ii) 2 additional ems.
    (b) Continuation of Services for Families Ceasing To Receive 
Assistance Under the State Program Funded Under Part A.--Section 454 
(42 U.S.C. 654) is amended--
            (1) by striking ``and'' at the end of paragraph (23);
            (2) by striking the period at the end of paragraph (24) and 
        inserting ``; and''; and
            (3) by adding after paragraph (24) the following new 
        paragraph:
            ``(25) provide that if a family with respect to which 
        services are provided under the plan ceases to receive 
        assistance under the State program funded under part A, the 
        State shall provide appropriate notice to the family and 
        continue to provide such services, subject to the same 
        conditions and on the same basis as in the case of other 
        individuals to whom services are furnished under the plan, 
        except that an application or other request to continue 
        services shall not be required of such a family and paragraph 
        (6)(B) shall not apply to the family.''.
    (c) Conforming Amendments.--
            (1) Section 452(b) (42 U.S.C. 652(b)) is amended by 
        striking ``454(6)'' and inserting ``454(4)''.
            (2) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is 
        amended by striking ``454(6)'' each place it appears and 
        inserting ``454(4)(A)(ii)''.
            (3) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is 
        amended by striking ``in the case of overdue support which a 
        State has agreed to collect under section 454(6)'' and 
        inserting ``in any other case''.
            (4) Section 466(e) (42 U.S.C. 666(e)) is amended by 
        striking ``paragraph (4) or (6) of section 454'' and inserting 
        ``section 454(4)''.

SEC. 2302. DISTRIBUTION OF CHILD SUPPORT COLLECTIONS.

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

``SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

    ``(a) In General.--Subject to subsection (e), an amount collected 
on behalf of a family as support by a State pursuant to a plan approved 
under this part shall be distributed as follows:
            ``(1) Families receiving assistance.--In the case of a 
        family receiving assistance from the State, the State shall--
                    ``(A) pay to the Federal Government the Federal 
                share of the amount so collected; and
                    ``(B) retain, or distribute to the family, the 
                State share of the amount so collected.
            ``(2) Families that formerly received assistance.--In the 
        case of a family that formerly received assistance from the 
        State:
                    ``(A) Current support payments.--To the extent that 
                the amount so collected does not exceed the amount 
                required to be paid to the family for the month in 
                which collected, the State shall distribute the amount 
                so collected to the family.
                    ``(B) Payments of arrearages.--To the extent that 
                the amount so collected exceeds the amount required to 
                be paid to the family for the month in which collected, 
                the State shall distribute the amount so collected as 
                follows:
                            ``(i) Distribution of arrearages that 
                        accrued after the family ceased to receive 
                        assistance.--
                                    ``(I) Pre-october 1997.--Except as 
                                provided in subclause (II), the 
                                provisions of this section (other than 
                                subsection (b)(1)) as in effect and 
                                applied on the day before the date of 
                                the enactment of section 2302 of the 
                                Personal Responsibility and Work 
                                Opportunity Act of 1996 shall apply 
                                with respect to the distribution of 
                                support arrearages that--
                                            ``(aa) accrued after the 
                                        family ceased to receive 
                                        assistance, and
                                            ``(bb) are collected before 
                                        October 1, 1997.
                                    ``(II) Post-september 1997.--With 
                                respect to the amount so collected on 
                                or after October 1, 1997 (or before 
                                such date, at the option of the 
                                State)--
                                            ``(aa) In general.--The 
                                        State shall first distribute 
                                        the amount so collected (other 
                                        than any amount described in 
                                        clause (iv)) to the family to 
                                        the extent necessary to satisfy 
                                        any support arrearages with 
                                        respect to the family that 
                                        accrued after the family ceased 
                                        to receive assistance from the 
                                        State.
                                            ``(bb) Reimbursement of 
                                        governments for assistance 
                                        provided to the family.--After 
                                        the application of division 
                                        (aa) and clause (ii)(II)(aa) 
                                        with respect to the amount so 
                                        collected, the State shall 
                                        retain the State share of the 
                                        amount so collected, and pay to 
                                        the Federal Government the 
                                        Federal share (as defined in 
                                        subsection (c)(2)) of the 
                                        amount so collected, but only 
                                        to the extent necessary to 
                                        reimburse amounts paid to the 
                                        family as assistance by the 
                                        State.
                                            ``(cc) Distribution of the 
                                        remainder to the family.--To 
                                        the extent that neither 
                                        division (aa) nor division (bb) 
                                        applies to the amount so 
                                        collected, the State shall 
                                        distribute the amount to the 
                                        family.
                            ``(ii) Distribution of arrearages that 
                        accrued before the family received 
                        assistance.--
                                    ``(I) Pre-october 2000.--Except as 
                                provided in subclause (II), the 
                                provisions of this section (other than 
                                subsection (b)(1)) as in effect and 
                                applied on the day before the date of 
                                the enactment of section 2302 of the 
                                Personal Responsibility and Work 
                                Opportunity Act of 1996 shall apply 
                                with respect to the distribution of 
                                support arrearages that--
                                            ``(aa) accrued before the 
                                        family received assistance, and
                                            ``(bb) are collected before 
                                        October 1, 2000.
                                    ``(II) Post-september 2000.--
                                Unless, based on the report required by 
                                paragraph (4), the Congress determines 
                                otherwise, with respect to the amount 
                                so collected on or after October 1, 
                                2000 (or before such date, at the 
                                option of the State)--
                                            ``(aa) In general.--The 
                                        State shall first distribute 
                                        the amount so collected (other 
                                        than any amount described in 
                                        clause (iv)) to the family to 
                                        the extent necessary to satisfy 
                                        any support arrearages with 
                                        respect to the family that 
                                        accrued before the family 
                                        received assistance from the 
                                        State.
                                            ``(bb) Reimbursement of 
                                        governments for assistance 
                                        provided to the family.--After 
                                        the application of clause 
                                        (i)(II)(aa) and division (aa) 
                                        with respect to the amount so 
                                        collected, the State shall 
                                        retain the State share of the 
                                        amount so collected, and pay to 
                                        the Federal Government the 
                                        Federal share (as defined in 
                                        subsection (c)(2)) of the 
                                        amount so collected, but only 
                                        to the extent necessary to 
                                        reimburse amounts paid to the 
                                        family as assistance by the 
                                        State.
                                            ``(cc) Distribution of the 
                                        remainder to the family.--To 
                                        the extent that neither 
                                        division (aa) nor division (bb) 
                                        applies to the amount so 
                                        collected, the State shall 
                                        distribute the amount to the 
                                        family.
                            ``(iii) Distribution of arrearages that 
                        accrued while the family received assistance.--
                        In the case of a family described in this 
                        subparagraph, the provisions of paragraph (1) 
                        shall apply with respect to the distribution of 
                        support arrearages that accrued while the 
                        family received assistance.
                            ``(iv) Amounts collected pursuant to 
                        section 464.--Notwithstanding any other 
                        provision of this section, any amount of 
                        support collected pursuant to section 464 shall 
                        be retained by the State to the extent past-due 
                        support has been assigned to the State as a 
                        condition of receiving assistance from the 
                        State, up to the amount necessary to reimburse 
                        the State for amounts paid to the family as 
                        assistance by the State. The State shall pay to 
                        the Federal Government the Federal share of the 
                        amounts so retained. To the extent the amount 
                        collected pursuant to section 464 exceeds the 
                        amount so retained, the State shall distribute 
                        the excess to the family.
                            ``(v) Ordering rules for distributions.--
                        For purposes of this subparagraph, unless an 
                        earlier effective date is required by this 
                        section, effective October 1, 2000, the State 
                        shall treat any support arrearages collected, 
                        except for amounts collected pursuant to 
                        section 464, as accruing in the following 
                        order:
                                    ``(I) To the period after the 
                                family ceased to receive assistance.
                                    ``(II) To the period before the 
                                family received assistance.
                                    ``(III) To the period while the 
                                family was receiving assistance.
            ``(3) Families that never received assistance.--In the case 
        of any other family, the State shall distribute the amount so 
        collected to the family.
            ``(4) Families under certain agreements.--In the case of a 
        family receiving assistance from an Indian tribe, distribute 
        the amount so collected pursuant to an agreement entered into 
        pursuant to a State plan under section 454(33).
            ``(5) Study and report.--Not later than October 1, 1998, 
        the Secretary shall report to the Congress the Secretary's 
        findings with respect to--
                    ``(A) whether the distribution of post-assistance 
                arrearages to families has been effective in moving 
                people off of welfare and keeping them off of welfare;
                    ``(B) whether early implementation of a pre-
                assistance arrearage program by some States has been 
                effective in moving people off of welfare and keeping 
                them off of welfare;
                    ``(C) what the overall impact has been of the 
                amendments made by the Personal Responsibility and Work 
                Opportunity Act of 1996 with respect to child support 
                enforcement in moving people off of welfare and keeping 
                them off of welfare; and
                    ``(D) based on the information and data the 
                Secretary has obtained, what changes, if any, should be 
                made in the policies related to the distribution of 
                child support arrearages.
    ``(b) Continuation Of Assignments.--Any rights to support 
obligations, which were assigned to a State as a condition of receiving 
assistance from the State under part A and which were in effect on the 
day before the date of the enactment of the Personal Responsibility and 
Work Opportunity Act of 1996, shall remain assigned after such date.
    ``(c) Definitions.--As used in subsection (a):
            ``(1) Assistance.--The term `assistance from the State' 
        means--
                    ``(A) assistance under the State program funded 
                under part A or under the State plan approved under 
                part A of this title (as in effect on the day before 
                the date of the enactment of the Personal 
                Responsibility and Work Opportunity Act of 1996); and
                    ``(B) foster care maintenance payments under the 
                State plan approved under part E of this title.
            ``(2) Federal share.--The term `Federal share' means that 
        portion of the amount collected resulting from the application 
        of the Federal medical assistance percentage in effect for the 
        fiscal year in which the amount is collected.
            ``(3) Federal medical assistance percentage.--The term 
        `Federal medical assistance percentage' means--
                    ``(A) the Federal medical assistance percentage (as 
                defined in section 1118), in the case of Puerto Rico, 
                the Virgin Islands, Guam, and American Samoa; or
                    ``(B) the Federal medical assistance percentage (as 
                defined in section 1905(b), as in effect on September 
                30, 1996) in the case of any other State.
            ``(4) State share.--The term `State share' means 100 
        percent minus the Federal share.
    ``(d) Hold Harmless Provision.--If the amounts collected which 
could be retained by the State in the fiscal year (to the extent 
necessary to reimburse the State for amounts paid to families as 
assistance by the State) are less than the State share of the amounts 
collected in fiscal year 1995 (determined in accordance with section 
457 as in effect on the day before the date of the enactment of the 
Personal Responsibility and Work Opportunity Act of 1996), the State 
share for the fiscal year shall be an amount equal to the State share 
in fiscal year 1995.
    ``(e) Gap Payments not Subject to Distribution Under This 
Section.--At State option, this section shall not apply to any amount 
collected on behalf of a family as support by the State (and paid to 
the family in addition to the amount of assistance otherwise payable to 
the family) pursuant to a plan approved under this part if such amount 
would have been paid to the family by the State under section 
402(a)(28), as in effect and applied on the day before the date of the 
enactment of section 2302 of the Personal Responsibility and Work 
Opportunity Act of 1996. For purposes of subsection (d), the State 
share of such amount paid to the family shall be considered amounts 
which could be retained by the State if such payments were reported by 
the State as part of the State share of amounts collected in fiscal 
year 1995.''.
    (b) Conforming Amendments.--
            (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is amended by 
        striking ``section 457(b)(4) or (d)(3)'' and inserting 
        ``section 457''.
            (2) Section 454 (42 U.S.C. 654) is amended--
                    (A) in paragraph (11)--
                            (i) by striking ``(11)'' and inserting 
                        ``(11)(A)''; and
                            (ii) by inserting after the semicolon 
                        ``and''; and
                    (B) by redesignating paragraph (12) as subparagraph 
                (B) of paragraph (11).
    (c) Effective Dates.--
            (1) In General.--Except as provided in paragraph (2), the 
        amendments made by this section shall be effective on October 
        1, 1996, or earlier at the State's option.
            (2) Conforming amendments.--The amendments made by 
        subsection (b)(2) shall become effective on the date of the 
        enactment of this Act.

SEC. 2303. PRIVACY SAFEGUARDS.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by section 2301(b) of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (24);
            (2) by striking the period at the end of paragraph (25) and 
        inserting ``; and''; and
            (3) by adding after paragraph (25) the following new 
        paragraph:
            ``(26) will have in effect safeguards, applicable to all 
        confidential information handled by the State agency, that are 
        designed to protect the privacy rights of the parties, 
        including--
                    ``(A) safeguards against unauthorized use or 
                disclosure of information relating to proceedings or 
                actions to establish paternity, or to establish or 
                enforce support;
                    ``(B) prohibitions against the release of 
                information on the whereabouts of 1 party to another 
                party against whom a protective order with respect to 
                the former party has been entered; and
                    ``(C) prohibitions against the release of 
                information on the whereabouts of 1 party to another 
                party if the State has reason to believe that the 
                release of the information may result in physical or 
                emotional harm to the former party.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective on October 1, 1997.

SEC. 2304. RIGHTS TO NOTIFICATION OF HEARINGS.

    (a) In General.--Section 454 (42 U.S.C. 654), as amended by section 
2302(b)(2) of this Act, is amended by inserting after paragraph (11) 
the following new paragraph:
            ``(12) provide for the establishment of procedures to 
        require the State to provide individuals who are applying for 
        or receiving services under the State plan, or who are parties 
        to cases in which services are being provided under the State 
        plan--
                    ``(A) with notice of all proceedings in which 
                support obligations might be established or modified; 
                and
                    ``(B) with a copy of any order establishing or 
                modifying a child support obligation, or (in the case 
                of a petition for modification) a notice of 
                determination that there should be no change in the 
                amount of the child support award, within 14 days after 
                issuance of such order or determination;''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective on October 1, 1997.

                 Subchapter B--Locate and Case Tracking

SEC. 2311. STATE CASE REGISTRY.

    Section 454A, as added by section 2344(a)(2) of this Act, is 
amended by adding at the end the following new subsections:
    ``(e) State Case Registry.--
            ``(1) Contents.--The automated system required by this 
        section shall include a registry (which shall be known as the 
        `State case registry') that contains records with respect to--
                    ``(A) each case in which services are being 
                provided by the State agency under the State plan 
                approved under this part; and
                    ``(B) each support order established or modified in 
                the State on or after October 1, 1998.
            ``(2) Linking of local registries.--The State case registry 
        may be established by linking local case registries of support 
        orders through an automated information network, subject to 
        this section.
            ``(3) Use of standardized data elements.--Such records 
        shall use standardized data elements for both parents (such as 
        names, social security numbers and other uniform identification 
        numbers, dates of birth, and case identification numbers), and 
        contain such other information (such as on case status) as the 
        Secretary may require.
            ``(4) Payment records.--Each case record in the State case 
        registry with respect to which services are being provided 
        under the State plan approved under this part and with respect 
        to which a support order has been established shall include a 
        record of--
                    ``(A) the amount of monthly (or other periodic) 
                support owed under the order, and other amounts 
                (including arrearages, interest or late payment 
                penalties, and fees) due or overdue under the order;
                    ``(B) any amount described in subparagraph (A) that 
                has been collected;
                    ``(C) the distribution of such collected amounts;
                    ``(D) the birth date of any child for whom the 
                order requires the provision of support; and
                    ``(E) the amount of any lien imposed with respect 
                to the order pursuant to section 466(a)(4).
            ``(5) Updating and monitoring.--The State agency operating 
        the automated system required by this section shall promptly 
        establish and update, maintain, and regularly monitor, case 
        records in the State case registry with respect to which 
        services are being provided under the State plan approved under 
        this part, on the basis of--
                    ``(A) information on administrative actions and 
                administrative and judicial proceedings and orders 
                relating to paternity and support;
                    ``(B) information obtained from comparison with 
                Federal, State, or local sources of information;
                    ``(C) information on support collections and 
                distributions; and
                    ``(D) any other relevant information.
    ``(f) Information Comparisons and Other Disclosures of 
Information.--The State shall use the automated system required by this 
section to extract information from (at such times, and in such 
standardized format or formats, as may be required by the Secretary), 
to share and compare information with, and to receive information from, 
other data bases and information comparison services, in order to 
obtain (or provide) information necessary to enable the State agency 
(or the Secretary or other State or Federal agencies) to carry out this 
part, subject to section 6103 of the Internal Revenue Code of 1986. 
Such information comparison activities shall include the following:
            ``(1) Federal case registry of child support orders.--
        Furnishing to the Federal Case Registry of Child Support Orders 
        established under section 453(h) (and update as necessary, with 
        information including notice of expiration of orders) the 
        minimum amount of information on child support cases recorded 
        in the State case registry that is necessary to operate the 
        registry (as specified by the Secretary in regulations).
            ``(2) Federal parent locator service.--Exchanging 
        information with the Federal Parent Locator Service for the 
        purposes specified in section 453.
            ``(3) Temporary family assistance and medicaid agencies.--
        Exchanging information with State agencies (of the State and of 
        other States) administering programs funded under part A, 
        programs operated under a State plan under title XV or a State 
        plan approved under title XIX, and other programs designated by 
        the Secretary, as necessary to perform State agency 
        responsibilities under this part and under such programs.
            ``(4) Intrastate and interstate information comparisons.--
        Exchanging information with other agencies of the State, 
        agencies of other States, and interstate information networks, 
        as necessary and appropriate to carry out (or assist other 
        States to carry out) the purposes of this part.''.

SEC. 2312. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 2301(b) and 2303(a) of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (25);
            (2) by striking the period at the end of paragraph (26) and 
        inserting ``; and''; and
            (3) by adding after paragraph (26) the following new 
        paragraph:
            ``(27) provide that, on and after October 1, 1998, the 
        State agency will--
                    ``(A) operate a State disbursement unit in 
                accordance with section 454B; and
                    ``(B) have sufficient State staff (consisting of 
                State employees) and (at State option) contractors 
                reporting directly to the State agency to--
                            ``(i) monitor and enforce support 
                        collections through the unit in cases being 
                        enforced by the State pursuant to section 
                        454(4) (including carrying out the automated 
                        data processing responsibilities described in 
                        section 454A(g)); and
                            ``(ii) take the actions described in 
                        section 466(c)(1) in appropriate cases.''.
    (b) Establishment of State Disbursement Unit.--Part D of title IV 
(42 U.S.C. 651-669), as amended by section 2344(a)(2) of this Act, is 
amended by inserting after section 454A the following new section:

``SEC. 454B. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

    ``(a) State Disbursement Unit.--
            ``(1) In general.--In order for a State to meet the 
        requirements of this section, the State agency must establish 
        and operate a unit (which shall be known as the `State 
        disbursement unit') for the collection and disbursement of 
        payments under support orders--
                    ``(A) in all cases being enforced by the State 
                pursuant to section 454(4); and
                    ``(B) in all cases not being enforced by the State 
                under this part in which the support order is initially 
                issued in the State on or after January 1, 1994, and in 
                which the wages of the noncustodial parent are subject 
                to withholding pursuant to section 466(a)(8)(B).
            ``(2) Operation.--The State disbursement unit shall be 
        operated--
                    ``(A) directly by the State agency (or 2 or more 
                State agencies under a regional cooperative agreement), 
                or (to the extent appropriate) by a contractor 
                responsible directly to the State agency; and
                    ``(B) except in cases described in paragraph 
                (1)(B), in coordination with the automated system 
                established by the State pursuant to section 454A.
            ``(3) Linking of local disbursement units.--The State 
        disbursement unit may be established by linking local 
        disbursement units through an automated information network, 
        subject to this section, if the Secretary agrees that the 
        system will not cost more nor take more time to establish or 
        operate than a centralized system. In addition, employers shall 
        be given 1 location to which income withholding is sent.
    ``(b) Required Procedures.--The State disbursement unit shall use 
automated procedures, electronic processes, and computer-driven 
technology to the maximum extent feasible, efficient, and economical, 
for the collection and disbursement of support payments, including 
procedures--
            ``(1) for receipt of payments from parents, employers, and 
        other States, and for disbursements to custodial parents and 
        other obligees, the State agency, and the agencies of other 
        States;
            ``(2) for accurate identification of payments;
            ``(3) to ensure prompt disbursement of the custodial 
        parent's share of any payment; and
            ``(4) to furnish to any parent, upon request, timely 
        information on the current status of support payments under an 
        order requiring payments to be made by or to the parent.
    ``(c) Timing of Disbursements.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        State disbursement unit shall distribute all amounts payable 
        under section 457(a) within 2 business days after receipt from 
        the employer or other source of periodic income, if sufficient 
        information identifying the payee is provided.
            ``(2) Permissive retention of arrearages.--The State 
        disbursement unit may delay the distribution of collections 
        toward arrearages until the resolution of any timely appeal 
        with respect to such arrearages.
    ``(d) Business Day Defined.--As used in this section, the term 
`business day' means a day on which State offices are open for regular 
business.''.
    (c) Use of Automated System.--Section 454A, as added by section 
2344(a)(2) and as amended by section 2311 of this Act, is amended by 
adding at the end the following new subsection:
    ``(g) Collection and Distribution of Support Payments.--
            ``(1) In general.--The State shall use the automated system 
        required by this section, to the maximum extent feasible, to 
        assist and facilitate the collection and disbursement of 
        support payments through the State disbursement unit operated 
        under section 454B, through the performance of functions, 
        including, at a minimum--
                    ``(A) transmission of orders and notices to 
                employers (and other debtors) for the withholding of 
                wages and other income--
                            ``(i) within 2 business days after receipt 
                        of notice of, and the income source subject to, 
                        such withholding from a court, another State, 
                        an employer, the Federal Parent Locator 
                        Service, or another source recognized by the 
                        State; and
                            ``(ii) using uniform formats prescribed by 
                        the Secretary;
                    ``(B) ongoing monitoring to promptly identify 
                failures to make timely payment of support; and
                    ``(C) automatic use of enforcement procedures 
                (including procedures authorized pursuant to section 
                466(c)) if payments are not timely made.
            ``(2) Business day defined.--As used in paragraph (1), the 
        term `business day' means a day on which State offices are open 
        for regular business.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall become effective on 
        October 1, 1998.
            (2) Limited exception to unit handling payments.--
        Notwithstanding section 454B(b)(1) of the Social Security Act, 
        as added by this section, any State which, as of the date of 
        the enactment of this Act, processes the receipt of child 
        support payments through local courts may, at the option of the 
        State, continue to process through September 30, 1999, such 
        payments through such courts as processed such payments on or 
        before such date of enactment.

SEC. 2313. STATE DIRECTORY OF NEW HIRES.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 2301(b), 2303(a) and 2312(a) of this Act, is 
amended--
            (1) by striking ``and'' at the end of paragraph (26);
            (2) by striking the period at the end of paragraph (27) and 
        inserting ``; and''; and
            (3) by adding after paragraph (27) the following new 
        paragraph:
            ``(28) provide that, on and after October 1, 1997, the 
        State will operate a State Directory of New Hires in accordance 
        with section 453A.''.
    (b) State Directory of New Hires.--Part D of title IV (42 U.S.C. 
651-669) is amended by inserting after section 453 the following new 
section:

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

    ``(a) Establishment.--
            ``(1) In general.--
                    ``(A) Requirement for States that have no 
                directory.--Except as provided in subparagraph (B), not 
                later than October 1, 1997, each State shall establish 
                an automated directory (to be known as the `State 
                Directory of New Hires') which shall contain 
                information supplied in accordance with subsection (b) 
                by employers on each newly hired employee.
                    ``(B) States with new hire reporting in 
                existence.--A State which has a new hire reporting law 
                in existence on the date of the enactment of this 
                section may continue to operate under the State law, 
                but the State must meet the requirements of subsection 
                (g)(2) not later than October 1, 1997, and the 
                requirements of this section (other than subsection 
                (g)(2)) not later than October 1, 1998.
            ``(2) Definitions.--As used in this section:
                    ``(A) Employee.--The term `employee'--
                            ``(i) means an individual who is an 
                        employee within the meaning of chapter 24 of 
                        the Internal Revenue Code of 1986; and
                            ``(ii) does not include an employee of a 
                        Federal or State agency performing intelligence 
                        or counterintelligence functions, if the head 
                        of such agency has determined that reporting 
                        pursuant to paragraph (1) with respect to the 
                        employee could endanger the safety of the 
                        employee or compromise an ongoing investigation 
                        or intelligence mission.
                    ``(B) Employer.--
                            ``(i) In general.--The term `employer' has 
                        the meaning given such term in section 3401(d) 
                        of the Internal Revenue Code of 1986 and 
                        includes any governmental entity and any labor 
                        organization.
                            ``(ii) Labor organization.--The term `labor 
                        organization' shall have the meaning given such 
                        term in section 2(5) of the National Labor 
                        Relations Act, and includes any entity (also 
                        known as a `hiring hall') which is used by the 
                        organization and an employer to carry out 
                        requirements described in section 8(f)(3) of 
                        such Act of an agreement between the 
                        organization and the employer.
    ``(b) Employer Information.--
            ``(1) Reporting requirement.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), each employer shall furnish 
                to the Directory of New Hires of the State in which a 
                newly hired employee works, a report that contains the 
                name, address, and social security number of the 
                employee, and the name and address of, and identifying 
                number assigned under section 6109 of the Internal 
                Revenue Code of 1986 to, the employer.
                    ``(B) Multistate employers.--An employer that has 
                employees who are employed in 2 or more States and that 
                transmits reports magnetically or electronically may 
                comply with subparagraph (A) by designating 1 State in 
                which such employer has employees to which the employer 
                will transmit the report described in subparagraph (A), 
                and transmitting such report to such State. Any 
                employer that transmits reports pursuant to this 
                subparagraph shall notify the Secretary in writing as 
                to which State such employer designates for the purpose 
                of sending reports.
                    ``(C) Federal government employers.--Any 
                department, agency, or instrumentality of the United 
                States shall comply with subparagraph (A) by 
                transmitting the report described in subparagraph (A) 
                to the National Directory of New Hires established 
                pursuant to section 453.
            ``(2) Timing of report.--Each State may provide the time 
        within which the report required by paragraph (1) shall be made 
        with respect to an employee, but such report shall be made--
                    ``(A) not later than 20 days after the date the 
                employer hires the employee; or
                    ``(B) in the case of an employer transmitting 
                reports magnetically or electronically, by 2 monthly 
                transmissions (if necessary) not less than 12 days nor 
                more than 16 days apart.
    ``(c) Reporting Format and Method.--Each report required by 
subsection (b) shall be made on a W-4 form or, at the option of the 
employer, an equivalent form, and may be transmitted by 1st class mail, 
magnetically, or electronically.
    ``(d) Civil Money Penalties on Noncomplying Employers.--The State 
shall have the option to set a State civil money penalty which shall be 
less than--
            ``(1) $25; or
            ``(2) $500 if, under State law, the failure is the result 
        of a conspiracy between the employer and the employee to not 
        supply the required report or to supply a false or incomplete 
        report.
    ``(e) Entry of Employer Information.--Information shall be entered 
into the data base maintained by the State Directory of New Hires 
within 5 business days of receipt from an employer pursuant to 
subsection (b).
    ``(f) Information Comparisons.--
            ``(1) In general.--Not later than May 1, 1998, an agency 
        designated by the State shall, directly or by contract, conduct 
        automated comparisons of the social security numbers reported 
        by employers pursuant to subsection (b) and the social security 
        numbers appearing in the records of the State case registry for 
        cases being enforced under the State plan.
            ``(2) Notice of match.--When an information comparison 
        conducted under paragraph (1) reveals a match with respect to 
        the social security number of an individual required to provide 
        support under a support order, the State Directory of New Hires 
        shall provide the agency administering the State plan approved 
        under this part of the appropriate State with the name, 
        address, and social security number of the employee to whom the 
        social security number is assigned, and the name and address 
        of, and identifying number assigned under section 6109 of the 
        Internal Revenue Code of 1986 to, the employer.
    ``(g) Transmission of Information.--
            ``(1) Transmission of wage withholding notices to 
        employers.--Within 2 business days after the date information 
        regarding a newly hired employee is entered into the State 
        Directory of New Hires, the State agency enforcing the 
        employee's child support obligation shall transmit a notice to 
        the employer of the employee directing the employer to withhold 
        from the wages of the employee an amount equal to the monthly 
        (or other periodic) child support obligation (including any 
        past due support obligation) of the employee, unless the 
        employee's wages are not subject to withholding pursuant to 
        section 466(b)(3).
            ``(2) Transmissions to the national directory of new 
        hires.--
                    ``(A) New hire information.--Within 3 business days 
                after the date information regarding a newly hired 
                employee is entered into the State Directory of New 
                Hires, the State Directory of New Hires shall furnish 
                the information to the National Directory of New Hires.
                    ``(B) Wage and unemployment compensation 
                information.--The State Directory of New Hires shall, 
                on a quarterly basis, furnish to the National Directory 
                of New Hires extracts of the reports required under 
                section 303(a)(6) to be made to the Secretary of Labor 
                concerning the wages and unemployment compensation paid 
                to individuals, by such dates, in such format, and 
                containing such information as the Secretary of Health 
                and Human Services shall specify in regulations.
            ``(3) Business day defined.--As used in this subsection, 
        the term `business day' means a day on which State offices are 
        open for regular business.
    ``(h) Other Uses of New Hire Information.--
            ``(1) Location of child support obligors.--The agency 
        administering the State plan approved under this part shall use 
        information received pursuant to subsection (f)(2) to locate 
        individuals for purposes of establishing paternity and 
        establishing, modifying, and enforcing child support 
        obligations.
            ``(2) Verification of eligibility for certain programs.--A 
        State agency responsible for administering a program specified 
        in section 1137(b) shall have access to information reported by 
        employers pursuant to subsection (b) of this section for 
        purposes of verifying eligibility for the program.
            ``(3) Administration of employment security and workers' 
        compensation.--State agencies operating employment security and 
        workers' compensation programs shall have access to information 
        reported by employers pursuant to subsection (b) for the 
        purposes of administering such programs.''.
    (c) Quarterly Wage Reporting.--Section 1137(a)(3) (42 U.S.C. 1320b-
7(a)(3)) is amended--
            (1) by inserting ``(including State and local governmental 
        entities and labor organizations (as defined in section 
        453A(a)(2)(B)(iii))'' after ``employers''; and
            (2) by inserting ``, and except that no report shall be 
        filed with respect to an employee of a State or local agency 
        performing intelligence or counterintelligence functions, if 
        the head of such agency has determined that filing such a 
        report could endanger the safety of the employee or compromise 
        an ongoing investigation or intelligence mission'' after 
        ``paragraph (2)''.

SEC. 2314. AMENDMENTS CONCERNING INCOME WITHHOLDING.

    (a) Mandatory Income Withholding.--
            (1) In general.--Section 466(a)(1) (42 U.S.C. 666(a)(1)) is 
        amended to read as follows:
            ``(1)(A) Procedures described in subsection (b) for the 
        withholding from income of amounts payable as support in cases 
        subject to enforcement under the State plan.
            ``(B) Procedures under which the wages of a person with a 
        support obligation imposed by a support order issued (or 
        modified) in the State before October 1, 1996, if not otherwise 
        subject to withholding under subsection (b), shall become 
        subject to withholding as provided in subsection (b) if 
        arrearages occur, without the need for a judicial or 
        administrative hearing.''.
            (2) Conforming amendments.--
                    (A) Section 466(b) (42 U.S.C. 666(b)) is amended in 
                the matter preceding paragraph (1), by striking 
                ``subsection (a)(1)'' and inserting ``subsection 
                (a)(1)(A)''.
                    (B) Section 466(b)(4) (42 U.S.C. 666(b)(4)) is 
                amended to read as follows:
            ``(4)(A) Such withholding must be carried out in full 
        compliance with all procedural due process requirements of the 
        State, and the State must send notice to each noncustodial 
        parent to whom paragraph (1) applies--
                    ``(i) that the withholding has commenced; and
                    ``(ii) of the procedures to follow if the 
                noncustodial parent desires to contest such withholding 
                on the grounds that the withholding or the amount 
                withheld is improper due to a mistake of fact.
            ``(B) The notice under subparagraph (A) of this paragraph 
        shall include the information provided to the employer under 
        paragraph (6)(A).''.
                    (C) Section 466(b)(5) (42 U.S.C. 666(b)(5)) is 
                amended by striking all that follows ``administered 
                by'' and inserting ``the State through the State 
                disbursement unit established pursuant to section 454B, 
                in accordance with the requirements of section 454B.''.
                    (D) Section 466(b)(6)(A) (42 U.S.C. 666(b)(6)(A)) 
                is amended--
                            (i) in clause (i), by striking ``to the 
                        appropriate agency'' and all that follows and 
                        inserting ``to the State disbursement unit 
                        within 7 business days after the date the 
                        amount would (but for this subsection) have 
                        been paid or credited to the employee, for 
                        distribution in accordance with this part. The 
                        employer shall comply with the procedural rules 
                        relating to income withholding of the State in 
                        which the employee works, regardless of the 
                        State where the notice originates.'';
                            (ii) in clause (ii), by inserting ``be in a 
                        standard format prescribed by the Secretary, 
                        and'' after ``shall''; and
                            (iii) by adding at the end the following 
                        new clause:
            ``(iii) As used in this subparagraph, the term `business 
        day' means a day on which State offices are open for regular 
        business.''.
                    (E) Section 466(b)(6)(D) (42 U.S.C. 666(b)(6)(D)) 
                is amended by striking ``any employer'' and all that 
                follows and inserting ``any employer who--
                    ``(i) discharges from employment, refuses to 
                employ, or takes disciplinary action against any 
                noncustodial parent subject to wage withholding 
                required by this subsection because of the existence of 
                such withholding and the obligations or additional 
                obligations which it imposes upon the employer; or
                    ``(ii) fails to withhold support from wages or to 
                pay such amounts to the State disbursement unit in 
                accordance with this subsection.''.
                    (F) Section 466(b) (42 U.S.C. 666(b)) is amended by 
                adding at the end the following new paragraph:
            ``(11) Procedures under which the agency administering the 
        State plan approved under this part may execute a withholding 
        order without advance notice to the obligor, including issuing 
        the withholding order through electronic means.''.
    (b) Conforming Amendment.--Section 466(c) (42 U.S.C. 666(c)) is 
repealed.

SEC. 2315. LOCATOR INFORMATION FROM INTERSTATE NETWORKS.

    Section 466(a) (42 U.S.C. 666(a)) is amended by inserting after 
paragraph (11) the following new paragraph:
            ``(12) Locator information from interstate networks.--
        Procedures to ensure that all Federal and State agencies 
        conducting activities under this part have access to any system 
        used by the State to locate an individual for purposes relating 
        to motor vehicles or law enforcement.''.

SEC. 2316. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE.

    (a) Expanded Authority To Locate Individuals and Assets.--Section 
453 (42 U.S.C. 653) is amended--
            (1) in subsection (a), by striking all that follows 
        ``subsection (c))'' and inserting ``, for the purpose of 
        establishing parentage, establishing, setting the amount of, 
        modifying, or enforcing child support obligations, or enforcing 
        child custody or visitation orders--
            ``(1) information on, or facilitating the discovery of, the 
        location of any individual--
                    ``(A) who is under an obligation to pay child 
                support or provide child custody or visitation rights;
                    ``(B) against whom such an obligation is sought;
                    ``(C) to whom such an obligation is owed,
        including the individual's social security number (or numbers), 
        most recent address, and the name, address, and employer 
        identification number of the individual's employer;
            ``(2) information on the individual's wages (or other 
        income) from, and benefits of, employment (including rights to 
        or enrollment in group health care coverage); and
            ``(3) information on the type, status, location, and amount 
        of any assets of, or debts owed by or to, any such 
        individual.''; and
            (2) in subsection (b)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``social security'' and all that follows 
                through ``absent parent'' and inserting ``information 
                described in subsection (a)''; and
                    (B) in the flush paragraph at the end, by adding 
                the following: ``No information shall be disclosed to 
                any person if the State has notified the Secretary that 
                the State has reasonable evidence of domestic violence 
                or child abuse and the disclosure of such information 
                could be harmful to the custodial parent or the child 
                of such parent. Information received or transmitted 
                pursuant to this section shall be subject to the 
                safeguard provisions contained in section 454(26).''.
    (b) Authorized Person for Information Regarding Visitation 
Rights.--Section 453(c) (42 U.S.C. 653(c)) is amended--
            (1) in paragraph (1), by striking ``support'' and inserting 
        ``support or to seek to enforce orders providing child custody 
        or visitation rights''; and
            (2) in paragraph (2), by striking ``, or any agent of such 
        court; and'' and inserting ``or to issue an order against a 
        resident parent for child custody or visitation rights, or any 
        agent of such court;''.
    (c) Reimbursement for Information From Federal Agencies.--Section 
453(e)(2) (42 U.S.C. 653(e)(2)) is amended in the 4th sentence by 
inserting ``in an amount which the Secretary determines to be 
reasonable payment for the information exchange (which amount shall not 
include payment for the costs of obtaining, compiling, or maintaining 
the information)'' before the period.
    (d) Reimbursement for Reports by State Agencies.--Section 453 (42 
U.S.C. 653) is amended by adding at the end the following new 
subsection:
    ``(g) Reimbursement for Reports by State Agencies.--The Secretary 
may reimburse Federal and State agencies for the costs incurred by such 
entities in furnishing information requested by the Secretary under 
this section in an amount which the Secretary determines to be 
reasonable payment for the information exchange (which amount shall not 
include payment for the costs of obtaining, compiling, or maintaining 
the information).''.
    (e) Conforming Amendments.--
            (1) Sections 452(a)(9), 453(a), 453(b), 463(a), 463(e), and 
        463(f) (42 U.S.C. 652(a)(9), 653(a), 653(b), 663(a), 663(e), 
        and 663(f)) are each amended by inserting ``Federal'' before 
        ``Parent'' each place such term appears.
            (2) Section 453 (42 U.S.C. 653) is amended in the heading 
        by adding ``federal'' before ``parent''.
    (f) New Components.--Section 453 (42 U.S.C. 653), as amended by 
subsection (d) of this section, is amended by adding at the end the 
following new subsections:
    ``(h) Federal Case Registry of Child Support Orders.--
            ``(1) In general.--Not later than October 1, 1998, in order 
        to assist States in administering programs under State plans 
        approved under this part and programs funded under part A, and 
        for the other purposes specified in this section, the Secretary 
        shall establish and maintain in the Federal Parent Locator 
        Service an automated registry (which shall be known as the 
        `Federal Case Registry of Child Support Orders'), which shall 
        contain abstracts of support orders and other information 
        described in paragraph (2) with respect to each case in each 
        State case registry maintained pursuant to section 454A(e), as 
        furnished (and regularly updated), pursuant to section 454A(f), 
        by State agencies administering programs under this part.
            ``(2) Case information.--The information referred to in 
        paragraph (1) with respect to a case shall be such information 
        as the Secretary may specify in regulations (including the 
        names, social security numbers or other uniform identification 
        numbers, and State case identification numbers) to identify the 
        individuals who owe or are owed support (or with respect to or 
        on behalf of whom support obligations are sought to be 
        established), and the State or States which have the case.
    ``(i) National Directory of New Hires.--
            ``(1) In general.--In order to assist States in 
        administering programs under State plans approved under this 
        part and programs funded under part A, and for the other 
        purposes specified in this section, the Secretary shall, not 
        later than October 1, 1997, establish and maintain in the 
        Federal Parent Locator Service an automated directory to be 
        known as the National Directory of New Hires, which shall 
        contain the information supplied pursuant to section 
        453A(g)(2).
            ``(2) Entry of data.--Information shall be entered into the 
        data base maintained by the National Directory of New Hires 
        within 2 business days of receipt pursuant to section 
        453A(g)(2).
            ``(3) Administration of federal tax laws.--The Secretary of 
        the Treasury shall have access to the information in the 
        National Directory of New Hires for purposes of administering 
        section 32 of the Internal Revenue Code of 1986, or the advance 
        payment of the earned income tax credit under section 3507 of 
        such Code, and verifying a claim with respect to employment in 
        a tax return.
            ``(4) List of multistate employers.--The Secretary shall 
        maintain within the National Directory of New Hires a list of 
        multistate employers that report information regarding newly 
        hired employees pursuant to section 453A(b)(1)(B), and the 
        State which each such employer has designated to receive such 
        information.
    ``(j) Information Comparisons and Other Disclosures.--
            ``(1) Verification by social security administration.--
                    ``(A) In general.--The Secretary shall transmit 
                information on individuals and employers maintained 
                under this section to the Social Security 
                Administration to the extent necessary for verification 
                in accordance with subparagraph (B).
                    ``(B) Verification by ssa.--The Social Security 
                Administration shall verify the accuracy of, correct, 
                or supply to the extent possible, and report to the 
                Secretary, the following information supplied by the 
                Secretary pursuant to subparagraph (A):
                            ``(i) The name, social security number, and 
                        birth date of each such individual.
                            ``(ii) The employer identification number 
                        of each such employer.
            ``(2) Information comparisons.--For the purpose of locating 
        individuals in a paternity establishment case or a case 
        involving the establishment, modification, or enforcement of a 
        support order, the Secretary shall--
                    ``(A) compare information in the National Directory 
                of New Hires against information in the support case 
                abstracts in the Federal Case Registry of Child Support 
                Orders not less often than every 2 business days; and
                    ``(B) within 2 business days after such a 
                comparison reveals a match with respect to an 
                individual, report the information to the State agency 
                responsible for the case.
            ``(3) Information comparisons and disclosures of 
        information in all registries for title iv program purposes.--
        To the extent and with the frequency that the Secretary 
        determines to be effective in assisting States to carry out 
        their responsibilities under programs operated under this part 
        and programs funded under part A, the Secretary shall--
                    ``(A) compare the information in each component of 
                the Federal Parent Locator Service maintained under 
                this section against the information in each other such 
                component (other than the comparison required by 
                paragraph (2)), and report instances in which such a 
                comparison reveals a match with respect to an 
                individual to State agencies operating such programs; 
                and
                    ``(B) disclose information in such registries to 
                such State agencies.
            ``(4) Provision of new hire information to the social 
        security administration.--The National Directory of New Hires 
        shall provide the Commissioner of Social Security with all 
        information in the National Directory.
            ``(5) Research.--The Secretary may provide access to 
        information reported by employers pursuant to section 453A(b) 
        for research purposes found by the Secretary to be likely to 
        contribute to achieving the purposes of part A or this part, 
        but without personal identifiers.
    ``(k) Fees.--
            ``(1) For ssa verification.--The Secretary shall reimburse 
        the Commissioner of Social Security, at a rate negotiated 
        between the Secretary and the Commissioner, for the costs 
        incurred by the Commissioner in performing the verification 
        services described in subsection (j).
            ``(2) For information from state directories of new 
        hires.--The Secretary shall reimburse costs incurred by State 
        directories of new hires in furnishing information as required 
        by subsection (j)(3), at rates which the Secretary determines 
        to be reasonable (which rates shall not include payment for the 
        costs of obtaining, compiling, or maintaining such 
        information).
            ``(3) For information furnished to state and federal 
        agencies.--A State or Federal agency that receives information 
        from the Secretary pursuant to this section shall reimburse the 
        Secretary for costs incurred by the Secretary in furnishing the 
        information, at rates which the Secretary determines to be 
        reasonable (which rates shall include payment for the costs of 
        obtaining, verifying, maintaining, and comparing the 
        information).
    ``(l) Restriction on Disclosure and Use.--Information in the 
Federal Parent Locator Service, and information resulting from 
comparisons using such information, shall not be used or disclosed 
except as expressly provided in this section, subject to section 6103 
of the Internal Revenue Code of 1986.
    ``(m) Information Integrity and Security.--The Secretary shall 
establish and implement safeguards with respect to the entities 
established under this section designed to--
            ``(1) ensure the accuracy and completeness of information 
        in the Federal Parent Locator Service; and
            ``(2) restrict access to confidential information in the 
        Federal Parent Locator Service to authorized persons, and 
        restrict use of such information to authorized purposes.
    ``(n) Federal Government Reporting.--Each department, agency, and 
instrumentality of the United States shall on a quarterly basis report 
to the Federal Parent Locator Service the name and social security 
number of each employee and the wages paid to the employee during the 
previous quarter, except that such a report shall not be filed with 
respect to an employee of a department, agency, or instrumentality 
performing intelligence or counterintelligence functions, if the head 
of such department, agency, or instrumentality has determined that 
filing such a report could endanger the safety of the employee or 
compromise an ongoing investigation or intelligence mission.''.
    (g) Conforming Amendments.--
            (1) To part d of title iv of the social security act.--
                    (A) Section 454(8)(B) (42 U.S.C. 654(8)(B)) is 
                amended to read as follows:
                    ``(B) the Federal Parent Locator Service 
                established under section 453;''.
                    (B) Section 454(13) (42 U.S.C.654(13)) is amended 
                by inserting ``and provide that information requests by 
                parents who are residents of other States be treated 
                with the same priority as requests by parents who are 
                residents of the State submitting the plan'' before the 
                semicolon.
            (2) To federal unemployment tax act.--Section 3304(a)(16) 
        of the Internal Revenue Code of 1986 is amended--
                    (A) by striking ``Secretary of Health, Education, 
                and Welfare'' each place such term appears and 
                inserting ``Secretary of Health and Human Services'';
                    (B) in subparagraph (B), by striking ``such 
                information'' and all that follows and inserting 
                ``information furnished under subparagraph (A) or (B) 
                is used only for the purposes authorized under such 
                subparagraph;'';
                    (C) by striking ``and'' at the end of subparagraph 
                (A);
                    (D) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (E) by inserting after subparagraph (A) the 
                following new subparagraph:
            ``(B) wage and unemployment compensation information 
        contained in the records of such agency shall be furnished to 
        the Secretary of Health and Human Services (in accordance with 
        regulations promulgated by such Secretary) as necessary for the 
        purposes of the National Directory of New Hires established 
        under section 453(i) of the Social Security Act, and''.
            (3) To state grant program under title iii of the social 
        security act.--Subsection (h) of section 303 (42 U.S.C. 503) is 
        amended to read as follows:
    ``(h)(1) The State agency charged with the administration of the 
State law shall, on a reimbursable basis--
            ``(A) disclose quarterly, to the Secretary of Health and 
        Human Services, wage and claim information, as required 
        pursuant to section 453(i)(1), contained in the records of such 
        agency;
            ``(B) ensure that information provided pursuant to 
        subparagraph (A) meets such standards relating to correctness 
        and verification as the Secretary of Health and Human Services, 
        with the concurrence of the Secretary of Labor, may find 
        necessary; and
            ``(C) establish such safeguards as the Secretary of Labor 
        determines are necessary to insure that information disclosed 
        under subparagraph (A) is used only for purposes of section 
        453(i)(1) in carrying out the child support enforcement program 
        under title IV.
    ``(2) Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the 
administration of the State law, finds that there is a failure to 
comply substantially with the requirements of paragraph (1), the 
Secretary of Labor shall notify such State agency that further payments 
will not be made to the State until the Secretary of Labor is satisfied 
that there is no longer any such failure. Until the Secretary of Labor 
is so satisfied, the Secretary shall make no future certification to 
the Secretary of the Treasury with respect to the State.
    ``(3) For purposes of this subsection--
            ``(A) the term `wage information' means information 
        regarding wages paid to an individual, the social security 
        account number of such individual, and the name, address, 
        State, and the Federal employer identification number of the 
        employer paying such wages to such individual; and
            ``(B) the term `claim information' means information 
        regarding whether an individual is receiving, has received, or 
        has made application for, unemployment compensation, the amount 
        of any such compensation being received (or to be received by 
        such individual), and the individual's current (or most recent) 
        home address.''.
            (4) Disclosure of certain information to agents of child 
        support enforcement agencies.--
                    (A) In general.--Paragraph (6) of section 6103(l) 
                of the Internal Revenue Code of 1986 (relating to 
                disclosure of return information to Federal, State, and 
                local child support enforcement agencies) is amended by 
                redesignating subparagraph (B) as subparagraph (C) and 
                by inserting after subparagraph (A) the following new 
                subparagraph:
                    ``(B) Disclosure to certain agents.--The following 
                information disclosed to any child support enforcement 
                agency under subparagraph (A) with respect to any 
                individual with respect to whom child support 
                obligations are sought to be established or enforced 
                may be disclosed by such agency to any agent of such 
                agency which is under contract with such agency to 
                carry out the purposes described in subparagraph (C):
                            ``(i) The address and social security 
                        account number (or numbers) of such individual.
                            ``(ii) The amount of any reduction under 
                        section 6402(c) (relating to offset of past-due 
                        support against overpayments) in any 
                        overpayment otherwise payable to such 
                        individual.''.
                    (B) Conforming amendments.--
                            (i) Paragraph (3) of section 6103(a) of 
                        such Code is amended by striking ``(l)(12)'' 
                        and inserting ``paragraph (6) or (12) of 
                        subsection (l)''.
                            (ii) Subparagraph (C) of section 6103(l)(6) 
                        of such Code, as redesignated by subsection 
                        (a), is amended to read as follows:
                    ``(C) Restriction on disclosure.--Information may 
                be disclosed under this paragraph only for purposes of, 
                and to the extent necessary in, establishing and 
                collecting child support obligations from, and 
                locating, individuals owing such obligations.''.
                            (iii) The material following subparagraph 
                        (F) of section 6103(p)(4) of such Code is 
                        amended by striking ``subsection (l)(12)(B)'' 
                        and inserting ``paragraph (6)(A) or (12)(B) of 
                        subsection (l)''.
    (h) Requirement for Cooperation.--The Secretary of Labor and the 
Secretary of Health and Human Services shall work jointly to develop 
cost-effective and efficient methods of accessing the information in 
the various State directories of new hires and the National Directory 
of New Hires as established pursuant to the amendments made by this 
subchapter. In developing these methods the Secretaries shall take into 
account the impact, including costs, on the States, and shall also 
consider the need to insure the proper and authorized use of wage 
record information.

SEC. 2317. COLLECTION AND USE OF SOCIAL SECURITY NUMBERS FOR USE IN 
              CHILD SUPPORT ENFORCEMENT.

    Section 466(a) (42 U.S.C. 666(a)), as amended by section 2315 of 
this Act, is amended by inserting after paragraph (12) the following 
new paragraph:
            ``(13) Recording of social security numbers in certain 
        family matters.--Procedures requiring that the social security 
        number of--
                    ``(A) any applicant for a professional license, 
                commercial driver's license, occupational license, or 
                marriage license be recorded on the application;
                    ``(B) any individual who is subject to a divorce 
                decree, support order, or paternity determination or 
                acknowledgment be placed in the records relating to the 
                matter; and
                    ``(C) any individual who has died be placed in the 
                records relating to the death and be recorded on the 
                death certificate.
        For purposes of subparagraph (A), if a State allows the use of 
        a number other than the social security number, the State shall 
        so advise any applicants.''.

        Subchapter C--Streamlining and Uniformity of Procedures

SEC. 2321. ADOPTION OF UNIFORM STATE LAWS.

    Section 466 (42 U.S.C. 666) is amended by adding at the end the 
following new subsection:
    ``(f) Uniform Interstate Family Support Act.--
            ``(1) Enactment and use.--In order to satisfy section 
        454(20)(A), on and after January 1, 1998, each State must have 
        in effect the Uniform Interstate Family Support Act, as 
        approved by the American Bar Association on February 9, 1993, 
        together with any amendments officially adopted before January 
        1, 1998 by the National Conference of Commissioners on Uniform 
        State Laws.
            ``(2) Employers to follow procedural rules of state where 
        employee works.--The State law enacted pursuant to paragraph 
        (1) shall provide that an employer that receives an income 
        withholding order or notice pursuant to section 501 of the 
        Uniform Interstate Family Support Act follow the procedural 
        rules that apply with respect to such order or notice under the 
        laws of the State in which the obligor works.''.

SEC. 2322. IMPROVEMENTS TO FULL FAITH AND CREDIT FOR CHILD SUPPORT 
              ORDERS.

    Section 1738B of title 28, United States Code, is amended--
            (1) in subsection (a)(2), by striking ``subsection (e)'' 
        and inserting ``subsections (e), (f), and (i)'';
            (2) in subsection (b), by inserting after the 2nd 
        undesignated paragraph the following:
    ```child's home State' means the State in which a child lived with 
a parent or a person acting as parent for at least 6 consecutive months 
immediately preceding the time of filing of a petition or comparable 
pleading for support and, if a child is less than 6 months old, the 
State in which the child lived from birth with any of them. A period of 
temporary absence of any of them is counted as part of the 6-month 
period.'';
            (3) in subsection (c), by inserting ``by a court of a 
        State'' before ``is made'';
            (4) in subsection (c)(1), by inserting ``and subsections 
        (e), (f), and (g)'' after ``located'';
            (5) in subsection (d)--
                    (A) by inserting ``individual'' before 
                ``contestant''; and
                    (B) by striking ``subsection (e)'' and inserting 
                ``subsections (e) and (f)'';
            (6) in subsection (e), by striking ``make a modification of 
        a child support order with respect to a child that is made'' 
        and inserting ``modify a child support order issued'';
            (7) in subsection (e)(1), by inserting ``pursuant to 
        subsection (i)'' before the semicolon;
            (8) in subsection (e)(2)--
                    (A) by inserting ``individual'' before 
                ``contestant'' each place such term appears; and
                    (B) by striking ``to that court's making the 
                modification and assuming'' and inserting ``with the 
                State of continuing, exclusive jurisdiction for a court 
                of another State to modify the order and assume'';
            (9) by redesignating subsections (f) and (g) as subsections 
        (g) and (h), respectively;
            (10) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Recognition of Child Support Orders.--If 1 or more child 
support orders have been issued with regard to an obligor and a child, 
a court shall apply the following rules in determining which order to 
recognize for purposes of continuing, exclusive jurisdiction and 
enforcement:
            ``(1) If only 1 court has issued a child support order, the 
        order of that court must be recognized.
            ``(2) If 2 or more courts have issued child support orders 
        for the same obligor and child, and only 1 of the courts would 
        have continuing, exclusive jurisdiction under this section, the 
        order of that court must be recognized.
            ``(3) If 2 or more courts have issued child support orders 
        for the same obligor and child, and more than 1 of the courts 
        would have continuing, exclusive jurisdiction under this 
        section, an order issued by a court in the current home State 
        of the child must be recognized, but if an order has not been 
        issued in the current home State of the child, the order most 
        recently issued must be recognized.
            ``(4) If 2 or more courts have issued child support orders 
        for the same obligor and child, and none of the courts would 
        have continuing, exclusive jurisdiction under this section, a 
        court may issue a child support order, which must be 
        recognized.
            ``(5) The court that has issued an order recognized under 
        this subsection is the court having continuing, exclusive 
        jurisdiction.'';
            (11) in subsection (g) (as so redesignated)--
                    (A) by striking ``Prior'' and inserting 
                ``Modified''; and
                    (B) by striking ``subsection (e)'' and inserting 
                ``subsections (e) and (f)'';
            (12) in subsection (h) (as so redesignated)--
                    (A) in paragraph (2), by inserting ``including the 
                duration of current payments and other obligations of 
                support'' before the comma; and
                    (B) in paragraph (3), by inserting ``arrears 
                under'' after ``enforce''; and
            (13) by adding at the end the following new subsection:
    ``(i) Registration for Modification.--If there is no individual 
contestant or child residing in the issuing State, the party or support 
enforcement agency seeking to modify, or to modify and enforce, a child 
support order issued in another State shall register that order in a 
State with jurisdiction over the nonmovant for the purpose of 
modification.''.

SEC. 2323. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 2315 and 
2317(a) of this Act, is amended by inserting after paragraph (13) the 
following new paragraph:
            ``(14) Administrative enforcement in interstate cases.--
        Procedures under which--
                    ``(A)(i) the State shall respond within 5 business 
                days to a request made by another State to enforce a 
                support order; and
                    ``(ii) the term `business day' means a day on which 
                State offices are open for regular business;
                    ``(B) the State may, by electronic or other means, 
                transmit to another State a request for assistance in a 
                case involving the enforcement of a support order, 
                which request--
                            ``(i) shall include such information as 
                        will enable the State to which the request is 
                        transmitted to compare the information about 
                        the case to the information in the data bases 
                        of the State; and
                            ``(ii) shall constitute a certification by 
                        the requesting State--
                                    ``(I) of the amount of support 
                                under the order the payment of which is 
                                in arrears; and
                                    ``(II) that the requesting State 
                                has complied with all procedural due 
                                process requirements applicable to the 
                                case;
                    ``(C) if the State provides assistance to another 
                State pursuant to this paragraph with respect to a 
                case, neither State shall consider the case to be 
                transferred to the caseload of such other State; and
                    ``(D) the State shall maintain records of--
                            ``(i) the number of such requests for 
                        assistance received by the State;
                            ``(ii) the number of cases for which the 
                        State collected support in response to such a 
                        request; and
                            ``(iii) the amount of such collected 
                        support.''.

SEC. 2324. USE OF FORMS IN INTERSTATE ENFORCEMENT.

    (a) Promulgation.--Section 452(a) (42 U.S.C. 652(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(11) not later than October 1, 1996, after consulting 
        with the State directors of programs under this part, 
        promulgate forms to be used by States in interstate cases for--
                    ``(A) collection of child support through income 
                withholding;
                    ``(B) imposition of liens; and
                    ``(C) administrative subpoenas.''.
    (b) Use by States.--Section 454(9) (42 U.S.C. 654(9)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by inserting ``and'' at the end of subparagraph (D); 
        and
            (3) by adding at the end the following new subparagraph:
                    ``(E) not later than March 1, 1997, in using the 
                forms promulgated pursuant to section 452(a)(11) for 
                income withholding, imposition of liens, and issuance 
                of administrative subpoenas in interstate child support 
                cases;''.

SEC. 2325. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

    (a) State Law Requirements.--Section 466 (42 U.S.C. 666), as 
amended by section 2314 of this Act, is amended--
            (1) in subsection (a)(2), by striking the first sentence 
        and inserting the following: ``Expedited administrative and 
        judicial procedures (including the procedures specified in 
        subsection (c)) for establishing paternity and for 
        establishing, modifying, and enforcing support obligations.''; 
        and
            (2) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Expedited Procedures.--The procedures specified in this 
subsection are the following:
            ``(1) Administrative action by state agency.--Procedures 
        which give the State agency the authority to take the following 
        actions relating to establishment of paternity or to 
        establishment, modification, or enforcement of support orders, 
        without the necessity of obtaining an order from any other 
        judicial or administrative tribunal, and to recognize and 
        enforce the authority of State agencies of other States to take 
        the following actions:
                    ``(A) Genetic testing.--To order genetic testing 
                for the purpose of paternity establishment as provided 
                in section 466(a)(5).
                    ``(B) Financial or other information.--To subpoena 
                any financial or other information needed to establish, 
                modify, or enforce a support order, and to impose 
                penalties for failure to respond to such a subpoena.
                    ``(C) Response to state agency request.--To require 
                all entities in the State (including for-profit, 
                nonprofit, and governmental employers) to provide 
                promptly, in response to a request by the State agency 
                of that or any other State administering a program 
                under this part, information on the employment, 
                compensation, and benefits of any individual employed 
                by such entity as an employee or contractor, and to 
                sanction failure to respond to any such request.
                    ``(D) Access to information contained in certain 
                records.--To obtain access, subject to safeguards on 
                privacy and information security, and subject to the 
                nonliability of entities that afford such access under 
                this subparagraph, to information contained in the 
                following records (including automated access, in the 
                case of records maintained in automated data bases):
                            ``(i) Records of other State and local 
                        government agencies, including--
                                    ``(I) vital statistics (including 
                                records of marriage, birth, and 
                                divorce);
                                    ``(II) State and local tax and 
                                revenue records (including information 
                                on residence address, employer, income 
                                and assets);
                                    ``(III) records concerning real and 
                                titled personal property;
                                    ``(IV) records of occupational and 
                                professional licenses, and records 
                                concerning the ownership and control of 
                                corporations, partnerships, and other 
                                business entities;
                                    ``(V) employment security records;
                                    ``(VI) records of agencies 
                                administering public assistance 
                                programs;
                                    ``(VII) records of the motor 
                                vehicle department; and
                                    ``(VIII) corrections records.
                            ``(ii) Certain records held by private 
                        entities with respect to individuals who owe or 
                        are owed support (or against or with respect to 
                        whom a support obligation is sought), 
                        consisting of--
                                    ``(I) the names and addresses of 
                                such individuals and the names and 
                                addresses of the employers of such 
                                individuals, as appearing in customer 
                                records of public utilities and cable 
                                television companies, pursuant to an 
                                administrative subpoena authorized by 
                                subparagraph (B); and
                                    ``(II) information (including 
                                information on assets and liabilities) 
                                on such individuals held by financial 
                                institutions.
                    ``(E) Change in payee.--In cases in which support 
                is subject to an assignment in order to comply with a 
                requirement imposed pursuant to part A or section 1912, 
                or to a requirement to pay through the State 
                disbursement unit established pursuant to section 454B, 
                upon providing notice to obligor and obligee, to direct 
                the obligor or other payor to change the payee to the 
                appropriate government entity.
                    ``(F) Income withholding.--To order income 
                withholding in accordance with subsections (a)(1)(A) 
                and (b) of section 466.
                    ``(G) Securing assets.--In cases in which there is 
                a support arrearage, to secure assets to satisfy the 
                arrearage by--
                            ``(i) intercepting or seizing periodic or 
                        lump-sum payments from--
                                    ``(I) a State or local agency, 
                                including unemployment compensation, 
                                workers' compensation, and other 
                                benefits; and
                                    ``(II) judgments, settlements, and 
                                lotteries;
                            ``(ii) attaching and seizing assets of the 
                        obligor held in financial institutions;
                            ``(iii) attaching public and private 
                        retirement funds; and
                            ``(iv) imposing liens in accordance with 
                        subsection (a)(4) and, in appropriate cases, to 
                        force sale of property and distribution of 
                        proceeds.
                    ``(H) Increase monthly payments.--For the purpose 
                of securing overdue support, to increase the amount of 
                monthly support payments to include amounts for 
                arrearages, subject to such conditions or limitations 
                as the State may provide.
        Such procedures shall be subject to due process safeguards, 
        including (as appropriate) requirements for notice, opportunity 
        to contest the action, and opportunity for an appeal on the 
        record to an independent administrative or judicial tribunal.
            ``(2) Substantive and procedural rules.--The expedited 
        procedures required under subsection (a)(2) shall include the 
        following rules and authority, applicable with respect to all 
        proceedings to establish paternity or to establish, modify, or 
        enforce support orders:
                    ``(A) Locator information; presumptions concerning 
                notice.--Procedures under which--
                            ``(i) each party to any paternity or child 
                        support proceeding is required (subject to 
                        privacy safeguards) to file with the tribunal 
                        and the State case registry upon entry of an 
                        order, and to update as appropriate, 
                        information on location and identity of the 
                        party, including social security number, 
                        residential and mailing addresses, telephone 
                        number, driver's license number, and name, 
                        address, and telephone number of employer; and
                            ``(ii) in any subsequent child support 
                        enforcement action between the parties, upon 
                        sufficient showing that diligent effort has 
                        been made to ascertain the location of such a 
                        party, the tribunal may deem State due process 
                        requirements for notice and service of process 
                        to be met with respect to the party, upon 
                        delivery of written notice to the most recent 
                        residential or employer address filed with the 
                        tribunal pursuant to clause (i).
                    ``(B) Statewide jurisdiction.--Procedures under 
                which--
                            ``(i) the State agency and any 
                        administrative or judicial tribunal with 
                        authority to hear child support and paternity 
                        cases exerts statewide jurisdiction over the 
                        parties; and
                            ``(ii) in a State in which orders are 
                        issued by courts or administrative tribunals, a 
                        case may be transferred between local 
                        jurisdictions in the State without need for any 
                        additional filing by the petitioner, or service 
                        of process upon the respondent, to retain 
                        jurisdiction over the parties.
            ``(3) Coordination with erisa.--Notwithstanding subsection 
        (d) of section 514 of the Employee Retirement Income Security 
        Act of 1974 (relating to effect on other laws), nothing in this 
        subsection shall be construed to alter, amend, modify, 
        invalidate, impair, or supersede subsections (a), (b), and (c) 
        of such section 514 as it applies with respect to any procedure 
        referred to in paragraph (1) and any expedited procedure 
        referred to in paragraph (2), except to the extent that such 
        procedure would be consistent with the requirements of section 
        206(d)(3) of such Act (relating to qualified domestic relations 
        orders) or the requirements of section 609(a) of such Act 
        (relating to qualified medical child support orders) if the 
        reference in such section 206(d)(3) to a domestic relations 
        order and the reference in such section 609(a) to a medical 
        child support order were a reference to a support order 
        referred to in paragraphs (1) and (2) relating to the same 
        matters, respectively.''.
    (b) Automation of State Agency Functions.--Section 454A, as added 
by section 2344(a)(2) and as amended by sections 2311 and 2312(c) of 
this Act, is amended by adding at the end the following new subsection:
    ``(h) Expedited Administrative Procedures.--The automated system 
required by this section shall be used, to the maximum extent feasible, 
to implement the expedited administrative procedures required by 
section 466(c).''.

                 Subchapter D--Paternity Establishment

SEC. 2331. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

    (a) State Laws Required.--Section 466(a)(5) (42 U.S.C. 666(a)(5)) 
is amended to read as follows:
            ``(5) Procedures concerning paternity establishment.--
                    ``(A) Establishment process available from birth 
                until age 18.--
                            ``(i) Procedures which permit the 
                        establishment of the paternity of a child at 
                        any time before the child attains 18 years of 
                        age.
                            ``(ii) As of August 16, 1984, clause (i) 
                        shall also apply to a child for whom paternity 
                        has not been established or for whom a 
                        paternity action was brought but dismissed 
                        because a statute of limitations of less than 
                        18 years was then in effect in the State.
                    ``(B) Procedures concerning genetic testing.--
                            ``(i) Genetic testing required in certain 
                        contested cases.--Procedures under which the 
                        State is required, in a contested paternity 
                        case (unless otherwise barred by State law) to 
                        require the child and all other parties (other 
                        than individuals found under section 454(29) to 
                        have good cause and other exceptions for 
                        refusing to cooperate) to submit to genetic 
                        tests upon the request of any such party, if 
                        the request is supported by a sworn statement 
                        by the party--
                                    ``(I) alleging paternity, and 
                                setting forth facts establishing a 
                                reasonable possibility of the requisite 
                                sexual contact between the parties; or
                                    ``(II) denying paternity, and 
                                setting forth facts establishing a 
                                reasonable possibility of the 
                                nonexistence of sexual contact between 
                                the parties.
                            ``(ii) Other requirements.--Procedures 
                        which require the State agency, in any case in 
                        which the agency orders genetic testing--
                                    ``(I) to pay costs of such tests, 
                                subject to recoupment (if the State so 
                                elects) from the alleged father if 
                                paternity is established; and
                                    ``(II) to obtain additional testing 
                                in any case if an original test result 
                                is contested, upon request and advance 
                                payment by the contestant.
                    ``(C) Voluntary paternity acknowledgment.--
                            ``(i) Simple civil process.--Procedures for 
                        a simple civil process for voluntarily 
                        acknowledging paternity under which the State 
                        must provide that, before a mother and a 
                        putative father can sign an acknowledgment of 
                        paternity, the mother and the putative father 
                        must be given notice, orally and in writing, of 
                        the alternatives to, the legal consequences of, 
                        and the rights (including, if 1 parent is a 
                        minor, any rights afforded due to minority 
                        status) and responsibilities that arise from, 
                        signing the acknowledgment.
                            ``(ii) Hospital-based program.--Such 
                        procedures must include a hospital-based 
                        program for the voluntary acknowledgment of 
                        paternity focusing on the period immediately 
                        before or after the birth of a child, unless 
                        good cause and other exceptions exist which--
                                    ``(I) shall be defined, taking into 
                                account the best interests of the 
                                child, and
                                    ``(II) shall be applied in each 
                                case,
                        by, at the option of the State, the State 
                        agency administering the State program under 
                        part A, this part, title XV, or title XIX.
                            ``(iii) Paternity establishment services.--
                                    ``(I) State-offered services.--Such 
                                procedures must require the State 
                                agency responsible for maintaining 
                                birth records to offer voluntary 
                                paternity establishment services.
                                    ``(II) Regulations.--
                                            ``(aa) Services offered by 
                                        hospitals and birth record 
                                        agencies.--The Secretary shall 
                                        prescribe regulations governing 
                                        voluntary paternity 
                                        establishment services offered 
                                        by hospitals and birth record 
                                        agencies.
                                            ``(bb) Services offered by 
                                        other entities.--The Secretary 
                                        shall prescribe regulations 
                                        specifying the types of other 
                                        entities that may offer 
                                        voluntary paternity 
                                        establishment services, and 
                                        governing the provision of such 
                                        services, which shall include a 
                                        requirement that such an entity 
                                        must use the same notice 
                                        provisions used by, use the 
                                        same materials used by, provide 
                                        the personnel providing such 
                                        services with the same training 
                                        provided by, and evaluate the 
                                        provision of such services in 
                                        the same manner as the 
                                        provision of such services is 
                                        evaluated by, voluntary 
                                        paternity establishment 
                                        programs of hospitals and birth 
                                        record agencies.
                            ``(iv) Use of paternity acknowledgment 
                        affidavit.--Such procedures must require the 
                        State to develop and use an affidavit for the 
                        voluntary acknowledgment of paternity which 
                        includes the minimum requirements of the 
                        affidavit specified by the Secretary under 
                        section 452(a)(7) for the voluntary 
                        acknowledgment of paternity, and to give full 
                        faith and credit to such an affidavit signed in 
                        any other State according to its procedures.
                    ``(D) Status of signed paternity acknowledgment.--
                            ``(i) Inclusion in birth records.--
                        Procedures under which the name of the father 
                        shall be included on the record of birth of the 
                        child of unmarried parents only if--
                                    ``(I) the father and mother have 
                                signed a voluntary acknowledgment of 
                                paternity; or
                                    ``(II) a court or an administrative 
                                agency of competent jurisdiction has 
                                issued an adjudication of paternity.
                        Nothing in this clause shall preclude a State 
                        agency from obtaining an admission of paternity 
                        from the father for submission in a judicial or 
                        administrative proceeding, or prohibit the 
                        issuance of an order in a judicial or 
                        administrative proceeding which bases a legal 
                        finding of paternity on an admission of 
                        paternity by the father and any other 
                        additional showing required by State law.
                            ``(ii) Legal finding of paternity.--
                        Procedures under which a signed voluntary 
                        acknowledgment of paternity is considered a 
                        legal finding of paternity, subject to the 
                        right of any signatory to rescind the 
                        acknowledgment within the earlier of--
                                    ``(I) 60 days; or
                                    ``(II) the date of an 
                                administrative or judicial proceeding 
                                relating to the child (including a 
                                proceeding to establish a support 
                                order) in which the signatory is a 
                                party.
                            ``(iii) Contest.--Procedures under which, 
                        after the 60-day period referred to in clause 
                        (ii), a signed voluntary acknowledgment of 
                        paternity may be challenged in court only on 
                        the basis of fraud, duress, or material mistake 
                        of fact, with the burden of proof upon the 
                        challenger, and under which the legal 
                        responsibilities (including child support 
                        obligations) of any signatory arising from the 
                        acknowledgment may not be suspended during the 
                        challenge, except for good cause shown.
                    ``(E) Bar on acknowledgment ratification 
                proceedings.--Procedures under which judicial or 
                administrative proceedings are not required or 
                permitted to ratify an unchallenged acknowledgment of 
                paternity.
                    ``(F) Admissibility of genetic testing results.--
                Procedures--
                            ``(i) requiring the admission into 
                        evidence, for purposes of establishing 
                        paternity, of the results of any genetic test 
                        that is--
                                    ``(I) of a type generally 
                                acknowledged as reliable by 
                                accreditation bodies designated by the 
                                Secretary; and
                                    ``(II) performed by a laboratory 
                                approved by such an accreditation body;
                            ``(ii) requiring an objection to genetic 
                        testing results to be made in writing not later 
                        than a specified number of days before any 
                        hearing at which the results may be introduced 
                        into evidence (or, at State option, not later 
                        than a specified number of days after receipt 
                        of the results); and
                            ``(iii) making the test results admissible 
                        as evidence of paternity without the need for 
                        foundation testimony or other proof of 
                        authenticity or accuracy, unless objection is 
                        made.
                    ``(G) Presumption of paternity in certain cases.--
                Procedures which create a rebuttable or, at the option 
                of the State, conclusive presumption of paternity upon 
                genetic testing results indicating a threshold 
                probability that the alleged father is the father of 
                the child.
                    ``(H) Default orders.--Procedures requiring a 
                default order to be entered in a paternity case upon a 
                showing of service of process on the defendant and any 
                additional showing required by State law.
                    ``(I) No right to jury trial.--Procedures providing 
                that the parties to an action to establish paternity 
                are not entitled to a trial by jury.
                    ``(J) Temporary support order based on probable 
                paternity in contested cases.--Procedures which require 
                that a temporary order be issued, upon motion by a 
                party, requiring the provision of child support pending 
                an administrative or judicial determination of 
                parentage, if there is clear and convincing evidence of 
                paternity (on the basis of genetic tests or other 
                evidence).
                    ``(K) Proof of certain support and paternity 
                establishment costs.--Procedures under which bills for 
                pregnancy, childbirth, and genetic testing are 
                admissible as evidence without requiring third-party 
                foundation testimony, and shall constitute prima facie 
                evidence of amounts incurred for such services or for 
                testing on behalf of the child.
                    ``(L) Standing of putative fathers.--Procedures 
                ensuring that the putative father has a reasonable 
                opportunity to initiate a paternity action.
                    ``(M) Filing of acknowledgments and adjudications 
                in state registry of birth records.--Procedures under 
                which voluntary acknowledgments and adjudications of 
                paternity by judicial or administrative processes are 
                filed with the State registry of birth records for 
                comparison with information in the State case 
                registry.''.
    (b) National Paternity Acknowledgment Affidavit.--Section 452(a)(7) 
(42 U.S.C. 652(a)(7)) is amended by inserting ``, and specify the 
minimum requirements of an affidavit to be used for the voluntary 
acknowledgment of paternity which shall include the social security 
number of each parent and, after consultation with the States, other 
common elements as determined by such designee'' before the semicolon.
    (c) Conforming Amendment.--Section 468 (42 U.S.C. 668) is amended 
by striking ``a simple civil process for voluntarily acknowledging 
paternity and''.

SEC. 2332. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT.

    Section 454(23) (42 U.S.C. 654(23)) is amended by inserting ``and 
will publicize the availability and encourage the use of procedures for 
voluntary establishment of paternity and child support by means the 
State deems appropriate'' before the semicolon.

SEC. 2333. COOPERATION BY APPLICANTS FOR AND RECIPIENTS OF PART A 
              ASSISTANCE.

    Section 454 (42 U.S.C. 654), as amended by sections 2301(b), 
2303(a), 2312(a), and 2313(a) of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (27);
            (2) by striking the period at the end of paragraph (28) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (28) the following new 
        paragraph:
            ``(29) provide that the State agency responsible for 
        administering the State plan--
                    ``(A) shall make the determination (and 
                redetermination at appropriate intervals) as to whether 
                an individual who has applied for or is receiving 
                assistance under the State program funded under part A, 
                the State program under title XV, or the State program 
                under title XIX is cooperating in good faith with the 
                State in establishing the paternity of, or in 
                establishing, modifying, or enforcing a support order 
                for, any child of the individual by providing the State 
                agency with the name of, and such other information as 
                the State agency may require with respect to, the 
                noncustodial parent of the child, subject to good cause 
                and other exceptions which--
                            ``(i) shall be defined, taking into account 
                        the best interests of the child, and
                            ``(ii) shall be applied in each case,
                by, at the option of the State, the State agency 
                administering the State program under part A, this 
                part, title XV, or title XIX;
                    ``(B) shall require the individual to supply 
                additional necessary information and appear at 
                interviews, hearings, and legal proceedings;
                    ``(C) shall require the individual and the child to 
                submit to genetic tests pursuant to judicial or 
                administrative order;
                    ``(D) may request that the individual sign a 
                voluntary acknowledgment of paternity, after notice of 
                the rights and consequences of such an acknowledgment, 
                but may not require the individual to sign an 
                acknowledgment or otherwise relinquish the right to 
                genetic tests as a condition of cooperation and 
                eligibility for assistance under the State program 
                funded under part A, the State program under title XV, 
                or the State program under title XIX; and
                    ``(E) shall promptly notify the individual and the 
                State agency administering the State program funded 
                under part A, the State agency administering the State 
                program under title XV, and the State agency 
                administering the State program under title XIX, of 
                each such determination, and if noncooperation is 
                determined, the basis therefore.''.

            Subchapter E--Program Administration and Funding

SEC. 2341. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

    (a) Development of New System.--The Secretary of Health and Human 
Services, in consultation with State directors of programs under part D 
of title IV of the Social Security Act, shall develop a new incentive 
system to replace, in a revenue neutral manner, the system under 
section 458 of such Act. The new system shall provide additional 
payments to any State based on such State's performance under such a 
program. Not later than November 1, 1996, the Secretary shall report on 
the new system to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate.
    (b) Conforming Amendments to Present System.--Section 458 (42 
U.S.C. 658) is amended--
            (1) in subsection (a), by striking ``aid to families with 
        dependent children under a State plan approved under part A of 
        this title'' and inserting ``assistance under a program funded 
        under part A'';
            (2) in subsection (b)(1)(A), by striking ``section 
        402(a)(26)'' and inserting ``section 408(a)(4)'';
            (3) in subsections (b) and (c)--
                    (A) by striking ``AFDC collections'' each place it 
                appears and inserting ``title IV-A collections'', and
                    (B) by striking ``non-AFDC collections'' each place 
                it appears and inserting ``non-title IV-A 
                collections''; and
            (4) in subsection (c), by striking ``combined AFDC/non-AFDC 
        administrative costs'' both places it appears and inserting 
        ``combined title IV-A/non-title IV-A administrative costs''.
    (c) Calculation of Paternity Establishment Percentage.--
            (1) Section 452(g)(1)(A) (42 U.S.C. 652(g)(1)(A)) is 
        amended by striking ``75'' and inserting ``90''.
            (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is amended--
                    (A) by redesignating subparagraphs (B) through (E) 
                as subparagraphs (C) through (F), respectively, and by 
                inserting after subparagraph (A) the following new 
                subparagraph:
            ``(B) for a State with a paternity establishment percentage 
        of not less than 75 percent but less than 90 percent for such 
        fiscal year, the paternity establishment percentage of the 
        State for the immediately preceding fiscal year plus 2 
        percentage points;''; and
                    (B) by adding at the end the following new flush 
                sentence:
``In determining compliance under this section, a State may use as its 
paternity establishment percentage either the State's IV-D paternity 
establishment percentage (as defined in paragraph (2)(A)) or the 
State's statewide paternity establishment percentage (as defined in 
paragraph (2)(B)).''.
            (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended--
                    (A) in subparagraph (A)--
                            (i) in the matter preceding clause (i)--
                                    (I) by striking ``paternity 
                                establishment percentage'' and 
                                inserting ``IV-D paternity 
                                establishment percentage''; and
                                    (II) by striking ``(or all States, 
                                as the case may be)''; and
                            (ii) by striking ``and'' at the end 
                        thereof;
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C) and by inserting after subparagraph 
                (A) the following new subparagraph:
            ``(B) the term `statewide paternity establishment 
        percentage' means, with respect to a State for a fiscal year, 
        the ratio (expressed as a percentage) that the total number of 
        minor children--
                    ``(i) who have been born out of wedlock, and
                    ``(ii) the paternity of whom has been established 
                or acknowledged during the fiscal year,
        bears to the total number of children born out of wedlock 
        during the preceding fiscal year; and''.
            (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is amended--
                    (A) by striking subparagraph (A) and redesignating 
                subparagraphs (B) and (C) as subparagraphs (A) and (B), 
                respectively; and
                    (B) in subparagraph (A) (as so redesignated), by 
                striking ``the percentage of children born out-of-
                wedlock in a State'' and inserting ``the percentage of 
                children in a State who are born out of wedlock or for 
                whom support has not been established''.
    (d) Effective Dates.--
            (1) Incentive adjustments.--
            (A) In general.--The system developed under subsection (a) 
        and the amendments made by subsection (b) shall become 
        effective on October 1, 1998, except to the extent provided in 
        subparagraph (B).
            (B) Application of section 458.--Section 458 of the Social 
        Security Act, as in effect on the day before the date of the 
        enactment of this section, shall be effective for purposes of 
        incentive payments to States for fiscal years before fiscal 
        year 1999.
            (2) Penalty reductions.--The amendments made by subsection 
        (c) shall become effective with respect to calendar quarters 
        beginning on or after the date of the enactment of this Act.

SEC. 2342. FEDERAL AND STATE REVIEWS AND AUDITS.

    (a) State Agency Activities.--Section 454 (42 U.S.C. 654) is 
amended--
            (1) in paragraph (14), by striking ``(14)'' and inserting 
        ``(14)(A)'';
            (2) by redesignating paragraph (15) as subparagraph (B) of 
        paragraph (14); and
            (3) by inserting after paragraph (14) the following new 
        paragraph:
            ``(15) provide for--
                    ``(A) a process for annual reviews of and reports 
                to the Secretary on the State program operated under 
                the State plan approved under this part, including such 
                information as may be necessary to measure State 
                compliance with Federal requirements for expedited 
                procedures, using such standards and procedures as are 
                required by the Secretary, under which the State agency 
                will determine the extent to which the program is 
                operated in compliance with this part; and
                    ``(B) a process of extracting from the automated 
                data processing system required by paragraph (16) and 
                transmitting to the Secretary data and calculations 
                concerning the levels of accomplishment (and rates of 
                improvement) with respect to applicable performance 
                indicators (including paternity establishment 
                percentages) to the extent necessary for purposes of 
                sections 452(g) and 458;''.
    (b) Federal Activities.--Section 452(a)(4) (42 U.S.C. 652(a)(4)) is 
amended to read as follows:
            ``(4)(A) review data and calculations transmitted by State 
        agencies pursuant to section 454(15)(B) on State program 
        accomplishments with respect to performance indicators for 
        purposes of subsection (g) of this section and section 458;
            ``(B) review annual reports submitted pursuant to section 
        454(15)(A) and, as appropriate, provide to the State comments, 
        recommendations for additional or alternative corrective 
        actions, and technical assistance; and
            ``(C) conduct audits, in accordance with the Government 
        auditing standards of the Comptroller General of the United 
        States--
                    ``(i) at least once every 3 years (or more 
                frequently, in the case of a State which fails to meet 
                the requirements of this part concerning performance 
                standards and reliability of program data) to assess 
                the completeness, reliability, and security of the data 
                and the accuracy of the reporting systems used in 
                calculating performance indicators under subsection (g) 
                of this section and section 458;
                    ``(ii) of the adequacy of financial management of 
                the State program operated under the State plan 
                approved under this part, including assessments of--
                            ``(I) whether Federal and other funds made 
                        available to carry out the State program are 
                        being appropriately expended, and are properly 
                        and fully accounted for; and
                            ``(II) whether collections and 
                        disbursements of support payments are carried 
                        out correctly and are fully accounted for; and
                    ``(iii) for such other purposes as the Secretary 
                may find necessary;''.
    (c) Effective Date.--The amendments made by this section shall be 
effective with respect to calendar quarters beginning 12 months or more 
after the date of the enactment of this Act.

SEC. 2343. REQUIRED REPORTING PROCEDURES.

    (a) Establishment.--Section 452(a)(5) (42 U.S.C. 652(a)(5)) is 
amended by inserting ``, and establish procedures to be followed by 
States for collecting and reporting information required to be provided 
under this part, and establish uniform definitions (including those 
necessary to enable the measurement of State compliance with the 
requirements of this part relating to expedited processes) to be 
applied in following such procedures'' before the semicolon.
    (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 2301(b), 2303(a), 2312(a), 2313(a), and 2333 of 
this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (28);
            (2) by striking the period at the end of paragraph (29) and 
        inserting ``; and''; and
            (3) by adding after paragraph (29) the following new 
        paragraph:
            ``(30) provide that the State shall use the definitions 
        established under section 452(a)(5) in collecting and reporting 
        information as required under this part.''.

SEC. 2344. AUTOMATED DATA PROCESSING REQUIREMENTS.

    (a) Revised Requirements.--
            (1) In general.--Section 454(16) (42 U.S.C. 654(16)) is 
        amended--
                    (A) by striking ``, at the option of the State,'';
                    (B) by inserting ``and operation by the State 
                agency'' after ``for the establishment'';
                    (C) by inserting ``meeting the requirements of 
                section 454A'' after ``information retrieval system'';
                    (D) by striking ``in the State and localities 
                thereof, so as (A)'' and inserting ``so as'';
                    (E) by striking ``(i)''; and
                    (F) by striking ``(including'' and all that follows 
                and inserting a semicolon.
            (2) Automated data processing.--Part D of title IV (42 
        U.S.C. 651-669) is amended by inserting after section 454 the 
        following new section:

``SEC. 454A. AUTOMATED DATA PROCESSING.

    ``(a) In General.--In order for a State to meet the requirements of 
this section, the State agency administering the State program under 
this part shall have in operation a single statewide automated data 
processing and information retrieval system which has the capability to 
perform the tasks specified in this section with the frequency and in 
the manner required by or under this part.
    ``(b) Program Management.--The automated system required by this 
section shall perform such functions as the Secretary may specify 
relating to management of the State program under this part, 
including--
            ``(1) controlling and accounting for use of Federal, State, 
        and local funds in carrying out the program; and
            ``(2) maintaining the data necessary to meet Federal 
        reporting requirements under this part on a timely basis.
    ``(c) Calculation of Performance Indicators.--In order to enable 
the Secretary to determine the incentive payments and penalty 
adjustments required by sections 452(g) and 458, the State agency 
shall--
            ``(1) use the automated system--
                    ``(A) to maintain the requisite data on State 
                performance with respect to paternity establishment and 
                child support enforcement in the State; and
                    ``(B) to calculate the paternity establishment 
                percentage for the State for each fiscal year; and
            ``(2) have in place systems controls to ensure the 
        completeness and reliability of, and ready access to, the data 
        described in paragraph (1)(A), and the accuracy of the 
        calculations described in paragraph (1)(B).
    ``(d) Information Integrity and Security.--The State agency shall 
have in effect safeguards on the integrity, accuracy, and completeness 
of, access to, and use of data in the automated system required by this 
section, which shall include the following (in addition to such other 
safeguards as the Secretary may specify in regulations):
            ``(1) Policies restricting access.--Written policies 
        concerning access to data by State agency personnel, and 
        sharing of data with other persons, which--
                    ``(A) permit access to and use of data only to the 
                extent necessary to carry out the State program under 
                this part; and
                    ``(B) specify the data which may be used for 
                particular program purposes, and the personnel 
                permitted access to such data.
            ``(2) Systems controls.--Systems controls (such as 
        passwords or blocking of fields) to ensure strict adherence to 
        the policies described in paragraph (1).
            ``(3) Monitoring of access.--Routine monitoring of access 
        to and use of the automated system, through methods such as 
        audit trails and feedback mechanisms, to guard against and 
        promptly identify unauthorized access or use.
            ``(4) Training and information.--Procedures to ensure that 
        all personnel (including State and local agency staff and 
        contractors) who may have access to or be required to use 
        confidential program data are informed of applicable 
        requirements and penalties (including those in section 6103 of 
        the Internal Revenue Code of 1986), and are adequately trained 
        in security procedures.
            ``(5) Penalties.--Administrative penalties (up to and 
        including dismissal from employment) for unauthorized access 
        to, or disclosure or use of, confidential data.''.
            (3) Regulations.--The Secretary of Health and Human 
        Services shall prescribe final regulations for implementation 
        of section 454A of the Social Security Act not later than 2 
        years after the date of the enactment of this Act.
            (4) Implementation timetable.--Section 454(24) (42 U.S.C. 
        654(24)), as amended by section 2303(a)(1) of this Act, is 
        amended to read as follows:
            ``(24) provide that the State will have in effect an 
        automated data processing and information retrieval system--
                    ``(A) by October 1, 1997, which meets all 
                requirements of this part which were enacted on or 
                before the date of enactment of the Family Support Act 
                of 1988, and
                    ``(B) by October 1, 2000, which meets all 
                requirements of this part enacted on or before the date 
                of the enactment of the Personal Responsibility and 
                Work Opportunity Act of 1996, except that such deadline 
                shall be extended by 1 day for each day (if any) by 
                which the Secretary fails to meet the deadline imposed 
                by section 2344(a)(3) of the Personal Responsibility 
                and Work Opportunity Act of 1996;''.
    (b) Special Federal Matching Rate for Development Costs of 
Automated Systems.--
            (1) In general.--Section 455(a) (42 U.S.C. 655(a)) is 
        amended--
                    (A) in paragraph (1)(B)--
                            (i) by striking ``90 percent'' and 
                        inserting ``the percent specified in paragraph 
                        (3)'';
                            (ii) by striking ``so much of''; and
                            (iii) by striking ``which the Secretary'' 
                        and all that follows and inserting ``, and''; 
                        and
                    (B) by adding at the end the following new 
                paragraph:
    ``(3)(A) The Secretary shall pay to each State, for each quarter in 
fiscal years 1996 and 1997, 90 percent of so much of the State 
expenditures described in paragraph (1)(B) as the Secretary finds are 
for a system meeting the requirements specified in section 454(16) (as 
in effect on September 30, 1995) but limited to the amount approved for 
States in the advance planning documents of such States submitted on or 
before September 30, 1995. Notwithstanding the preceding sentence, any 
payment to a State with respect to fiscal year 1997 shall be made in 
one payment in fiscal year 1998.
    ``(B)(i) The Secretary shall pay to each State, for each quarter in 
fiscal years 1996 through 2001, the percentage specified in clause (ii) 
of so much of the State expenditures described in paragraph (1)(B) as 
the Secretary finds are for a system meeting the requirements of 
sections 454(16) and 454A.
    ``(ii) The percentage specified in this clause is 80 percent.''.
            (2) Temporary limitation on payments under special federal 
        matching rate.--
                    (A) In general.--The Secretary of Health and Human 
                Services may not pay more than $400,000,000 in the 
                aggregate under section 455(a)(3)(B) of the Social 
                Security Act for fiscal years 1996 through 2001.
                    (B) Allocation of limitation among states.--The 
                total amount payable to a State under section 
                455(a)(3)(B) of such Act for fiscal years 1996 through 
                2001 shall not exceed the limitation determined for the 
                State by the Secretary of Health and Human Services in 
                regulations.
                    (C) Allocation formula.--The regulations referred 
                to in subparagraph (B) shall prescribe a formula for 
                allocating the amount specified in subparagraph (A) 
                among States with plans approved under part D of title 
                IV of the Social Security Act, which shall take into 
                account--
                            (i) the relative size of State caseloads 
                        under such part; and
                            (ii) the level of automation needed to meet 
                        the automated data processing requirements of 
                        such part.
    (c) Conforming Amendment.--Section 123(c) of the Family Support Act 
of 1988 (102 Stat. 2352; Public Law 100-485) is repealed.

SEC. 2345. TECHNICAL ASSISTANCE.

    (a) For Training of Federal and State Staff, Research and 
Demonstration Programs, and Special Projects of Regional or National 
Significance.--Section 452 (42 U.S.C. 652) is amended by adding at the 
end the following new subsection:
    ``(j) Out of any money in the Treasury of the United States not 
otherwise appropriated, there is hereby appropriated to the Secretary 
for each fiscal year (beginning with fiscal year 1998) an amount equal 
to 1 percent of the total amount paid to the Federal Government 
pursuant to section 457(a) during the immediately preceding fiscal year 
(as determined on the basis of the most recent reliable data available 
to the Secretary as of the end of the 3rd calendar quarter following 
the end of such preceding fiscal year), to cover costs incurred by the 
Secretary for--
            ``(1) information dissemination and technical assistance to 
        States, training of State and Federal staff, staffing studies, 
        and related activities needed to improve programs under this 
        part (including technical assistance concerning State automated 
        systems required by this part); and
            ``(2) research, demonstration, and special projects of 
        regional or national significance relating to the operation of 
        State programs under this part.
The amount appropriated under this subsection shall remain available 
until expended.''.
    (b) Operation of Federal Parent Locator Service.--Section 453 (42 
U.S.C. 653), as amended by section 2316 of this Act, is amended by 
adding at the end the following new subsection:
    ``(o) Recovery of Costs.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there is hereby appropriated 
to the Secretary for each fiscal year an amount equal to 2 percent of 
the total amount paid to the Federal Government pursuant to section 
457(a) during the immediately preceding fiscal year (as determined on 
the basis of the most recent reliable data available to the Secretary 
as of the end of the 3rd calendar quarter following the end of such 
preceding fiscal year), to cover costs incurred by the Secretary for 
operation of the Federal Parent Locator Service under this section, to 
the extent such costs are not recovered through user fees.''.

SEC. 2346. REPORTS AND DATA COLLECTION BY THE SECRETARY.

    (a) Annual Report to Congress.--
            (1) Section 452(a)(10)(A) (42 U.S.C. 652(a)(10)(A)) is 
        amended--
                    (A) by striking ``this part;'' and inserting ``this 
                part, including--''; and
                    (B) by adding at the end the following new clauses:
                            ``(i) the total amount of child support 
                        payments collected as a result of services 
                        furnished during the fiscal year to individuals 
                        receiving services under this part;
                            ``(ii) the cost to the States and to the 
                        Federal Government of so furnishing the 
                        services; and
                            ``(iii) the number of cases involving 
                        families--
                                    ``(I) who became ineligible for 
                                assistance under State programs funded 
                                under part A during a month in the 
                                fiscal year; and
                                    ``(II) with respect to whom a child 
                                support payment was received in the 
                                month;''.
            (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
        amended--
                    (A) in the matter preceding clause (i)--
                            (i) by striking ``with the data required 
                        under each clause being separately stated for 
                        cases'' and inserting ``separately stated for 
                        cases'';
                            (ii) by striking ``cases where the child 
                        was formerly receiving'' and inserting ``or 
                        formerly received'';
                            (iii) by inserting ``or 1912'' after 
                        ``471(a)(17)''; and
                            (iv) by inserting ``for'' before ``all 
                        other'';
                    (B) in each of clauses (i) and (ii), by striking 
                ``, and the total amount of such obligations'';
                    (C) in clause (iii), by striking ``described in'' 
                and all that follows and inserting ``in which support 
                was collected during the fiscal year;'';
                    (D) by striking clause (iv); and
                    (E) by redesignating clause (v) as clause (vii), 
                and inserting after clause (iii) the following new 
                clauses:
                            ``(iv) the total amount of support 
                        collected during such fiscal year and 
                        distributed as current support;
                            ``(v) the total amount of support collected 
                        during such fiscal year and distributed as 
                        arrearages;
                            ``(vi) the total amount of support due and 
                        unpaid for all fiscal years; and''.
            (3) Section 452(a)(10)(G) (42 U.S.C. 652(a)(10)(G)) is 
        amended by striking ``on the use of Federal courts and''.
            (4) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended--
                    (A) in subparagraph (H), by striking ``and'';
                    (B) in subparagraph (I), by striking the period and 
                inserting ``; and''; and
                    (C) by inserting after subparagraph (I) the 
                following new subparagraph:
                    ``(J) compliance, by State, with the standards 
                established pursuant to subsections (h) and (i).''.
            (5) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended by 
        striking all that follows subparagraph (J), as added by 
        paragraph (4).
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective with respect to fiscal year 1997 and succeeding fiscal years.

     Subchapter F--Establishment and Modification of Support Orders

SEC. 2351. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF CHILD 
              SUPPORT ORDERS.

    Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amended to read as 
follows:
            ``(10) Review and adjustment of support orders upon 
        request.--Procedures under which the State shall review and 
        adjust each support order being enforced under this part if 
        there is an assignment under part A or upon the request of 
        either parent, and may review and adjust any other support 
        order being enforced under this part. Such procedures shall 
        provide the following:
                    ``(A) In general.--
                            ``(i) 3-year cycle.--Except as provided in 
                        subparagraphs (B) and (C), the State shall 
                        review and, as appropriate, adjust the support 
                        order every 3 years, taking into account the 
                        best interests of the child involved.
                            ``(ii) Methods of adjustment.--The State 
                        may elect to review and, if appropriate, adjust 
                        an order pursuant to clause (i) by--
                                    ``(I) reviewing and, if 
                                appropriate, adjusting the order in 
                                accordance with the guidelines 
                                established pursuant to section 467(a) 
                                if the amount of the child support 
                                award under the order differs from the 
                                amount that would be awarded in 
                                accordance with the guidelines; or
                                    ``(II) applying a cost-of-living 
                                adjustment to the order in accordance 
                                with a formula developed by the State 
                                and permit either party to contest the 
                                adjustment, within 30 days after the 
                                date of the notice of the adjustment, 
                                by making a request for review and, if 
                                appropriate, adjustment of the order in 
                                accordance with the child support 
                                guidelines established pursuant to 
                                section 467(a).
                            ``(iii) No proof of change in circumstances 
                        necessary.--Any adjustment under this 
                        subparagraph (A) shall be made without a 
                        requirement for proof or showing of a change in 
                        circumstances.
                    ``(B) Automated method.--The State may use 
                automated methods (including automated comparisons with 
                wage or State income tax data) to identify orders 
                eligible for review, conduct the review, identify 
                orders eligible for adjustment, and apply the 
                appropriate adjustment to the orders eligible for 
                adjustment under the threshold established by the 
                State.
                    ``(C) Request upon substantial change in 
                circumstances.--The State shall, at the request of 
                either parent subject to such an order or of any State 
                child support enforcement agency, review and, if 
                appropriate, adjust the order in accordance with the 
                guidelines established pursuant to section 467(a) based 
                upon a substantial change in the circumstances of 
                either parent.
                    ``(D) Notice of right to review.--The State shall 
                provide notice not less than once every 3 years to the 
                parents subject to such an order informing them of 
                their right to request the State to review and, if 
                appropriate, adjust the order pursuant to this 
                paragraph. The notice may be included in the order.''.

SEC. 2352. FURNISHING CONSUMER REPORTS FOR CERTAIN PURPOSES RELATING TO 
              CHILD SUPPORT.

    Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is 
amended by adding at the end the following new paragraphs:
    ``(4) In response to a request by the head of a State or local 
child support enforcement agency (or a State or local government 
official authorized by the head of such an agency), if the person 
making the request certifies to the consumer reporting agency that--
            ``(A) the consumer report is needed for the purpose of 
        establishing an individual's capacity to make child support 
        payments or determining the appropriate level of such payments;
            ``(B) the paternity of the consumer for the child to which 
        the obligation relates has been established or acknowledged by 
        the consumer in accordance with State laws under which the 
        obligation arises (if required by those laws);
            ``(C) the person has provided at least 10 days' prior 
        notice to the consumer whose report is requested, by certified 
        or registered mail to the last known address of the consumer, 
        that the report will be requested; and
            ``(D) the consumer report will be kept confidential, will 
        be used solely for a purpose described in subparagraph (A), and 
        will not be used in connection with any other civil, 
        administrative, or criminal proceeding, or for any other 
        purpose.
    ``(5) To an agency administering a State plan under section 454 of 
the Social Security Act (42 U.S.C. 654) for use to set an initial or 
modified child support award.''.

SEC. 2353. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL 
              RECORDS TO STATE CHILD SUPPORT ENFORCEMENT AGENCIES IN 
              CHILD SUPPORT CASES.

    Part D of title IV (42 U.S.C. 651-669) is amended by adding at the 
end the following:

``SEC. 469A. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING 
              FINANCIAL RECORDS TO STATE CHILD SUPPORT ENFORCEMENT 
              AGENCIES IN CHILD SUPPORT CASES.

    ``(a) In General.--Notwithstanding any other provision of Federal 
or State law, a financial institution shall not be liable under any 
Federal or State law to any person for disclosing any financial record 
of an individual to a State child support enforcement agency attempting 
to establish, modify, or enforce a child support obligation of such 
individual.
    ``(b) Prohibition of Disclosure of Financial Record Obtained by 
State Child Support Enforcement Agency.--A State child support 
enforcement agency which obtains a financial record of an individual 
from a financial institution pursuant to subsection (a) may disclose 
such financial record only for the purpose of, and to the extent 
necessary in, establishing, modifying, or enforcing a child support 
obligation of such individual.
    ``(c) Civil Damages for Unauthorized Disclosure.--
            ``(1) Disclosure by state officer or employee.--If any 
        person knowingly, or by reason of negligence, discloses a 
        financial record of an individual in violation of subsection 
        (b), such individual may bring a civil action for damages 
        against such person in a district court of the United States.
            ``(2) No liability for good faith but erroneous 
        interpretation.--No liability shall arise under this subsection 
        with respect to any disclosure which results from a good faith, 
        but erroneous, interpretation of subsection (b).
            ``(3) Damages.--In any action brought under paragraph (1), 
        upon a finding of liability on the part of the defendant, the 
        defendant shall be liable to the plaintiff in an amount equal 
        to the sum of--
                    ``(A) the greater of--
                            ``(i) $1,000 for each act of unauthorized 
                        disclosure of a financial record with respect 
                        to which such defendant is found liable; or
                            ``(ii) the sum of--
                                    ``(I) the actual damages sustained 
                                by the plaintiff as a result of such 
                                unauthorized disclosure; plus
                                    ``(II) in the case of a willful 
                                disclosure or a disclosure which is the 
                                result of gross negligence, punitive 
                                damages; plus
                    ``(B) the costs (including attorney's fees) of the 
                action.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Financial institution.--The term `financial 
        institution' means--
                    ``(A) a depository institution, as defined in 
                section 3(c) of the Federal Deposit Insurance Act (12 
                U.S.C. 1813(c));
                    ``(B) an institution-affiliated party, as defined 
                in section 3(u) of such Act (12 U.S.C. 1813(u));
                    ``(C) any Federal credit union or State credit 
                union, as defined in section 101 of the Federal Credit 
                Union Act (12 U.S.C. 1752), including an institution-
                affiliated party of such a credit union, as defined in 
                section 206(r) of such Act (12 U.S.C. 1786(r)); and
                    ``(D) any benefit association, insurance company, 
                safe deposit company, money-market mutual fund, or 
                similar entity authorized to do business in the State.
            ``(2) Financial record.--The term `financial record' has 
        the meaning given such term in section 1101 of the Right to 
        Financial Privacy Act of 1978 (12 U.S.C. 3401).''.

              Subchapter G--Enforcement of Support Orders

SEC. 2361. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES.

    (a) Collection of Fees.--Section 6305(a) of the Internal Revenue 
Code of 1986 (relating to collection of certain liability) is amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``, and'';
            (3) by adding at the end the following new paragraph:
            ``(5) no additional fee may be assessed for adjustments to 
        an amount previously certified pursuant to such section 452(b) 
        with respect to the same obligor.''; and
            (4) by striking ``Secretary of Health, Education, and 
        Welfare'' each place it appears and inserting ``Secretary of 
        Health and Human Services''.
    (b) Effective Date.--The amendments made by this section shall 
become effective October 1, 1997.

SEC. 2362. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL EMPLOYEES.

    (a) Consolidation and Streamlining of Authorities.--Section 459 (42 
U.S.C. 659) is amended to read as follows:

``SEC. 459. CONSENT BY THE UNITED STATES TO INCOME WITHHOLDING, 
              GARNISHMENT, AND SIMILAR PROCEEDINGS FOR ENFORCEMENT OF 
              CHILD SUPPORT AND ALIMONY OBLIGATIONS.

    ``(a) Consent to Support Enforcement.--Notwithstanding any other 
provision of law (including section 207 of this Act and section 5301 of 
title 38, United States Code), effective January 1, 1975, moneys (the 
entitlement to which is based upon remuneration for employment) due 
from, or payable by, the United States or the District of Columbia 
(including any agency, subdivision, or instrumentality thereof) to any 
individual, including members of the Armed Forces of the United States, 
shall be subject, in like manner and to the same extent as if the 
United States or the District of Columbia were a private person, to 
withholding in accordance with State law enacted pursuant to 
subsections (a)(1) and (b) of section 466 and regulations of the 
Secretary under such subsections, and to any other legal process 
brought, by a State agency administering a program under a State plan 
approved under this part or by an individual obligee, to enforce the 
legal obligation of the individual to provide child support or alimony.
    ``(b) Consent to Requirements Applicable to Private Person.--With 
respect to notice to withhold income pursuant to subsection (a)(1) or 
(b) of section 466, or any other order or process to enforce support 
obligations against an individual (if the order or process contains or 
is accompanied by sufficient data to permit prompt identification of 
the individual and the moneys involved), each governmental entity 
specified in subsection (a) shall be subject to the same requirements 
as would apply if the entity were a private person, except as otherwise 
provided in this section.
    ``(c) Designation of Agent; Response to Notice or Process--
            ``(1) Designation of agent.--The head of each agency 
        subject to this section shall--
                    ``(A) designate an agent or agents to receive 
                orders and accept service of process in matters 
                relating to child support or alimony; and
                    ``(B) annually publish in the Federal Register the 
                designation of the agent or agents, identified by title 
                or position, mailing address, and telephone number.
            ``(2) Response to notice or process.--If an agent 
        designated pursuant to paragraph (1) of this subsection 
        receives notice pursuant to State procedures in effect pursuant 
        to subsection (a)(1) or (b) of section 466, or is effectively 
        served with any order, process, or interrogatory, with respect 
        to an individual's child support or alimony payment 
        obligations, the agent shall--
                    ``(A) as soon as possible (but not later than 15 
                days) thereafter, send written notice of the notice or 
                service (together with a copy of the notice or service) 
                to the individual at the duty station or last-known 
                home address of the individual;
                    ``(B) within 30 days (or such longer period as may 
                be prescribed by applicable State law) after receipt of 
                a notice pursuant to such State procedures, comply with 
                all applicable provisions of section 466; and
                    ``(C) within 30 days (or such longer period as may 
                be prescribed by applicable State law) after effective 
                service of any other such order, process, or 
                interrogatory, respond to the order, process, or 
                interrogatory.
    ``(d) Priority of Claims.--If a governmental entity specified in 
subsection (a) receives notice or is served with process, as provided 
in this section, concerning amounts owed by an individual to more than 
1 person--
            ``(1) support collection under section 466(b) must be given 
        priority over any other process, as provided in section 
        466(b)(7);
            ``(2) allocation of moneys due or payable to an individual 
        among claimants under section 466(b) shall be governed by 
        section 466(b) and the regulations prescribed under such 
        section; and
            ``(3) such moneys as remain after compliance with 
        paragraphs (1) and (2) shall be available to satisfy any other 
        such processes on a first-come, first-served basis, with any 
        such process being satisfied out of such moneys as remain after 
        the satisfaction of all such processes which have been 
        previously served.
    ``(e) No Requirement to Vary Pay Cycles.--A governmental entity 
that is affected by legal process served for the enforcement of an 
individual's child support or alimony payment obligations shall not be 
required to vary its normal pay and disbursement cycle in order to 
comply with the legal process.
    ``(f) Relief From Liability.--
            ``(1) Neither the United States, nor the government of the 
        District of Columbia, nor any disbursing officer shall be 
        liable with respect to any payment made from moneys due or 
        payable from the United States to any individual pursuant to 
        legal process regular on its face, if the payment is made in 
        accordance with this section and the regulations issued to 
        carry out this section.
            ``(2) No Federal employee whose duties include taking 
        actions necessary to comply with the requirements of subsection 
        (a) with regard to any individual shall be subject under any 
        law to any disciplinary action or civil or criminal liability 
        or penalty for, or on account of, any disclosure of information 
        made by the employee in connection with the carrying out of 
        such actions.
    ``(g) Regulations.--Authority to promulgate regulations for the 
implementation of this section shall, insofar as this section applies 
to moneys due from (or payable by)--
            ``(1) the United States (other than the legislative or 
        judicial branches of the Federal Government) or the government 
        of the District of Columbia, be vested in the President (or the 
        designee of the President);
            ``(2) the legislative branch of the Federal Government, be 
        vested jointly in the President pro tempore of the Senate and 
        the Speaker of the House of Representatives (or their 
        designees), and
            ``(3) the judicial branch of the Federal Government, be 
        vested in the Chief Justice of the United States (or the 
        designee of the Chief Justice).
    ``(h) Moneys Subject to Process.--
            ``(1) In general.--Subject to paragraph (2), moneys paid or 
        payable to an individual which are considered to be based upon 
        remuneration for employment, for purposes of this section--
                    ``(A) consist of--
                            ``(i) compensation paid or payable for 
                        personal services of the individual, whether 
                        the compensation is denominated as wages, 
                        salary, commission, bonus, pay, allowances, or 
                        otherwise (including severance pay, sick pay, 
                        and incentive pay);
                            ``(ii) periodic benefits (including a 
                        periodic benefit as defined in section 
                        228(h)(3)) or other payments--
                                    ``(I) under the insurance system 
                                established by title II;
                                    ``(II) under any other system or 
                                fund established by the United States 
                                which provides for the payment of 
                                pensions, retirement or retired pay, 
                                annuities, dependents' or survivors' 
                                benefits, or similar amounts payable on 
                                account of personal services performed 
                                by the individual or any other 
                                individual;
                                    ``(III) as compensation for death 
                                under any Federal program;
                                    ``(IV) under any Federal program 
                                established to provide `black lung' 
                                benefits; or
                                    ``(V) by the Secretary of Veterans 
                                Affairs as compensation for a service-
                                connected disability paid by the 
                                Secretary to a former member of the 
                                Armed Forces who is in receipt of 
                                retired or retainer pay if the former 
                                member has waived a portion of the 
                                retired or retainer pay in order to 
                                receive such compensation; and
                            ``(iii) worker's compensation benefits paid 
                        under Federal or State law but
                    ``(B) do not include any payment--
                            ``(i) by way of reimbursement or otherwise, 
                        to defray expenses incurred by the individual 
                        in carrying out duties associated with the 
                        employment of the individual; or
                            ``(ii) as allowances for members of the 
                        uniformed services payable pursuant to chapter 
                        7 of title 37, United States Code, as 
                        prescribed by the Secretaries concerned 
                        (defined by section 101(5) of such title) as 
                        necessary for the efficient performance of 
                        duty.
            ``(2) Certain amounts excluded.--In determining the amount 
        of any moneys due from, or payable by, the United States to any 
        individual, there shall be excluded amounts which--
                    ``(A) are owed by the individual to the United 
                States;
                    ``(B) are required by law to be, and are, deducted 
                from the remuneration or other payment involved, 
                including Federal employment taxes, and fines and 
                forfeitures ordered by court-martial;
                    ``(C) are properly withheld for Federal, State, or 
                local income tax purposes, if the withholding of the 
                amounts is authorized or required by law and if amounts 
                withheld are not greater than would be the case if the 
                individual claimed all dependents to which he was 
                entitled (the withholding of additional amounts 
                pursuant to section 3402(i) of the Internal Revenue 
                Code of 1986 may be permitted only when the individual 
                presents evidence of a tax obligation which supports 
                the additional withholding);
                    ``(D) are deducted as health insurance premiums;
                    ``(E) are deducted as normal retirement 
                contributions (not including amounts deducted for 
                supplementary coverage); or
                    ``(F) are deducted as normal life insurance 
                premiums from salary or other remuneration for 
                employment (not including amounts deducted for 
                supplementary coverage).
    ``(i) Definitions.--For purposes of this section--
            ``(1) United states.--The term `United States' includes any 
        department, agency, or instrumentality of the legislative, 
        judicial, or executive branch of the Federal Government, the 
        United States Postal Service, the Postal Rate Commission, any 
        Federal corporation created by an Act of Congress that is 
        wholly owned by the Federal Government, and the governments of 
        the territories and possessions of the United States.
            ``(2) Child support.--The term `child support', when used 
        in reference to the legal obligations of an individual to 
        provide such support, means amounts required to be paid under a 
        judgment, decree, or order, whether temporary, final, or 
        subject to modification, issued by a court or an administrative 
        agency of competent jurisdiction, for the support and 
        maintenance of a child, including a child who has attained the 
        age of majority under the law of the issuing State, or a child 
        and the parent with whom the child is living, which provides 
        for monetary support, health care, arrearages or reimbursement, 
        and which may include other related costs and fees, interest 
        and penalties, income withholding, attorney's fees, and other 
        relief.
            ``(3) Alimony.--
                    ``(A) In general.--The term `alimony', when used in 
                reference to the legal obligations of an individual to 
                provide the same, means periodic payments of funds for 
                the support and maintenance of the spouse (or former 
                spouse) of the individual, and (subject to and in 
                accordance with State law) includes separate 
                maintenance, alimony pendente lite, maintenance, and 
                spousal support, and includes attorney's fees, 
                interest, and court costs when and to the extent that 
                the same are expressly made recoverable as such 
                pursuant to a decree, order, or judgment issued in 
                accordance with applicable State law by a court of 
                competent jurisdiction.
                    ``(B) Exceptions.--Such term does not include--
                            ``(i) any child support; or
                            ``(ii) any payment or transfer of property 
                        or its value by an individual to the spouse or 
                        a former spouse of the individual in compliance 
                        with any community property settlement, 
                        equitable distribution of property, or other 
                        division of property between spouses or former 
                        spouses.
            ``(4) Private person.--The term `private person' means a 
        person who does not have sovereign or other special immunity or 
        privilege which causes the person not to be subject to legal 
        process.
            ``(5) Legal process.--The term `legal process' means any 
        writ, order, summons, or other similar process in the nature of 
        garnishment--
                    ``(A) which is issued by--
                            ``(i) a court or an administrative agency 
                        of competent jurisdiction in any State, 
                        territory, or possession of the United States;
                            ``(ii) a court or an administrative agency 
                        of competent jurisdiction in any foreign 
                        country with which the United States has 
                        entered into an agreement which requires the 
                        United States to honor the process; or
                            ``(iii) an authorized official pursuant to 
                        an order of such a court or an administrative 
                        agency of competent jurisdiction or pursuant to 
                        State or local law; and
                    ``(B) which is directed to, and the purpose of 
                which is to compel, a governmental entity which holds 
                moneys which are otherwise payable to an individual to 
                make a payment from the moneys to another party in 
                order to satisfy a legal obligation of the individual 
                to provide child support or make alimony payments.''.
    (b) Conforming Amendments.--
            (1) To part d of title iv.--Sections 461 and 462 (42 U.S.C. 
        661 and 662) are repealed.
            (2) To title 5, united states code.--Section 5520a of title 
        5, United States Code, is amended, in subsections (h)(2) and 
        (i), by striking ``sections 459, 461, and 462 of the Social 
        Security Act (42 U.S.C. 659, 661, and 662)'' and inserting 
        ``section 459 of the Social Security Act (42 U.S.C. 659)''.
    (c) Military Retired and Retainer Pay.--
            (1) Definition of court.--Section 1408(a)(1) of title 10, 
        United States Code, is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by striking the period at the end of 
                subparagraph (C) and inserting ``; and''; and
                    (C) by adding after subparagraph (C) the following 
                new subparagraph:
                    ``(D) any administrative or judicial tribunal of a 
                State competent to enter orders for support or 
                maintenance (including a State agency administering a 
                program under a State plan approved under part D of 
                title IV of the Social Security Act), and, for purposes 
                of this subparagraph, the term `State' includes the 
                District of Columbia, the Commonwealth of Puerto Rico, 
                the Virgin Islands, Guam, and American Samoa.''.
            (2) Definition of court order.--Section 1408(a)(2) of such 
        title is amended--
                    (A) by inserting ``or a support order, as defined 
                in section 453(p) of the Social Security Act (42 U.S.C. 
                653(p)),'' before ``which--'';
                    (B) in subparagraph (B)(i), by striking ``(as 
                defined in section 462(b) of the Social Security Act 
                (42 U.S.C. 662(b)))'' and inserting ``(as defined in 
                section 459(i)(2) of the Social Security Act (42 U.S.C. 
                659(i)(2)))''; and
                    (C) in subparagraph (B)(ii), by striking ``(as 
                defined in section 462(c) of the Social Security Act 
                (42 U.S.C. 662(c)))'' and inserting ``(as defined in 
                section 459(i)(3) of the Social Security Act (42 U.S.C. 
                659(i)(3)))''.
            (3) Public payee.--Section 1408(d) of such title is 
        amended--
                    (A) in the heading, by inserting ``(or for Benefit 
                of)'' before ``Spouse or''; and
                    (B) in paragraph (1), in the 1st sentence, by 
                inserting ``(or for the benefit of such spouse or 
                former spouse to a State disbursement unit established 
                pursuant to section 454B of the Social Security Act or 
                other public payee designated by a State, in accordance 
                with part D of title IV of the Social Security Act, as 
                directed by court order, or as otherwise directed in 
                accordance with such part D)'' before ``in an amount 
                sufficient''.
            (4) Relationship to part d of title iv.--Section 1408 of 
        such title is amended by adding at the end the following new 
        subsection:
    ``(j) Relationship to Other Laws.--In any case involving an order 
providing for payment of child support (as defined in section 459(i)(2) 
of the Social Security Act) by a member who has never been married to 
the other parent of the child, the provisions of this section shall not 
apply, and the case shall be subject to the provisions of section 459 
of such Act.''.
    (d) Effective Date.--The amendments made by this section shall 
become effective 6 months after the date of the enactment of this Act.

SEC. 2363. ENFORCEMENT OF CHILD SUPPORT OBLIGATIONS OF MEMBERS OF THE 
              ARMED FORCES.

    (a) Availability of Locator Information.--
            (1) Maintenance of address information.--The Secretary of 
        Defense shall establish a centralized personnel locator service 
        that includes the address of each member of the Armed Forces 
        under the jurisdiction of the Secretary. Upon request of the 
        Secretary of Transportation, addresses for members of the Coast 
        Guard shall be included in the centralized personnel locator 
        service.
            (2) Type of address.--
                    (A) Residential address.--Except as provided in 
                subparagraph (B), the address for a member of the Armed 
                Forces shown in the locator service shall be the 
                residential address of that member.
                    (B) Duty address.--The address for a member of the 
                Armed Forces shown in the locator service shall be the 
                duty address of that member in the case of a member--
                            (i) who is permanently assigned overseas, 
                        to a vessel, or to a routinely deployable unit; 
                        or
                            (ii) with respect to whom the Secretary 
                        concerned makes a determination that the 
                        member's residential address should not be 
                        disclosed due to national security or safety 
                        concerns.
            (3) Updating of locator information.--Within 30 days after 
        a member listed in the locator service establishes a new 
        residential address (or a new duty address, in the case of a 
        member covered by paragraph (2)(B)), the Secretary concerned 
        shall update the locator service to indicate the new address of 
        the member.
            (4) Availability of information.--The Secretary of Defense 
        shall make information regarding the address of a member of the 
        Armed Forces listed in the locator service available, on 
        request, to the Federal Parent Locator Service established 
        under section 453 of the Social Security Act.
    (b) Facilitating Granting of Leave for Attendance at Hearings.--
            (1) Regulations.--The Secretary of each military 
        department, and the Secretary of Transportation with respect to 
        the Coast Guard when it is not operating as a service in the 
        Navy, shall prescribe regulations to facilitate the granting of 
        leave to a member of the Armed Forces under the jurisdiction of 
        that Secretary in a case in which--
                    (A) the leave is needed for the member to attend a 
                hearing described in paragraph (2);
                    (B) the member is not serving in or with a unit 
                deployed in a contingency operation (as defined in 
                section 101 of title 10, United States Code); and
                    (C) the exigencies of military service (as 
                determined by the Secretary concerned) do not otherwise 
                require that such leave not be granted.
            (2) Covered hearings.--Paragraph (1) applies to a hearing 
        that is conducted by a court or pursuant to an administrative 
        process established under State law, in connection with a civil 
        action--
                    (A) to determine whether a member of the Armed 
                Forces is a natural parent of a child; or
                    (B) to determine an obligation of a member of the 
                Armed Forces to provide child support.
            (3) Definitions.--For purposes of this subsection--
                    (A) The term ``court'' has the meaning given that 
                term in section 1408(a) of title 10, United States 
                Code.
                    (B) The term ``child support'' has the meaning 
                given such term in section 459(i) of the Social 
                Security Act (42 U.S.C. 659(i)).
    (c) Payment of Military Retired Pay in Compliance With Child 
Support Orders.--
            (1) Date of certification of court order.--Section 1408 of 
        title 10, United States Code, as amended by section 2362(c)(4) 
        of this Act, is amended--
                    (A) by redesignating subsections (i) and (j) as 
                subsections (j) and (k), respectively; and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Certification Date.--It is not necessary that the date of a 
certification of the authenticity or completeness of a copy of a court 
order for child support received by the Secretary concerned for the 
purposes of this section be recent in relation to the date of receipt 
by the Secretary.''.
            (2) Payments consistent with assignments of rights to 
        states.--Section 1408(d)(1) of such title is amended by 
        inserting after the 1st sentence the following new sentence: 
        ``In the case of a spouse or former spouse who, pursuant to 
        section 408(a)(4) of the Social Security Act (42 U.S.C. 
        608(a)(4)), assigns to a State the rights of the spouse or 
        former spouse to receive support, the Secretary concerned may 
        make the child support payments referred to in the preceding 
        sentence to that State in amounts consistent with that 
        assignment of rights.''.
            (3) Arrearages owed by members of the uniformed services.--
        Section 1408(d) of such title is amended by adding at the end 
        the following new paragraph:
    ``(6) In the case of a court order for which effective service is 
made on the Secretary concerned on or after the date of the enactment 
of this paragraph and which provides for payments from the disposable 
retired pay of a member to satisfy the amount of child support set 
forth in the order, the authority provided in paragraph (1) to make 
payments from the disposable retired pay of a member to satisfy the 
amount of child support set forth in a court order shall apply to 
payment of any amount of child support arrearages set forth in that 
order as well as to amounts of child support that currently become 
due.''.
            (4) Payroll deductions.--The Secretary of Defense shall 
        begin payroll deductions within 30 days after receiving notice 
        of withholding, or for the 1st pay period that begins after 
        such 30-day period.

SEC. 2364. VOIDING OF FRAUDULENT TRANSFERS.

    Section 466 (42 U.S.C. 666), as amended by section 2321 of this 
Act, is amended by adding at the end the following new subsection:
    ``(g) Laws Voiding Fraudulent Transfers.--In order to satisfy 
section 454(20)(A), each State must have in effect--
            ``(1)(A) the Uniform Fraudulent Conveyance Act of 1981;
            ``(B) the Uniform Fraudulent Transfer Act of 1984; or
            ``(C) another law, specifying indicia of fraud which create 
        a prima facie case that a debtor transferred income or property 
        to avoid payment to a child support creditor, which the 
        Secretary finds affords comparable rights to child support 
        creditors; and
            ``(2) procedures under which, in any case in which the 
        State knows of a transfer by a child support debtor with 
        respect to which such a prima facie case is established, the 
        State must--
                    ``(A) seek to void such transfer; or
                    ``(B) obtain a settlement in the best interests of 
                the child support creditor.''.

SEC. 2365. WORK REQUIREMENT FOR PERSONS OWING PAST-DUE CHILD SUPPORT.

    (a) In General.--Section 466(a) (42 U.S.C. 666(a)), as amended by 
sections 2315, 2317(a), and 2323 of this Act, is amended by inserting 
after paragraph (14) the following new paragraph:
            ``(15) Procedures to ensure that persons owing past-due 
        support work or have a plan for payment of such support.--
                    ``(A) In general.--Procedures under which the State 
                has the authority, in any case in which an individual 
                owes past-due support with respect to a child receiving 
                assistance under a State program funded under part A, 
                to issue an order or to request that a court or an 
                administrative process established pursuant to State 
                law issue an order that requires the individual to--
                            ``(i) pay such support in accordance with a 
                        plan approved by the court, or, at the option 
                        of the State, a plan approved by the State 
                        agency administering the State program under 
                        this part; or
                            ``(ii) if the individual is subject to such 
                        a plan and is not incapacitated, participate in 
                        such work activities (as defined in section 
                        407(d)) as the court, or, at the option of the 
                        State, the State agency administering the State 
                        program under this part, deems appropriate.
                    ``(B) Past-due support defined.--For purposes of 
                subparagraph (A), the term `past-due support' means the 
                amount of a delinquency, determined under a court 
                order, or an order of an administrative process 
                established under State law, for support and 
                maintenance of a child, or of a child and the parent 
                with whom the child is living.''.
    (b) Conforming Amendment.--The flush paragraph at the end of 
section 466(a) (42 U.S.C. 666(a)) is amended by striking ``and (7)'' 
and inserting ``(7), and (15)''.

SEC. 2366. DEFINITION OF SUPPORT ORDER.

    Section 453 (42 U.S.C. 653) as amended by sections 2316 and 2345(b) 
of this Act, is amended by adding at the end the following new 
subsection:
    ``(p) Support Order Defined.--As used in this part, the term 
`support order' means a judgment, decree, or order, whether temporary, 
final, or subject to modification, issued by a court or an 
administrative agency of competent jurisdiction, for the support and 
maintenance of a child, including a child who has attained the age of 
majority under the law of the issuing State, or a child and the parent 
with whom the child is living, which provides for monetary support, 
health care, arrearages, or reimbursement, and which may include 
related costs and fees, interest and penalties, income withholding, 
attorneys' fees, and other relief.''.

SEC. 2367. REPORTING ARREARAGES TO CREDIT BUREAUS.

    Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended to read as 
follows:
            ``(7) Reporting arrearages to credit bureaus.--
                    ``(A) In general.--Procedures (subject to 
                safeguards pursuant to subparagraph (B)) requiring the 
                State to report periodically to consumer reporting 
                agencies (as defined in section 603(f) of the Fair 
                Credit Reporting Act (15 U.S.C. 1681a(f)) the name of 
                any noncustodial parent who is delinquent in the 
                payment of support, and the amount of overdue support 
                owed by such parent.
                    ``(B) Safeguards.--Procedures ensuring that, in 
                carrying out subparagraph (A), information with respect 
                to a noncustodial parent is reported--
                            ``(i) only after such parent has been 
                        afforded all due process required under State 
                        law, including notice and a reasonable 
                        opportunity to contest the accuracy of such 
                        information; and
                            ``(ii) only to an entity that has furnished 
                        evidence satisfactory to the State that the 
                        entity is a consumer reporting agency (as so 
                        defined).''.

SEC. 2368. LIENS.

    Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended to read as 
follows:
            ``(4) Liens.--Procedures under which--
                    ``(A) liens arise by operation of law against real 
                and personal property for amounts of overdue support 
                owed by a noncustodial parent who resides or owns 
                property in the State; and
                    ``(B) the State accords full faith and credit to 
                liens described in subparagraph (A) arising in another 
                State, when the State agency, party, or other entity 
                seeking to enforce such a lien complies with the 
                procedural rules relating to recording or serving liens 
                that arise within the State, except that such rules may 
                not require judicial notice or hearing prior to the 
                enforcement of such a lien.''.

SEC. 2369. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 2315, 
2317(a), 2323, and 2365 of this Act, is amended by inserting after 
paragraph (15) the following:
            ``(16) Authority to withhold or suspend licenses.--
        Procedures under which the State has (and uses in appropriate 
        cases) authority to withhold or suspend, or to restrict the use 
        of driver's licenses, professional and occupational licenses, 
        and recreational licenses of individuals owing overdue support 
        or failing, after receiving appropriate notice, to comply with 
        subpoenas or warrants relating to paternity or child support 
        proceedings.''.

SEC. 2370. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD SUPPORT.

    (a) HHS Certification Procedure.--
            (1) Secretarial responsibility.--Section 452 (42 U.S.C. 
        652), as amended by section 2345 of this Act, is amended by 
        adding at the end the following new subsection:
    ``(k)(1) If the Secretary receives a certification by a State 
agency in accordance with the requirements of section 454(31) that an 
individual owes arrearages of child support in an amount exceeding 
$5,000, the Secretary shall transmit such certification to the 
Secretary of State for action (with respect to denial, revocation, or 
limitation of passports) pursuant to paragraph (2).
    ``(2) The Secretary of State shall, upon certification by the 
Secretary transmitted under paragraph (1), refuse to issue a passport 
to such individual, and may revoke, restrict, or limit a passport 
issued previously to such individual.
    ``(3) The Secretary and the Secretary of State shall not be liable 
to an individual for any action with respect to a certification by a 
State agency under this section.''.
            (2) State agency responsibility.--Section 454 (42 U.S.C. 
        654), as amended by sections 2301(b), 2303(a), 2312(b), 
        2313(a), 2333, and 2343(b) of this Act, is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (29);
                    (B) by striking the period at the end of paragraph 
                (30) and inserting ``; and''; and
                    (C) by adding after paragraph (30) the following 
                new paragraph:
            ``(31) provide that the State agency will have in effect a 
        procedure for certifying to the Secretary, for purposes of the 
        procedure under section 452(k), determinations that individuals 
        owe arrearages of child support in an amount exceeding $5,000, 
        under which procedure--
                    ``(A) each individual concerned is afforded notice 
                of such determination and the consequences thereof, and 
                an opportunity to contest the determination; and
                    ``(B) the certification by the State agency is 
                furnished to the Secretary in such format, and 
                accompanied by such supporting documentation, as the 
                Secretary may require.''.
    (b) Effective Date.--This section and the amendments made by this 
section shall become effective October 1, 1997.

SEC. 2371. INTERNATIONAL SUPPORT ENFORCEMENT.

    (a) Authority for International Agreements.--Part D of title IV, as 
amended by section 2362(a) of this Act, is amended by adding after 
section 459 the following new section:

``SEC. 459A. INTERNATIONAL SUPPORT ENFORCEMENT.

    ``(a) Authority for Declarations.--
            ``(1) Declaration.--The Secretary of State, with the 
        concurrence of the Secretary of Health and Human Services, is 
        authorized to declare any foreign country (or a political 
        subdivision thereof) to be a foreign reciprocating country if 
        the foreign country has established, or undertakes to 
        establish, procedures for the establishment and enforcement of 
        duties of support owed to obligees who are residents of the 
        United States, and such procedures are substantially in 
        conformity with the standards prescribed under subsection (b).
            ``(2) Revocation.--A declaration with respect to a foreign 
        country made pursuant to paragraph (1) may be revoked if the 
        Secretaries of State and Health and Human Services determine 
        that--
                    ``(A) the procedures established by the foreign 
                country regarding the establishment and enforcement of 
                duties of support have been so changed, or the foreign 
                country's implementation of such procedures is so 
                unsatisfactory, that such procedures do not meet the 
                criteria for such a declaration; or
                    ``(B) continued operation of the declaration is not 
                consistent with the purposes of this part.
            ``(3) Form of declaration.--A declaration under paragraph 
        (1) may be made in the form of an international agreement, in 
        connection with an international agreement or corresponding 
        foreign declaration, or on a unilateral basis.
    ``(b) Standards for Foreign Support Enforcement Procedures.--
            ``(1) Mandatory elements.--Support enforcement procedures 
        of a foreign country which may be the subject of a declaration 
        pursuant to subsection (a)(1) shall include the following 
        elements:
                    ``(A) The foreign country (or political subdivision 
                thereof) has in effect procedures, available to 
                residents of the United States--
                            ``(i) for establishment of paternity, and 
                        for establishment of orders of support for 
                        children and custodial parents; and
                            ``(ii) for enforcement of orders to provide 
                        support to children and custodial parents, 
                        including procedures for collection and 
                        appropriate distribution of support payments 
                        under such orders.
                    ``(B) The procedures described in subparagraph (A), 
                including legal and administrative assistance, are 
                provided to residents of the United States at no cost.
                    ``(C) An agency of the foreign country is 
                designated as a Central Authority responsible for--
                            ``(i) facilitating support enforcement in 
                        cases involving residents of the foreign 
                        country and residents of the United States; and
                            ``(ii) ensuring compliance with the 
                        standards established pursuant to this 
                        subsection.
            ``(2) Additional elements.--The Secretary of Health and 
        Human Services and the Secretary of State, in consultation with 
        the States, may establish such additional standards as may be 
        considered necessary to further the purposes of this section.
    ``(c) Designation of United States Central Authority.--It shall be 
the responsibility of the Secretary of Health and Human Services to 
facilitate support enforcement in cases involving residents of the 
United States and residents of foreign countries that are the subject 
of a declaration under this section, by activities including--
            ``(1) development of uniform forms and procedures for use 
        in such cases;
            ``(2) notification of foreign reciprocating countries of 
        the State of residence of individuals sought for support 
        enforcement purposes, on the basis of information provided by 
        the Federal Parent Locator Service; and
            ``(3) such other oversight, assistance, and coordination 
        activities as the Secretary may find necessary and appropriate.
    ``(d) Effect on Other Laws.--States may enter into reciprocal 
arrangements for the establishment and enforcement of support 
obligations with foreign countries that are not the subject of a 
declaration pursuant to subsection (a), to the extent consistent with 
Federal law.''.
    (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 2301(b), 2303(a), 2312(b), 2313(a), 2333, 2343(b), 
and 2370(a)(2) of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (30);
            (2) by striking the period at the end of paragraph (31) and 
        inserting ``; and''; and
            (3) by adding after paragraph (31) the following new 
        paragraph:
            ``(32)(A) provide that any request for services under this 
        part by a foreign reciprocating country or a foreign country 
        with which the State has an arrangement described in section 
        459A(d)(2) shall be treated as a request by a State;
            ``(B) provide, at State option, notwithstanding paragraph 
        (4) or any other provision of this part, for services under the 
        plan for enforcement of a spousal support order not described 
        in paragraph (4)(B) entered by such a country (or subdivision); 
        and
            ``(C) provide that no applications will be required from, 
        and no costs will be assessed for such services against, the 
        foreign reciprocating country or foreign obligee (but costs may 
        at State option be assessed against the obligor).''.

SEC. 2372. FINANCIAL INSTITUTION DATA MATCHES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 2315, 
2317(a), 2323, 2365, and 2369 of this Act, is amended by inserting 
after paragraph (16) the following new paragraph:
            ``(17) Financial institution data matches.--
                    ``(A) In general.--Procedures under which the State 
                agency shall enter into agreements with financial 
                institutions doing business in the State--
                            ``(i) to develop and operate, in 
                        coordination with such financial institutions, 
                        a data match system, using automated data 
                        exchanges to the maximum extent feasible, in 
                        which each such financial institution is 
                        required to provide for each calendar quarter 
                        the name, record address, social security 
                        number or other taxpayer identification number, 
                        and other identifying information for each 
                        noncustodial parent who maintains an account at 
                        such institution and who owes past-due support, 
                        as identified by the State by name and social 
                        security number or other taxpayer 
                        identification number; and
                            ``(ii) in response to a notice of lien or 
                        levy, encumber or surrender, as the case may 
                        be, assets held by such institution on behalf 
                        of any noncustodial parent who is subject to a 
                        child support lien pursuant to paragraph (4).
                    ``(B) Reasonable fees.--The State agency may pay a 
                reasonable fee to a financial institution for 
                conducting the data match provided for in subparagraph 
                (A)(i), not to exceed the actual costs incurred by such 
                financial institution.
                    ``(C) Liability.--A financial institution shall not 
                be liable under any Federal or State law to any 
                person--
                            ``(i) for any disclosure of information to 
                        the State agency under subparagraph (A)(i);
                            ``(ii) for encumbering or surrendering any 
                        assets held by such financial institution in 
                        response to a notice of lien or levy issued by 
                        the State agency as provided for in 
                        subparagraph (A)(ii); or
                            ``(iii) for any other action taken in good 
                        faith to comply with the requirements of 
                        subparagraph (A).
                    ``(D) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Financial institution.--The term 
                        `financial institution' has the meaning given 
                        to such term by section 469A(d)(1).
                            ``(ii) Account.--The term `account' means a 
                        demand deposit account, checking or negotiable 
                        withdrawal order account, savings account, time 
                        deposit account, or money-market mutual fund 
                        account.''.

SEC. 2373. ENFORCEMENT OF ORDERS AGAINST PATERNAL OR MATERNAL 
              GRANDPARENTS IN CASES OF MINOR PARENTS.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 2315, 
2317(a), 2323, 2365, 2369, and 2372 of this Act, is amended by 
inserting after paragraph (17) the following new paragraph:
            ``(18) Enforcement of orders against paternal or maternal 
        grandparents.--Procedures under which, at the State's option, 
        any child support order enforced under this part with respect 
        to a child of minor parents, if the custodial parent of such 
        child is receiving assistance under the State program under 
        part A, shall be enforceable, jointly and severally, against 
        the parents of the noncustodial parent of such child.''.

SEC. 2374. NONDISCHARGEABILITY IN BANKRUPTCY OF CERTAIN DEBTS FOR THE 
              SUPPORT OF A CHILD.

    (a) Amendment to Title 11 of the United States Code.--Section 
523(a) of title 11, United States Code, is amended--
            (1) by striking ``or'' at the end of paragraph (16);
            (2) by striking the period at the end of paragraph (17) and 
        inserting ``; or'';
            (3) by adding at the end the following:
            ``(18) owed under State law to a State or municipality that 
        is--
                    ``(A) in the nature of support, and
                    ``(B) enforceable under part D of title IV of the 
                Social Security Act (42 U.S.C. 601 et seq.).'', and
            (3) in paragraph (5), by striking ``section 402(a)(26)'' 
        and inserting ``section 408(a)(4)''.
    (b) Amendment to the Social Security Act.--Section 456(b) (42 
U.S.C. 656(b)) is amended to read as follows:
    ``(b) Nondischargeability.--A debt (as defined in section 101 of 
title 11 of the United States Code) owed under State law to a State (as 
defined in such section) or municipality (as defined in such section) 
that is in the nature of support and that is enforceable under this 
part is not released by a discharge in bankruptcy under title 11 of the 
United States Code.''.
    (c) Application of Amendments.--The amendments made by this section 
shall apply only with respect to cases commenced under title 11 of the 
United States Code after the date of the enactment of this Act.

SEC. 2375. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES.

    (a) Child Support Enforcement Agreements.--Section 454 (42 U.S.C. 
654), as amended by sections 2301(b), 2303(a), 2312(b), 2313(a), 2333, 
2343(b), 2370(a)(2), and 2371(b) of this Act is amended--
            (1) by striking ``and'' at the end of paragraph (31);
            (2) by striking the period at the end of paragraph (32) and 
        inserting ``; and'';
            (3) by adding after paragraph (32) the following new 
        paragraph:
            ``(33) provide that a State that receives funding pursuant 
        to section 428 and that has within its borders Indian country 
        (as defined in section 1151 of title 18, United States Code) 
        may enter into cooperative agreements with an Indian tribe or 
        tribal organization (as defined in subsections (e) and (l) of 
        section 4 of the Indian Self-Determination and Education 
        Assistance Act (25 U.S.C. 450b)), if the Indian tribe or tribal 
        organization demonstrates that such tribe or organization has 
        an established tribal court system or a Court of Indian 
        Offenses with the authority to establish paternity, establish, 
        modify, and enforce support orders, and to enter support orders 
        in accordance with child support guidelines established by such 
        tribe or organization, under which the State and tribe or 
        organization shall provide for the cooperative delivery of 
        child support enforcement services in Indian country and for 
        the forwarding of all funding collected pursuant to the 
        functions performed by the tribe or organization to the State 
        agency, or conversely, by the State agency to the tribe or 
        organization, which shall distribute such funding in accordance 
        with such agreement; and
            (4) by adding at the end the following new sentence: 
        ``Nothing in paragraph (33) shall void any provision of any 
        cooperative agreement entered into before the date of the 
        enactment of such paragraph, nor shall such paragraph deprive 
        any State of jurisdiction over Indian country (as so defined) 
        that is lawfully exercised under section 402 of the Act 
        entitled `An Act to prescribe penalties for certain acts of 
        violence or intimidation, and for other purposes', approved 
        April 11, 1968 (25 U.S.C. 1322).''.
    (b) Direct Federal Funding to Indian Tribes and Tribal 
Organizations.--Section 455 (42 U.S.C. 655) is amended by adding at the 
end the following new subsection:
    ``(b) The Secretary may, in appropriate cases, make direct payments 
under this part to an Indian tribe or tribal organization which has an 
approved child support enforcement plan under this title. In 
determining whether such payments are appropriate, the Secretary shall, 
at a minimum, consider whether services are being provided to eligible 
Indian recipients by the State agency through an agreement entered into 
pursuant to section 454(33).''.
    (c) Cooperative Enforcement Agreements.--Paragraph (7) of section 
454 (42 U.S.C. 654) is amended by inserting ``and Indian tribes or 
tribal organizations (as defined in subsections (e) and (l) of section 
4 of the Indian Self-Determination and Education Assistance Act (25 
U.S.C. 450b))'' after ``law enforcement officials''.
    (d) Conforming Amendment.--Subsection (c) of section 428 (42 U.S.C. 
628) is amended to read as follows:
    ``(c) For purposes of this section, the terms `Indian tribe' and 
`tribal organization' shall have the meanings given such terms by 
subsections (e) and (l) of section 4 of the Indian Self-Determination 
and Education Assistance Act (25 U.S.C. 450b)), respectively.''.

                     Subchapter H--Medical Support

SEC. 2376. CORRECTION TO ERISA DEFINITION OF MEDICAL CHILD SUPPORT 
              ORDER.

    (a) In General.--Section 609(a)(2)(B) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1169(a)(2)(B)) is amended--
            (1) by striking ``issued by a court of competent 
        jurisdiction'';
            (2) by striking the period at the end of clause (ii) and 
        inserting a comma; and
            (3) by adding, after and below clause (ii), the following:
                ``if such judgment, decree, or order (I) is issued by a 
                court of competent jurisdiction or (II) is issued 
                through an administrative process established under 
                State law and has the force and effect of law under 
                applicable State law.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on the date of the enactment of this Act.
            (2) Plan amendments not required until january 1, 1997.--
        Any amendment to a plan required to be made by an amendment 
        made by this section shall not be required to be made before 
        the 1st plan year beginning on or after January 1, 1997, if--
                    (A) during the period after the date before the 
                date of the enactment of this Act and before such 1st 
                plan year, the plan is operated in accordance with the 
                requirements of the amendments made by this section; 
                and
                    (B) such plan amendment applies retroactively to 
                the period after the date before the date of the 
                enactment of this Act and before such 1st plan year.
        A plan shall not be treated as failing to be operated in 
        accordance with the provisions of the plan merely because it 
        operates in accordance with this paragraph.

SEC. 2377. ENFORCEMENT OF ORDERS FOR HEALTH CARE COVERAGE.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 2315, 
2317(a), 2323, 2365, 2369, 2372, and 2373 of this Act, is amended by 
inserting after paragraph (18) the following new paragraph:
            ``(19) Health care coverage.--Procedures under which all 
        child support orders enforced pursuant to this part shall 
        include a provision for the health care coverage of the child, 
        and in the case in which a noncustodial parent provides such 
        coverage and changes employment, and the new employer provides 
        health care coverage, the State agency shall transfer notice of 
        the provision to the employer, which notice shall operate to 
        enroll the child in the noncustodial parent's health plan, 
        unless the noncustodial parent contests the notice.''.

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

SEC. 2381. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    Part D of title IV (42 U.S.C. 651-669), as amended by section 2353 
of this Act, is amended by adding at the end the following new section:

``SEC. 469B. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    ``(a) In General.--The Administration for Children and Families 
shall make grants under this section to enable States to establish and 
administer programs to support and facilitate noncustodial parents' 
access to and visitation of their children, by means of activities 
including mediation (both voluntary and mandatory), counseling, 
education, development of parenting plans, visitation enforcement 
(including monitoring, supervision and neutral drop-off and pickup), 
and development of guidelines for visitation and alternative custody 
arrangements.
    ``(b) Amount of Grant.--The amount of the grant to be made to a 
State under this section for a fiscal year (beginning with fiscal year 
1998) shall be an amount equal to the lesser of--
            ``(1) 90 percent of State expenditures during the fiscal 
        year for activities described in subsection (a); or
            ``(2) the allotment of the State under subsection (c) for 
        the fiscal year.
    ``(c) Allotments to States.--
            ``(1) In general.--The allotment of a State for a fiscal 
        year is the amount that bears the same ratio to $10,000,000 for 
        grants under this section for the fiscal year as the number of 
        children in the State living with only 1 biological parent 
        bears to the total number of such children in all States.
            ``(2) Minimum allotment.--The Administration for Children 
        and Families shall adjust allotments to States under paragraph 
        (1) as necessary to ensure that no State is allotted less 
        than--
                    ``(A) $50,000 for fiscal year 1998 or 1999 or
                    ``(B) $100,000 for any succeeding fiscal year.
    ``(d) No Supplantation of State Expenditures for Similar 
Activities.--A State to which a grant is made under this section may 
not use the grant to supplant expenditures by the State for activities 
specified in subsection (a), but shall use the grant to supplement such 
expenditures at a level at least equal to the level of such 
expenditures for fiscal year 1995.
    ``(e) State Administration.--Each State to which a grant is made 
under this section--
            ``(1) may administer State programs funded with the grant, 
        directly or through grants to or contracts with courts, local 
        public agencies, or nonprofit private entities;
            ``(2) shall not be required to operate such programs on a 
        statewide basis; and
            ``(3) shall monitor, evaluate, and report on such programs 
        in accordance with regulations prescribed by the Secretary.''.

        Subchapter J--Effective Dates and Conforming Amendments

SEC. 2391. EFFECTIVE DATES AND CONFORMING AMENDMENTS.

    (a) In General.--Except as otherwise specifically provided (but 
subject to subsections (b) and (c))--
            (1) the provisions of this chapter requiring the enactment 
        or amendment of State laws under section 466 of the Social 
        Security Act, or revision of State plans under section 454 of 
        such Act, shall be effective with respect to periods beginning 
        on and after October 1, 1996; and
            (2) all other provisions of this chapter shall become 
        effective upon the date of the enactment of this Act.
    (b) Grace Period for State Law Changes.--The provisions of this 
chapter shall become effective with respect to a State on the later 
of--
            (1) the date specified in this chapter, or
            (2) the effective date of laws enacted by the legislature 
        of such State implementing such provisions,
but in no event later than the 1st day of the 1st calendar quarter 
beginning after the close of the 1st regular session of the State 
legislature that begins after the date of the enactment of this Act. 
For purposes of the previous sentence, in the case of a State that has 
a 2-year legislative session, each year of such session shall be deemed 
to be a separate regular session of the State legislature.
    (c) Grace Period for State Constitutional Amendment.--A State shall 
not be found out of compliance with any requirement enacted by this 
chapter if the State is unable to so comply without amending the State 
constitution until the earlier of--
            (1) 1 year after the effective date of the necessary State 
        constitutional amendment; or
            (2) 5 years after the date of the enactment of this Act.
    (d) Conforming Amendments.--
            (1) The following provisions are amended by striking 
        ``absent'' each place it appears and inserting 
        ``noncustodial'':
                    (A) Section 451 (42 U.S.C. 651).
                    (B) Subsections (a)(1), (a)(8), (a)(10)(E), 
                (a)(10)(F), (f), and (h) of section 452 (42 U.S.C. 
                652).
                    (C) Section 453(f) (42 U.S.C. 653(f)).
                    (D) Paragraphs (8), (13), and (21)(A) of section 
                454 (42 U.S.C. 654).
                    (E) Section 455(e)(1) (42 U.S.C. 655(e)(1)).
                    (F) Section 458(a) (42 U.S.C. 658(a)).
                    (G) Subsections (a), (b), and (c) of section 463 
                (42 U.S.C. 663).
                    (H) Subsections (a)(3)(A), (a)(3)(C), (a)(6), and 
                (a)(8)(B)(ii), the last sentence of subsection (a), and 
                subsections (b)(1), (b)(3)(B), (b)(3)(B)(i), 
                (b)(6)(A)(i), (b)(8), (b)(9), and (e) of section 466 
                (42 U.S.C. 666).
            (2) The following provisions are amended by striking ``an 
        absent'' each place it appears and inserting ``a 
        noncustodial'':
                    (A) Paragraphs (2) and (3) of section 453(c) (42 
                U.S.C. 653(c)).
                    (B) Subparagraphs (B) and (C) of section 454(9) (42 
                U.S.C. 654(9)).
                    (C) Section 456(a)(3) (42 U.S.C. 656(a)(3)).
                    (D) Subsections (a)(3)(A), (a)(6), (a)(8)(B)(i), 
                (b)(3)(A), and (b)(3)(B) of section 466 (42 U.S.C. 
                666).
                    (E) Paragraphs (2) and (4) of section 469(b) (42 
                U.S.C. 669(b)).

     CHAPTER 4--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

SEC. 2400. STATEMENTS OF NATIONAL POLICY CONCERNING WELFARE AND 
              IMMIGRATION.

    The Congress makes the following statements concerning national 
policy with respect to welfare and immigration:
            (1) Self-sufficiency has been a basic principle of United 
        States immigration law since this country's earliest 
        immigration statutes.
            (2) It continues to be the immigration policy of the United 
        States that--
                    (A) aliens within the Nation's borders not depend 
                on public resources to meet their needs, but rather 
                rely on their own capabilities and the resources of 
                their families, their sponsors, and private 
                organizations, and
                    (B) the availability of public benefits not 
                constitute an incentive for immigration to the United 
                States.
            (3) Despite the principle of self-sufficiency, aliens have 
        been applying for and receiving public benefits from Federal, 
        State, and local governments at increasing rates.
            (4) Current eligibility rules for public assistance and 
        unenforceable financial support agreements have proved wholly 
        incapable of assuring that individual aliens not burden the 
        public benefits system.
            (5) It is a compelling government interest to enact new 
        rules for eligibility and sponsorship agreements in order to 
        assure that aliens be self-reliant in accordance with national 
        immigration policy.
            (6) It is a compelling government interest to remove the 
        incentive for illegal immigration provided by the availability 
        of public benefits.
            (7) With respect to the State authority to make 
        determinations concerning the eligibility of qualified aliens 
        for public benefits in this chapter, a State that chooses to 
        follow the Federal classification in determining the 
        eligibility of such aliens for public assistance shall be 
        considered to have chosen the least restrictive means available 
        for achieving the compelling governmental interest of assuring 
        that aliens be self-reliant in accordance with national 
        immigration policy.

             Subchapter A--Eligibility for Federal Benefits

SEC. 2401. ALIENS WHO ARE NOT QUALIFIED ALIENS INELIGIBLE FOR FEDERAL 
              PUBLIC BENEFITS.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsection (b), an alien who is not a qualified 
alien (as defined in section 2431) is not eligible for any Federal 
public benefit (as defined in subsection (c)).
    (b) Exceptions.--
            (1) Subsection (a) shall not apply with respect to the 
        following Federal public benefits:
                    (A) Emergency medical services under title XV or 
                XIX of the Social Security Act.
                    (B) Short-term, non-cash, in-kind emergency 
                disaster relief.
                    (C)(i) Public health assistance for immunizations.
                    (ii) Public health assistance for testing and 
                treatment of a communicable disease if the Secretary of 
                Health and Human Services determines that it is 
                necessary to prevent the spread of such disease.
                    (D) Programs, services, or assistance (such as soup 
                kitchens, crisis counseling and intervention, and 
                short-term shelter) specified by the Attorney General, 
                in the Attorney General's sole and unreviewable 
                discretion after consultation with appropriate Federal 
                agencies and departments, which (i) deliver in-kind 
                services at the community level, including through 
                public or private nonprofit agencies; (ii) do not 
                condition the provision of assistance, the amount of 
                assistance provided, or the cost of assistance provided 
                on the individual recipient's income or resources; and 
                (iii) are necessary for the protection of life or 
                safety.
                    (E) Programs for housing or community development 
                assistance or financial assistance administered by the 
                Secretary of Housing and Urban Development, any program 
                under title V of the Housing Act of 1949, or any 
                assistance under section 306C of the Consolidated Farm 
                and Rural Development Act, to the extent that the alien 
                is receiving such a benefit on the date of the 
                enactment of this Act.
            (2) Subsection (a) shall not apply to any benefit payable 
        under title II of the Social Security Act to an alien who is 
        lawfully present in the United States as determined by the 
        Attorney General, to any benefit if nonpayment of such benefit 
        would contravene an international agreement described in 
        section 233 of the Social Security Act, to any benefit if 
        nonpayment would be contrary to section 202(t) of the Social 
        Security Act, or to any benefit payable under title II of the 
        Social Security Act to which entitlement is based on an 
        application filed in or before the month in which this Act 
        becomes law.
    (c) Federal Public Benefit Defined.--
            (1) Except as provided in paragraph (2), for purposes of 
        this chapter the term ``Federal public benefit'' means--
                    (A) any grant, contract, loan, professional 
                license, or commercial license provided by an agency of 
                the United States or by appropriated funds of the 
                United States; and
                    (B) any retirement, welfare, health, disability, 
                public or assisted housing, postsecondary education, 
                food assistance, unemployment benefit, or any other 
                similar benefit for which payments or assistance are 
                provided to an individual, household, or family 
                eligibility unit by an agency of the United States or 
                by appropriated funds of the United States.
            (2) Such term shall not apply--
                    (A) to any contract, professional license, or 
                commercial license for a nonimmigrant whose visa for 
                entry is related to such employment in the United 
                States; or
                    (B) with respect to benefits for an alien who as a 
                work authorized nonimmigrant or as an alien lawfully 
                admitted for permanent residence under the Immigration 
                and Nationality Act qualified for such benefits and for 
                whom the United States under reciprocal treaty 
                agreements is required to pay benefits, as determined 
                by the Attorney General, after consultation with the 
                Secretary of State.

SEC. 2402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN FEDERAL 
              PROGRAMS.

    (a) Limited Eligibility for Specified Federal Programs.--
            (1) In general.--Notwithstanding any other provision of law 
        and except as provided in paragraph (2), an alien who is a 
        qualified alien (as defined in section 2431) is not eligible 
        for any specified Federal program (as defined in paragraph 
        (3)).
            (2) Exceptions.--
                    (A) Time-limited exception for refugees and 
                asylees.--Paragraph (1) shall not apply to an alien 
                until 5 years after the date--
                            (i) an alien is admitted to the United 
                        States as a refugee under section 207 of the 
                        Immigration and Nationality Act;
                            (ii) an alien is granted asylum under 
                        section 208 of such Act; or
                            (iii) an alien's deportation is withheld 
                        under section 243(h) of such Act.
                    (B) Certain permanent resident aliens.--Paragraph 
                (1) shall not apply to an alien who--
                            (i) is lawfully admitted to the United 
                        States for permanent residence under the 
                        Immigration and Nationality Act; and
                            (ii)(I) has worked 40 qualifying quarters 
                        of coverage as defined under title II of the 
                        Social Security Act or can be credited with 
                        such qualifying quarters as provided under 
                        section 435, and (II) did not receive any 
                        Federal means-tested public benefit (as defined 
                        in section 2403(c)) during any such quarter.
                    (C) Veteran and active duty exception.--Paragraph 
                (1) shall not apply to an alien who is lawfully 
                residing in any State and is--
                            (i) a veteran (as defined in section 101 of 
                        title 38, United States Code) with a discharge 
                        characterized as an honorable discharge and not 
                        on account of alienage,
                            (ii) on active duty (other than active duty 
                        for training) in the Armed Forces of the United 
                        States, or
                            (iii) the spouse or unmarried dependent 
                        child of an individual described in clause (i) 
                        or (ii).
                    (D) Transition for aliens currently receiving 
                benefits.--
                            (i) SSI.--
                                    (I) In general.--With respect to 
                                the specified Federal program described 
                                in paragraph (3)(A), during the period 
                                beginning on the date of the enactment 
                                of this Act and ending on the date 
                                which is 1 year after such date of 
                                enactment, the Commissioner of Social 
                                Security shall redetermine the 
                                eligibility of any individual who is 
                                receiving benefits under such program 
                                as of the date of the enactment of this 
                                Act and whose eligibility for such 
                                benefits may terminate by reason of the 
                                provisions of this subsection.
                                    (II) Redetermination criteria.--
                                With respect to any redetermination 
                                under subclause (I), the Commissioner 
                                of Social Security shall apply the 
                                eligibility criteria for new applicants 
                                for benefits under such program.
                                    (III) Grandfather provision.--The 
                                provisions of this subsection and the 
                                redetermination under subclause (I), 
                                shall only apply with respect to the 
                                benefits of an individual described in 
                                subclause (I) for months beginning on 
                                or after the date of the 
                                redetermination with respect to such 
                                individual.
                                    (IV) Notice.--Not later than 
                                January 1, 1997, the Commissioner of 
                                Social Security shall notify an 
                                individual described in subclause (I) 
                                of the provisions of this clause.
                            (ii) Food stamps.--
                                    (I) In general.--With respect to 
                                the specified Federal program described 
                                in paragraph (3)(B), during the period 
                                beginning on the date of enactment of 
                                this Act and ending on the date which 
                                is 1 year after the date of enactment, 
                                the State agency shall, at the time of 
                                the recertification, recertify the 
                                eligibility of any individual who is 
                                receiving benefits under such program 
                                as of the date of enactment of this Act 
                                and whose eligibility for such benefits 
                                may terminate by reason of the 
                                provisions of this subsection.
                                    (II) Recertification criteria.--
                                With respect to any recertification 
                                under subclause (I), the State agency 
                                shall apply the eligibility criteria 
                                for applicants for benefits under such 
                                program.
                                    (III) Grandfather provision.--The 
                                provisions of this subsection and the 
                                recertification under subclause (I) 
                                shall only apply with respect to the 
                                eligibility of an alien for a program 
                                for months beginning on or after the 
                                date of recertification, if on the date 
                                of enactment of this Act the alien is 
                                lawfully residing in any State and is 
                                receiving benefits under such program 
                                on such date of enactment.
            (3) Specified federal program defined.--For purposes of 
        this chapter, the term ``specified Federal program'' means any 
        of the following:
                    (A) SSI.--The supplemental security income program 
                under title XVI of the Social Security Act, including 
                supplementary payments pursuant to an agreement for 
                Federal administration under section 1616(a) of the 
                Social Security Act and payments pursuant to an 
                agreement entered into under section 212(b) of Public 
                Law 93-66.
                    (B) Food stamps.--The food stamp program as defined 
                in section 3(h) of the Food Stamp Act of 1977.
    (b) Limited Eligibility for Designated Federal Programs.--
            (1) In general.--Notwithstanding any other provision of law 
        and except as provided in section 2403 and paragraph (2), a 
        State is authorized to determine the eligibility of an alien 
        who is a qualified alien (as defined in section 2431) for any 
        designated Federal program (as defined in paragraph (3)).
            (2) Exceptions.--Qualified aliens under this paragraph 
        shall be eligible for any designated Federal program.
                    (A) Time-limited exception for refugees and 
                asylees.--
                            (i) An alien who is admitted to the United 
                        States as a refugee under section 207 of the 
                        Immigration and Nationality Act until 5 years 
                        after the date of an alien's entry into the 
                        United States.
                            (ii) An alien who is granted asylum under 
                        section 208 of such Act until 5 years after the 
                        date of such grant of asylum.
                            (iii) An alien whose deportation is being 
                        withheld under section 243(h) of such Act until 
                        5 years after such withholding.
                    (B) Certain permanent resident aliens.--An alien 
                who--
                            (i) is lawfully admitted to the United 
                        States for permanent residence under the 
                        Immigration and Nationality Act; and
                            (ii)(I) has worked 40 qualifying quarters 
                        of coverage as defined under title II of the 
                        Social Security Act or can be credited with 
                        such qualifying quarters as provided under 
                        section 2435, and (II) did not receive any 
                        Federal means-tested public benefit (as defined 
                        in section 2403(c)) during any such quarter.
                    (C) Veteran and active duty exception.--An alien 
                who is lawfully residing in any State and is--
                            (i) a veteran (as defined in section 101 of 
                        title 38, United States Code) with a discharge 
                        characterized as an honorable discharge and not 
                        on account of alienage,
                            (ii) on active duty (other than active duty 
                        for training) in the Armed Forces of the United 
                        States, or
                            (iii) the spouse or unmarried dependent 
                        child of an individual described in clause (i) 
                        or (ii).
                    (D) Transition for those currently receiving 
                benefits.--An alien who on the date of the enactment of 
                this Act is lawfully residing in any State and is 
                receiving benefits under such program on the date of 
                the enactment of this Act shall continue to be eligible 
                to receive such benefits until January 1, 1997.
            (3) Designated federal program defined.--For purposes of 
        this chapter, the term ``designated Federal program'' means any 
        of the following:
                    (A) Temporary assistance for needy families.--The 
                program of block grants to States for temporary 
                assistance for needy families under part A of title IV 
                of the Social Security Act.
                    (B) Social services block grant.--The program of 
                block grants to States for social services under title 
                XX of the Social Security Act.
                    (C) Medicaid.--The program of medical assistance 
                under title XV and XIX of the Social Security Act.

SEC. 2403. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR 
              FEDERAL MEANS-TESTED PUBLIC BENEFIT.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsection (b), an alien who is a qualified alien 
(as defined in section 2431) and who enters the United States on or 
after the date of the enactment of this Act is not eligible for any 
Federal means-tested public benefit (as defined in subsection (c)) for 
a period of five years beginning on the date of the alien's entry into 
the United States with a status within the meaning of the term 
``qualified alien''.
    (b) Exceptions.--The limitation under subsection (a) shall not 
apply to the following aliens:
            (1) Exception for refugees and asylees.--
                    (A) An alien who is admitted to the United States 
                as a refugee under section 207 of the Immigration and 
                Nationality Act.
                    (B) An alien who is granted asylum under section 
                208 of such Act.
                    (C) An alien whose deportation is being withheld 
                under section 243(h) of such Act.
            (2) Veteran and active duty exception.--An alien who is 
        lawfully residing in any State and is--
                    (A) a veteran (as defined in section 101 of title 
                38, United States Code) with a discharge characterized 
                as an honorable discharge and not on account of 
                alienage,
                    (B) on active duty (other than active duty for 
                training) in the Armed Forces of the United States, or
                    (C) the spouse or unmarried dependent child of an 
                individual described in subparagraph (A) or (B).
    (c) Federal Means-tested Public Benefit Defined.--Such term does 
not include the following:
            (1) Emergency medical services under title XV or XIX of the 
        Social Security Act.
            (2) Short-term, non-cash, in-kind emergency disaster 
        relief.
            (3) Assistance or benefits under the National School Lunch 
        Act.
            (4) Assistance or benefits under the Child Nutrition Act of 
        1966.
            (5)(A) Public health assistance for immunizations.
            (B) Public health assistance for testing and treatment of a 
        communicable disease if the Secretary of Health and Human 
        Services determines that it is necessary to prevent the spread 
        of such disease.
            (6) Payments for foster care and adoption assistance under 
        part E of title IV of the Social Security Act for a child who 
        would, in the absence of subsection (a), be eligible to have 
        such payments made on the child's behalf under such part, but 
        only if the foster or adoptive parent or parents of such child 
        are not described under subsection (a).
            (7) Programs, services, or assistance (such as soup 
        kitchens, crisis counseling and intervention, and short-term 
        shelter) specified by the Attorney General, in the Attorney 
        General's sole and unreviewable discretion after consultation 
        with appropriate Federal agencies and departments, which (i) 
        deliver in-kind services at the community level, including 
        through public or private nonprofit agencies; (ii) do not 
        condition the provision of assistance, the amount of assistance 
        provided, or the cost of assistance provided on the individual 
        recipient's income or resources; and (iii) are necessary for 
        the protection of life or safety.
            (8) Programs of student assistance under titles IV, V, IX, 
        and X of the Higher Education Act of 1965, and titles III, VII, 
        and VIII of the Public Health Service Act.
            (9) Means-tested programs under the Elementary and 
        Secondary Education Act of 1965.

SEC. 2404. NOTIFICATION AND INFORMATION REPORTING.

    (a) Notification.--Each Federal agency that administers a program 
to which section 2401, 2402, or 2403 applies shall, directly or through 
the States, post information and provide general notification to the 
public and to program recipients of the changes regarding eligibility 
for any such program pursuant to this subchapter.
    (b) Information Reporting Under Title IV of the Social Security 
Act.--Part A of title IV of the Social Security Act, as amended by 
section 2103(a) of this Act, is amended by inserting the following new 
section after section 411:

``SEC. 411A. STATE REQUIRED TO PROVIDE CERTAIN INFORMATION.

    ``Each State to which a grant is made under section 403 shall, at 
least 4 times annually and upon request of the Immigration and 
Naturalization Service, furnish the Immigration and Naturalization 
Service with the name and address of, and other identifying information 
on, any individual who the State knows is unlawfully in the United 
States.''.
    (c) SSI.--Section 1631(e) of such Act (42 U.S.C. 1383(e)) is 
amended--
            (1) by redesignating the paragraphs (6) and (7) inserted by 
        sections 206(d)(2) and 206(f)(1) of the Social Security 
        Independence and Programs Improvement Act of 1994 (Public Law 
        103-296; 108 Stat. 1514, 1515) as paragraphs (7) and (8), 
        respectively; and
            (2) by adding at the end the following new paragraph:
    ``(9) Notwithstanding any other provision of law, the Commissioner 
shall, at least 4 times annually and upon request of the Immigration 
and Naturalization Service (hereafter in this paragraph referred to as 
the `Service'), furnish the Service with the name and address of, and 
other identifying information on, any individual who the Commissioner 
knows is unlawfully in the United States, and shall ensure that each 
agreement entered into under section 1616(a) with a State provides that 
the State shall furnish such information at such times with respect to 
any individual who the State knows is unlawfully in the United 
States.''.
    (d) Information Reporting for Housing Programs.--Title I of the 
United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended 
by adding at the end the following new section:

``SEC. 27. PROVISION OF INFORMATION TO LAW ENFORCEMENT AND OTHER 
              AGENCIES.

    ``Notwithstanding any other provision of law, the Secretary shall, 
at least 4 times annually and upon request of the Immigration and 
Naturalization Service (hereafter in this section referred to as the 
`Service'), furnish the Service with the name and address of, and other 
identifying information on, any individual who the Secretary knows is 
unlawfully in the United States, and shall ensure that each contract 
for assistance entered into under section 6 or 8 of this Act with a 
public housing agency provides that the public housing agency shall 
furnish such information at such times with respect to any individual 
who the public housing agency knows is unlawfully in the United 
States.''.

 Subchapter B--Eligibility for State and Local Public Benefits Programs

SEC. 2411. ALIENS WHO ARE NOT QUALIFIED ALIENS OR NONIMMIGRANTS 
              INELIGIBLE FOR STATE AND LOCAL PUBLIC BENEFITS.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsections (b) and (d), an alien who is not--
            (1) a qualified alien (as defined in section 2431),
            (2) a nonimmigrant under the Immigration and Nationality 
        Act, or
            (3) an alien who is paroled into the United States under 
        section 212(d)(5) of such Act for less than one year,
is not eligible for any State or local public benefit (as defined in 
subsection (c)).
    (b) Exceptions.--Subsection (a) shall not apply with respect to the 
following State or local public benefits:
            (1) Emergency medical services under title XV or XIX of the 
        Social Security Act.
            (2) Short-term, non-cash, in-kind emergency disaster 
        relief.
            (3)(A) Public health assistance for immunizations.
            (B) Public health assistance for testing and treatment of a 
        communicable disease if the Secretary of Health and Human 
        Services determines that it is necessary to prevent the spread 
        of such disease.
            (4) Programs, services, or assistance (such as soup 
        kitchens, crisis counseling and intervention, and short-term 
        shelter) specified by the Attorney General, in the Attorney 
        General's sole and unreviewable discretion after consultation 
        with appropriate Federal agencies and departments, which (A) 
        deliver in-kind services at the community level, including 
        through public or private nonprofit agencies; (B) do not 
        condition the provision of assistance, the amount of assistance 
        provided, or the cost of assistance provided on the individual 
        recipient's income or resources; and (C) are necessary for the 
        protection of life or safety.
    (c) State or Local Public Benefit Defined.--
            (1) Except as provided in paragraph (2), for purposes of 
        this subchapter the term ``State or local public benefit'' 
        means--
                    (A) any grant, contract, loan, professional 
                license, or commercial license provided by an agency of 
                a State or local government or by appropriated funds of 
                a State or local government; and
                    (B) any retirement, welfare, health, disability, 
                public or assisted housing, postsecondary education, 
                food assistance, unemployment benefit, or any other 
                similar benefit for which payments or assistance are 
                provided to an individual, household, or family 
                eligibility unit by an agency of a State or local 
                government or by appropriated funds of a State or local 
                government.
            (2) Such term shall not apply--
                    (A) to any contract, professional license, or 
                commercial license for a nonimmigrant whose visa for 
                entry is related to such employment in the United 
                States; or
                    (B) with respect to benefits for an alien who as a 
                work authorized nonimmigrant or as an alien lawfully 
                admitted for permanent residence under the Immigration 
                and Nationality Act qualified for such benefits and for 
                whom the United States under reciprocal treaty 
                agreements is required to pay benefits, as determined 
                by the Secretary of State, after consultation with the 
                Attorney General.
    (d) State Authority To Provide for Eligibility of Illegal Aliens 
for State and Local Public Benefits.--A State may provide that an alien 
who is not lawfully present in the United States is eligible for any 
State or local public benefit for which such alien would otherwise be 
ineligible under subsection (a) only through the enactment of a State 
law after the date of the enactment of this Act which affirmatively 
provides for such eligibility.

SEC. 2412. STATE AUTHORITY TO LIMIT ELIGIBILITY OF QUALIFIED ALIENS FOR 
              STATE PUBLIC BENEFITS.

    (a) In General.--Notwithstanding any other provision of law and 
except as provided in subsection (b), a State is authorized to 
determine the eligibility for any State public benefits (as defined in 
subsection (c) of an alien who is a qualified alien (as defined in 
section 2431), a nonimmigrant under the Immigration and Nationality 
Act, or an alien who is paroled into the United States under section 
212(d)(5) of such Act for less than one year.
    (b) Exceptions.--Qualified aliens under this subsection shall be 
eligible for any State public benefits.
            (1) Time-limited exception for refugees and asylees.--
                    (A) An alien who is admitted to the United States 
                as a refugee under section 207 of the Immigration and 
                Nationality Act until 5 years after the date of an 
                alien's entry into the United States.
                    (B) An alien who is granted asylum under section 
                208 of such Act until 5 years after the date of such 
                grant of asylum.
                    (C) An alien whose deportation is being withheld 
                under section 243(h) of such Act until 5 years after 
                such withholding.
            (2) Certain permanent resident aliens.--An alien who--
                    (A) is lawfully admitted to the United States for 
                permanent residence under the Immigration and 
                Nationality Act; and
                    (B)(i) has worked 40 qualifying quarters of 
                coverage as defined under title II of the Social 
                Security Act or can be credited with such qualifying 
                quarters as provided under section 2435, and (ii) did 
                not receive any Federal means-tested public benefit (as 
                defined in section 2403(c)) during any such quarter.
            (3) Veteran and active duty exception.--An alien who is 
        lawfully residing in any State and is--
                    (A) a veteran (as defined in section 101 of title 
                38, United States Code) with a discharge characterized 
                as an honorable discharge and not on account of 
                alienage,
                    (B) on active duty (other than active duty for 
                training) in the Armed Forces of the United States, or
                    (C) the spouse or unmarried dependent child of an 
                individual described in subparagraph (A) or (B).
            (4) Transition for those currently receiving benefits.--An 
        alien who on the date of the enactment of this Act is lawfully 
        residing in any State and is receiving benefits on the date of 
        the enactment of this Act shall continue to be eligible to 
        receive such benefits until January 1, 1997.

     Subchapter C--Attribution of Income and Affidavits of Support

SEC. 2421. FEDERAL ATTRIBUTION OF SPONSOR'S INCOME AND RESOURCES TO 
              ALIEN.

    (a) In General.--Notwithstanding any other provision of law, in 
determining the eligibility and the amount of benefits of an alien for 
any Federal means-tested public benefits program (as defined in section 
2403(c)), the income and resources of the alien shall be deemed to 
include the following:
            (1) The income and resources of any person who executed an 
        affidavit of support pursuant to section 213A of the 
        Immigration and Nationality Act (as added by section 2423) on 
        behalf of such alien.
            (2) The income and resources of the spouse (if any) of the 
        person.
    (b) Application.--Subsection (a) shall apply with respect to an 
alien until such time as the alien--
            (1) achieves United States citizenship through 
        naturalization pursuant to chapter 2 of title III of the 
        Immigration and Nationality Act; or
            (2)(A) has worked 40 qualifying quarters of coverage as 
        defined under title II of the Social Security Act or can be 
        credited with such qualifying quarters as provided under 
        section 2435, and (B) did not receive any Federal means-tested 
        public benefit (as defined in section 2403(c)) during any such 
        quarter.
    (c) Review of Income and Resources of Alien Upon Reapplication.--
Whenever an alien is required to reapply for benefits under any Federal 
means-tested public benefits program, the applicable agency shall 
review the income and resources attributed to the alien under 
subsection (a).
    (d) Application.--
            (1) If on the date of the enactment of this Act, a Federal 
        means-tested public benefits program attributes a sponsor's 
        income and resources to an alien in determining the alien's 
        eligibility and the amount of benefits for an alien, this 
        section shall apply to any such determination beginning on the 
        day after the date of the enactment of this Act.
            (2) If on the date of the enactment of this Act, a Federal 
        means-tested public benefits program does not attribute a 
        sponsor's income and resources to an alien in determining the 
        alien's eligibility and the amount of benefits for an alien, 
        this section shall apply to any such determination beginning 
        180 days after the date of the enactment of this Act.

SEC. 2422. AUTHORITY FOR STATES TO PROVIDE FOR ATTRIBUTION OF SPONSORS 
              INCOME AND RESOURCES TO THE ALIEN WITH RESPECT TO STATE 
              PROGRAMS.

    (a) Optional Application to State Programs.--Except as provided in 
subsection (b), in determining the eligibility and the amount of 
benefits of an alien for any State public benefits (as defined in 
section 2412(c)), the State or political subdivision that offers the 
benefits is authorized to provide that the income and resources of the 
alien shall be deemed to include--
            (1) the income and resources of any individual who executed 
        an affidavit of support pursuant to section 213A of the 
        Immigration and Nationality Act (as added by section 2423) on 
        behalf of such alien, and
            (2) the income and resources of the spouse (if any) of the 
        individual.
    (b) Exceptions.--Subsection (a) shall not apply with respect to the 
following State public benefits:
            (1) Emergency medical services.
            (2) Short-term, non-cash, in-kind emergency disaster 
        relief.
            (3) Programs comparable to assistance or benefits under the 
        National School Lunch Act.
            (4) Programs comparable to assistance or benefits under the 
        Child Nutrition Act of 1966.
            (5)(A) Public health assistance for immunizations.
            (B) Public health assistance for testing and treatment of a 
        communicable disease if the appropriate chief State health 
        official determines that it is necessary to prevent the spread 
        of such disease.
            (6) Payments for foster care and adoption assistance.
            (7) Programs, services, or assistance (such as soup 
        kitchens, crisis counseling and intervention, and short-term 
        shelter) specified by the Attorney General of a State, after 
        consultation with appropriate agencies and departments, which 
        (A) deliver in-kind services at the community level, including 
        through public or private nonprofit agencies; (B) do not 
        condition the provision of assistance, the amount of assistance 
        provided, or the cost of assistance provided on the individual 
        recipient's income or resources; and (C) are necessary for the 
        protection of life or safety.

SEC. 2423. REQUIREMENTS FOR SPONSOR'S AFFIDAVIT OF SUPPORT.

    (a) In General.--Title II of the Immigration and Nationality Act is 
amended by inserting after section 213 the following new section:

           ``requirements for sponsor's affidavit of support

    ``Sec. 213A. (a) Enforceability.--(1) No affidavit of support may 
be accepted by the Attorney General or by any consular officer to 
establish that an alien is not excludable as a public charge under 
section 212(a)(4) unless such affidavit is executed as a contract--
            ``(A) which is legally enforceable against the sponsor by 
        the sponsored alien, the Federal Government, and by any State 
        (or any political subdivision of such State) which provides any 
        means-tested public benefits program, but not later than 10 
        years after the alien last receives any such benefit;
            ``(B) in which the sponsor agrees to financially support 
        the alien, so that the alien will not become a public charge; 
        and
            ``(C) in which the sponsor agrees to submit to the 
        jurisdiction of any Federal or State court for the purpose of 
        actions brought under subsection (e)(2).
    ``(2) A contract under paragraph (1) shall be enforceable with 
respect to benefits provided to the alien until such time as the alien 
achieves United States citizenship through naturalization pursuant to 
chapter 2 of title III.
    ``(b) Forms.--Not later than 90 days after the date of enactment of 
this section, the Attorney General, in consultation with the Secretary 
of State and the Secretary of Health and Human Services, shall 
formulate an affidavit of support consistent with the provisions of 
this section.
    ``(c) Remedies.--Remedies available to enforce an affidavit of 
support under this section include any or all of the remedies described 
in section 3201, 3203, 3204, or 3205 of title 28, United States Code, 
as well as an order for specific performance and payment of legal fees 
and other costs of collection, and include corresponding remedies 
available under State law. A Federal agency may seek to collect amounts 
owed under this section in accordance with the provisions of subchapter 
II of chapter 37 of title 31, United States Code.
    ``(d) Notification of Change of Address.--
            ``(1) In general.--The sponsor shall notify the Attorney 
        General and the State in which the sponsored alien is currently 
        resident within 30 days of any change of address of the sponsor 
        during the period specified in subsection (a)(2).
            ``(2) Penalty.--Any person subject to the requirement of 
        paragraph (1) who fails to satisfy such requirement shall be 
        subject to a civil penalty of--
                    ``(A) not less than $250 or more than $2,000, or
                    ``(B) if such failure occurs with knowledge that 
                the alien has received any means-tested public benefit, 
                not less than $2,000 or more than $5,000.
    ``(e) Reimbursement of Government Expenses.--(1)(A) Upon 
notification that a sponsored alien has received any benefit under any 
means-tested public benefits program, the appropriate Federal, State, 
or local official shall request reimbursement by the sponsor in the 
amount of such assistance.
    ``(B) The Attorney General, in consultation with the Secretary of 
Health and Human Services, shall prescribe such regulations as may be 
necessary to carry out subparagraph (A).
    ``(2) If within 45 days after requesting reimbursement, the 
appropriate Federal, State, or local agency has not received a response 
from the sponsor indicating a willingness to commence payments, an 
action may be brought against the sponsor pursuant to the affidavit of 
support.
    ``(3) If the sponsor fails to abide by the repayment terms 
established by such agency, the agency may, within 60 days of such 
failure, bring an action against the sponsor pursuant to the affidavit 
of support.
    ``(4) No cause of action may be brought under this subsection later 
than 10 years after the alien last received any benefit under any 
means-tested public benefits program.
    ``(5) If, pursuant to the terms of this subsection, a Federal, 
State, or local agency requests reimbursement from the sponsor in the 
amount of assistance provided, or brings an action against the sponsor 
pursuant to the affidavit of support, the appropriate agency may 
appoint or hire an individual or other person to act on behalf of such 
agency acting under the authority of law for purposes of collecting any 
moneys owed. Nothing in this subsection shall preclude any appropriate 
Federal, State, or local agency from directly requesting reimbursement 
from a sponsor for the amount of assistance provided, or from bringing 
an action against a sponsor pursuant to an affidavit of support.
    ``(f) Definition.--For the purposes of this section the term 
`sponsor' means an individual who--
            ``(1) is a citizen or national of the United States or an 
        alien who is lawfully admitted to the United States for 
        permanent residence;
            ``(2) is 18 years of age or over;
            ``(3) is domiciled in any of the 50 States or the District 
        of Columbia; and
            ``(4) is the person petitioning for the admission of the 
        alien under section 204.
    (b) Clerical Amendment.--The table of contents of such Act is 
amended by inserting after the item relating to section 213 the 
following:

``Sec. 213A. Requirements for sponsor's affidavit of support.''.
    (c) Effective Date.--Subsection (a) of section 213A of the 
Immigration and Nationality Act, as inserted by subsection (a) of this 
section, shall apply to affidavits of support executed on or after a 
date specified by the Attorney General, which date shall be not earlier 
than 60 days (and not later than 90 days) after the date the Attorney 
General formulates the form for such affidavits under subsection (b) of 
such section.
    (d) Benefits Not Subject to Reimbursement.--Requirements for 
reimbursement by a sponsor for benefits provided to a sponsored alien 
pursuant to an affidavit of support under section 213A of the 
Immigration and Nationality Act shall not apply with respect to the 
following:
            (1) Emergency medical services under title XV or XIX of the 
        Social Security Act.
            (2) Short-term, non-cash, in-kind emergency disaster 
        relief.
            (3) Assistance or benefits under the National School Lunch 
        Act.
            (4) Assistance or benefits under the Child Nutrition Act of 
        1966.
            (5)(A) Public health assistance for immunizations.
            (B) Public health assistance for testing and treatment of a 
        communicable disease if the Secretary of Health and Human 
        Services determines that it is necessary to prevent the spread 
        of such disease.
            (6) Payments for foster care and adoption assistance under 
        part E of title IV of the Social Security Act for a child, but 
        only if the foster or adoptive parent or parents of such child 
        are not otherwise ineligible pursuant to section 2403 of this 
        Act.
            (7) Programs, services, or assistance (such as soup 
        kitchens, crisis counseling and intervention, and short-term 
        shelter) specified by the Attorney General, in the Attorney 
        General's sole and unreviewable discretion after consultation 
        with appropriate Federal agencies and departments, which (A) 
        deliver in-kind services at the community level, including 
        through public or private nonprofit agencies; (B) do not 
        condition the provision of assistance, the amount of assistance 
        provided, or the cost of assistance provided on the individual 
        recipient's income or resources; and (C) are necessary for the 
        protection of life or safety.
            (8) Programs of student assistance under titles IV, V, IX, 
        and X of the Higher Education Act of 1965.

                    Subchapter D--General Provisions

SEC. 2431. DEFINITIONS.

    (a) In General.--Except as otherwise provided in this chapter, the 
terms used in this chapter have the same meaning given such terms in 
section 101(a) of the Immigration and Nationality Act.
    (b) Qualified Alien.--For purposes of this chapter, the term 
``qualified alien'' means an alien who, at the time the alien applies 
for, receives, or attempts to receive a Federal public benefit, is--
            (1) an alien who is lawfully admitted for permanent 
        residence under the Immigration and Nationality Act,
            (2) an alien who is granted asylum under section 208 of 
        such Act,
            (3) a refugee who is admitted to the United States under 
        section 207 of such Act,
            (4) an alien who is paroled into the United States under 
        section 212(d)(5) of such Act for a period of at least 1 year,
            (5) an alien whose deportation is being withheld under 
        section 243(h) of such Act, or
            (6) an alien who is granted conditional entry pursuant to 
        section 203(a)(7) of such Act as in effect prior to April 1, 
        1980.

SEC. 2432. VERIFICATION OF ELIGIBILITY FOR FEDERAL PUBLIC BENEFITS.

    (a) In General.--Not later than 18 months after the date of the 
enactment of this Act, the Attorney General of the United States, after 
consultation with the Secretary of Health and Human Services, shall 
promulgate regulations requiring verification that a person applying 
for a Federal public benefit (as defined in section 2401(c)), to which 
the limitation under section 2401 applies, is a qualified alien and is 
eligible to receive such benefit. Such regulations shall, to the extent 
feasible, require that information requested and exchanged be similar 
in form and manner to information requested and exchanged under section 
1137 of the Social Security Act.
    (b) State Compliance.--Not later than 24 months after the date the 
regulations described in subsection (a) are adopted, a State that 
administers a program that provides a Federal public benefit shall have 
in effect a verification system that complies with the regulations.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out the purpose of 
this section.

SEC. 2433. STATUTORY CONSTRUCTION.

    (a) Limitation.--
            (1) Nothing in this chapter may be construed as an 
        entitlement or a determination of an individual's eligibility 
        or fulfillment of the requisite requirements for any Federal, 
        State, or local governmental program, assistance, or benefits. 
        For purposes of this chapter, eligibility relates only to the 
        general issue of eligibility or ineligibility on the basis of 
        alienage.
            (2) Nothing in this chapter may be construed as addressing 
        alien eligibility for a basic public education as determined by 
        the Supreme Court of the United States under Plyler v. Doe (457 
        U.S. 202)(1982).
    (b) Not Applicable to Foreign Assistance.--This chapter does not 
apply to any Federal, State, or local governmental program, assistance, 
or benefits provided to an alien under any program of foreign 
assistance as determined by the Secretary of State in consultation with 
the Attorney General.
    (c) Severability.--If any provision of this chapter or the 
application of such provision to any person or circumstance is held to 
be unconstitutional, the remainder of this chapter and the application 
of the provisions of such to any person or circumstance shall not be 
affected thereby.

SEC. 2434. COMMUNICATION BETWEEN STATE AND LOCAL GOVERNMENT AGENCIES 
              AND THE IMMIGRATION AND NATURALIZATION SERVICE.

    Notwithstanding any other provision of Federal, State, or local 
law, no State or local government entity may be prohibited, or in any 
way restricted, from sending to or receiving from the Immigration and 
Naturalization Service information regarding the immigration status, 
lawful or unlawful, of an alien in the United States.

SEC. 2435. QUALIFYING QUARTERS.

    For purposes of this chapter, in determining the number of 
qualifying quarters of coverage under title II of the Social Security 
Act an alien shall be credited with--
            (1) all of the qualifying quarters of coverage as defined 
        under title II of the Social Security Act worked by a parent of 
        such alien while the alien was under age 18 if the parent did 
        not receive any Federal means-tested public benefit (as defined 
        in section 2403(c)) during any such quarter, and
            (2) all of the qualifying quarters worked by a spouse of 
        such alien during their marriage if the spouse did not receive 
        any Federal means-tested public benefit (as defined in section 
        2403(c)) during any such quarter and the alien remains married 
        to such spouse or such spouse is deceased.

    Subchapter E--Conforming Amendments Relating to Assisted Housing

SEC. 2441. CONFORMING AMENDMENTS RELATING TO ASSISTED HOUSING.

    (a) Limitations on Assistance.--Section 214 of the Housing and 
Community Development Act of 1980 (42 U.S.C. 1436a) is amended--
            (1) by striking ``Secretary of Housing and Urban 
        Development'' each place it appears and inserting ``applicable 
        Secretary'';
            (2) in subsection (b), by inserting after ``National 
        Housing Act,'' the following: ``the direct loan program under 
        section 502 of the Housing Act of 1949 or section 502(c)(5)(D), 
        504, 521(a)(2)(A), or 542 of such Act, subtitle A of title III 
        of the Cranston-Gonzalez National Affordable Housing Act,'';
            (3) in paragraphs (2) through (6) of subsection (d), by 
        striking ``Secretary'' each place it appears and inserting 
        ``applicable Secretary'';
            (4) in subsection (d), in the matter following paragraph 
        (6), by striking ``the term `Secretary''' and inserting ``the 
        term `applicable Secretary'''; and
            (5) by adding at the end the following new subsection:
    ``(h) For purposes of this section, the term `applicable Secretary' 
means--
            ``(1) the Secretary of Housing and Urban Development, with 
        respect to financial assistance administered by such Secretary 
        and financial assistance under subtitle A of title III of the 
        Cranston-Gonzalez National Affordable Housing Act; and
            ``(2) the Secretary of Agriculture, with respect to 
        financial assistance administered by such Secretary.''.
    (b) Conforming Amendments.--Section 501(h) of the Housing Act of 
1949 (42 U.S.C. 1471(h)) is amended--
            (1) by striking ``(1)'';
            (2) by striking ``by the Secretary of Housing and Urban 
        Development''; and
            (3) by striking paragraph (2).

  Subchapter F--Earned Income Credit Denied to Unauthorized Employees

SEC. 2451. EARNED INCOME CREDIT DENIED TO INDIVIDUALS NOT AUTHORIZED TO 
              BE EMPLOYED IN THE UNITED STATES.

    (a) In General.--Section 32(c)(1) of the Internal Revenue Code of 
1986 (relating to individuals eligible to claim the earned income 
credit) is amended by adding at the end the following new subparagraph:
                    ``(F) Identification number requirement.--The term 
                `eligible individual' does not include any individual 
                who does not include on the return of tax for the 
                taxable year--
                            ``(i) such individual's taxpayer 
                        identification number, and
                            ``(ii) if the individual is married (within 
                        the meaning of section 7703), the taxpayer 
                        identification number of such individual's 
                        spouse.''.
    (b) Special Identification Number.--Section 32 of such Code is 
amended by adding at the end the following new subsection:
    ``(l) Identification Numbers.--Solely for purposes of subsections 
(c)(1)(F) and (c)(3)(D), a taxpayer identification number means a 
social security number issued to an individual by the Social Security 
Administration (other than a social security number issued pursuant to 
clause (II) (or that portion of clause (III) that relates to clause 
(II)) of section 205(c)(2)(B)(i) of the Social Security Act).''.
    (c) Extension of Procedures Applicable to Mathematical or Clerical 
Errors.--Section 6213(g)(2) of such Code (relating to the definition of 
mathematical or clerical errors) is amended by striking ``and' at the 
end of subparagraph (D), by striking the period at the end of 
subparagraph (E) and inserting a comma, and by inserting after 
subparagraph (E) the following new subparagraphs:
                    ``(F) an omission of a correct taxpayer 
                identification number required under section 32 
                (relating to the earned income tax credit) to be 
                included on a return, and
                    ``(G) an entry on a return claiming the credit 
                under section 32 with respect to net earnings from 
                self-employment described in section 32(c)(2)(A) to the 
                extent the tax imposed by section 1401 (relating to 
                self-employment tax) on such net earnings has not been 
                paid.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

                  CHAPTER 5--REFORM OF PUBLIC HOUSING

SEC. 2501. FAILURE TO COMPLY WITH OTHER WELFARE AND PUBLIC ASSISTANCE 
              PROGRAMS.

    Title I of the United States Housing Act of 1937 (42 U.S.C. 1437 et 
seq.), as amended by section 2404(d) of this Act, is amended by adding 
at the end the following new section:

``SEC. 28. FAILURE TO COMPLY WITH OTHER WELFARE AND PUBLIC ASSISTANCE 
              PROGRAMS.

    ``(a) In General.--If the benefits of a family are reduced under a 
Federal, State, or local law relating to welfare or a public assistance 
program for the failure of any member of the family to perform an 
action required under the law or program, the family may not, for the 
duration of the reduction, receive any increased assistance under this 
Act as the result of a decrease in the income of the family to the 
extent that the decrease in income is the result of the benefits 
reduction.
    ``(b) Exception.--Subsection (a) shall not apply in any case in 
which the benefits of a family are reduced because the welfare or 
public assistance program to which the Federal, State, or local law 
relates limits the period during which benefits may be provided under 
the program.''.

SEC. 2502. FRAUD UNDER MEANS-TESTED WELFARE AND PUBLIC ASSISTANCE 
              PROGRAMS.

    (a) In General.--If an individual's benefits under a Federal, 
State, or local law relating to a means-tested welfare or a public 
assistance program are reduced because of an act of fraud by the 
individual under the law or program, the individual may not, for the 
duration of the reduction, receive an increased benefit under any other 
means-tested welfare or public assistance program for which Federal 
funds are appropriated as a result of a decrease in the income of the 
individual (determined under the applicable program) attributable to 
such reduction.
    (b) Welfare or Public Assistance Programs for Which Federal Funds 
Are Appropriated.--For purposes of subsection (a), the term ``means-
tested welfare or public assistance program for which Federal funds are 
appropriated'' includes the food stamp program under the Food Stamp Act 
of 1977 (7 U.S.C. 2011 et seq.), any program of public or assisted 
housing under title I of the United States Housing Act of 1937 (42 
U.S.C. 1437 et seq.), and State programs funded under part A of title 
IV of the Social Security Act (42 U.S.C. 601 et seq.).

 CHAPTER 6--TECHNICAL AMENDMENTS RELATING TO CHILD PROTECTION PROGRAMS

SEC. 2601. EXTENSION OF ENHANCED FUNDING FOR IMPLEMENTATION OF 
              STATEWIDE AUTOMATED CHILD WELFARE INFORMATION SYSTEMS.

    Section 474(a)(3)(B) of the Social Security Act (42 U.S.C. 
674(a)(3)(B)) is amended by inserting ``(of, if the quarter is in 
fiscal year 1997, 75 percent)'' after ``50 percent'' each place it 
appears.

SEC. 2602. REDESIGNATION OF SECTION 1123.

    The Social Security Act is amended by redesignating section 1123, 
the second place it appears (42 U.S.C. 1320a-1a), as section 1123A.

SEC. 2603. KINSHIP CARE.

    Section 471(a) of the Social Security Act (42 U.S.C. 671(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (16);
            (2) by striking the period at the end of paragraph (17) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(18) provides that States shall give preference to an 
        adult relative over a non-related caregiver when determining a 
        placement for a child, provided that the relative caregiver 
        meets all relevant State child protection standards.''.

                         CHAPTER 7--CHILD CARE

SEC. 2701. SHORT TITLE AND REFERENCES.

    (a) Short Title.--This chapter may be cited as the ``Child Care and 
Development Block Grant Amendments of 1996''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this chapter an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et 
seq.).

SEC. 2802. GOALS.

    (a) Goals.--Section 658A (42 U.S.C. 9801 note) is amended--
            (1) in the section heading by inserting ``and goals'' after 
        ``title'';
            (2) by inserting ``(a) Short Title.--'' before ``This''; 
        and
            (3) by adding at the end the following:
    ``(b) Goals.--The goals of this subchapter are--
            ``(1) to allow each State maximum flexibility in developing 
        child care programs and policies that best suit the needs of 
        children and parents within such State;
            ``(2) to promote parental choice to empower working parents 
        to make their own decisions on the child care that best suits 
        their family's needs;
            ``(3) to encourage States to provide consumer education 
        information to help parents make informed choices about child 
        care;
            ``(4) to assist States to provide child care to parents 
        trying to achieve independence from public assistance; and
            ``(5) to assist States in implementing the health, safety, 
        licensing, and registration standards established in State 
        regulations.''.

SEC. 2703. AUTHORIZATION OF APPROPRIATIONS AND ENTITLEMENT AUTHORITY.

    (a) In General.--Section 658B (42 U.S.C. 9858) is amended to read 
as follows:

``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this 
subchapter $1,000,000,000 for each of the fiscal years 1996 through 
2002.''.
    (b) Social Security Act.--Part A of title IV of the Social Security 
Act (42 U.S.C. 601 et seq.) is amended by adding at the end the 
following:

``SEC. 418. FUNDING FOR CHILD CARE.

    ``(a) General Child Care Entitlement.--
            ``(1) General entitlement.--Subject to the amount 
        appropriated under paragraph (3), each State shall, for the 
        purpose of providing child care assistance, be entitled to 
        payments under a grant under this subsection for a fiscal year 
        in an amount equal to--
                    ``(A) the sum of the total amount required to be 
                paid to the State under former section 403 for fiscal 
                year 1994 or 1995 (whichever is greater) with respect 
                to amounts expended for child care under section--
                            ``(i) 402(g) of this Act (as such section 
                        was in effect before October 1, 1995); and
                            ``(ii) 402(i) of this Act (as so in 
                        effect); or
                    ``(B) the average of the total amounts required to 
                be paid to the State for fiscal years 1992 through 1994 
                under the sections referred to in subparagraph (A);
        whichever is greater.
            ``(2) Remainder.--
                    ``(A) Grants.--The Secretary shall use any amounts 
                appropriated for a fiscal year under paragraph (3), and 
                remaining after the reservation described in paragraph 
                (4) and after grants are awarded under paragraph (1), 
                to make grants to States under this paragraph.
                    ``(B) Amount.--Subject to subparagraph (C), the 
                amount of a grant awarded to a State for a fiscal year 
                under this paragraph shall be based on the formula used 
                for determining the amount of Federal payments to the 
                State under section 403(n) (as such section was in 
                effect before October 1, 1995).
                    ``(C) Matching requirement.--The Secretary shall 
                pay to each eligible State in a fiscal year an amount, 
                under a grant under subparagraph (A), equal to the 
                Federal medical assistance percentage for such State 
                for fiscal year 1995 (as defined in section 1905(b)) of 
                so much of the expenditures by the State for child care 
                in such year as exceed the State set-aside for such 
                State under paragraph (1)(A) for such year and the 
                amount of State expenditures in fiscal year 1994 (or 
                fiscal year 1995, whichever is greater) that equal the 
                non-Federal share for the programs described in 
                subparagraph (A) of paragraph (1).
                    ``(D) Redistribution.--
                            ``(i) In general.--With respect to any 
                        fiscal year, if the Secretary determines (in 
                        accordance with clause (ii)) that amounts under 
                        any grant awarded to a State under this 
                        paragraph for such fiscal year will not be used 
                        by such State during such fiscal year for 
                        carrying out the purpose for which the grant is 
                        made, the Secretary shall make such amounts 
                        available in the subsequent fiscal year for 
                        carrying out such purpose to 1 or more States 
                        which apply for such funds to the extent the 
                        Secretary determines that such States will be 
                        able to use such additional amounts for 
                        carrying out such purpose. Such available 
                        amounts shall be redistributed to a State 
                        pursuant to section 402(i) (as such section was 
                        in effect before October 1, 1995) by 
                        substituting `the number of children residing 
                        in all States applying for such funds' for `the 
                        number of children residing in the United 
                        States in the second preceding fiscal year'.
                            ``(ii) Time of determination and 
                        distribution.--The determination of the 
                        Secretary under clause (i) for a fiscal year 
                        shall be made not later than the end of the 
                        first quarter of the subsequent fiscal year. 
                        The redistribution of amounts under clause (i) 
                        shall be made as close as practicable to the 
                        date on which such determination is made. Any 
                        amount made available to a State from an 
                        appropriation for a fiscal year in accordance 
                        with this subparagraph shall, for purposes of 
                        this part, be regarded as part of such State's 
                        payment (as determined under this subsection) 
                        for the fiscal year in which the redistribution 
                        is made.
            ``(3) Appropriation.--There are authorized to be 
        appropriated, and there are appropriated, to carry out this 
        section--
                    ``(A) $1,967,000,000 for fiscal year 1997;
                    ``(B) $2,067,000,000 for fiscal year 1998;
                    ``(C) $2,167,000,000 for fiscal year 1999;
                    ``(D) $2,367,000,000 for fiscal year 2000;
                    ``(E) $2,567,000,000 for fiscal year 2001; and
                    ``(F) $2,717,000,000 for fiscal year 2002.
            ``(4) Indian tribes.--The Secretary shall reserve not more 
        than 1 percent of the aggregate amount appropriated to carry 
        out this section in each fiscal year for payments to Indian 
        tribes and tribal organizations.
    ``(b) Use of Funds.--
            ``(1) In general.--Amounts received by a State under this 
        section shall only be used to provide child care assistance. 
        Amounts received by a State under a grant under subsection 
        (a)(1) shall be available for use by the State without fiscal 
        year limitation.
            ``(2) Use for certain populations.--A State shall ensure 
        that not less than 70 percent of the total amount of funds 
        received by the State in a fiscal year under this section are 
        used to provide child care assistance to families who are 
        receiving assistance under a State program under this part, 
        families who are attempting through work activities to 
        transition off of such assistance program, and families who are 
        at risk of becoming dependent on such assistance program.
    ``(c) Application of Child Care and Development Block Grant Act of 
1990.--Notwithstanding any other provision of law, amounts provided to 
a State under this section shall be transferred to the lead agency 
under the Child Care and Development Block Grant Act of 1990, 
integrated by the State into the programs established by the State 
under such Act, and be subject to requirements and limitations of such 
Act.
    ``(d) Definition.--As used in this section, the term `State' means 
each of the 50 States or the District of Columbia.''.

SEC. 2704. LEAD AGENCY.

    Section 658D(b) (42 U.S.C. 9858b(b)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by striking ``State'' the 
                first place that such appears and inserting 
                ``governmental or nongovernmental''; and
                    (B) in subparagraph (C), by inserting ``with 
                sufficient time and Statewide distribution of the 
                notice of such hearing,'' after ``hearing in the 
                State''; and
            (2) in paragraph (2), by striking the second sentence.

SEC. 2705. APPLICATION AND PLAN.

    Section 658E (42 U.S.C. 9858c) is amended--
            (1) in subsection (b)--
                    (A) by striking ``implemented--'' and all that 
                follows through ``(2)'' and inserting ``implemented''; 
                and
                    (B) by striking ``for subsequent State plans'';
            (2) in subsection (c)--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i) by striking ``, 
                                other than through assistance provided 
                                under paragraph (3)(C),''; and
                                    (II) by striking ``except'' and all 
                                that follows through ``1992'', and 
                                inserting ``and provide a detailed 
                                description of the procedures the State 
                                will implement to carry out the 
                                requirements of this subparagraph'';
                            (ii) in subparagraph (B)--
                                    (I) by striking ``Provide 
                                assurances'' and inserting ``Certify''; 
                                and
                                    (II) by inserting before the period 
                                at the end ``and provide a detailed 
                                description of such procedures'';
                            (iii) in subparagraph (C)--
                                    (I) by striking ``Provide 
                                assurances'' and inserting ``Certify''; 
                                and
                                    (II) by inserting before the period 
                                at the end ``and provide a detailed 
                                description of how such record is 
                                maintained and is made available'';
                            (iv) by amending subparagraph (D) to read 
                        as follows:
                    ``(D) Consumer education information.--Certify that 
                the State will collect and disseminate to parents of 
                eligible children and the general public, consumer 
                education information that will promote informed child 
                care choices.'';
                            (v) in subparagraph (E), to read as 
                        follows:
                    ``(E) Compliance with state licensing 
                requirements.--
                            ``(i) In general.--Certify that the State 
                        has in effect licensing requirements applicable 
                        to child care services provided within the 
                        State, and provide a detailed description of 
                        such requirements and of how such requirements 
                        are effectively enforced. Nothing in the 
                        preceding sentence shall be construed to 
                        require that licensing requirements be applied 
                        to specific types of providers of child care 
                        services.
                            ``(ii) Indian tribes and tribal 
                        organizations.--In lieu of any licensing and 
                        regulatory requirements applicable under State 
                        and local law, the Secretary, in consultation 
                        with Indian tribes and tribal organizations, 
                        shall develop minimum child care standards 
                        (that appropriately reflect tribal needs and 
                        available resources) that shall be applicable 
                        to Indian tribes and tribal organizations 
                        receiving assistance under this subchapter.''; 
                        and
                            (vi) by striking subparagraphs (H), (I), 
                        and (J) and inserting the following:
                    ``(G) Meeting the needs of certain populations.--
                Demonstrate the manner in which the State will meet the 
                specific child care needs of families who are receiving 
                assistance under a State program under part A of title 
                IV of the Social Security Act, families who are 
                attempting through work activities to transition off of 
                such assistance program, and families that are at risk 
                of becoming dependent on such assistance program.'';
                    (B) in paragraph (3)--
                            (i) in subparagraph (A), by striking ``(B) 
                        and (C)'' and inserting ``(B) through (D)'';
                            (ii) in subparagraph (B)--
                                    (I) by striking ``.--Subject to the 
                                reservation contained in subparagraph 
                                (C), the'' and inserting ``and related 
                                activities.--The'';
                                    (II) in clause (i) by striking ``; 
                                and'' at the end and inserting a 
                                period;
                                    (III) by striking ``for--'' and all 
                                that follows through ``section 
                                658E(c)(2)(A)'' and inserting ``for 
                                child care services on sliding fee 
                                scale basis, activities that improve 
                                the quality or availability of such 
                                services, and any other activity that 
                                the State deems appropriate to realize 
                                any of the goals specified in 
                                paragraphs (2) through (5) of section 
                                658A(b)''; and
                                    (IV) by striking clause (ii);
                            (iii) by amending subparagraph (C) to read 
                        as follows:
                    ``(C) Limitation on administrative costs.--Not more 
                than 5 percent of the aggregate amount of funds 
                available to the State to carry out this subchapter by 
                a State in each fiscal year may be expended for 
                administrative costs incurred by such State to carry 
                out all of its functions and duties under this 
                subchapter. As used in the preceding sentence, the term 
                `administrative costs' shall not include the costs of 
                providing direct services.''; and
                            (iv) by adding at the end thereof the 
                        following:
                    ``(D) Assistance for certain families.--A State 
                shall ensure that a substantial portion of the amounts 
                available (after the State has complied with the 
                requirement of section 418(b)(2) of the Social Security 
                Act with respect to each of the fiscal years 1997 
                through 2002) to the State to carry out activities 
                under this subchapter in each fiscal year is used to 
                provide assistance to low-income working families other 
                than families described in paragraph (2)(F).''; and
                    (C) in paragraph (4)(A)--
                            (i) by striking ``provide assurances'' and 
                        inserting ``certify'';
                            (ii) in the first sentence by inserting 
                        ``and shall provide a summary of the facts 
                        relied on by the State to determine that such 
                        rates are sufficient to ensure such access'' 
                        before the period; and
                            (iii) by striking the last sentence.

SEC. 2706. LIMITATION ON STATE ALLOTMENTS.

    Section 658F(b) (42 U.S.C. 9858d(b)) is amended--
            (1) in paragraph (1), by striking ``No'' and inserting 
        ``Except as provided for in section 658O(c)(6), no''; and
            (2) in paragraph (2), by striking ``referred to in section 
        658E(c)(2)(F)''.

SEC. 2707. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

    Section 658G (42 U.S.C. 9858e) is amended to read as follows:

``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

    ``A State that receives funds to carry out this subchapter for a 
fiscal year, shall use not less than 4 percent of the amount of such 
funds for activities that are designed to provide comprehensive 
consumer education to parents and the public, activities that increase 
parental choice, and activities designed to improve the quality and 
availability of child care (such as resource and referral services).''.

SEC. 2708. REPEAL OF EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-
              SCHOOL CARE REQUIREMENT.

    Section 658H (42 U.S.C. 9858f) is repealed.

SEC. 2709. ADMINISTRATION AND ENFORCEMENT.

    Section 658I(b) (42 U.S.C. 9858g(b)) is amended--
            (1) in paragraph (1), by striking ``, and shall have'' and 
        all that follows through ``(2)''; and
            (2) in the matter following clause (ii) of paragraph 
        (2)(A), by striking ``finding and that'' and all that follows 
        through the period and inserting ``finding and shall require 
        that the State reimburse the Secretary for any funds that were 
        improperly expended for purposes prohibited or not authorized 
        by this subchapter, that the Secretary deduct from the 
        administrative portion of the State allotment for the following 
        fiscal year an amount that is less than or equal to any 
        improperly expended funds, or a combination of such options.''.

SEC. 2710. PAYMENTS.

    Section 658J(c) (42 U.S.C. 9858h(c)) is amended by striking 
``expended'' and inserting ``obligated''.

SEC. 2711. ANNUAL REPORT AND AUDITS.

    Section 658K (42 U.S.C. 9858i) is amended--
            (1) in the section heading by striking ``annual report'' 
        and inserting ``reports'';
            (2) in subsection (a), to read as follows:
    ``(a) Reports.--
            ``(1) Collection of information by states.--
                    ``(A) In general.--A State that receives funds to 
                carry out this subchapter shall collect the information 
                described in subparagraph (B) on a monthly basis.
                    ``(B) Required information.--The information 
                required under this subparagraph shall include, with 
                respect to a family unit receiving assistance under 
                this subchapter information concerning--
                            ``(i) family income;
                            ``(ii) county of residence;
                            ``(iii) the gender, race, and age of 
                        children receiving such assistance;
                            ``(iv) whether the family includes only 1 
                        parent;
                            ``(v) the sources of family income, 
                        including the amount obtained from (and 
                        separately identified)--
                                    ``(I) employment, including self-
                                employment;
                                    ``(II) cash or other assistance 
                                under part A of title IV of the Social 
                                Security Act;
                                    ``(III) housing assistance;
                                    ``(IV) assistance under the Food 
                                Stamp Act of 1977; and
                                    ``(V) other assistance programs;
                            ``(vi) the number of months the family has 
                        received benefits;
                            ``(vii) the type of child care in which the 
                        child was enrolled (such as family child care, 
                        home care, or center-based child care);
                            ``(viii) whether the child care provider 
                        involved was a relative;
                            ``(ix) the cost of child care for such 
                        families; and
                            ``(x) the average hours per week of such 
                        care;
                during the period for which such information is 
                required to be submitted.
                    ``(C) Submission to secretary.--A State described 
                in subparagraph (A) shall, on a quarterly basis, submit 
                the information required to be collected under 
                subparagraph (B) to the Secretary.
                    ``(D) Sampling.--The Secretary may disapprove the 
                information collected by a State under this paragraph 
                if the State uses sampling methods to collect such 
                information.
            ``(2) Biannual reports.--Not later than December 31, 1997, 
        and every 6 months thereafter, a State described in paragraph 
        (1)(A) shall prepare and submit to the Secretary a report that 
        includes aggregate data concerning--
                    ``(A) the number of child care providers that 
                received funding under this subchapter as separately 
                identified based on the types of providers listed in 
                section 658P(5);
                    ``(B) the monthly cost of child care services, and 
                the portion of such cost that is paid for with 
                assistance provided under this subchapter, listed by 
                the type of child care services provided;
                    ``(C) the number of payments made by the State 
                through vouchers, contracts, cash, and disregards under 
                public benefit programs, listed by the type of child 
                care services provided;
                    ``(D) the manner in which consumer education 
                information was provided to parents and the number of 
                parents to whom such information was provided; and
                    ``(E) the total number (without duplication) of 
                children and families served under this subchapter;
        during the period for which such report is required to be 
        submitted.''; and
            (2) in subsection (b)--
                    (A) in paragraph (1) by striking ``a application'' 
                and inserting ``an application'';
                    (B) in paragraph (2) by striking ``any agency 
                administering activities that receive'' and inserting 
                ``the State that receives''; and
                    (C) in paragraph (4) by striking ``entitles'' and 
                inserting ``entitled''.

SEC. 2712. REPORT BY THE SECRETARY.

    Section 658L (42 U.S.C. 9858j) is amended--
            (1) by striking ``1993'' and inserting ``1997'';
            (2) by striking ``annually'' and inserting ``biennially''; 
        and
            (3) by striking ``Education and Labor'' and inserting 
        ``Economic and Educational Opportunities''.

SEC. 2713. ALLOTMENTS.

    Section 658O (42 U.S.C. 9858m) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``Possessions'' and inserting 
                ``possessions'';
                    (B) by inserting ``and'' after ``States,''; and
                    (C) by striking ``, and the Trust Territory of the 
                Pacific Islands'';
            (2) in subsection (c)--
                    (A) in paragraph (5) by striking ``our'' and 
                inserting ``out''; and
                    (B) by adding at the end thereof the following new 
                paragraph:
            ``(6) Construction or renovation of facilities.--
                    ``(A) Request for use of funds.--An Indian tribe or 
                tribal organization may submit to the Secretary a 
                request to use amounts provided under this subsection 
                for construction or renovation purposes.
                    ``(B) Determination.--With respect to a request 
                submitted under subparagraph (A), and except as 
                provided in subparagraph (C), upon a determination by 
                the Secretary that adequate facilities are not 
                otherwise available to an Indian tribe or tribal 
                organization to enable such tribe or organization to 
                carry out child care programs in accordance with this 
                subchapter, and that the lack of such facilities will 
                inhibit the operation of such programs in the future, 
                the Secretary may permit the tribe or organization to 
                use assistance provided under this subsection to make 
                payments for the construction or renovation of 
                facilities that will be used to carry out such 
                programs.
                    ``(C) Limitation.--The Secretary may not permit an 
                Indian tribe or tribal organization to use amounts 
                provided under this subsection for construction or 
                renovation if such use will result in a decrease in the 
                level of child care services provided by the tribe or 
                organization as compared to the level of such services 
                provided by the tribe or organization in the fiscal 
                year preceding the year for which the determination 
                under subparagraph (A) is being made.
                    ``(D) Uniform procedures.--The Secretary shall 
                develop and implement uniform procedures for the 
                solicitation and consideration of requests under this 
                paragraph.''; and
            (3) in subsection (e), by adding at the end thereof the 
        following new paragraph:
            ``(4) Indian tribes or tribal organizations.--Any portion 
        of a grant or contract made to an Indian tribe or tribal 
        organization under subsection (c) that the Secretary determines 
        is not being used in a manner consistent with the provision of 
        this subchapter in the period for which the grant or contract 
        is made available, shall be allotted by the Secretary to other 
        tribes or organizations that have submitted applications under 
        subsection (c) in accordance with their respective needs.''.

SEC. 2714. DEFINITIONS.

    Section 658P (42 U.S.C. 9858n) is amended--
            (1) in paragraph (2), in the first sentence by inserting 
        ``or as a deposit for child care services if such a deposit is 
        required of other children being cared for by the provider'' 
        after ``child care services''; and
            (2) by striking paragraph (3);
            (3) in paragraph (4)(B), by striking ``75 percent'' and 
        inserting ``85 percent'';
            (4) in paragraph (5)(B)--
                    (A) by inserting ``great grandchild, sibling (if 
                such provider lives in a separate residence),'' after 
                ``grandchild,'';
                    (B) by striking ``is registered and''; and
                    (C) by striking ``State'' and inserting 
                ``applicable''.
            (5) by striking paragraph (10);
            (6) in paragraph (13)--
                    (A) by inserting ``or'' after ``Samoa,''; and
                    (B) by striking ``, and the Trust Territory of the 
                Pacific Islands'';
            (7) in paragraph (14)--
                    (A) by striking ``The term'' and inserting the 
                following:
                    ``(A) In general.--The term''; and
                    (B) by adding at the end thereof the following new 
                subparagraph:
                    ``(B) Other organizations.--Such term includes a 
                Native Hawaiian Organization, as defined in section 
                4009(4) of the Augustus F. Hawkins-Robert T. Stafford 
                Elementary and Secondary School Improvement Amendments 
                of 1988 (20 U.S.C. 4909(4)) and a private nonprofit 
                organization established for the purpose of serving 
                youth who are Indians or Native Hawaiians.''.

SEC. 2715. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this chapter 
and the amendments made by this chapter shall take effect on October 1, 
1996.
    (b) Exception.--The amendment made by section 2803(a) shall take 
effect on the date of enactment of this Act.

                        CHAPTER 8--MISCELLANEOUS

SEC. 2801. APPROPRIATION BY STATE LEGISLATURES.

    (a) In General.--Any funds received by a State under the provisions 
of law specified in subsection (b) shall be subject to appropriation by 
the State legislature, consistent with the terms and conditions 
required under such provisions of law.
    (b) Provisions of Law.--The provisions of law specified in this 
subsection are the following:
            (1) Part A of title IV of the Social Security Act (relating 
        to block grants for temporary assistance for needy families).
            (2) Section 27 of the Food Stamp Act of 1977 (relating to 
        the optional State food assistance block grant).
            (3) The Child Care and Development Block Grant Act of 1990 
        (relating to block grants for child care).

SEC. 2802. SANCTIONING FOR TESTING POSITIVE FOR CONTROLLED SUBSTANCES.

    Notwithstanding any other provision of law, States shall not be 
prohibited by the Federal Government from testing welfare recipients 
for use of controlled substances nor from sanctioning welfare 
recipients who test positive for use of controlled substances.

SEC. 2803. REDUCTION IN BLOCK GRANTS TO STATES FOR SOCIAL SERVICES.

    (a) In General.--Section 2003(c) of the Social Security Act (42 
U.S.C. 1397b(c)) is amended--
            (1) by striking ``and'' at the end of paragraph (4); and
            (2) by striking paragraph (5) and inserting the following:
            ``(5) $2,800,000,000 for each of the fiscal years 1990 
        through 1995;
            ``(6) $2,381,000,000 for the fiscal year 1996;
            ``(7) $2,240,000,000 for each of the fiscal years 1997 
        through 2002; and
            ``(8) $2,800,000,000 for the fiscal year 2003 and each 
        succeeding fiscal year.''.
    (b) Dedication of Block Grant Share.--Section 2001 of the Social 
Security Act (42 U.S.C. 1397) is amended--
            (1) in the matter preceding paragraph (1), by inserting 
        ``(a)'' before ``For''; and
            (2) by adding at the end the following:
    ``(b) For any fiscal year in which a State receives an allotment 
under section 2003, such State shall dedicate an amount equal to 1 
percent of such allotment to fund programs and services that teach 
minors to avoid out-of-wedlock pregnancies.''.

SEC. 2804. ELIMINATION OF HOUSING ASSISTANCE WITH RESPECT TO FUGITIVE 
              FELONS AND PROBATION AND PAROLE VIOLATORS.

    (a) Eligibility for Assistance.--The United States Housing Act of 
1937 (42 U.S.C. 1437 et seq.) is amended--
            (1) in section 6(l)--
                    (A) in paragraph (5), by striking ``and'' at the 
                end;
                    (B) in paragraph (6), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by inserting immediately after paragraph (6) 
                the following new paragraph:
            ``(7) provide that it shall be cause for immediate 
        termination of the tenancy of a public housing tenant if such 
        tenant--
                    ``(A) is fleeing to avoid prosecution, or custody 
                or confinement after conviction, under the laws of the 
                place from which the individual flees, for a crime, or 
                attempt to commit a crime, which is a felony under the 
                laws of the place from which the individual flees, or 
                which, in the case of the State of New Jersey, is a 
                high misdemeanor under the laws of such State; or
            ``(2) is violating a condition of probation or parole 
        imposed under Federal or State law.''; and
            (2) in section 8(d)(1)(B)--
                    (A) in clause (iii), by striking ``and'' at the 
                end;
                    (B) in clause (iv), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding after clause (iv) the following new 
                clause:
                            ``(v) it shall be cause for termination of 
                        the tenancy of a tenant if such tenant--
                                    ``(I) is fleeing to avoid 
                                prosecution, or custody or confinement 
                                after conviction, under the laws of the 
                                place from which the individual flees, 
                                for a crime, or attempt to commit a 
                                crime, which is a felony under the laws 
                                of the place from which the individual 
                                flees, or which, in the case of the 
                                State of New Jersey, is a high 
                                misdemeanor under the laws of such 
                                State; or
                                    ``(II) is violating a condition of 
                                probation or parole imposed under 
                                Federal or State law;''.
    (b) Provision of Information to Law Enforcement Agencies.--Title I 
of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.), as 
amended by sections 2404(d) and 2601 of this Act, is amended by adding 
at the end the following:

``SEC. 29. EXCHANGE OF INFORMATION WITH LAW ENFORCEMENT AGENCIES.

    ``Notwithstanding any other provision of law, each public housing 
agency that enters into a contract for assistance under section 6 or 8 
of this Act with the Secretary shall furnish any Federal, State, or 
local law enforcement officer, upon the request of the officer, with 
the current address, Social Security number, and photograph (if 
applicable) of any recipient of assistance under this Act, if the 
officer--
            ``(1) furnishes the public housing agency with the name of 
        the recipient; and
            ``(2) notifies the agency that--
                    ``(A) such recipient--
                            ``(i) is fleeing to avoid prosecution, or 
                        custody or confinement after conviction, under 
                        the laws of the place from which the individual 
                        flees, for a crime, or attempt to commit a 
                        crime, which is a felony under the laws of the 
                        place from which the individual flees, or 
                        which, in the case of the State of New Jersey, 
                        is a high misdemeanor under the laws of such 
                        State; or
                            ``(ii) is violating a condition of 
                        probation or parole imposed under Federal or 
                        State law; or
                            ``(iii) has information that is necessary 
                        for the officer to conduct the officer's 
                        official duties;
                    ``(B) the location or apprehension of the recipient 
                is within such officer's official duties; and
                    ``(C) the request is made in the proper exercise of 
                the officer's official duties.''.

SEC. 2805. SENSE OF THE SENATE REGARDING ENTERPRISE ZONES.

    (a) Findings.--The Senate finds that:
            (1) Many of the Nation's urban centers are places with high 
        levels of poverty, high rates of welfare dependency, high crime 
        rates, poor schools, and joblessness;
            (2) Federal tax incentives and regulatory reforms can 
        encourage economic growth, job creation and small business 
        formation in many urban centers;
            (3) Encouraging private sector investment in America's 
        economically distressed urban and rural areas is essential to 
        breaking the cycle of poverty and the related ills of crime, 
        drug abuse, illiteracy, welfare dependency, and unemployment;
            (4) The empowerment zones enacted in 1993 should be 
        enhanced by providing incentives to increase entrepreneurial 
        growth, capital formation, job creation, educational 
        opportunities, and home ownership in the designated communities 
        and zones.
    (b) Sense of the Senate.--Therefore, it is the Sense of the Senate 
that the Congress should adopt enterprise zone legislation in the One 
Hundred Fourth Congress, and that such enterprise zone legislation 
provide the following incentives and provisions:
            (1) Federal tax incentives that expand access to capital, 
        increase the formation and expansion of small businesses, and 
        promote commercial revitalization;
            (2) Regulatory reforms that allow localities to petition 
        Federal agencies, subject to the relevant agencies' approval, 
        for waivers or modifications of regulations to improve job 
        creation, small business formation and expansion, community 
        development, or economic revitalization objectives of the 
        enterprise zones;
            (3) Home ownership incentives and grants to encourage 
        resident management of public housing and home ownership of 
        public housing;
            (4) School reform pilot projects in certain designated 
        enterprise zones to provide low-income parents with new and 
        expanded educational options for their children's elementary 
        and secondary schooling.

SEC. 2806. SENSE OF THE SENATE REGARDING THE INABILITY OF THE NON-
              CUSTODIAL PARENT TO PAY CHILD SUPPORT.

    It is the sense of the Senate that--
            (a) States should diligently continue their efforts to 
        enforce child support payments by the non-custodial parent to 
        the custodial parent, regardless of the employment status or 
        location of the non-custodial parent; and
            (b) States are encouraged to pursue pilot programs in which 
        the parents of a non-adult, non-custodial parent who refuses to 
        or is unable to pay child support must--
                    (1) pay or contribute to the child support owed by 
                the non-custodial parent; or
                    (2) otherwise fulfill all financial obligations and 
                meet all conditions imposed on the non-custodial 
                parent, such as participation in a work program or 
                other related activity.

SEC. 2807. ESTABLISHING NATIONAL GOALS TO PREVENT TEENAGE PREGNANCIES.

    (a) In General.--Not later than January 1, 1997, the Secretary of 
Health and Human Services shall establish and implement a strategy 
for--
            (1) preventing out-of-wedlock teenage pregnancies, and
            (2) assuring that at least 25 percent of the communities in 
        the United States have teenage pregnancy prevention programs in 
        place.
    (b) Report.--Not later than June 30, 1998, and annually thereafter, 
the Secretary shall report to the Congress with respect to the progress 
that has been made in meeting the goals described in paragraphs (1) and 
(2) of subsection (a).

SEC. 2808. SENSE OF THE SENATE REGARDING ENFORCEMENT OF STATUTORY RAPE 
              LAWS.

    (a) Sense of the Senate.--It is the sense of the Senate that States 
and local jurisdictions should aggressively enforce statutory rape 
laws.
    (b) Justice Department Program On Statutory Rape.--Not later than 
January 1, 1997, the Attorney General shall establish and implement a 
program that--
            (1) studies the linkage between statutory rape and teenage 
        pregnancy, particularly by predatory older men committing 
        repeat offensives; and
            (2) educates State and local criminal law enforcement 
        officials on the prevention and prosecution of statutory rape, 
        focusing in particular on the commission of statutory rape by 
        predatory older men committing repeat offensives, and any links 
        to teenage pregnancy.
    (c) Violence Against Women Initiative.--The Attorney General shall 
ensure that the Department of Justice's Violence Against Women 
initiative addresses the issue of statutory rape, particularly the 
commission of statutory rape by predatory older men committing repeat 
offensives.

SEC. 2809. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) 
is amended--
            (1) by striking ``(d) In the event'' and inserting ``(d) 
        Applicability to Service Providers Other Than Certain Financial 
        Institutions.--
            ``(1) In general.--In the event''; and
            (2) by adding at the end the following new paragraph:
            ``(2) State and local government electronic benefit 
        transfer programs.--
                    ``(A) Exemption generally.--The disclosures, 
                protections, responsibilities, and remedies established 
                under this title, and any regulation prescribed or 
                order issued by the Board in accordance with this 
                title, shall not apply to any electronic benefit 
                transfer program established under State or local law 
                or administered by a State or local government.
                    ``(B) Exception for direct deposit into recipient's 
                account.--Subparagraph (A) shall not apply with respect 
                to any electronic funds transfer under an electronic 
                benefit transfer program for deposits directly into a 
                consumer account held by the recipient of the benefit.
                    ``(C) Rule of construction.--No provision of this 
                paragraph may be construed as--
                            ``(i) affecting or altering the protections 
                        otherwise applicable with respect to benefits 
                        established by Federal, State, or local law; or
                            ``(ii) otherwise superseding the 
                        application of any State or local law.
                    ``(D) Electronic benefit transfer program 
                defined.--For purposes of this paragraph, the term 
                `electronic benefit transfer program'--
                            ``(i) means a program under which a 
                        government agency distributes needs-tested 
                        benefits by establishing accounts to be 
                        accessed by recipients electronically, such as 
                        through automated teller machines, or point-of-
                        sale terminals; and
                            ``(ii) does not include employment-related 
                        payments, including salaries and pension, 
                        retirement, or unemployment benefits 
                        established by Federal, State, or local 
                        governments.''.

SEC. 2810. RULES RELATING TO DENIAL OF EARNED INCOME CREDIT ON BASIS OF 
              DISQUALIFIED INCOME.

    (a) Reduction in Disqualified Income Threshold.--
            (1) In general.--Paragraph (1) of section 32(i) of the 
        Internal Revenue Code of 1986 (relating to denial of credit for 
        individuals having excessive investment income) is amended by 
        striking ``$2,350'' and inserting ``$2,200''.
            (2) Adjustment for inflation.--Subsection (j) of section 32 
        of such Code is amended to read as follows:
    ``(j) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 1996, each of the dollar amounts in subsections 
        (b)(2)(A) and (i)(1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 1995' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--
                    ``(A) In general.--If any dollar amount in 
                subsection (b)(2), after being increased under 
                paragraph (1), is not a multiple of $10, such dollar 
                amount shall be rounded to the nearest multiple of $10.
                    ``(B) Disqualified income threshold amount.--If the 
                dollar amount in subsection (i)(1), after being 
                increased under paragraph (1), is not a multiple of 
                $50, such amount shall be rounded to the next lowest 
                multiple of $50.''.
            (3) Conforming amendments.--The table contained in section 
        32(b)(2)(A) of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``$6,000'' and inserting ``$6,330'',
            (2) by striking ``$11,000'' both places it appears and 
        inserting ``$11,610'',
            (3) by striking ``$8,425'' and inserting ``$8,890'',
            (4) by striking ``$4,000'' and inserting ``$4,220'', and
            (5) by striking ``$5,000'' and inserting ``$5,280''.
    (b) Definition of Disqualified Income.--Paragraph (2) of section 
32(i) of such Code (defining disqualified income) is amended by 
striking ``and'' at the end of subparagraph (B), by striking the period 
at the end of subparagraph (C) and inserting a comma, and by adding at 
the end the following new subparagraphs:
                    ``(D) the capital gain net income (as defined in 
                section 1222) of the taxpayer for such taxable year, 
                and
                    ``(E) the excess (if any) of--
                            ``(i) the aggregate income from all passive 
                        activities for the taxable year (determined 
                        without regard to any amount included in earned 
                        income under subsection (c)(2) or described in 
                        a preceding subparagraph), over
                            ``(ii) the aggregate losses from all 
                        passive activities for the taxable year (as so 
                        determined).
        For purposes of subparagraph (E), the term `passive activity' 
        has the meaning given such term by section 469.''.
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 1995.
            (2) Advance payment individuals.--In the case of any 
        individual who on or before June 26, 1996, has in effect an 
        earned income eligibility certificate for the individual's 
        taxable year beginning in 1996, the amendments made by this 
        section shall apply to taxable years beginning after December 
        31, 1996.

SEC. 2811. MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION FOR EARNED 
              INCOME CREDIT.

    (a) In General.--Subsections (a)(2)(B), (c)(1)(C), and (f)(2)(B) of 
section 32 of the Internal Revenue Code of 1986 are each amended by 
striking ``adjusted gross income'' each place it appears and inserting 
``modified adjusted gross income''.
    (b) Modified Adjusted Gross Income Defined.--Section 32(c) of such 
Code (relating to definitions and special rules) is amended by adding 
at the end the following new paragraph:
            ``(5) Modified adjusted gross income.--
                    ``(A) In general.--The term `modified adjusted 
                gross income' means adjusted gross income--
                            ``(i) increased by the sum of the amounts 
                        described in subparagraph (B), and
                            ``(ii) determined without regard to the 
                        amounts described in subparagraph (C).
                    ``(B) Nontaxable income taken into account.--
                Amounts described in this subparagraph are--
                            ``(i) interest received or accrued during 
                        the taxable year which is exempt from tax 
                        imposed by this chapter, and
                            ``(ii) amounts received as a pension or 
                        annuity, and any distributions or payments 
                        received from an individual retirement plan, by 
                        the taxpayer during the taxable year to the 
                        extent not included in gross income.
                Clause (ii) shall not include any amount which is not 
                includible in gross income by reason of section 402(c), 
                403(a)(4), 403(b)(8), 408(d) (3), (4), or (5), or 
                457(e)(10).
                    ``(C) Certain amounts disregarded.--An amount is 
                described in this subparagraph if it is--
                            ``(i) the amount of losses from sales or 
                        exchanges of capital assets in excess of gains 
                        from such sales or exchanges to the extent such 
                        amount does not exceed the amount under section 
                        1211(b)(1),
                            ``(ii) the net loss from estates and 
                        trusts,
                            ``(iii) the excess (if any) of amounts 
                        described in subsection (i)(2)(C)(ii) over the 
                        amounts described in subsection (i)(2)(C)(i) 
                        (relating to nonbusiness rents and royalties), 
                        and
                            ``(iv) the net loss from the carrying on of 
                        trades or businesses, computed separately with 
                        respect to--
                                    ``(I) trades or businesses (other 
                                than farming) conducted as sole 
                                proprietorships,
                                    ``(II) trades or businesses of 
                                farming conducted as sole 
                                proprietorships, and
                                    ``(III) other trades or businesses.
                For purposes of clause (iv), there shall not be taken 
                into account items which are attributable to a trade or 
                business which consists of the performance of services 
                by the taxpayer as an employee.''.
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 1995.
            (2) Advance payment individuals.--In the case of any 
        individual who on or before June 26, 1996, has in effect an 
        earned income eligibility certificate for the individual's 
        taxable year beginning in 1996, the amendments made by this 
        section shall apply to taxable years beginning after December 
        31, 1996.

SEC. 2812. SUSPENSION OF INFLATION ADJUSTMENTS FOR INDIVIDUALS WITH NO 
              QUALIFYING CHILDREN.

    (a) In General.--Subsection (j) of section 32 of the Internal 
Revenue Code of 1986, as amended by section 2911(a)(2) of this Act, is 
amended by adding at the end the following new paragraph:
            ``(3) No adjustment for individuals with no qualifying 
        children.--This subsection shall not apply to each dollar 
        amount contained in subsection (b)(2)(A) with respect to 
        individuals with no qualifying children.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1996.

SEC. 2813. REFUNDABLE CREDIT FOR ADOPTION EXPENSES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. ADOPTION EXPENSES.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for the taxable year the amount of the qualified adoption expenses paid 
or incurred by the taxpayer during such taxable year.
    ``(b) Limitations.--
            ``(1) Dollar limitation.--The aggregate amount of qualified 
        adoption expenses which may be taken into account under 
        subsection (a) with respect to the adoption of a child shall 
        not exceed $5,000.
            ``(2) Income limitation.--The amount allowable as a credit 
        under subsection (a) for any taxable year shall be reduced (but 
        not below zero) by an amount which bears the same ratio to the 
        amount so allowable (determined without regard to this 
        paragraph but with regard to paragraph (1)) as--
                    ``(A) the amount (if any) by which the taxpayer's 
                adjusted gross income exceeds $60,000, bears to
                    ``(B) $40,000.
            ``(3) Denial of double benefit.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) for any expense for which a deduction or 
                credit is allowable under any other provision of this 
                chapter.
                    ``(B) Grants.--No credit shall be allowed under 
                subsection (a) for any expense to the extent that funds 
                for such expense are received under any Federal, State, 
                or local program.
    ``(c) Qualified Adoption Expenses.--For purposes of this section, 
the term `qualified adoption expenses' means reasonable and necessary 
adoption fees, court costs, attorney fees, and other expenses which are 
directly related to the legal and finalized adoption of a child by the 
taxpayer and which are not incurred in violation of State or Federal 
law or in carrying out any surrogate parenting arrangement. The term 
`qualified adoption expenses' shall not include any expenses in 
connection with the adoption by an individual of a child who is the 
child of such individual's spouse.
    ``(d) Married Couples Must File Joint Returns.--Rules similar to 
the rules of paragraphs (2), (3), and (4) of section 21(e) shall apply 
for purposes of this section.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following:

                              ``Sec. 35. Adoption expenses.
                              ``Sec. 36. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 2814. EXCLUSION OF ADOPTION ASSISTANCE.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 137 as section 
138 and by inserting after section 136 the following new section:

``SEC. 137. ADOPTION ASSISTANCE.

    ``(a) In General.--Gross income of an employee does not include 
employee adoption assistance benefits, or military adoption assistance 
benefits, received by the employee with respect to the employee's 
adoption of a child.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Employee adoption assistance benefits.--The term 
        `employee adoption assistance benefits' means payment by an 
        employer of qualified adoption expenses with respect to an 
        employee's adoption of a child, or reimbursement by the 
        employer of such qualified adoption expenses paid or incurred 
        by the employee in the taxable year.
            ``(2) Employer and employee.--The terms `employer' and 
        `employee' have the respective meanings given such terms by 
        section 127(c).
            ``(3) Military adoption assistance benefits.--The term 
        `military adoption assistance benefits' means benefits provided 
        under section 1052 of title 10, United States Code, or section 
        514 of title 14, United States Code.
            ``(4) Qualified adoption expenses.--The term `qualified 
        adoption expenses' means reasonable and necessary adoption 
        fees, court costs, attorney fees, and other expenses which are 
        directly related to the legal and finalized adoption of a child 
        by the taxpayer and which are not incurred in violation of 
        State or Federal law or in carrying out any surrogate parenting 
        arrangement. The term `qualified adoption expenses' shall not 
        include any expenses in connection with the adoption by an 
        individual of a child who is the child of such individual's 
        spouse.
    ``(c) Coordination With Other Provisions.--The Secretary shall 
issue regulations to coordinate the application of this section with 
the application of any other provision of this title which allows a 
credit or deduction with respect to qualified adoption expenses.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by striking the item 
relating to section 137 and inserting the following new items:

                              ``Sec. 137. Adoption assistance.
                              ``Sec. 138. Cross references to other 
                                        Acts.''.
    (c) Effective Date.--The amendments made this section shall apply 
to taxable years beginning after December 31, 1996.

SEC. 2815. WITHDRAWAL FROM IRA FOR ADOPTION EXPENSES.

  (a) In General.--Subsection (d) of section 408 of the Internal 
Revenue Code of 1986 (relating to tax treatment of distributions) is 
amended by adding at the end the following new paragraph:
            ``(8) Qualified adoption expenses.--
                    ``(A) In general.--Any amount which is paid or 
                distributed out of an individual retirement plan of the 
                taxpayer, and which would (but for this paragraph) be 
                includible in gross income, shall be excluded from 
                gross income to the extent that--
                            ``(i) such amount exceeds the sum of--
                                    ``(I) the amount excludable under 
                                section 137, and
                                    ``(II) any amount allowable as a 
                                credit under this title with respect to 
                                qualified adoption expenses; and
                            ``(ii) such amount does not exceed the 
                        qualified adoption expenses paid or incurred by 
                        the taxpayer during the taxable year.
                    ``(B) Qualified adoption expenses.--For purposes of 
                this paragraph, the term `qualified adoption expenses' 
                has the meaning given such term by section 137.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1996.

            Attest:

                                                             Secretary.
104th CONGRESS

  2d Session

                               H. R. 3734

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                               AMENDMENT

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