[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1726 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1726

   To establish as an element of the national security of the United 
    States the importance of providing for the health, safety, and 
              education of children in the United States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 22, 1997

   Ms. Furse (for herself, Mrs. Clayton, Ms. DeGette, Ms. Hooley of 
    Oregon, Ms. Jackson-Lee of Texas, Ms. Lofgren, Mrs. Lowey, Ms. 
 McKinney, Mrs. Maloney of New York, Ms. Millender-McDonald, Mrs. Mink 
  of Hawaii, Ms. Norton, Ms. Slaughter, Ms. Waters, and Ms. Woolsey) 
 introduced the following bill; which was referred to the Committee on 
    Commerce, and in addition to the Committees on Ways and Means, 
    Education and the Workforce, the Judiciary, Transportation and 
 Infrastructure, Banking and Financial Services, and the Budget, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
   To establish as an element of the national security of the United 
    States the importance of providing for the health, safety, and 
              education of children in the United States.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Children's 
National Security Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
                        TITLE I--HEALTHY FUTURE

Sec. 101. Medicaid presumptive eligibility for low-income children.
Sec. 102. Amendment to Public Health Service Act.
Sec. 103. Diabetes research.
Sec. 104. Extension of Bone Marrow Program; provision regarding bone 
                            marrow registry and children of mixed 
                            ancestry.
Sec. 105. Genetic information nondiscrimination in health insurance.
Sec. 106. Eating disorders information and education.
Sec. 107. Medicare special reimbursement rule for primary care combined 
                            residency programs.
Sec. 108. Grandparent and family caregiver support.
                     TITLE II--CARING FOR FAMILIES

Sec. 201. Intergenerational foster care housing demonstration.
Sec. 202. Middle class child care affordability.
Sec. 203. Leave for adopted and foster children.
Sec. 204. States required to have standby guardianship law as a 
                            condition of eligibility for Federal funds 
                            for foster care and adoption assistance.
Sec. 205. Omnibus foster care improvement.
Sec. 206. Working families child care.
                        TITLE III--FAMILY SAFETY

Sec. 301. Prevention of date rape.
Sec. 302. Child Abuse Accountability Act.
Sec. 303. Protection from sexual predators.
Sec. 304. Child safety locks for firearms.
Sec. 305. Safe and sober streets.
Sec. 306. Minimum sentence for a person who operates a motor vehicle 
                            while alcohol-impaired.
Sec. 307. Handgun safety.
                      TITLE IV--ECONOMIC SECURITY

Sec. 401. Family investment package.
Sec. 402. Single Parent Protection Act.
Sec. 403. Work for Real Wages Act.
                    TITLE V--EDUCATING OUR CHILDREN

                       Part 1--Program Authorized

Sec. 501. Findings and purposes.
Sec. 502. Definitions.
Sec. 503. Funds appropriated.
Sec. 504. Allocation of funds.
                        Part 2--Grants to States

Sec. 511. Allocation of funds.
Sec. 512. Eligible State agency.
Sec. 513. Allowable use of funds.
Sec. 514. Eligible construction projects; period of initiation.
Sec. 515. Selection of localities and projects.
Sec. 516. State applications.
Sec. 517. Amount of Federal subsidy.
Sec. 518. Separate funds or accounts' prudent investment.
Sec. 519. State reports.
          Part 3--Direct Grants to Local Educational Agencies

Sec. 521. Eligible local educational agencies.
Sec. 522. Grantees.
Sec. 523. Allowable use of funds.
Sec. 524. Eligible construction projects; redistribution.
Sec. 525. Local applications.
Sec. 526. Formula grants.
Sec. 527. Competitive grants.
Sec. 528. Amount of Federal subsidy.
Sec. 529. Separate funds or accounts; prudent investment.
Sec. 530. Local reports.
                       Part 4--General Provisions

Sec. 531. Technical employees.
Sec. 532. Wage rates.
Sec. 533. No liability of Federal Government.
Sec. 534. Consultation with Secretary of the Treasury.
                     TITLE VI--BUDGETING PROVISIONS

Sec. 601. Increase in budget functions for domestic programs.
Sec. 602. Offsetting reductions in defense budget functions.

                        TITLE I--HEALTHY FUTURE

SEC. 101. MEDICAID PRESUMPTIVE ELIGIBILITY FOR LOW-INCOME CHILDREN.

    (a) In General.--Title XIX of the Social Security Act is amended by 
inserting after section 1920 the following new section:

                 ``presumptive eligibility for children

    ``Sec. 1920A. (a) A State plan approved under section 1902 may 
provide for making medical assistance with respect to health care items 
and services covered under the State plan available to a child during a 
presumptive eligibility period.
    ``(b) For purposes of this section:
            ``(1) The term `child' means an individual under 19 years 
        of age.
            ``(2) The term `presumptive eligibility period' means, with 
        respect to a child, the period that--
                    ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the family income of the child does 
                not exceed the applicable income level of eligibility 
                under the State plan, and
                    ``(B) ends with (and includes) the earlier of--
                            ``(i) the day on which a determination is 
                        made with respect to the eligibility of the 
                        child for medical assistance under the State 
                        plan, or
                            ``(ii) in the case of a child on whose 
                        behalf an application is not filed by the last 
                        day of the month following the month during 
                        which the entity makes the determination 
                        referred to in subparagraph (A), such last day.
            ``(3)(A) Subject to subparagraph (B), the term `qualified 
        entity' means any entity that--
                    ``(i)(I) is eligible for payments under a State 
                plan approved under this title and provides items and 
                services described in subsection (a) or (II) is 
                authorized to determine eligibility of a child to 
                participate in a Head Start program under the Head 
                Start Act (42 U.S.C. 9821 et seq.), eligibility of a 
                child to receive child care services for which 
                financial assistance is provided under the Child Care 
                and Development Block Grant Act of 1990 (42 U.S.C. 9858 
                et seq.), eligibility of an infant or child to receive 
                assistance under the special supplemental nutrition 
                program for women, infants, and children (WIC) under 
                section 17 of the Child Nutrition Act of 1966 (42 
                U.S.C. 1786); and
                    ``(ii) is determined by the State agency to be 
                capable of making determinations of the type described 
                in paragraph (1)(A).
            ``(B) The Secretary may issue regulations further limiting 
        those entities that may become qualified entities in order to 
        prevent fraud and abuse and for other reasons.
            ``(C) Nothing in this section shall be construed as 
        preventing a State from limiting the classes of entities that 
        may become qualified entities, consistent with any limitations 
        imposed under subparagraph (B).
    ``(c)(1) The State agency shall provide qualified entities with--
            ``(A) such forms as are necessary for an application to be 
        made on behalf of a child for medical assistance under the 
        State plan, and
            ``(B) information on how to assist parents, guardians, and 
        other persons in completing and filing such forms.
    ``(2) A qualified entity that determines under subsection (b)(1)(A) 
that a child is presumptively eligible for medical assistance under a 
State plan shall--
            ``(A) notify the State agency of the determination within 5 
        working days after the date on which determination is made, and
            ``(B) inform the parent or custodian of the child at the 
        time the determination is made that an application for medical 
        assistance under the State plan is required to be made by not 
        later than the last day of the month following the month during 
        which the determination is made.
    ``(3) In the case of a child who is determined by a qualified 
entity to be presumptively eligible for medical assistance under a 
State plan, the parent, guardian, or other person shall make 
application on behalf of the child for medical assistance under such 
plan by not later than the last day of the month following the month 
during which the determination is made, which application may be the 
application used for the receipt of medical assistance by individuals 
described in section 1902(l)(1).
    ``(d) Notwithstanding any other provision of this title, medical 
assistance for items and services described in subsection (a) that--
            ``(1) are furnished to a child--
                    ``(A) during a presumptive eligibility period,
                    ``(B) by a entity that is eligible for payments 
                under the State plan; and
            ``(2) are included in the care and services covered by a 
        State plan;
shall be treated as medical assistance provided by such plan for 
purposes of section 1903.''.
    (b) Conforming Amendments.--(1) Section 1902(a)(47) of such Act (42 
U.S.C. 1396a(a)(47)) is amended by inserting before the semicolon at 
the end the following: ``and provide for making medical assistance for 
items and services described in subsection (a) of section 1920A 
available to children during a presumptive eligibility period in 
accordance with such section''.
    (2) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
1396b(u)(1)(D)(v)) is amended by inserting before the period at the end 
the following: ``or for items and services described in subsection (a) 
of section 1920A provided to a child during a presumptive eligibility 
period under such section''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 102. AMENDMENT TO PUBLIC HEALTH SERVICE ACT.

    (a) In General.--Title XXVII of the Public Health Service Act, as 
added by section 111(a) of the Health Insurance Portability and 
Accountability Act of 1996, is amended by inserting after section 2741 
the following new section:

``SEC. 2741A. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH INSURANCE 
              COVERAGE TO UNINSURED CHILDREN.

    ``(a) Guaranteed Availability.--
            ``(1) In general.--Subject to the succeeding subsections of 
        this section, each health insurance issuer that offers health 
        insurance coverage (as defined in section 2791(b)(1)) in the 
        individual market in a State, in the case of an eligible child 
        (as defined in subsection (b)) desiring to enroll in individual 
        health insurance coverage--
                    ``(A) may not decline to offer such coverage to, or 
                deny enrollment of, such child;
                    ``(B) either (i) does not impose any preexisting 
                condition exclusion (as defined in section 
                2701(b)(1)(A)) with respect to such coverage, or (ii) 
                imposes such a preexisting condition exclusion only to 
                the extent such an exclusion may be imposed under 
                section 2701(a) in the case of an individual who is not 
                a late enrollee; and
                    ``(C) shall provide that the premium for the 
                coverage is determined in a manner so that the ratio of 
                the premium for such eligible children to the premium 
                for eligible individuals described in section 2741(b) 
                does not exceed the ratio of the actuarial value of 
                such coverage (calculated based on a standardized 
                population and a set of standardized utilization and 
                cost factors) for children to such actuarial value for 
                such coverage for such eligible individuals.
            ``(2) Substitution by state of acceptable alternative 
        mechanism.--The requirement of paragraph (1) shall not apply to 
        health insurance coverage offered in the individual market in a 
        State in which the State is implementing an acceptable 
        alternative mechanism under section 2744.
    ``(b) Eligible Child Defined.--In this part, the term `eligible 
child' means an individual born after September 30, 1983, who has not 
attained 16 years of age and--
            ``(1) who is a citizen or national of the United States, an 
        alien lawfully admitted for permanent residence, or an alien 
        otherwise permanently residing in the United States under color 
        of law;
            ``(2) who is not eligible for coverage under (A) a group 
        health plan, (B) part A or part B of title XVIII of the Social 
        Security Act, or (C) a State plan under title XIX of such Act 
        (or any successor program), and does not have other health 
        insurance coverage; and
            ``(3) with respect to whom the most recent coverage (if 
        any, within the 1-year period ending on the date coverage is 
        sought under this section) was not terminated based on a factor 
        described in paragraph (1) or (2) of section 2712(b) (relating 
        to nonpayment of premiums or fraud).
For purposes of paragraph (2)(A), the term `group health plan' does not 
include COBRA continuation coverage.
    ``(c) Incorporation of Certain Provisions.--
            ``(1) In general.--Subject to paragraph (2), the provisions 
        of subsections (c), (d), (e) and (f) (other than paragraph (1)) 
        of section 2741 and section 2744 shall apply in relation to 
        eligible children under subsection (a) in the same manner as 
        they apply in relation to eligible individuals under section 
        2741(a).
            ``(2) Special rules for acceptable alternative 
        mechanisms.--With respect to applying section 2744 under 
        paragraph (1)--
                    ``(A) the requirement in subsection (a)(1)(B) shall 
                be applied instead of the requirement of section 
                2744(a)(1)(B);
                    ``(B) the requirement in subsection (a)(1)(C) shall 
                be applied instead of the requirement of section 
                2744(a)(1)(D); and
                    ``(C) any deadline specified in such section shall 
                be 6 months after the deadline otherwise specified.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of section 2741 of the 
Public Health Service Act under section 111(a) of the Health Insurance 
Portability and Accountability Act of 1996.

SEC. 103. DIABETES RESEARCH.

    (a) Findings.--The Congress finds as follows:
            (1) Diabetes is a serious health problem in America.
            (2) More than 14,000,000 Americans suffer from diabetes.
            (3) Diabetes is the fourth leading cause of death in 
        America, taking the lives of 162,000 people annually.
            (4) Diabetes disproportionately affects minority 
        populations, especially African-Americans, Hispanics, and 
        Native Americans.
            (5) Diabetes is the leading cause of new blindness, 
        affecting up to 39,000 Americans each year.
            (6) Diabetes is the leading cause of kidney failure 
        requiring dialysis or transplantation, affecting up to 13,000 
        Americans each year.
            (7) Diabetes is the leading cause of nontraumatic 
        amputations, affecting 54,000 Americans each year.
            (8) The cost of treating diabetes and its complications are 
        staggering for our Nation.
            (9) Diabetes accounted for health expenditures of 
        $105,000,000,000 in 1992.
            (10) Diabetes accounts for over 14 percent of our Nation's 
        health care costs.
            (11) Federal funds invested in diabetes research over the 
        last two decades has led to significant advances and, according 
        to leading scientists and endocrinologists, has brought us to 
        the threshold of revolutionary discoveries which hold the 
        potential to dramatically reduce the economic and social burden 
        of this disease.
            (12) The National Institute of Diabetes and Digestive and 
        Kidney Diseases supports, in addition to many other areas of 
        research, genetic research, islet cell transplantation 
        research, and prevention and treatment clinical trials focusing 
        on diabetes. Other research institutes within the National 
        Institutes of Health conduct diabetes-related research focusing 
        on its numerous complications, such as heart disease, eye and 
        kidney problems, amputations, and diabetic neuropathy.
    (b) National Institutes of Health; Increased Funding Regarding 
Diabetes.--With respect to the conduct and support of diabetes-related 
research by the National Institutes of Health--
            (1) in addition to any other authorization of 
        appropriations that is available for such purpose for the 
        fiscal year involved, there are authorized to be appropriated 
        for such purpose such sums as may be necessary for each of the 
        fiscal years 1996 through 2000; and
            (2) of the amounts appropriated under paragraph (1) for 
        such purpose for a fiscal year, the Director of the National 
        Institutes of Health shall reserve--
                    (A) not less than $155,000,000 for such purpose for 
                the National Institute of Diabetes and Digestive and 
                Kidney Diseases; and
                    (B) not less than $160,000,000 for such purpose for 
                the other national research institutes.

SEC. 104. EXTENSION OF BONE MARROW PROGRAM; PROVISION REGARDING BONE 
              MARROW REGISTRY AND CHILDREN OF MIXED ANCESTRY.

    (a) Provision Regarding Children of Mixed Ancestry.--Section 
379(b)(3) of the Public Health Service Act (42 U.S.C. 274k(b)(3)) is 
amended by inserting ``, including children of mixed ancestry,'' after 
``racial and ethnic minority groups''.
    (b) Extension of Bone Marrow Program.--Section 379(j) of the Public 
Health Service Act (42 U.S.C. 274k(j)) is amended--
            (1) by striking ``1991 and'' and inserting ``1991,''; and
            (2) by inserting before the period the following: ``, 
        $16,500,000 for fiscal year 1998, and such sums as may be 
        necessary for each of the fiscal years 1999 and 2000''.

SEC. 105. GENETIC INFORMATION NONDISCRIMINATION IN HEALTH INSURANCE

    (a) Amendments to Employee Retirement Income Security Act of 
1974.--
            (1) In general.--Subpart B of part 7 of subtitle B of title 
        I of the Employee Retirement Income Security Act of 1974 is 
        amended by inserting after section 712 the following new 
        section:

``SEC. 713. PROHIBITION OF HEALTH INSURANCE DISCRIMINATION ON THE BASIS 
              OF GENETIC INFORMATION.

    ``(a) In General.--In the case of benefits consisting of medical 
care provided under a group health plan or in the case of group health 
insurance coverage offered by a health insurance issuer in connection 
with a group health plan, the plan or issuer may not deny, cancel, or 
refuse to renew such benefits or such coverage, or vary the premiums, 
terms, or conditions for such benefits or such coverage, for any 
participant or beneficiary under the plan--
            ``(1) on the basis of genetic information; or
            ``(2) on the basis that the participant or beneficiary has 
        requested or received genetic services.
    ``(b) Limitation on Collection and Disclosure of Information.--
            ``(1) In general.--A group health plan, or a health 
        insurance issuer offering group health insurance coverage in 
        connection with a group health plan, may not request or require 
        a participant or beneficiary (or an applicant for coverage as a 
        participant or beneficiary) to disclose to the plan or issuer 
        genetic information about the participant, beneficiary, or 
        applicant.
            ``(2) Requirement of prior authorization.--A group health 
        plan, or a health insurance issuer offering health insurance 
        coverage in connection with a group health plan, may not 
        disclose genetic information about a participant or beneficiary 
        (or an applicant for coverage as a participant or beneficiary) 
        without the prior written authorization of the participant, 
        beneficiary, or applicant or of the legal representative 
        thereof. Such authorization is required for each disclosure and 
        shall include an identification of the person to whom the 
        disclosure would be made.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Genetic information.--The term `genetic information' 
        means information about genes, gene products, or inherited 
        characteristics that may derive from an individual or a family 
        member of the individual.
            ``(2) Genetic services.--The term `genetic services' means 
        health services provided to obtain, assess, and interpret 
        genetic information for diagnostic and therapeutic purposes, 
        and for genetic education and counselling.
            ``(3) Family member.--The term `family member' means, with 
        respect to an individual, another individual related by blood 
        to that individual, or a spouse or adopted child of the 
        individual.''.
            (2) Damages.--Section 502(c) of such Act (29 U.S.C. 
        1132(c)) is amended by adding at the end the following new 
        paragraph:
    ``(7) Any group health plan (as defined in section 733(a)) and any 
health insurance issuer (as defined in section 733(b)(2)) who fails to 
meet the requirements of section 713 with respect to any participant, 
beneficiary, or applicant referred to in such section may in the 
court's discretion be liable to such participant, beneficiary, or 
applicant for compensatory, consequential, and punitive damages.''.
            (3) Clerical amendment.--The table of contents in section 1 
        of such Act is amended by inserting after the item relating to 
        section 712 the following new item:

``Sec. 713. Prohibition of health insurance discrimination on the basis 
                            of genetic information.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply with respect to group health plans for plan years 
        beginning after 1 year after the date of the enactment of this 
        Act.
    (b) Amendments to the Public Health Service Act.--
            (1) Amendment relating to the group market.--
                    (A) In general.--Subpart 2 of part A of title XXVII 
                of the Public Health Service Act is amended by 
                inserting after section 2705 the following new section:

``SEC. 2706. PROHIBITION OF HEALTH INSURANCE DISCRIMINATION ON THE 
              BASIS OF GENETIC INFORMATION.

    ``(a) In General.--In the case of benefits consisting of medical 
care provided under a group health plan or in the case of group health 
insurance coverage offered by a health insurance issuer in connection 
with a group health plan, the plan or issuer may not deny, cancel, or 
refuse to renew such benefits or such coverage, or vary the premiums, 
terms, or conditions for such benefits or such coverage, for any 
participant or beneficiary under the plan--
            ``(1) on the basis of genetic information; or
            ``(2) on the basis that the participant or beneficiary has 
        requested or received genetic services.
    ``(b) Limitation on Collection and Disclosure of Information.--
            ``(1) In general.--A group health plan, or a health 
        insurance issuer offering group health insurance coverage in 
        connection with a group health plan, may not request or require 
        a participant or beneficiary (or an applicant for coverage as a 
        participant or beneficiary) to disclose to the plan or issuer 
        genetic information about the participant, beneficiary, or 
        applicant.
            ``(2) Requirement of prior authorization.--A group health 
        plan, or a health insurance issuer offering health insurance 
        coverage in connection with a group health plan, may not 
        disclose genetic information about a participant or beneficiary 
        (or an applicant for coverage as a participant or beneficiary) 
        without the prior written authorization of the participant, 
        beneficiary, or applicant or of the legal representative 
        thereof. Such authorization is required for each disclosure and 
        shall include an identification of the person to whom the 
        disclosure would be made.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Genetic information.--The term `genetic information' 
        means information about genes, gene products, or inherited 
        characteristics that may derive from an individual or a family 
        member of the individual.
            ``(2) Genetic services.--The term `genetic services' means 
        health services provided to obtain, assess, and interpret 
        genetic information for diagnostic and therapeutic purposes, 
        and for genetic education and counselling.
            ``(3) Family member.--The term `family member' means, with 
        respect to an individual, another individual related by blood 
        to that individual, or a spouse or adopted child of the 
        individual.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall apply with respect to group health 
                plans for plan years beginning after 1 year after the 
                date of the enactment of this Act.
            (2) Amendment relating to the individual market.--
                    (A) In general.--Subpart 3 of part B of title XXVII 
                of such Act is amended by inserting after section 2751 
                the following new section:

``SEC. 2752. PROHIBITION OF HEALTH INSURANCE DISCRIMINATION ON THE 
              BASIS OF GENETIC INFORMATION.

    ``The provisions of section 2705 shall apply to health insurance 
coverage offered by a health insurance issuer in the individual market 
in the same manner as it applies to health insurance coverage offered 
by a health insurance issuer in connection with a group health plan in 
the small or large group market.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall apply with respect to health insurance 
                coverage offered, sold, issued, renewed, in effect, or 
                operated in the individual market after 1 year after 
                the date of the enactment of this Act.
            (3) Action for damages.--Section 2761 of such Act (29 
        U.S.C. 300gg-61) is amended by adding at the end the following 
        new subsection:
    ``(c) Action for Damages
            ``(1) In general.--In any case in which a group health plan 
        or a health insurance issuer fails to meet the applicable 
        requirements of section 2706 or 2752 with respect to any 
        individual who is a plan participant or beneficiary in such a 
        plan, a covered individual, or an applicant for coverage, such 
        individual may bring a civil action under this section. In any 
        such action, such plan or issuer may in the court's discretion 
        be liable to such individual for compensatory, consequential, 
        and punitive damages.
            ``(2) Additional provisions.--For purposes of this 
        subsection, the provisions of subsections (d), (e), (f), (g), 
        (h), and (j) of section 502 of the Employee Retirement Income 
        Security Act of 1974 shall apply in connection with such 
        action, the plaintiff in such action, and the Secretary of 
        Health and Human Services in the same manner and to the same 
        extent as such provisions apply in connection with actions 
        under such section 502, plaintiffs in such actions, and the 
        Secretary of Labor.''.
    (c) Amendments to Title XVIII of the Social Security Act Relating 
to Medigap.--
            (1) In general.--Section 1882(s)(2) of the Social Security 
        Act (42 U.S.C. 1395ss(s)) is amended by adding at the end the 
        following new subparagraph:
    ``(D)(i) An issuer of a medicare supplemental policy (as defined in 
section 1882(g)) may not deny or condition the issuance or 
effectiveness of the policy, and may not discriminate in the pricing of 
the policy of an eligible individual--
            ``(I) on the basis of genetic information; or
            ``(II) on the basis that the individual or a family member 
        of the individual has requested or received genetic services.
    ``(ii) For purposes of this subparagraph--
            ``(I) The term `genetic information' means information 
        about genes, gene products, or inherited characteristics that 
        may derive from an individual or a family member of the 
        individual.
            ``(II) The term `genetic services' means health services 
        provided to obtain, assess, and interpret genetic information 
        for diagnostic and therapeutic purposes, and for genetic 
        education and counselling.
            ``(III) The term `family member' means, with respect to an 
        individual, another individual related by blood to that 
        individual, or a spouse or adopted child of the individual.''.
            (2) Action for damages.--Section 1882(s) of such Act is 
        amended further by adding at the end the following new 
        paragraph:
    ``(4)(A) In any case in which a medicare supplemental policy fails 
to meet the applicable requirements of paragraph (2)(D) respect to any 
individual who is a covered individual or an applicant for coverage, 
such individual may bring a civil action under this paragraph. In any 
such action, issuer of such policy may in the court's discretion be 
liable to such individual for compensatory, consequential, and punitive 
damages.
    ``(B) For purposes of this paragraph, the provisions of subsections 
(d), (e), (f), (g), (h), and (j) of section 502 of the Employee 
Retirement Income Security Act of 1974 shall apply in connection with 
such action, the plaintiff in such action, and the Secretary of Health 
and Human Services in the same manner and to the same extent as such 
provisions apply in connection with actions under such section 502, 
plaintiffs in such actions, and the Secretary of Labor.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to medicare supplemental policies 
        offered, sold, issued, renewed, in effect, or operated in the 
        individual market after 1 year after the date of the enactment 
        of this Act.
    (d) Amendments of Internal Revenue Code of 1986.--
            (1) In general.--Chapter 100 of the Internal Revenue Code 
        of 1986 (relating to group health plan portability, access, and 
renewability requirements) is amended by adding at the end the 
following new subchapter:

``Subchapter B--Prohibition of Discrimination By Group Health Plans on 
                      Basis of Genetic Information

                              ``Sec. 9811. Prohibition of 
                                        discrimination by group health 
                                        plans on basis of genetic 
                                        information.

``SEC. 9811. PROHIBITION OF DISCRIMINATION BY GROUP HEALTH PLANS ON 
              BASIS OF GENETIC INFORMATION.

    ``(a) In General.--In the case of benefits consisting of medical 
care provided under a group health plan or in the case of group health 
insurance coverage offered by a health insurance issuer in connection 
with a group health plan, the plan or issuer may not deny, cancel, or 
refuse to renew such benefits or such coverage, or vary the premiums, 
terms, or conditions for such benefits or such coverage, for any 
participant or beneficiary under the plan--
            ``(1) on the basis of genetic information; or
            ``(2) on the basis that the participant or beneficiary has 
        requested or received genetic services.
    ``(b) Limitation on Collection and Disclosure of Information.--
            ``(1) In general.--A group health plan, or a health 
        insurance issuer offering group health insurance coverage in 
        connection with a group health plan, may not request or require 
        a participant or beneficiary (or an applicant for coverage as a 
        participant or beneficiary) to disclose to the plan or issuer 
        genetic information about the participant, beneficiary, or 
        applicant.
            ``(2) Requirement of prior authorization.--A group health 
        plan, or a health insurance issuer offering health insurance 
        coverage in connection with a group health plan, may not 
        disclose genetic information about a participant or beneficiary 
        (or an applicant for coverage as a participant or beneficiary) 
        without the prior written authorization of the participant, 
        beneficiary, or applicant or of the legal representative 
thereof. Such authorization is required for each disclosure and shall 
include an identification of the person to whom the disclosure would be 
made.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Genetic information.--The term `genetic information' 
        means information about genes, gene products, or inherited 
        characteristics that may derive from an individual or a family 
        member of the individual.
            ``(2) Genetic services.--The term `genetic services' means 
        health services provided to obtain, assess, and interpret 
        genetic information for diagnostic and therapeutic purposes, 
        and for genetic education and counselling.
            ``(3) Family member.--The term `family member' means, with 
        respect to an individual, another individual related by blood 
        to that individual, or a spouse or adopted child of the 
        individual.''.
            (2) Technical and conforming amendments.--
                    (A) Paragraph (1) of section 4980D(f) of such Code 
                (relating to failure to meet certain group health plan 
                requirements) is amended by adding at the end the 
                following new sentence: ``For purposes of applying this 
                section with respect to the requirements of subchapter 
                B of chapter 100, the term `group health plan' includes 
                a health insurance issuer (within the meaning of 
                section 9811).''
                    (B) Chapter 100 of such Code is amended by striking 
                the chapter heading and inserting the following:

    ``CHAPTER 100--REQUIREMENTS RELATING TO GROUP HEALTH PLANS, ETC.

                              ``Subchapter A. Group health plan 
                                        portability, access, and 
                                        renewability requirements.
                              ``Subchapter B. Prohibition of 
                                        discrimination by group health 
                                        plans on basis of genetic 
                                        information.

``Subchapter A--Group Health Plan Portability, Access, and Renewability 
                            Requirements''.

                    (C) The table of chapters for such Code is amended 
                by striking the item relating to chapter 100 and 
                inserting the following new item:

                              Chapter 100. Requirements relating to 
                                        group health plans, etc.''
                    (D) Subsection (a) of section 4980D of such Code is 
                amended by striking ``(relating to group health plan 
                portability, access, and renewability requirements)'' 
                and inserting ``(relating to group health plans, etc., 
                requirements)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to group health plans for plan years 
        beginning after 1 year after the date of the enactment of this 
        Act.

SEC. 106. EATING DISORDERS INFORMATION AND EDUCATION.

    (a) Findings.--The Congress finds the following:
            (1) Eating disorders include anorexia nervosa, bulimia 
        nervosa, and binge eating disorder, as well as eating disorders 
        not otherwise defined or yet identified.
            (2) Eating disorders primarily affect women and girls, to 
        the point that dieting and body dissatisfaction is considered 
        normative behavior even among those considered average or 
        underweight.
            (3) Many girls begin dieting at a young age and in large 
        numbers, as revealed in one study where 80 percent of girls 
        reported they had already been on a diet to lose weight before 
        age 13.
            (4) Dieting at an early age can interfere with normal 
        physiological development and can lead to serious eating 
        disorders, which can result in cardiac impairments, depression, 
        substance abuse, osteoporosis, infertility, amneorrhea, anemia, 
        and other medical conditions.
            (5) Eating disorders can lead to death, with the National 
        Institute of Mental Health reporting that 1 in 10 people with 
        anorexia nervosa die of starvation, cardiac arrest, or other 
        medical complications.
            (6) There are effective treatments for some eating 
        disorders, although medical authorities are uncertain to what 
        extent these disorders are caused by physiological factors, by 
        psychosocial factors, or by both.
    (b) Public Information and Education on Eating Disorders.--Subpart 
3 of part B of title V of the Public Health Service Act (42 U.S.C. 
290bb-31 et seq.) is amended by adding at the end the following 
section:

                           ``eating disorders

    ``Sec. 520C. (a) Information and Education.--The Secretary, acting 
through the Director of the Center for Mental Health Services, shall 
carry out a program to provide information and education to the public 
on the prevention and treatment of eating disorders.
    ``(b) Toll-Free Telephone Communications.--In carrying out 
subsection (a), the Secretary shall provide for the operation of toll-
free telephone communications to provide information to the public on 
eating disorders, including referrals for services for the prevention 
and treatment of such disorders. Such communications shall be available 
on a 24-hour, 7-day basis.
    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated $2,000,000 
for fiscal year 1998, and such sums as may be necessary for each of the 
fiscal years 1999 and 2000.''.

SEC. 107. MEDICARE SPECIAL REIMBURSEMENT RULE FOR PRIMARY CARE COMBINED 
              RESIDENCY PROGRAMS.

    (a) In General.--Section 1886(h)(5)(G) of the Social Security Act 
(42 U.S.C. 1395ww(h)(5)(G)) is amended--
            (1) in clause (i), by striking ``and (iii)'' and inserting 
        ``, (iii), and (iv)''; and
            (2) by adding at the end the following:
                            ``(iv) Special rule for primary care 
                        combined residency programs.--(I) In the case 
                        of a resident enrolled in a combined medical 
                        residency training program in which all of the 
                        individual programs (that are combined) are for 
                        training a primary care resident (as defined in 
                        subparagraph (H)), the period of board 
                        eligibility shall be the minimum number of 
                        years of formal training required to satisfy 
                        the requirements for initial board eligibility 
                        in the longest of the individual programs plus 
                        one additional year.
                            ``(II) A resident enrolled in a combined 
                        medical residency training program that 
                        includes an obstetrics and gynecology program 
                        qualifies for the period of board eligibility 
                        under subclause (I) if the other programs such 
                        resident combines with such obstetrics and 
                        gynecology program are for training a primary 
                        care resident.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
combined medical residency programs in effect on or after July 1, 1996.

SEC. 108. GRANDPARENT AND FAMILY CAREGIVER SUPPORT.

    (a) Work Requirements Not To Apply to Families Headed by an Adult 
Nonparental Relative Caregiver.--
            (1) Work participation rates to be determined without 
        regard to families headed by an adult nonparental relative 
        caregiver.--Section 407(b) of the Social Security Act (42 
        U.S.C. 607(b)), as added by section 103(a) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996, 
        is amended by adding at the end the following:
            ``(6) Disregard of families headed by an adult nonparental 
        relative caregiver.--In determining the participation rates 
        under this subsection, a State shall disregard any exempt 
        family.''.
            (2) Adult nonparental relative caregiver head of family 
        exempted from penalties for refusal to work.--Section 407(e) of 
        the Social Security Act (42 U.S.C. 607(e)), as added by section 
        103(a) of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, is amended by adding at the end the 
        following:
            ``(3) Exception for adult nonparental relative caregiver 
        head of family.--Paragraph (1) shall not apply to any exempt 
        adult.''.
            (3) Prohibition against imposition of work requirements.--
        Section 408(a) of the Social Security Act (42 U.S.C. 608(a)), 
        as added by section 103(a) of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996, is amended by 
        adding at the end the following:
            ``(12) Prohibition against imposition of work requirements 
        on families headed by an adult nonparental relative 
        caregiver.--A State to which a grant is made under this part 
        shall not use any part of the grant to require an exempt adult 
        to work, or to otherwise penalize an exempt adult or an exempt 
        family for the refusal of an exempt adult to work.
            (4) Penalty for imposition of work requirements.--Section 
        409(a) of the Social Security Act (42 U.S.C. 609(a)), as added 
        by section 103(a) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996, is amended by 
        redesignating paragraph (12) as paragraph (13) and inserting 
        after paragraph (11) the following:
            ``(12) Penalty for imposition of work requirements on 
        families headed by an adult nonparental relative caregiver.--If 
        the Secretary determines that a State to which a grant is made 
        under section 403 for a fiscal year has violated section 
        408(a)(12) during the fiscal year, the Secretary shall reduce 
        the grant payable to the State under section 403(a)(1) for the 
        immediately succeeding fiscal year by 5 percent.''.
    (b) Time Limits Not To Apply to Adult Nonparental Relative 
Caregiver Heads of Families.--
            (1) Inapplicability of time limit provisions.--
                    (A) 2-year work provision.--Section 
                402(a)(1)(A)(ii) of the Social Security Act (42 U.S.C. 
                602(a)(1)(A)(ii)), as added by section 103(a) of the 
                Personal Responsibility and Work Opportunity 
                Reconciliation Act of 1996, is amended by inserting ``, 
                except as provided in section 407(e)(3)'' before the 
                period.
                    (B) 5-year limit.--
                            (i) In general.--Section 408(a)(7) of the 
                        Social Security Act (42 U.S.C. 608(a)(7)), as 
                        added by section 103(a) of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996, is amended by 
                        redesignating subparagraphs (E) and (F) as 
                        subparagraphs (F) and (G), respectively, and by 
                        inserting after subparagraph (D) the following:
                    ``(E) Disregard of months of assistance received by 
                family head who is an adult nonparental relative 
                caregiver.--In determining the number of months for 
                which an adult has received assistance under the State 
                program funded under this part, the State shall 
                disregard any month during which the adult is an exempt 
                adult.''.
                            (ii) Conforming amendment.--Section 
                        408(a)(1)(B) of the Social Security Act (42 
                        U.S.C. 608(a)(1)(B)), as added by section 
                        103(a) of the Personal Responsibility and Work 
                        Opportunity Reconciliation Act of 1996, is 
                        amended by striking ``or (D)'' and inserting 
                        ``, (D), or (E)''.
            (2) Prohibition against imposition of time limits.--Section 
        408(a) of the Social Security Act (42 U.S.C. 608(a)), as added 
        by section 103(a) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 and as amended by 
        subsection (a)(3) of this section, is amended by adding at the 
        end the following:
            ``(13) Prohibition against imposition of time limits on 
        families headed by an adult nonparental relative caregiver.--A 
        State to which a grant is made under this part shall not use 
        any part of the grant to impose a limit on the duration of 
        assistance to an exempt adult or an exempt family under any 
        Federal, State, or local program, or to otherwise penalize an 
        exempt adult or an exempt family by reason of such status.
            (3) Penalty for imposition of time limits.--Section 409(a) 
        of the Social Security Act (42 U.S.C. 609(a)), as added by 
        section 103(a) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 and as amended by 
        subsection (a)(4) of this section, is amended by redesignating 
        paragraph (13) as paragraph (14) and inserting after paragraph 
        (12) the following:
            ``(13) Penalty for imposition of time limits on families 
        headed by an adult nonparental relative caregiver.--If the 
        Secretary determines that a State to which a grant is made 
        under section 403 for a fiscal year has violated section 
        408(a)(13) during the fiscal year, the Secretary shall reduce 
        the grant payable to the State under section 403(a)(1) for the 
        immediately succeeding fiscal year by 5 percent.''.
    (c) Grants to States for Assistance Provided for Adult Nonparental 
Relative Caregivers.--Section 403(a) of the Social Security Act (42 
U.S.C. 607(b)), as added by section 103(a) of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996, is 
amended by adding at the end the following:
            ``(5) Grants for support provided for adult nonparental 
        relative caregivers.--
                    ``(A) In general.--Each eligible State shall be 
                entitled to receive from the Secretary a grant for each 
                fiscal year in an amount equal to the total amount 
                expended by the State during the immediately preceding 
                fiscal year under the State program funded under this 
                part for assistance to any exempt family or exempt 
                adult for any month for which the family or the adult, 
                in the absence of section 408(a)(7)(E), would not be 
                eligible for such assistance.
                    ``(B) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for grants under 
                this paragraph such sums as may be necessary for each 
                fiscal year.''.
    (d) Definitions.--Section 419 of the Social Security Act (42 U.S.C. 
607(b)), as added by section 103(a) of the Personal Responsibility and 
Work Opportunity Reconciliation Act of 1996, is amended by 
redesignating paragraphs (2) through (5) as paragraphs (4) through (7), 
respectively, and by inserting after paragraph (1) the following:
            ``(2) Exempt adult.--The term `exempt adult' means an adult 
        who is--
                    ``(A) living with and caring for a minor child who 
                is related to (but not a biological child of) the 
                adult; and
                    ``(B) the head of a family that--
                            ``(i) does not include a parent of any such 
                        minor child; and
                            ``(ii) does not include a biological child 
                        of the adult.
            ``(3) Exempt family.--The term `exempt family' means a 
        family which--
                    ``(A) is headed by an adult who is living with and 
                caring for a minor child who is related to (but not a 
                biological child of) the adult;
                    ``(B) does not include a parent of any such minor 
                child; and
                    ``(C) does not include a biological child of the 
                adult.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996.

                     TITLE II--CARING FOR FAMILIES

SEC. 201. INTERGENERATIONAL FOSTER CARE HOUSING DEMONSTRATION.

    (a) In General.--The Secretary of Housing and Urban Development and 
the Secretary of Health and Human Services shall jointly carry out a 
program to demonstrate the effectiveness of providing assistance to 
private nonprofit organizations for development of intergenerational 
foster care housing and for providing foster care services in such 
housing.
    (b) Grants.--
            (1) In general.--Under the demonstration program under this 
        section, the Secretaries shall make grants in fiscal year 1998 
        to the private nonprofit organizations selected under 
        subsection (c) using amounts made available pursuant to 
        subsection (h). In making the grants, the Secretaries shall 
        designate the portion of the grant amounts for each grantee 
        that are housing grant amounts and the portion that are foster 
        care grant amounts.
            (2) Limitation on amount.--Of the total amount made 
        available under subsection (h) for grants under this section, 
        not less than 10 percent and not more than 35 percent may be 
        used for a grant for any single grantee.
    (c) Selection of Grantees.--The Secretaries shall jointly select 5 
private nonprofit organizations to receive grants under the 
demonstration program under this section. The organizations shall be 
selected on the basis of their capacity to provide intergenerational 
foster care housing, as evidenced by such plans and applications as the 
Secretaries may require.
    (d) Use of Amounts.--
            (1) Housing grant amounts.--Grant amounts provided to a 
        grantee from housing grant amounts under subsection (h)(1) may 
        be used by the grantee only for activities relating to the 
        acquisition, construction, or rehabilitation of housing that 
        will be used as intergenerational foster care housing, 
        including costs of planning, design, financing, and equipment.
            (2) Foster care grant amounts.--Grant amounts provided to a 
        grantee from foster care grant amounts under subsection (h)(2) 
        may be used only for activities to provide foster care services 
        in connection with intergenerational foster care housing, 
        including counseling for foster care children and resident 
        elderly volunteers, training and education for staff, resident 
        foster care parents, and resident elderly volunteers, adoption 
        services, and living expenses for foster care children.
    (e) Intergenerational Foster Care Housing.--For purposes of this 
section, intergenerational foster care housing is housing that is used, 
for a period of not less than 10 years beginning upon the provision of 
assistance for the housing with grant amounts under this section--
            (1) to provide a foster family home for children, which--
                    (A) is licensed by the State in which it is 
                situated or has been approved, by the agency of such 
                State having responsibility for licensing homes of such 
                type, as meeting the standards established for such 
                licensing;
                    (B) is staffed by professional foster parents; and
                    (C) provides housing for foster children in a 
                setting permitting the such children to reside together 
                with any of their siblings who are also foster care 
                children and the professional foster parents until a 
                permanent home is found;
                    (D) provides food, clothing, shelter, daily 
                supervision, and other essential needs for foster 
                children; and
                    (E) provides ongoing education and training for 
                staff, resident elderly volunteers, other volunteers 
                engaged in providing foster care services, and resident 
                foster parents;
            (2) includes dwelling units that--
                    (A) are made available for occupancy only by 
                elderly persons (and their spouses) who are low-income 
                families and have agreed to volunteer in providing 
                companionship and foster care services for foster care 
                children residing in or served by the housing; and
                    (B) are rented to such elderly families at rates 
                that are affordable to such families; and
            (3) has appropriate design features, which may include 
        community space, that permit the use of the housing for the 
        purposes under subparagraphs (A) and (B) and facilitate the 
        interaction of the elderly persons and foster children residing 
        in the housing.
    (f) Reports.--For each of fiscal years 1998, 1999, and 2000, each 
grantee under the demonstration program under this section shall submit 
to the Secretaries a report for such fiscal year regarding the use of 
grant amounts received by the grantee and the operation of the 
intergenerational foster care housing assisted with the grant amounts. 
Not later than December 31, 2000, the Secretaries shall jointly prepare 
and submit to the Congress a report describing the use of grant amounts 
provided under this section and analyzing the effectiveness of the 
program and the housing assisted under the program.
    (g) Definitions.--For purposes of this section the following 
definitions shall apply:
            (1) Elderly person.--The term ``elderly person'' means a 
        person who is at least 62 years of age.
            (2) Grantee.--The term ``grantee'' means a private 
        nonprofit organization that receives a grant under this section 
        pursuant to selection under subsection (c).
            (3) Low-income family.--The term ``low-income family'' 
        means a family or individual whose income does not exceed 80 
        percent of the area median income.
            (4) Private nonprofit organization.--The term ``private 
        nonprofit organization'' means a private organization that--
                    (A) is organized under State or local laws;
                    (B) has no part of its net earnings inuring to the 
                benefit of any member, shareholder, founder, 
                contributor, or individual;
                    (C) complies with standards of financial 
                accountability acceptable to the Secretaries.
            (5) Secretaries.--The term ``Secretaries'' means the 
        Secretary of Housing and Urban Development and the Secretary of 
        Health and Human Services.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated for grants under the demonstration program under this 
section $40,000,000 for fiscal year 1998. Of any amounts appropriated 
for such grants--
            (1) 75 percent shall be housing grant amounts, which shall 
        be used only as provided in subsection (d)(1); and
            (2) 25 percent shall be foster care grant amounts, which 
        shall be used only as provided in subsection (d)(2).
    (i) Requirements.--The Secretaries shall jointly issue any 
requirements necessary to carry out the demonstration program under 
this section.

SEC. 202. MIDDLE CLASS CHILD CARE AFFORDABILITY.

    (a) Increase of Certain Limitations Applicable to Child Care 
Credit.--
            (1) Increase of amount of employment-related expenses taken 
        into account.--Subsection (c) of section 21 of the Internal 
        Revenue Code of 1986 (relating to expenses for household and 
        dependent care services necessary for gainful employment) is 
        amended--
                    (A) in paragraph (1), by striking ``$2,400'' and 
                inserting ``$3,600'', and
                    (B) in paragraph (2), by striking ``$4,800'' and 
                inserting ``$5,400''.
            (2) Increase of amount at which phase-down of percentage 
        begins.--Paragraph (2) of section 21(a) of such Code is amended 
        by striking ``$10,000'' and inserting ``$20,000''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 1997.
    (b) Offset Provisions Regarding Foreign Sales Corporations.--
            (1) Elimination of exclusion.--Section 921 of the Internal 
        Revenue Code of 1986 (relating to exempt foreign trade income 
        excluded from gross income) is amended by adding at the end the 
        following new subsection:
    ``(e) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 1995.''
            (2) Elimination of special dividends received deduction.--
        Section 245 of such Code (relating to dividends received from 
        certain foreign corporations) is amended by striking subsection 
        (c).
            (3) Effective dates.--
                    (A) Exclusion.--The amendment made by paragraph (1) 
                shall apply to taxable years beginning after December 
                31, 1997.
                    (B) Dividends received deduction.--The amendment 
                made by paragraph (2) shall apply to dividends 
                distributed out of earnings and profits attributable to 
                taxable years beginning after December 31, 1997.

SEC. 203. LEAVE FOR ADOPTED AND FOSTER CHILDREN.

    If an employer provides to an employee who is a parent leave, in 
addition to the leave required by the Family and Medical Leave Act of 
1993, for the birth of a child, such employer shall provide the same 
leave to an employee who is a parent for an adopted child or a foster 
child. For purposes of enforcement such additional leave shall be 
considered leave required to be provided under section 102 of such Act.

SEC. 204. STATES REQUIRED TO HAVE STANDBY GUARDIANSHIP LAW AS A 
              CONDITION OF ELIGIBILITY FOR FEDERAL FUNDS FOR FOSTER 
              CARE AND ADOPTION ASSISTANCE.

    (a) In General.--Part E of title IV of the Social Security Act (42 
U.S.C. 670-679) is amended by inserting after section 477 the 
following:

``SEC. 478. STANDBY GUARDIANSHIP LAWS AND PROCEDURES.

    ``To be eligible for payments under this part, a State must have in 
effect laws and procedures that permit any parent who is chronically 
ill or near death, without surrendering parental rights, to designate a 
standby guardian for the parent's minor children, whose authority would 
take effect upon--
            ``(1) the death of the parent;
            ``(2) the mental incapacity of the parent; or
            ``(3) the physical debilitation and consent of the 
        parent.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect at the end of the first calendar quarter that begins 60 or 
more months after the date of the enactment of this Act, and shall 
apply to payments under part E of title IV of the Social Security Act 
for the quarter and payments made under such part for any succeeding 
quarter.

SEC. 205. OMNIBUS FOSTER CARE IMPROVEMENT.

    (a) Requirement That States Administer Qualifying Examinations to 
All State Employees With New Authority To Make Decisions Regarding 
Child Welfare Services.--Section 474 of the Social Security Act (42 
U.S.C. 674) is amended by adding at the end the following:
    ``(d) The Secretary may not make a payment to a State under 
subsection (a) for any calendar quarter beginning after the 18-month 
period that begins with the date of the enactment of this subsection, 
unless the State has in effect procedures to ensure that, before the 
State provides to a prospective child welfare decisionmaker the 
authority to make decisions regarding child welfare services, the 
individual must take and pass an examination, administered by the 
State, that tests knowledge of such subjects as child development, 
family dynamics, dysfunctional behavior, substance abuse, child abuse, 
and community advocacy. As used in the preceding sentence, the term 
`prospective child welfare decisionmaker' means an individual who, on 
the date of the enactment of this subsection, does not have any 
authority to make a decision regarding child welfare services.''.
    (b) Procedures To Expedite the Permanent Placement of Foster 
Children.--
            (1) In general.--Section 474 of the Social Security Act (42 
        U.S.C. 674), as amended by subsection (a) of this section, is 
        amended by adding at the end the following:
    ``(e) The Secretary may not make a payment to a State for a 
calendar quarter under subsection (a) unless the State has in effect 
procedures requiring the State agency, at the time a child is removed 
from a home and placed in foster care under the supervision of the 
State, to locate any parent of the child who is not living at the home, 
and evaluate the ability of the parent to provide a suitable home for 
the child.''.
            (2) Applicability.--The amendment made by paragraph (1) of 
        this subsection shall not apply with respect to any child who, 
        on the date of the enactment of this Act, is in foster care 
        under the supervision of a State (as defined in section 
        1101(a)(1) of the Social Security Act for purposes of title IV 
        of such Act).
    (c) Placement of Foster Children in Permanent Kinship Care 
Arrangements.
            (1) State option to deem kinship placement as adoption.--
        Section 473(a) of the Social Security Act (42 U.S.C. 673(a)) is 
        amended by adding at the end the following:
    ``(7) If a State places a child (who has been in foster care under 
the supervision of the State) with a blood relative of the child or of 
a half-sibling of the child, and transfers legal custody of the child 
to the relative, pursuant to a written agreement, entered into between 
the State and the relative, that contains provisions of the type 
described in section 475(3), then, at the option of the State, for 
purposes of this part--
            ``(A) the placement is deemed an adoption;
            ``(B) the initiation of the proceeding to so place the 
        child is deemed an adoption proceeding;
            ``(C) the relative is deemed the adoptive parent of the 
        child;
            ``(D) the agreement is deemed an adoption assistance 
        agreement;
            ``(E) the payments made under the agreement are deemed to 
        be adoption assistance payments; and
            ``(F) any reasonable and necessary court costs, attorneys 
        fees, and other expenses which are directly related to the 
        placement or the transfer of legal custody and are not in 
        violation of State or Federal law are deemed nonrecurring 
        adoption expenses.''.
            (2) Consideration of kinship placement option at 
        dispositional hearing.--Section 475(5)(C) of such Act (42 
        U.S.C. 675(5)(C)) is amended by inserting ``should be placed 
        with a relative of the child as provided in section 
        473(a)(7),'' before ``should be placed for adoption''.
    (d) Federal Funds for Foster Care and Adoption Assistance Available 
Only to States That Require State Agencies, in Considering Applications 
To Adopt Certain Foster Children, To Give Preference to Applications of 
a Foster Parent or Caretaker Relative of the Child.--Section 474 of the 
Social Security Act (42 U.S.C. 674), as amended by subsections (a) and 
(b) of this section, is amended by adding at the end the following:
    ``(f) Notwithstanding any other provision of this section, the 
Secretary may not make any payment to a State under this section, for 
any calendar quarter ending after the 5-year period that begins with 
the date of the enactment of this subsection, unless the State has in 
effect laws and procedures requiring a State agency to complete the 
processing of an application to adopt a child who is in foster care 
under the responsibility of the State that has been submitted by a 
foster parent or caretaker relative of the child, before completing the 
processing of any other application to adopt the child if--
            ``(1) a court has approved a permanent plan for adoption of 
        the child, or the child has been freed for adoption; and
            ``(2) the agency with authority to place the child for 
        adoption determines that--
                    ``(A) the child has substantial emotional ties to 
                the foster parent or caretaker relative, as the case 
                may be; and
                    ``(B) removal of the child from the foster parent 
                or caretaker relative, as the case may be, would be 
                seriously detrimental to the well-being of the 
                child.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to payments under part E of title IV of the Social Security Act 
for quarters beginning after the date of the enactment of this Act.

SEC. 206. WORKING FAMILIES CHILD CARE.

    (a) Findings.--Congress makes the following findings:
            (1) Availability and affordability of quality child care is 
        a major obstacle for working parents who struggle to remain 
        self-sufficient.
                    (A) Compared to all other income groups, the 
                working poor are the least likely to receive assistance 
                with their child care costs.
                    (B) Low-income families spend 24 percent of their 
                household income on child care, whereas middle-income 
                families spend 6 percent of their household income on 
                child care.
                    (C) 38 States have waiting lists for child care for 
                the working poor. Among those States, Georgia has 
                41,000 individuals on its waiting list, Texas has 
                36,000 individuals on its waiting list, and Illinois 
                and Alabama each have 20,000 individuals on their 
                waiting lists.
                    (D) One survey of low-income families on a waiting 
                list for subsidized child care found that of those 
                families paying for child care out of their own funds, 
                71 percent faced serious debt or bankruptcy.
                    (E) Half of the States and the District of 
                Columbia, even before the enactment of the Personal 
                Responsibility and Work Opportunity Reconciliation Act 
                of 1996 (Public Law 104-193, 110 Stat. 2105) during the 
                104th Congress, increased the proportion of child care 
                slots or dollars going to families on welfare, rather 
                than to working poor families.
            (2) The Congressional Budget Office estimates that there 
        will be $1,400,000,000 less expenditures of child care funds 
        for working poor families as a result of the States 
        implementing the work requirements imposed under the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (Public Law 104-193, 110 Stat. 2105).
            (3) Important types of child care are not available in 
        certain States including infant care, school-age care, care for 
        children with disabilities and special health care needs, and 
        child care for parents with unconventional or shifting work 
        hours.
                    (A) A 1995 State study by the Comptroller General 
                of the United States found a shortage of child care for 
                infants and children with special needs in inner 
                cities, and a shortage of all types of child care in 
                rural areas.
                    (B) Only one-third of the schools in low-income 
                neighborhoods offer school-age child care, compared 
                with 52 percent of schools in more affluent areas 
                offering such care.
                    (C) Eighth-graders who are left home alone for 11 
                or more hours a week report significantly greater use 
                of cigarettes, alcohol, and marijuana than eighth-
                graders who are not left home alone.
                    (D) Existing child care arrangements do not 
                accommodate the work schedules of many working women. 
                According to a 1995 statistic published by the 
                Department of Labor, 14,300,000 workers, nearly 1 in 5 
                full-time workers work nonstandard hours, and more than 
                1 in 3 of those workers are women.
                    (E) Only 10 percent of child care centers and 6 
                percent of family day care providers offer child care 
                on weekends. Yet one-third of working mothers with 
                annual incomes below the poverty level and one-quarter 
                of mothers with annual incomes above the poverty level 
                but below $25,000 work on weekends.
                    (F) Less than 30 percent of Head Start programs 
                operate on a full-time, full-year basis.
    (b) Authorization of Appropriations for Child Care for Low-Income 
Working Families and for Child Care Supply Shortages.--Section 658B of 
the Child Care Development Block Grant Act of 1990 (42 U.S.C. 9858) is 
amended--
            (1) by inserting ``(excluding subparagraphs (E) and (F) of 
        section 658E(c)(3))'' after ``subchapter'',
            (2) by inserting ``(a)'' before ``There'', and
            (3) and by adding at the end the following:
    ``(b) There is authorized to be appropriated to provide child care 
services under this chapter to satisfy the requirement specified in 
section 658E(c)(3)(E) $1,400,000,000 for each of the fiscal years 1997 
through 2002.
    ``(c) There is authorized to be appropriated to carry out child 
care activities under this chapter to satisfy the requirement specified 
in section 658E(c)(3)(F) $500,000,000 for each of the fiscal years 1997 
through 2002.''.
    (c) Expenditures for Child Services Care for Low-Income Working 
Families and for Child Care Supply Shortages.--
            (1) Required state expenditures.--Section 658E(c)(3) of the 
        Child Care Development Block Grant Act of 1990 (42 U.S.C. 
        9858c(c)(3)) is amended by adding at the end the following:
                    ``(E) Child care for certain low-income working 
                families.--A State shall ensure that 100 percent of 
                amounts paid to the State out of funds appropriated 
                under section 658B(b) with respect to each of the 
                fiscal years 1997 through 2002 shall be used to provide 
                child care services for families who have left the 
                State program of assistance under part A of title IV of 
                the Social Security Act because of employment, families 
                that are at risk of becoming dependent on such 
                assistance program, and low-income working families 
                described in section subparagraph (D).
                    ``(F) Child care supply shortages.--
                            ``(i) In general.--A State shall ensure 
                        that 100 percent of amounts paid to the State 
                        out of funds appropriated under section 658B(c) 
                        with respect to each of the fiscal years 1997 
                        through 2002 shall be used to carry out child 
                        care activities described in clause (ii) in 
                        geographic areas within the State that have a 
                        shortage, as determined by the State, in 
                        consultation with localities, of child care 
                        services.
                            ``(ii) Child care activities described.--
                        The child care activities described in this 
                        clause include the following:
                                    ``(I) Infant care programs.
                                    ``(II) Before- and after-school 
                                child care programs.
                                    ``(III) Resource and referral 
                                programs.
                                    ``(IV) Nontraditional work hours 
                                child care programs.
                                    ``(V) Extending the hours of 
                                prekindergarten programs to provide 
                                full-day services.
                                    ``(VI) Any other child care 
                                programs that the Secretary determines 
                                are appropriate.''.
            (2) Conforming amendment.--Section 658E(c)(3)(A) of the 
        Child Care Development Block Grant Act of 1990 (42 U.S.C. 
        9858c(c)(3)(A)) is amended by striking ``(D)'' and inserting 
        ``(F)''.
    (d) Report on Access to Child Care by Low-Income Working 
Families.--
            (1) State reporting requirement.--Section 658K(a)(2) of the 
        Child Care Development Block Grant Act of 1990 (42 U.S.C. 
        9858i(a)(2)) is amended--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end; and
                    (B) by inserting after subparagraph (E), the 
                following:
                    ``(F) the total number of families described in 
                section 658B(b) that were eligible for but did not 
                receive assistance under this subchapter or under 
                section 418 of the Social Security Act and a 
                description of the obstacles to providing such 
                assistance; and
                    ``(G) the total number of families described in 
                section 658B(b) that received assistance provided under 
                this subchapter or under section 418 of the Social 
                Security Act and a description of the manner in which 
                that assistance was provided;''.
            (2) Secretarial reporting requirement.--Section 658L of the 
        Child Care Development Block Grant Act of 1990 (42 U.S.C. 
        9858j) is amended by inserting ``, with particular emphasis on 
        access of low-income working families,'' after ``public''.

                        TITLE III--FAMILY SAFETY

SEC. 301. PREVENTION OF DATE RAPE.

    (a) Drug Rescheduling.--The Attorney General shall schedule Gamma 
y-hydroxybutyrate in schedule I of the Controlled Substances Act (21 
U.S.C. 812) and shall schedule Ketamine in schedule II of such Act.
    (b) Education and Drug Abuse Prevention.--The Attorney General 
shall establish programs throughout the United States and disseminate 
materials to provide young people in high school and college with 
education about the use of controlled substances in the furtherance of 
rape and sexual assault and shall assist law enforcement personnel in 
the prevention of abuse of controlled substances for such purpose.

SEC. 302. CHILD ABUSE ACCOUNTABILITY ACT.

    (a) Creation or Assignment of Rights to Benefits Under Qualified 
Child Abuse Orders.--Section 206(d)(3)(A) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1056(d)(3)(A)) is amended--
            (1) by inserting ``or a child abuse order'' after ``a 
        domestic relations order'';
            (2) by inserting ``or a qualified child abuse order'' after 
        ``a qualified domestic relations order''; and
            (3) by inserting ``or any qualified child abuse order'' 
        after ``any qualified domestic relations order''.
    (b) Qualified Child Abuse Orders.--Section 206(d)(3)(B) of such Act 
(29 U.S.C. 1056(d)(3)(B)) is amended--
            (1) in clause (i), by striking ``the term'' and inserting 
        ``The term'', and by striking ``, and'' at the end and 
        inserting a period;
            (2) in clause (ii), by striking ``the term'' and inserting 
        ``The term''; and
            (3) by adding at the end the following new clauses:
                    ``(iii) The term `qualified child abuse order' 
                means a child abuse order--
                            ``(I) which creates or recognizes the 
                        existence of an alternate payee's right to, or 
                        assigns to an alternate payee the right to, 
                        receive all or a portion of the benefits 
                        payable with respect to a participant under a 
                        plan, and
                            ``(II) with respect to which the 
                        requirements of subparagraphs (C) and (D) are 
                        met.
                    ``(iv) The term `child abuse order' means any court 
                order or other similar process for the enforcement of a 
                judgment rendered against a participant or beneficiary 
                under a plan for physically, sexually, or emotionally 
                abusing a child. For purposes of this clause--
                            ``(I) The term `judgment rendered for 
                        physically, sexually, or emotionally abusing a 
                        child' means any legal claim perfected through 
                        a final enforceable judgment, which claim is 
                        based in whole or in part upon the physical, 
                        sexual, or emotional abuse of a child, whether 
                        or not that abuse is accompanied by other 
                        actionable wrongdoing, such as sexual 
                        exploitation or gross negligence.
                            ``(II) The term `child' means an individual 
                        under 18 years of age.''.
    (c) Exemption From Preemption.--Section 514(b)(7) of such Act (29 
U.S.C. 1144(b)(7)) is amended by inserting ``or qualified child abuse 
orders (within the meaning of section 206(d)(3)(B)(iii))'' before the 
period.
    (d) Conforming Amendments to ERISA.--Section 206(d)(3) of such Act 
(29 U.S.C. 1056(d)(3)) is amended--
            (1) in subparagraph (C), by inserting ``or child abuse 
        order'' after ``A domestic relations order'';
            (2) in subparagraph (D), by inserting ``or child abuse 
        order'' after ``A domestic relations order'';
            (3) in subparagraph (E)(i), by inserting ``or child abuse 
        order'' after ``A domestic relations order'';
            (4) in subparagraph (G)(i), by inserting ``or child abuse 
        order'' after ``any domestic relations order'', by inserting 
        ``or child abuse orders'' in subclause (I) after ``domestic 
        relations orders'', and by inserting ``or a qualified child 
        abuse order'' in subclause (II) after ``a qualified domestic 
        relations order'';
            (5) in subparagraph (G)(ii), by inserting ``and child abuse 
        orders'' after ``domestic relations orders'', by inserting ``or 
        child abuse order'' after ``domestic relations order'' each 
        place it appears in subclauses (II) and (III);
            (6) in subparagraph (H)(i), by inserting ``or whether a 
        child abuse order is a qualified child abuse order'' after 
        ``whether a domestic relations order is a qualified domestic 
        relations order'', and by inserting ``or a qualified child 
        abuse order'' after ``to be a qualified domestic relations 
        order'';
            (7) in subparagraph (H)(ii), by inserting ``or a qualified 
        child abuse order'' after ``a qualified domestic relations 
        order'';
            (8) in subparagraph (H)(iii), by inserting ``or a qualified 
        child abuse order'' after ``a qualified domestic relations 
        order'' each place it appears in subclauses (I) and (II);
            (9) in subparagraph (H)(iv), by inserting ``or a qualified 
        child abuse order'' after ``a qualified domestic relations 
        order'';
            (10) in subparagraph (H)(v), by inserting ``or child abuse 
        order'' after ``the domestic relations order'';
            (11) in subparagraph (I)(i), by inserting ``or child abuse 
        order'' after ``a domestic relations order'', and by inserting 
        ``or qualified child abuse order'' after ``a qualified domestic 
        relations order'';
            (12) in subparagraph (J), by inserting ``or a qualified 
        child abuse order'' after ``a qualified domestic relations 
        order'';
            (13) in subparagraph (K), by inserting ``or child abuse 
        order'' after ``a domestic relations order''; and
            (14) in subparagraph (M), by inserting ``or a qualified 
        child abuse order'' after ``a qualified domestic relations 
        order''.
    (e) Creation or Assignment of Rights to Benefits Under Qualified 
Child Abuse Orders.--Subparagraph (B) of section 401(a)(13) of the 
Internal Revenue Code of 1986 (relating to assignment of benefits) is 
amended--
            (1) by inserting ``or child abuse orders'' after ``domestic 
        relations orders'' in the heading;
            (2) by inserting ``or a child abuse order'' after ``a 
        domestic relations order''; and
            (3) by inserting ``or a qualified child abuse order'' after 
        ``a qualified domestic relations order''.
    (f) Qualified Child Abuse Orders.--Paragraph (1) of section 414(p) 
of such Code (defining qualified domestic relations order) is amended--
            (1) in the heading, by inserting ``and Qualified Child 
        Abuse Order'' after ``Order''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(C) Qualified child abuse order.--The term 
                `qualified child abuse order' means a child abuse 
                order--
                            ``(i) which creates or recognizes the 
                        existence of an alternate payee's right to, or 
                        assigns to an alternate payee the right to, 
                        receive all or a portion of the benefits 
                        payable with respect to a participant under a 
                        plan, and
                            ``(ii) with respect to which the 
                        requirements of paragraphs (2) and (3) are met.
                    ``(D) Child abuse order.--
                            ``(i) In general.--The term `child abuse 
                        order' means any court order or other similar 
                        process for the enforcement of a judgment 
                        rendered against a participant or beneficiary 
                        under a plan for physically, sexually, or 
                        emotionally abusing a child.
                            ``(ii) Definitions.--For purposes of this 
                        subparagraph--
                                    ``(I) The term `judgment rendered 
                                for physically, sexually, or 
                                emotionally abusing a child' means any 
                                legal claim perfected through a final 
                                enforceable judgment, which claim is 
                                based in whole or in part upon the 
                                physical, sexual, or emotional abuse of 
                                a child, whether or not that abuse is 
                                accompanied by other actionable 
                                wrongdoing, such as sexual exploitation 
                                or gross negligence.
                                    ``(II) The term `child' means an 
                                individual under 18 years of age.''.
    (g) Conforming Amendments to IRC of 1986.--Subsection (p) of 
section 414 of such Code is amended--
            (1) in paragraph (2), by inserting ``or child abuse order'' 
        after ``A domestic relations order'';
            (2) in paragraph (3), by inserting ``or child abuse order'' 
        after ``A domestic relations order'';
            (3) in paragraph (4)(A), by inserting ``or child abuse 
        order'' after ``a domestic relations order'';
            (4) in paragraph (6)(A), by inserting ``or child abuse 
        order'' after ``any domestic relations order'', by inserting 
        ``or child abuse orders'' in clause (i) after ``domestic 
        relations orders'', and by inserting ``or a qualified child 
        abuse order'' in clause (ii) after ``a qualified domestic 
        relations order'';
            (5) in paragraph (6)(B), by inserting ``and child abuse 
        orders'' after ``domestic relations orders'';
            (6) in paragraph (7)(A), by inserting ``or whether a child 
        abuse order is a qualified child abuse order'' after ``whether 
        a domestic relations order is a qualified domestic relations 
        order'', and by inserting ``or a qualified child abuse order'' 
        after ``to be a qualified domestic relations order'';
            (7) in paragraph (7)(B), by inserting ``or qualified child 
        support order'' in the heading after ``qualified domestic 
        relations order'', and by inserting ``or a qualified child 
        abuse order'' after ``a qualified domestic relations order'';
            (8) in paragraph (7)(C), by inserting ``or a qualified 
        child abuse order'' after ``a qualified domestic relations 
        order'' each place it appears in clauses (i) and (ii);
            (9) in paragraph (7)(D), by inserting ``or a qualified 
        child abuse order'' after ``a qualified domestic relations 
        order'';
            (10) in paragraph (7)(E), by inserting ``or child abuse 
        order'' after ``the domestic relations order'';
            (11) in paragraph (8), by inserting ``or child abuse 
        order'' after ``a domestic relations order'';
            (12) in paragraph (9), by inserting ``or a qualified child 
        abuse order'' after ``a qualified domestic relations order'';
            (13) in paragraph (10), by inserting ``or a qualified child 
        abuse order'' after ``a qualified domestic relations order''; 
        and
            (14) in paragraph (11), by inserting ``or a qualified child 
        abuse order'' after ``pursuant to a qualified domestic 
        relations order'', and by inserting ``or a child abuse order'' 
        after ``pursuant to a domestic relations order''.
    (h) Tax Treatment of Distributions Pursuant to Qualified Child 
Abuse Orders.--
            (1) Alternate payee must include benefits in gross 
        income.--Paragraph (1) of section 402(e) of such Code (relating 
        to alternate payee under qualified domestic relations order 
        treated as distributee) is amended by inserting ``or a 
        qualified child abuse order (as defined in section 414(p))'' 
        after ``a qualified domestic relations order (as defined in 
        section 414(p))'' each place it appears.
            (2) Allocation of investment in the contract.--Paragraph 
        (10) of section 72(m) of such Code (relating to determination 
        of investment in the contract in the case of qualified domestic 
        relations orders) is amended--
                    (A) in the heading, by inserting ``and qualified 
                child abuse orders'' after ``qualified domestic 
                relations orders''; and
                    (B) by inserting ``or a qualified child abuse order 
                (as defined in section 414(p))'' after ``a qualified 
                domestic relations order (as defined in section 
                414(p))''.
            (3) Clarification of eligibility of participant for lump 
        sum treatment.--
                    (A) Subparagraph (H) of section 402(d)(4) of such 
                Code (relating to balance to credit of employee not to 
                include amounts payable under qualified domestic 
                relations order) is amended--
                            (i) in the heading, by inserting ``or 
                        qualified child abuse order'' after ``qualified 
                        domestic relations order''; and
                            (ii) by inserting ``or a qualified child 
                        abuse order (within the meaning of section 
                        414(p))'' after ``a qualified domestic 
                        relations order (within the meaning of section 
                        414(p))''.
                    (B) Subparagraph (J) of section 402(d)(4) of such 
                Code is amended by inserting ``, or under a qualified 
                child abuse order (within the meaning of section 
                414(p)) of the balance to the credit of an alternate 
                payee,'' after ``former spouse of the employee''.
    (i) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1998, except that, in the case of a child abuse 
order entered before such date, the plan administrator--
            (1) shall treat such order as a qualified child abuse order 
        if such administrator is paying benefits pursuant to such order 
        on such date, and
            (2) may treat any other such order entered before such date 
        as a qualified child abuse order even if such order does not 
        meet the requirements of such amendments.

SEC. 303. PROTECTION FROM SEXUAL PREDATORS.

    (a) Findings.--Congress finds that--
            (1) rape and sexual assaults continue to be serious threats 
        to the safety of communities across America;
            (2) sexual offenders are much more likely than any other 
        category of criminals to repeat their crimes again and again, 
        even after serving time in prison;
            (3) the average rape sentence is just 10\1/2\ years, and 
        the average time served is half of that, approximately 5 years; 
        and
            (4) repeat sexual offenders frequently strike in more than 
        one State and, while States have primary responsibility for the 
        prosecution of sexual offenders, the option of Federal 
        prosecution provides a needed additional tool to safeguard 
        communities victimized by these individuals.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) States should more seriously consider the relatively 
        high recidivism rate of sexual offenders when deciding whether 
        to plea bargain with a first-time sexual offender and whether 
        to grant parole to sexual offenders; and
            (2) States should review their treatment and parole 
        supervision programs for sexual offenders to assure that these 
        programs are fulfilling their goals, and, if they are not, 
        these programs should be immediately replaced or abandoned.
    (c) Amendments to Title 18.--Section 2241 of title 18, United 
States Code, is amended by adding at the end the following:
    ``(e) Punishment for Sexual Predators.--(1) Whoever, in a 
circumstance described in paragraph (2) of this subsection--
            ``(A) violates this section; or
            ``(B) engages in conduct that would violate this section, 
        if the conduct had occurred in the special maritime and 
        territorial jurisdiction of the United States, and--
                    ``(i) that conduct is in interstate or foreign 
                commerce;
                    ``(ii) the person engaging in that conduct crossed 
                a State line with intent to engage in the conduct; or
                    ``(iii) the person engaging in that conduct 
                thereafter engages in conduct that is a violation of 
                section 1073(1) with respect to an offense that 
                consists of the conduct so engaged in;
shall be imprisoned for life.
    ``(2) The circumstance referred to in paragraph (1) of this 
subsection is that the defendant has previously been convicted of 
another State or Federal offense for conduct which--
            ``(A) is an offense under this section or section 2242 of 
        this title; or
            ``(B) would have been an offense under either of such 
        sections if the offense had occurred in the special maritime or 
        territorial jurisdiction of the United States.''.
    (d) Amendments to Violent Crime Control and Law Enforcement Act of 
1994.--Section 2012 of the Violent Crime Control and Law Enforcement 
Act of 1994 (42 U.S.C. 13702) is amended by adding at the end the 
following:
    ``(c) Additional Requirement.--A State is not eligible for a grant 
under this section unless such State has provided assurances to the 
Attorney General that such State has in effect laws which allow the 
court to impose a sentence of life in prison without parole on a 
defendant in a criminal case who is convicted of a State offense for 
conduct that--
            ``(1) is an offense under section 2241 or 2242 of title 18, 
        United States Code; or
            ``(2) would have been an offense under either of such 
        sections if the offense had occurred in the special maritime or 
        territorial jurisdiction of the United States;
after having previously been convicted of another State or Federal 
offense for conduct that was an offense described in paragraph (1) or 
(2).''.
    (e) Study of Persistent Sexual Predators.--The National Institute 
of Justice, either directly or through grant, shall carry out a study 
of persistent sexual predators. Not later than one year after the date 
of the enactment of this Act, such Institute shall report to Congress 
and the President the results of such study. Such report shall 
include--
            (1) a synthesis of current research in psychology, 
        sociology, law, criminal justice, and other fields regarding 
        persistent sexual offenders, including--
                    (A) common characteristics of such offenders;
                    (B) recidivism rates for such offenders;
                    (C) treatment techniques and their effectiveness;
                    (D) responses of offenders to treatment and 
                deterrence; and
                    (E) the possibility of early intervention to 
                prevent people from becoming sexual predators; and
            (2) an agenda for future research in this area.

SEC. 304. CHILD SAFETY LOCKS FOR FIREARMS.

    (a) Civil Prohibitions.--
            (1) Prohibition against transfer of firearm without locking 
        device attached.--
                    (A) Prohibition.--Effective 12 months after the 
                date of the enactment of this Act, it shall be unlawful 
                for any person, in or affecting commerce, to transfer a 
                firearm in the United States, unless a locking device 
                is attached to, or is an integral part of, the firearm.
                    (B) Penalties.--
                            (i) Private transfers.--The Secretary shall 
                        impose a civil fine of $5,000 on any person, 
                        other than a licensed dealer or licensed 
                        manufacturer, who violates subparagraph (A).
                            (ii) Transfers by federally licensed 
                        firearms dealers.--The Secretary shall impose a 
                        civil fine of $10,000 on any licensed dealer 
                        who violates subparagraph (A), and shall 
                        suspend or revoke any license issued under 
                        chapter 44 of title 18, United States Code, to 
                        the dealer.
                            (iii) Transfers by federally licensed 
                        firearms manufacturers.--The Secretary shall 
                        impose a civil fine of $25,000 on any licensed 
                        manufacturer who violates subparagraph (A), and 
                        shall suspend or revoke any license issued 
                        under chapter 44 of title 18, United States 
                        Code, to the manufacturer.
            (2) Prohibition against manufacture of handgun without 
        locking device attached.--
                    (A) Prohibition.--Effective 18 months after the 
                date of the enactment of this Act, it shall be unlawful 
                for any person, in or affecting commerce, to 
                manufacture a handgun in the United States, unless a 
                locking device that meets the minimum quality standards 
                prescribed under subsection (e) is attached to, or is 
                an integral part of, the firearm.
                    (B) Penalties.--The Secretary shall impose a civil 
                fine of $25,000 on any person who violates subparagraph 
                (A), and shall suspend or revoke any license issued 
                under chapter 44 of title 18, United States Code, to 
the manufacturer.
            (3) Prohibition against transfer of firearm by licensee 
        without notice and warning.--
                    (A) Prohibition.--Effective 60 days after the date 
                of the enactment of this Act, it shall be unlawful for 
                any licensed importer, licensed manufacturer, or 
                licensed dealer to transfer a handgun that is not 
                accompanied by the following, which shall be printed in 
                \3/4\-inch type:
    ``THE USE OF A LOCKING BOX OR LOCKING DEVICE PLACED ON THE TRIGGER 
GUARD OF A FIREARM IS ONLY ONE ASPECT OF RESPONSIBLE FIREARM STORAGE. 
FIREARMS AND THEIR AMMUNITION SHOULD BE STORED AND SECURED IN A 
LOCATION THAT IS INACCESSIBLE TO CHILDREN.
    ``IF MISUSED, HANDGUNS CAN RESULT IN UNINTENTIONAL INJURY OR LOSS 
OF LIFE. TRIGGER LOCKS LOWER THE RISK OF UNINTENTIONAL DISCHARGE, 
HOWEVER TRIGGER LOCKS DO NOT TOTALLY ELIMINATE THE RISK.
    ``FAILURE TO PROPERLY LOCK AND STORE YOUR FIREARM MAY RESULT IN 
CIVIL OR CRIMINAL LIABILITY UNDER STATE LAW. FEDERAL LAW PROHIBITS THE 
POSSESSION OF A HANDGUN BY A MINOR IN MOST CIRCUMSTANCES.''.
                    (B) Penalties.--
                            (i) Transfers by federally licensed 
                        firearms dealers or importers.--The Secretary 
                        shall impose a civil fine of $10,000 on any 
                        licensed dealer or licensed importer who 
                        violates subparagraph (A), and shall suspend or 
                        revoke any license issued under chapter 44 of 
                        title 18, United States Code, to the dealer or 
                        importer.
                            (ii) Transfers by federally licensed 
                        firearms manufacturers.--The Secretary shall 
                        impose a civil fine of $5,000 on any licensed 
                        manufacturer who violates subparagraph (A), and 
                        shall suspend or revoke any license issued 
                        under chapter 44 of title 18, United States 
                        Code, to the manufacturer.
            (4) Inapplicability to governmental entities.--Paragraphs 
        (1), (2), and (3) shall not apply to conduct of, or authorized 
        by, the United States or any department or agency thereof, or 
        any State or any department, agency, or political subdivision 
        thereof.
            (5) Judicial review.--Not later than 60 days after an 
        individual receives notice from the Secretary of a decision to 
        impose a fine on, or suspend or revoke a license of, the 
        individual under this subsection, the individual may bring an 
        action against the Secretary in any United States district 
        court for de novo review of the decision.
    (b) Criminal Prohibition Against Adult Leaving Firearm and 
Ammunition With an Unsupervised Minor.--
            (1) Prohibition.--Section 922 of title 18, United States 
        Code, is amended by inserting after subsection (x) the 
        following:
    ``(y)(1) It shall be unlawful for an adult to leave a loaded 
firearm, or an unloaded firearm and ammunition for the firearm, with a 
minor, unless the possession of the firearm by the minor is supervised 
by an adult who is not prohibited by Federal, State, or local law from 
possessing a firearm.
    ``(2) As used in paragraph (1):
            ``(A) The term `adult' means an individual who has attained 
        18 years of age.
            ``(B) The term `minor' means an individual who has not 
        attained 18 years of age.''.
            (2) Penalties.--Section 924(a) of such title is amended by 
        adding at the end the following:
    ``(7) Whoever knowingly violates section 922(y) shall, 
notwithstanding section 3571, be fined not more than $10,000, 
imprisoned not more than 1 year, or both.''.
    (c) Studies.--
            (1) Standards for locking devices.--
                    (A) In general.--The National Institute of Justice 
                and the Consumer Product Safety Commission shall each 
                conduct a study to determine the feasibility of 
                developing minimum quality standards for locking 
                devices.
                    (B) Report.--Not later than 90 days after the date 
                of the enactment of this Act, the National Institute of 
                Justice and the Consumer Product Safety Commission 
                shall each submit to the Attorney General and the 
                Secretary of the Treasury a report that includes the 
                results of the study required of the entity by 
                subparagraph (A) and any recommendations for 
                legislative or regulatory action.
            (2) Results of this section.--
                    (A) In general.--The Director of the Centers for 
                Disease Control shall conduct a study on the results of 
                this section.
                    (B) Report.--Not later than 18 months after the 
                date of the enactment of this Act, the Director of the 
                Centers for Disease Control and Prevention shall submit 
                to the Attorney General and the Secretary of the 
                Treasury a report that contains the findings of the 
                study required by subparagraph (A).
    (d) Educational Programs.--For public service announcements and 
counter advertisements designed to educate the public on the proper 
storage of firearms, not more than $1,000,000 are authorized to be 
appropriated for fiscal year 1998 to each of the Attorney General and 
the Secretary of Health and Human Services, who shall coordinate their 
expenditure of the sums appropriated pursuant to this subsection, and 
the sums are authorized to remain available until expended.
    (e) Regulations Governing Manufacture of Locking Devices.--Within 6 
months after the date of the enactment of this Act, the Secretary shall 
issue final regulations which prescribe minimum quality standards for 
locking devices.
    (f) Definitions.--As used in this section:
            (1) Locking device.--The term ``locking device'' means a 
        device that--
                    (A) when installed and secured (with a key, 
                electronic code, or electro-mechanically operated 
                combination lock) on the trigger guard of a firearm, 
                and while activated, prevents the firearm from being 
                discharged; or
                    (B) is incorporated into the design of, and is an 
                integral part of, a handgun, and while activated, 
                prevents the handgun from being discharged.
            (2) Other terms.--The terms ``State'', ``firearm'', 
        ``handgun'', ``dealer'', ``licensed dealer'', ``manufacturer'', 
        ``licensed manufacturer'', ``importer'', ``licensed importer'', 
        and ``Secretary'' shall have the meanings given such terms in 
        section 921(a) of title 18, United States Code.

SEC. 305. SAFE AND SOBER STREETS.

    (a) Standard to Prohibit Operation of Motor Vehicles by Intoxicated 
Individuals.--Chapter 1 of title 23, United States Code, is amended by 
adding at the end the following:
``Sec. 162. National standard to prohibit the operation of motor 
              vehicles by intoxicated individuals
    ``(a) Withholding of Apportionments for Noncompliance.--
            ``(1) Fiscal year 2001.--The Secretary shall withhold 5 
        percent of the amount required to be apportioned to any State 
        under each of sections 104(b)(1), 104(b)(3), and 104(b)(5)(B) 
        on October 1, 2000, if the State does not meet the requirement 
        of paragraph (3) on such date.
            ``(2) Thereafter.--The Secretary shall withhold 10 percent 
        (including any amounts withheld under paragraph (1)) of the 
        amount required to be apportioned to any State under each of 
        sections 104(b)(1), 104(b)(3), and 104(b)(5)(B) on October 1, 
        2001, and on October 1 of each fiscal year thereafter, if the 
        State does not meet the requirement of paragraph (3) on such 
        date.
            ``(3) Requirement.--A State meets the requirement of this 
        paragraph if the State has enacted and is enforcing a law that 
        considers an individual who has an alcohol concentration of 
        0.08 percent or greater while operating a motor vehicle in the 
        State to be driving while intoxicated or driving under the 
        influence of alcohol.
    ``(b) Period of Availability; Effect of Compliance and 
Noncompliance.--
            ``(1) Period of availability of withheld funds.--
                    ``(A) Funds withheld on or before September 30, 
                2002.--Any funds withheld under subsection (a) from 
                apportionment to any State on or before September 30, 
                2002, shall remain available until the end of the third 
                fiscal year following the fiscal year for which such 
                funds are authorized to be appropriated.
                    ``(B) Funds withheld after September 30, 2002.--No 
                funds withheld under this section from apportionment to 
                any State after September 30, 2002, shall be available 
                for apportionment to such State.
            ``(2) Apportionment of withheld funds after compliance.--
        If, before the last day of the period for which funds withheld 
        under subsection (a) from apportionment are to remain available 
        for apportionment to a State under paragraph (1), the State 
        meets the requirement of subsection (a)(3), the Secretary 
        shall, on the first day on which the State meets such 
        requirement, apportion to the State the funds withheld under 
        subsection (a) that remain available for apportionment to the 
        State.
            ``(3) Period of availability of subsequently apportioned 
        funds.--Any funds apportioned pursuant to paragraph (2) shall 
        remain available for expenditure until the end of the third 
        fiscal year following the fiscal year in which such funds are 
        so apportioned. Sums not obligated at the end of such period 
        shall lapse or, in the case of funds apportioned under section 
        104(b)(5)(B), shall lapse and be made available by the 
        Secretary for projects in accordance with section 118.
            ``(4) Effect of noncompliance.--If, at the end of the 
        period for which funds withheld under subsection (a) from 
        apportionment are available for apportionment to a State under 
        paragraph (1), the State does not meet the requirement of 
        subsection (a)(3), such funds shall lapse or, in the case of 
        funds withheld from apportionment under section 104(b)(5)(B), 
        such funds shall lapse and be made available by the Secretary 
        for projects in accordance with section 118.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following:

``162. National standard to prohibit the operation of motor vehicles by 
                            intoxicated individuals.''.

SEC. 306. MINIMUM SENTENCE FOR A PERSON WHO OPERATES A MOTOR VEHICLE 
              WHILE ALCOHOL-IMPAIRED.

    (a) In General.--Chapter 1 of title 23, United States Code, is 
amended by adding at the end the following:
``Sec. 162. National minimum sentence for a person who operates a motor 
              vehicle while alcohol-impaired
    ``(a) Withholding of Apportionments for Noncompliance.--
            ``(1) Fiscal year 2001.--The Secretary shall withhold 5 
        percent of the amount required to be apportioned to any State 
        under each of sections 104(b)(1), 104(b)(3), and 104(b)(5)(B) 
        on October 1, 2000, if the State does not meet the requirement 
        of paragraph (3) on such date.
            ``(2) Thereafter.--The Secretary shall withhold 10 percent 
        (including any amounts withheld under paragraph (1)) of the 
        amount required to be apportioned to any State under each of 
        sections 104(b)(1), 104(b)(3), and 104(b)(5)(B) on October 1, 
        2001, and on October 1 of each fiscal year thereafter, if the 
        State does not meet the requirement of paragraph (3) on such 
        date.
            ``(3) Requirement.--A State meets the requirement of this 
        paragraph if the State has enacted and is enforcing a law which 
        provides for a minimum sentence consistent with the following:
                    ``(A) In the case of the first conviction of a 
                person of operating a motor vehicle while under the 
                influence of alcohol, revocation of the person's 
                driver's license for 6 months.
                    ``(B) In the case of the second conviction of a 
                person of operating a motor vehicle while alcohol-
                impaired, revocation of the person's driver's license 
                for 1 year.
                    ``(C) In the case of the third or subsequent 
                conviction of a person of operating a motor vehicle 
                while alcohol-impaired, permanent revocation of the 
                person's driver's license.
        A revocation pursuant to this paragraph shall not be subject to 
        any exception or condition, including an exception or condition 
        to avoid hardship to any individual.
    ``(b) Period of Availability; Effect of Compliance and 
Noncompliance.--
            ``(1) Period of availability of withheld funds.--
                    ``(A) Funds withheld on or before September 30, 
                2002.--Any funds withheld under subsection (a) from 
                apportionment to any State on or before September 30, 
                2002, shall remain available until the end of the third 
                fiscal year following the fiscal year for which such 
                funds are authorized to be appropriated.
                    ``(B) Funds withheld after September 30, 2002.--No 
                funds withheld under this section from apportionment to 
                any State after September 30, 2002, shall be available 
                for apportionment to such State.
            ``(2) Apportionment of withheld funds after compliance.--
        If, before the last day of the period for which funds withheld 
        under subsection (a) from apportionment are to remain available 
        for apportionment to a State under paragraph (1), the State 
        meets the requirement of subsection (a)(3), the Secretary 
        shall, on the first day on which the State meets such 
        requirement, apportion to the State the funds withheld under 
        subsection (a) that remain available for apportionment to the 
        State.
            ``(3) Period of availability of subsequently apportioned 
        funds.--Any funds apportioned pursuant to paragraph (2) shall 
        remain available for expenditure until the end of the third 
        fiscal year following the fiscal year in which such funds are 
        so apportioned. Sums not obligated at the end of such period 
        shall lapse or, in the case of funds apportioned under section 
        104(b)(5)(B), shall lapse and be made available by the 
        Secretary for projects in accordance with section 118.
            ``(4) Effect of noncompliance.--If, at the end of the 
        period for which funds withheld under subsection (a) from 
        apportionment are available for apportionment to a State under 
        paragraph (1), the State does not meet the requirement of 
        subsection (a)(3), such funds shall lapse or, in the case of 
        funds withheld from apportionment under section 104(b)(5)(B), 
        such funds shall lapse and be made available by the Secretary 
        for projects in accordance with section 118.''.
    (b) Clerical amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following:

``162. National minimum sentence for a person who operates a motor 
                            vehicle while under the influence of 
                            alcohol.''.

SEC. 307. HANDGUN SAFETY.

    (a) Definition of Locking Device.--Section 921(a) of title 18, 
United States Code, is amended by adding at the end the following:
            ``(34) The term `locking device' means--
                    ``(A) a device that, if installed on a firearm and 
                secured by means of a key or a mechanically, 
                electronically, or electromechanically operated 
                combination lock, prevents the firearm from being 
                discharged without first deactivating or removing the 
                device by means of a key or mechanically, 
                electronically, or electromechanically operated 
                combination lock; or
                    ``(B) a locking mechanism incorporated into the 
                design of a firearm that prevents discharge of the 
                firearm by any person who does not have access to the 
                key or other device designed to unlock the mechanism 
                and thereby allow discharge of the firearm.''.
    (b) Unlawful Acts.--Section 922 of title 18, United States Code, is 
amended by inserting after subsection (x) the following:
    ``(y) Locking Devices and Warnings.--
            ``(1) In general.--Except as provided in paragraph (2), 
        beginning 90 days after the date of enactment of the Child 
        Safety Lock Act of 1997, it shall be unlawful for any licensed 
        manufacturer, licensed importer, or licensed dealer to sell, 
        deliver, or transfer any handgun--
                    ``(A) to any person, unless the transferee is 
                provided with a locking device for that handgun; or
                    ``(B) to any person, unless the handgun is 
                accompanied by the following warning, which shall 
                appear in conspicuous and legible type in capital 
                letters, and which shall be printed on a label affixed 
                to the gun and on a separate sheet of paper included 
                within the packaging enclosing the handgun:
                ```THE USE OF A LOCKING DEVICE OR SAFETY LOCK IS ONLY 
                ONE ASPECT OF RESPONSIBLE FIREARM STORAGE. FIREARMS 
                SHOULD BE STORED UNLOADED AND LOCKED IN A LOCATION THAT 
                IS BOTH SEPARATE FROM THEIR AMMUNITION AND INACCESSIBLE 
                TO CHILDREN.
                `FAILURE TO PROPERLY LOCK AND STORE YOUR FIREARM MAY 
                RESULT IN CIVIL OR CRIMINAL LIABILITY UNDER STATE LAW. 
                IN ADDITION, FEDERAL LAW PROHIBITS THE POSSESSION OF A 
                HANDGUN BY A MINOR IN MOST CIRCUMSTANCES.'
            ``(2) Exceptions.--Paragraph (1) does not apply to--
                    ``(A) the--
                            ``(i) manufacture for, transfer to, or 
                        possession by, the United States or a State or 
                        a department or agency of the United States, or 
                        a State or a department, agency, or political 
                        subdivision of a State, of a handgun; or
                            ``(iii) the transfer to, or possession by, 
                        a law enforcement officer employed by an entity 
                        referred to in clause (i) of a handgun for law 
                        enforcement purposes (whether on or off-duty); 
                        or
                    ``(B) the transfer to, or possession by, a rail 
                police officer employed by a rail carrier and certified 
                or commissioned as a police officer under the laws of a 
                State of a handgun for purposes of law enforcement 
                (whether on or off-duty).''.
    (c) Civil Penalties.--Section 924 of title 18, United States Code, 
is amended--
            (1) in subsection (a)(1), by striking ``or (f)'' and 
        inserting ``(f), or (p)''; and
            (2) by adding at the end the following:
    ``(p) Penalties Relating to Locking Devices and Warnings.--
            ``(1) In general.--
                    ``(A) Suspension or revocation of license; civil 
                penalties.--With respect to each violation of 
                subparagraph (A) or (B) of section 922(y)(1) by a 
                license, the Secretary may, after notice and 
                opportunity for hearing--
                            ``(i) suspend or revoke any license issued 
                        to the licensee under this chapter; or
                            ``(ii) subject the licensee to a civil 
                        penalty in an amount equal to not more than 
                        $10,000.
                    ``(B) Review.--An action of the Secretary under 
                this paragraph may be reviewed only as provided in 
                section 923(f).
            ``(2) Administrative remedies.--the suspension or 
        revocation of a license or the imposition of a civil penalty 
        under paragraph (1) does not preclude any administrative remedy 
        that is otherwise available to the Secretary.''.

                      TITLE IV--ECONOMIC SECURITY

SEC. 401. FAMILY INVESTMENT PACKAGE.

    (a) Refundable Credit and Increase of Amount of Employment-Related 
Expenses Taken Into Account and Amount at Which Phase-Down of 
Percentage Begins.--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 inserting after section 34 the following new section:

``SEC. 34A. EXPENSES FOR HOUSEHOLD AND DEPENDENT CARE SERVICES 
              NECESSARY FOR GAINFUL EMPLOYMENT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of an individual who 
        maintains a household which includes as a member one or more 
        qualifying individuals (as defined in subsection (b)(1)), there 
        shall be allowed as a credit against the tax imposed by this 
        chapter for the taxable year an amount equal to the applicable 
        percentage of the employment-related expenses (as defined in 
        subsection (b)(2)) paid by such individual during the taxable 
        year.
            ``(2) Applicable percentage defined.--For purposes of 
        paragraph (1), the term `applicable percentage' means 30 
        percent reduced (but not below 20 percent) by 1 percentage 
        point for each $2,000 (or fraction thereof) by which the 
        taxpayer's adjusted gross income for the taxable year exceeds 
        $20,000.
    ``(b) Definitions of Qualifying Individual and Employment-Related 
Expenses.--For purposes of this section--
            ``(1) Qualifying individual.--The term `qualifying 
        individual' means--
                    ``(A) a dependent of the taxpayer who is under the 
                age of 13 and with respect to whom the taxpayer is 
                entitled to a deduction under section 151(c),
                    ``(B) a dependent of the taxpayer who is physically 
                or mentally incapable of caring for himself, or
                    ``(C) the spouse of the taxpayer, if he is 
                physically or mentally incapable of caring for himself.
            ``(2) Employment-related expenses.--
                    ``(A) In general.--The term `employment-related 
                expenses' means amounts paid for the following 
                expenses, but only if such expenses are incurred to 
                enable the taxpayer to be gainfully employed for any 
                period for which there are 1 or more qualifying 
                individuals with respect to the taxpayer:
                            ``(i) expenses for household services, and
                            ``(ii) expenses for the care of a 
                        qualifying individual.
                Such term shall not include any amount paid for 
                services outside the taxpayer's household at a camp 
                where the qualifying individual stays overnight.
                    ``(B) Exception.--Employment-related expenses 
                described in subparagraph (A) which are incurred for 
                services outside the taxpayer's household shall be 
                taken into account only if incurred for the care of--
                            ``(i) a qualifying individual described in 
                        paragraph (1)(A), or
                            ``(ii) a qualifying individual (not 
                        described in paragraph (1)(A)) who regularly 
                        spends at least 8 hours each day in the 
                        taxpayer's household.
                    ``(C) Dependent care centers.--Employment-related 
                expenses described in subparagraph (A) which are 
                incurred for services provided outside the taxpayer's 
                household by a dependent care center (as defined in 
                subparagraph (D)) shall be taken into account only if--
                            ``(i) such center complies with all 
                        applicable laws and regulations of a State or 
                        unit of local government, and
                            ``(ii) the requirements of subparagraph (B) 
                        are met.
                    ``(D) Dependent care center defined.--For purposes 
                of this paragraph, the term `dependent care center' 
                means any facility which--
                            ``(i) provides care for more than six 
                        individuals (other than individuals who reside 
                        at the facility), and
                            ``(ii) receives a fee, payment, or grant 
                        for providing services for any of the 
                        individuals (regardless of whether such 
                        facility is operated for profit).
    ``(c) Dollar Limit on Amount Creditable.--The amount of the 
employment-related expenses incurred during any taxable year which may 
be taken into account under subsection (a) shall not exceed--
            ``(1) $3,600 if there is 1 qualifying individual with 
        respect to the taxpayer for such taxable year, or
            ``(2) $5,400 if there are 2 or more qualifying individuals 
        with respect to the taxpayer for such taxable year.
The amount determined under paragraph (1) or (2) (whichever is 
applicable) shall be reduced by the aggregate amount excludable from 
gross income under section 129 for the taxable year.
    ``(d) Earned Income Limitation.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the amount of the employment-related expenses 
        incurred during any taxable year which may be taken into 
        account under subsection (a) shall not exceed--
                    ``(A) in the case of an individual who is not 
                married at the close of such year, such individual's 
                earned income for such year, or
                    ``(B) in the case of an individual who is married 
                at the close of such year, the lesser of such 
                individual's earned income or the earned income of his 
                spouse for such year.
            ``(2) Special rule for spouse who is a student or incapable 
        of caring for himself.--In the case of a spouse who is a 
        student or a qualifying individual described in subsection 
        (b)(1)(C), for purposes of paragraph (1), such spouse shall be 
        deemed for each month during which such spouse is a full-time 
        student at an educational institution, or is such a qualifying 
        individual, to be gainfully employed and to have earned income 
        of not less than--
                    ``(A) $200 if subsection (c)(1) applies for the 
                taxable year, or
                    ``(B) $400 if subsection (c)(2) applies for the 
                taxable year.
        In the case of any husband and wife, this paragraph shall apply 
        with respect to only one spouse for any one month.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Maintaining household.--An individual shall be 
        treated as maintaining a household for any period only if over 
        half the cost of maintaining the household for such period is 
        furnished by such individual (or, if such individual is married 
        during such period, is furnished by such individual and his 
        spouse).
            ``(2) Married couples must file joint return.--If the 
        taxpayer is married at the close of the taxable year, the 
        credit shall be allowed under subsection (a) only if the 
        taxpayer and his spouse file a joint return for the taxable 
        year.
            ``(3) Marital status.--An individual legally separated from 
        his spouse under a decree of divorce or of separate maintenance 
        shall not be considered as married.
            ``(4) Certain married individuals living apart.--If--
                    ``(A) an individual who is married and who files a 
                separate return--
                            ``(i) maintains as his home a household 
                        which constitutes for more than one-half of the 
                        taxable year the principal place of abode of a 
                        qualifying individual, and
                            ``(ii) furnishes over half of the cost of 
                        maintaining such household during the taxable 
                        year, and
                    ``(B) during the last 6 months of such taxable year 
                such individual's spouse is not a member of such 
                household,
        such individual shall not be considered as married.
            ``(5) Special dependency test in case of divorced parents, 
        etc..--If--
                    ``(A) paragraph (2) or (4) of section 152(e) 
                applies to any child with respect to any calendar year, 
                and
                    ``(B) such child is under the age of 13 or is 
                physically or mentally incapable of caring for himself,
        in the case of any taxable year beginning in such calendar 
        year, such child shall be treated as a qualifying individual 
        described in subparagraph (A) or (B) of subsection (b)(1) 
        (whichever is appropriate) with respect to the custodial parent 
        (within the meaning of section 152(e)(1)), and shall not be 
        treated as a qualifying individual with respect to the 
        noncustodial parent.
            ``(6) Payments to related individuals.--No credit shall be 
        allowed under subsection (a) for any amount paid by the 
        taxpayer to an individual--
                    ``(A) with respect to whom, for the taxable year, a 
                deduction under section 151(c) (relating to deduction 
                for personal exemptions for dependents) is allowable 
                either to the taxpayer or his spouse, or
                    ``(B) who is a child of the taxpayer (within the 
                meaning of section 151(c)(3)) who has not attained the 
                age of 19 at the close of the taxable year.
        For purposes of this paragraph, the term `taxable year' means 
        the taxable year of the taxpayer in which the service is 
        performed.
            ``(7) Student.--The term `student' means an individual who 
        during each of 5 calendar months during the taxable year is a 
        full-time student at an educational organization.
            ``(8) Educational organization.--The term `educational 
        organization' means an educational organization described in 
        section 170(b)(1)(A)(ii).
            ``(9) Identifying information required with respect to 
        service provider.--No credit shall be allowed under subsection 
        (a) for any amount paid to any person unless--
                    ``(A) the name, address, and taxpayer 
                identification number of such person are included on 
                the return claiming the credit, or
                    ``(B) if such person is an organization described 
                in section 501(c)(3) and exempt from tax under section 
                501(a), the name and address of such person are 
                included on the return claiming the credit.
        In the case of a failure to provide the information required 
        under the preceding sentence, the preceding sentence shall not 
        apply if it is shown that the taxpayer exercised due diligence 
        in attempting to provide the information so required.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.''
    (b) Conforming Amendments Related to Expenses for Household and 
Dependent Care Expenses.--
            (1) In general.--
                    (A) Repeal of section 21.--Subpart A of part IV of 
                subchapter A chapter 1 of such Code (relating to 
                nonrefundable personal credits) is amended by striking 
                section 21.
                    (B) Additional conforming amendments.--Each of the 
                following provisions of such Code is amended by 
                striking ``section 21'' and inserting ``section 34A'':
                            (i) Section 129(a)(2)(C).
                            (ii) Section 129(b)(2).
                            (iii) Section 129(e)(1).
                            (iv) Section 213(e).
            (2) Clerical amendments.--
                    (A) The table of sections for subpart C of part IV 
                of subchapter A of chapter 1 of such Code is amended by 
                inserting after the item relating to section 34 the 
                following new item:

                              ``Sec. 34A. Expenses for household and 
                                        dependent care services 
                                        necessary for gainful 
                                        employment.''
                    (B) The table of sections for subpart A of part IV 
                of subchapter A chapter 1 of such Code is amended by 
                striking the item relating to section 21.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to taxable years beginning after December 31, 1996.
    (d) Allowance of Credit for Employer Expenses for Child Care 
Assistance.--Subpart D of part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to business related credits) is 
amended by adding at the end the following new section:

``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

    ``(a) In General.--For purposes of section 38, the employer-
provided child care credit determined under this section for the 
taxable year is an amount equal to 50 percent of the qualified child 
care expenditures of the taxpayer for such taxable year.
    ``(b) Dollar Limitation.--The credit allowable under subsection (a) 
for any taxable year shall not exceed $150,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified child care expenditure.--The term 
        `qualified child care expenditure' means any amount paid or 
        incurred--
                    ``(A) to acquire, construct, rehabilitate, or 
                expand property--
                            ``(i) which is to be used as part of a 
                        qualified child care facility of the taxpayer,
                            ``(ii) with respect to which a deduction 
                        for depreciation (or amortization in lieu of 
                        depreciation) is allowable, and
                            ``(iii) which does not constitute part of 
                        the principal residence (within the meaning of 
                        section 1034) of the taxpayer or any employee 
                        of the taxpayer,
                    ``(B) for the operating costs of a qualified child 
                care facility of the taxpayer, including costs related 
                to the training of employees, to scholarship programs, 
                and to the providing of increased compensation to 
                employees with higher levels of child care training,
                    ``(C) under a contract with a qualified child care 
                facility to provide child care services to employees of 
                the taxpayer, or
                    ``(D) under a contract to provide child care 
                resource and referral services to employees of the 
                taxpayer.
            ``(2) Qualified child care facility.--
                    ``(A) In general.--The term `qualified child care 
                facility' means a facility--
                            ``(i) the principal use of which is to 
                        provide child care assistance, and
                            ``(ii) which meets the requirements of all 
                        applicable laws and regulations of the State or 
                        local government in which it is located, 
                        including, but not limited to, the licensing of 
                        the facility as a child care facility.
                Clause (i) shall not apply to a facility which is the 
                principal residence (within the meaning of section 
                1034) of the operator of the facility.
                    ``(B) Special rules with respect to a taxpayer.--A 
                facility shall not be treated as a qualified child care 
                facility with respect to a taxpayer unless--
                            ``(i) enrollment in the facility is open to 
                        employees of the taxpayer during the taxable 
                        year,
                            ``(ii) the facility is not the principal 
                        trade or business of the taxpayer unless at 
                        least 30 percent of the enrollees of such 
                        facility are dependents of employees of the 
                        taxpayer, and
                            ``(iii) the use of such facility (or the 
                        eligibility to use such facility) does not 
                        discriminate in favor of employees of the 
                        taxpayer who are highly compensated employees 
                        (within the meaning of section 414(q)).
    ``(d) Recapture of Acquisition and Construction Credit.--
            ``(1) In general.--If, as of the close of any taxable year, 
        there is a recapture event with respect to any qualified child 
        care facility of the taxpayer, then the tax of the taxpayer 
        under this chapter for such taxable year shall be increased by 
        an amount equal to the product of--
                    ``(A) the applicable recapture percentage, and
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the qualified child care 
                expenditures of the taxpayer described in subsection 
                (c)(1)(A) with respect to such facility had been zero.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

  
                                                         The applicable
  
                                                              recapture
            ``If the recapture event occurs in:
                                                         percentage is:
                Years 1-3............................          100     
                Year 4...............................           85     
                Year 5...............................           70     
                Year 6...............................           55     
                Year 7...............................           40     
                Year 8...............................           25     
                Years 9 and 10.......................           10     
                Years 11 and thereafter..............            0.    
                    ``(B) Years.--For purposes of subparagraph (A), 
                year 1 shall begin on the first day of the taxable year 
                in which the qualified child care facility is placed in 
                service by the taxpayer.
            ``(3) Recapture event defined.--For purposes of this 
        subsection, the term `recapture event' means--
                    ``(A) Cessation of operation.--The cessation of the 
                operation of the facility as a qualified child care 
                facility.
                    ``(B) Change in ownership.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the disposition of a taxpayer's 
                        interest in a qualified child care facility 
                        with respect to which the credit described in 
                        subsection (a) was allowable.
                            ``(ii) Agreement to assume recapture 
                        liability.--Clause (i) shall not apply if the 
                        person acquiring such interest in the facility 
                        agrees in writing to assume the recapture 
                        liability of the person disposing of such 
                        interest in effect immediately before such 
                        disposition. In the event of such an 
                        assumption, the person acquiring the interest 
                        in the facility shall be treated as the 
                        taxpayer for purposes of assessing any 
                        recapture liability (computed as if there had 
                        been no change in ownership).
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under subpart A, B, or D of this 
                part.
                    ``(C) No recapture by reason of casualty loss.--The 
                increase in tax under this subsection shall not apply 
                to a cessation of operation of the facility as a 
                qualified child care facility by reason of a casualty 
                loss to the extent such loss is restored by 
                reconstruction or replacement within a reasonable 
                period established by the Secretary.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons which are treated as 
        a single employer under subsections (a) and (b) of section 52 
        shall be treated as a single taxpayer.
            ``(2) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(3) Allocation in the case of partnerships.--In the case 
        of partnerships, the credit shall be allocated among partners 
        under regulations prescribed by the Secretary.
    ``(f) No Double Benefit.--
            ``(1) Reduction in basis.--For purposes of this subtitle--
                    ``(A) In general.--If a credit is determined under 
                this section with respect to any property by reason of 
                expenditures described in subsection (c)(1)(A), the 
                basis of such property shall be reduced by the amount 
                of the credit so determined.
                    ``(B) Certain dispositions.--If during any taxable 
                year there is a recapture amount determined with 
                respect to any property the basis of which was reduced 
                under subparagraph (A), the basis of such property 
                (immediately before the event resulting in such 
                recapture) shall be increased by an amount equal to 
                such recapture amount. For purposes of the preceding 
                sentence, the term `recapture amount' means any 
                increase in tax (or adjustment in carrybacks or 
                carryovers) determined under subsection (d).
            ``(2) Other deductions and credits.--No deduction or credit 
        shall be allowed under any other provision of this chapter with 
        respect to the amount of the credit determined under this 
        section.
    ``(g) Termination.--This section shall not apply to taxable years 
beginning after December 31, 1999.''
    (e) Conforming Amendments Related to Employer Expenses for Child 
Care Assistance.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 is 
        amended--
                    (A) by striking out ``plus'' at the end of 
                paragraph (11),
                    (B) by striking out the period at the end of 
                paragraph (12), and inserting a comma and ``plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(13) the employer-provided child care credit determined 
        under section 45D.''
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

                              ``Sec. 45D. Employer-provided child care 
                                        credit.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.
    (f) Assistance for Low-Income Working Families.--Section 658B of 
the Child Care Development Block Grant Act of 1990 (42 U.S.C. 9858) is 
amended to read as follows:

``SEC. 658B. FUNDING OF GRANTS.

    ``(a) Authorization of Appropriations.--Except as provided in 
subsection (b), there is authorized to be appropriated to carry out 
this subchapter $2,000,000,000 for each of fiscal years 1997 through 
2002.
    ``(b) Appropriation.--The Secretary shall pay, from funds in the 
Treasury not otherwise appropriated, $1,400,000,000 for fiscal years 
1997 through 2002, through the awarding of grants to States under this 
subchapter for the purpose of providing child care services for 
families who have left the State program of assistance under part A of 
title IV of the Social Security Act because of employment, families 
that are at risk of becoming dependent on such assistance program, and 
low-income working families described in section 658E(c)(3)(D). Funds 
shall be paid under this subsection to the States in the same manner, 
and subject to the same requirements and limitations, as funds are paid 
to the States under section 418 of the Social Security Act (42 U.S.C. 
618).''.
    (g) Grants for Child Care Supply Shortages.--Section 658E(c)(3) of 
the Child Care Development Block Grant Act of 1990 (42 U.S.C. 
9858c(c)(3)) is amended by adding at the end the following:
                    ``(E) Child care supply shortages.--
                            ``(i) In general.--A State shall ensure 
                        that 100 percent of amounts paid to the State 
                        out of funds appropriated under section 
                        658B(a)(2) with respect to each of the fiscal 
                        years 1997 through 2002 shall be used to carry 
                        out child care activities described in clause 
                        (ii) in geographic areas within the State that 
                        have a shortage, as determined by the State, in 
                        consultation with localities, of child care 
                        services.
                            ``(ii) Child care activities described.--
                        The child care activities described in this 
                        clause include the following:
                                    ``(I) Infant care programs.
                                    ``(II) Before- and after-school 
                                child care programs.
                                    ``(III) Resource and referral 
                                programs.
                                    ``(IV) Nontraditional work hours 
                                child care programs.
                                    ``(V) Extending the hours of pre-
                                kindergarten programs to provide full-
                                day services.
                                    ``(VI) Any other child care 
                                programs that the Secretary determines 
                                are appropriate.''.
    (h) Authorization of Appropriations for Low-Income Working 
Families.--
            (1) In general.--Section 658B(a) of the Child Care 
        Development Block Grant Act of 1990 (42 U.S.C. 9858(a)), as 
        amended by subsection (f), is amended--
                    (A) by striking ``Except as provided in'' and 
                inserting the following:
            ``(1) In general.--Except as provided in paragraph (2) 
        and''; and
                    (B) by adding at the end the following:
            ``(2) Child care supply shortages.--There is authorized to 
        be appropriated to carry out section 658E(c)(3)(E), 
        $500,000,000 for each of fiscal years 1997 through 2002.''.
            (2) Conforming amendment.--Section 658(c)(3)(A) of the 
        Child Care Development Block Grant Act of 1990 (42 U.S.C. 
        9858c(c)(3)(A)) is amended by striking ``(D)'' and inserting 
        ``(E)''.
    (i) Report on Access to Child Care by Low-Income Working 
Families.--
            (1) In general.--Section 658K(a)(2) of the Child Care 
        Development Block Grant Act of 1990 (42 U.S.C. 9858i(a)(2)) is 
        amended--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end; and
                    (B) by inserting after subparagraph (E), the 
                following:
                    ``(F) the total number of families described in 
                section 658B(b) that were eligible for but did not 
                receive assistance under this subchapter or under 
                section 418 of the Social Security Act and a 
                description of the obstacles to providing such 
                assistance; and
                    ``(G) the total number of families described in 
                section 658B(b) that received assistance provided under 
                this subchapter or under section 418 of the Social 
                Security Act and a description of the manner in which 
                that assistance was provided;''.
            (2) Secretarial reporting requirement.--Section 658L of the 
        Child Care Development Block Grant Act of 1990 (42 U.S.C. 
        9858j) is amended by inserting ``, with particular emphasis on 
        access of low-income working families,'' after ``public''.
    (j) Effective Date.--Subsections (f) through (i) and the amendments 
made by such subsections shall take effect as if included in the 
enactment of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (Public Law 104-193, 110 Stat. 2105).

SEC. 402. SINGLE PARENT PROTECTION ACT.

    (a) Treatment of Unpaid Child Support.--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. UNPAID CHILD SUPPORT.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed as a credit against the tax imposed by this 
subtitle for the taxable year an amount equal to the unpaid child 
support of such individual for such year.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Eligible individual.--The term `eligible individual' 
        means any individual--
                    ``(A) who is entitled to receive child support 
                payments during the taxable year, and
                    ``(B) who, as of the close of such taxable year, 
                has not received all of the child support payments to 
                which such individual is entitled for such year.
            ``(2) Unpaid child support.--The term `unpaid child 
        support' means, with respect to an individual for any taxable 
        year, the excess of--
                    ``(A) the aggregate child support payments such 
                individual is entitled to receive during such year, 
                over
                    ``(B) the child support payments such individual 
                received during such year.
            ``(3) Child support payment.--
                    ``(A) In general.--The term `child support payment' 
                means, with respect to any taxable year--
                            ``(i) any periodic payment of a fixed 
                        amount, or
                            ``(ii) any payment of a medical or 
                        educational expense, insurance premium, or 
                        other similar item,
                which is required to be paid to the taxpayer during 
                such taxable year by an individual under a support 
                instrument for the support of any child of such 
                individual.
                    ``(B) Coordination with afdc.--The term `child 
                support payment' shall not include any payment the 
                right to which has been assigned to a State under 
                section 402(a)(26) of the Social Security Act.
    ``(c) Taxpayer Required To Identify Individual Required To Pay 
Support.--No credit shall be allowed under this section for a taxable 
year unless the taxpayer includes on the return for such year the name 
and TIN on each individual required to make support payments to the 
taxpayer during such taxable year.
    ``(d) Increase in Tax of Individual Failing To Make Required 
Support Payments.--
            ``(1) In general.--If credit is allowed under this section 
        for any taxable year with respect to unpaid support payments, 
        the tax imposed by this chapter of the individual failing to 
        make such payment (for such individual's taxable year which 
        begins in the calendar year in which the taxable year of the 
        taxpayer begins) shall be increased by the amount of such 
        credit.
            ``(2) No credits against tax, etc.--Any increase in tax 
        under this subsection shall not be treated as a tax imposed by 
        this chapter for purposes of determining--
                    ``(A) the amount of any other credit under this 
                part, or
                    ``(B) the minimum tax under section 55.''
    (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 is amended by striking the item 
        relating to section 35 and inserting the following new items:

                              ``Sec. 35. Unpaid child support.
                              ``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. 403. SINGLE PARENT PROTECTION ACT.

    (a) Treatment of Unpaid Child Support.--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. UNPAID CHILD SUPPORT.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed as a credit against the tax imposed by this 
subtitle for the taxable year an amount equal to the unpaid child 
support of such individual for such year.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Eligible individual.--The term `eligible individual' 
        means any individual--
                    ``(A) who is entitled to receive child support 
                payments during the taxable year, and
                    ``(B) who, as of the close of such taxable year, 
                has not received all of the child support payments to 
                which such individual is entitled for such year.
            ``(2) Unpaid child support.--The term `unpaid child 
        support' means, with respect to an individual for any taxable 
        year, the excess of--
                    ``(A) the aggregate child support payments such 
                individual is entitled to receive during such year, 
                over
                    ``(B) the child support payments such individual 
                received during such year.
            ``(3) Child support payment.--
                    ``(A) In general.--The term `child support payment' 
                means, with respect to any taxable year--
                            ``(i) any periodic payment of a fixed 
                        amount, or
                            ``(ii) any payment of a medical or 
                        educational expense, insurance premium, or 
                        other similar item,
                which is required to be paid to the taxpayer during 
                such taxable year by an individual under a support 
                instrument for the support of any child of such 
                individual.
                    ``(B) Coordination with afdc.--The term `child 
                support payment' shall not include any payment the 
                right to which has been assigned to a State under 
                section 402(a)(26) of the Social Security Act.
    ``(c) Taxpayer Required To Identify Individual Required To Pay 
Support.--No credit shall be allowed under this section for a taxable 
year unless the taxpayer includes on the return for such year the name 
and TIN on each individual required to make support payments to the 
taxpayer during such taxable year.
    ``(d) Increase in Tax of Individual Failing To Make Required 
Support Payments.--
            ``(1) In general.--If credit is allowed under this section 
        for any taxable year with respect to unpaid support payments, 
        the tax imposed by this chapter of the individual failing to 
        make such payment (for such individual's taxable year which 
        begins in the calendar year in which the taxable year of the 
        taxpayer begins) shall be increased by the amount of such 
        credit.
            ``(2) No credits against tax, etc.--Any increase in tax 
        under this subsection shall not be treated as a tax imposed by 
        this chapter for purposes of determining--
                    ``(A) the amount of any other credit under this 
                part, or
                    ``(B) the minimum tax under section 55.''
    (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 is amended by striking the item 
        relating to section 35 and inserting the following new items:

                              ``Sec. 35. Unpaid child support.
                              ``Sec. 36. Overpayments of tax.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

                    TITLE V--EDUCATING OUR CHILDREN

SEC. 501. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds as follows:
            (1) According to the General Accounting Office, one-third 
        of all elementary and secondary schools in the United States, 
        serving 14,000,000 students, need extensive repair or 
        renovation.
            (2) School infrastructure problems exist across the 
        country, but are most severe in central cities and in schools 
        with high proportions of poor and minority children.
            (3) Many States and school districts will need to build new 
        schools in order to accommodate increasing student enrollments; 
        the Department of Education has predicted that the Nation will 
        need 6,000 more schools by the year 2006.
            (4) Many schools do not have the physical infrastructure to 
        take advantage of computers and other technology needed to meet 
        the challenges of the next century.
            (5) While school construction and maintenance are primarily 
        a State and local concern, States and communities have not, on 
        their own, met the increasing burden of providing acceptable 
school facilities for all students, and the poorest communities have 
had the greatest difficulty meeting this need.
            (6) The Federal Government, by providing interest subsidies 
        and similar types of support, can lower the costs of State and 
        local school infrastructure investment, creating an incentive 
        for States and localities to increase their own infrastructure 
        improvement efforts and helping ensure that all students are 
        able to attend schools that are equipped for the 21st century.
    (b) Purpose.--The purpose of this title is to provide Federal 
interest subsidies, or similar assistance, to States and localities to 
help them bring all public school facilities up to an acceptable 
standard and build the additional public schools needed to educate the 
additional numbers of students who will enroll in the next decade.

SEC. 502. DEFINITIONS.

    Except as otherwise provided, as used in this title, the following 
terms have the following meanings:
            (1) Charter school.--The term ``charter school'' has the 
        meaning given that term in section 10306(1) of the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 8066(1)).
            (2) Community school.--The term ``community school'' means 
        a school, or part of a school, that serves as a center for 
        after-school and summer programs and delivery of education, 
        tutoring, cultural, and recreational services, and as a safe 
        haven for all members of the community by--
                    (A) collaborating with other public and private 
                nonprofit agencies (including libraries and other 
                educational, human-service, cultural, and recreational 
                entities) and private businesses in the provision of 
                services;
                    (B) providing services such as literacy and reading 
                programs; senior citizen programs; children's day-care 
                services; nutrition services; services for individuals 
                with disabilities; employment counseling, training, and 
                placement; and other educational, health, cultural, and 
                recreational services; and
                    (C) providing those services outside the normal 
                school day and school year, such as through safe and 
                drug-free safe havens for learning.
            (3)(A) Construction.--The term ``construction'' means--
                    (i) the preparation of drawings and specifications 
                for school facilities;
                    (ii) erecting, building, acquiring, remodeling, 
                renovating, improving, repairing or extending school 
                facilities;
                    (iii) demolition, in preparation for rebuilding 
                school facilities; and
                    (iv) the inspection and supervision of the 
                construction of school facilities.
            (B) The term ``construction'' does not include the 
        acquisition of any interest in real property.
            (4) Local educational agency.--The term ``local educational 
        agency'' has the meaning given that term in section 14101(18) 
        (A) and (B) of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 8801(18) (A) and (B)).
            (5) School facility.--(A) Term ``school facility'' means--
                    (i) a public structure suitable for use as a 
                classroom, laboratory, library, media center, or 
                related facility, whose primary purpose is the 
                instruction of public elementary or secondary students; 
                and
                    (ii) initial equipment, machinery, and utilities 
                necessary or appropriate for school purposes.
            (B) The term ``school facility'' does not include an 
        athletic stadium, or any other structure or facility intended 
        primarily for athletic exhibitions, contests, games, or events 
        for which admission is charged to the general public.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (7) State.--The term ``State'' means each of the 50 States 
        and the Commonwealth of Puerto Rico.
            (8) State educational agency.--The term ``State educational 
        agency'' has the meaning given that term in section 14101(28) 
        of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 8801(28)).

SEC. 503. FUNDS APPROPRIATED.

    There are appropriated $5,000,000,000 for the purpose of carrying 
out this title, which shall be available for obligation by the 
Secretary of Education from October 1, 1997 until September 30, 2001.

SEC. 504. ALLOCATION OF FUNDS.

    (a) Reservation for the Secretary of the Interior and the Outlying 
Areas.--
            (1) The Secretary shall reserve up to 2 percent of the 
        funds appropriated by section 503 to--
                    (A) provide assistance to the Secretary of the 
                Interior, which the Secretary of the Interior shall use 
                for the school construction priorities described in 
                section 1125(c) of the Education Amendments of 1978 (25 
                U.S.C. 2005(c)); and
                    (B) make grants to American Samoa, Guam, the Virgin 
                Islands, and the Commonwealth of the Northern Mariana 
                Islands, in accordance with their respective needs, as 
                determined by the Secretary.
            (2) Grants provided under paragraph (1)(B) shall be used 
        for activities that the Secretary determines best meet the 
        school infrastructure needs of the areas identified in that 
        paragraph, subject to the terms and conditions, consistent with 
        the purpose of this title, that the Secretary may establish.
    (b) Allocation of Remaining Funds.--Of the remaining funds 
appropriated by section 503--
            (1) 50 percent shall be used for formula grants to States 
        under section 511;
            (2) 35 percent shall be used for direct formula grants to 
        local educational agencies under section 526; and
            (3) 15 percent shall be used for competitive grants to 
        local educational agencies under section 527.

                        Part 2--Grants to States

SEC. 511. ALLOCATION OF FUNDS.

    (a) Formula Grants to States.--Subject to subsection (b), the 
Secretary shall allocate the funds available under section 504(b)(1) 
among the States in proportion to the relative amounts each State would 
have received for Basic Grants under subpart 2 of part A of title I of 
the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6331 et 
seq.) for the most recent fiscal year if the Secretary had disregarded 
the numbers of children counted under that subpart who were enrolled in 
schools of local educational agencies that are eligible to receive 
direct grants under section 526 of this title.
    (b) Adjustments to Allocations.--The Secretary shall adjust the 
allocations under subsection (a), as necessary, to ensure that, of the 
total amount allocated to States under subsection (a) and to local 
educational agencies under section 526, the percentage allocated to a 
State under this section and to localities in the State under section 
526 is at least the minimum percentage for the State described in 
section 1124(d) of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6334(d)) for the previous fiscal year.
    (c) Reallocations.--If a State does not apply for its allocation, 
applies for less than its full allocation, or fails to submit an 
approvable application, the Secretary may reallocate all or a portion 
of the State's allocation, as the case may be, to the remaining States 
in the same proportions as the original allocations were made to those 
States under subsections (a) and (b).

SEC. 512. ELIGIBLE STATE AGENCY.

    The Secretary shall award each State's grant to the State agency, 
such as a State educational agency, a State school construction agency, 
or a State bond bank, that the Governor, with the agreement of the 
chief State school officer, designates as best able to administer the 
grant.

SEC. 513. ALLOWABLE USE OF FUNDS.

    Each State shall use its grant under this part only for one or more 
of the following activities to subsidize the cost of eligible school 
construction projects described in section 514:
            (1) Providing a portion of the interest cost (or of another 
        financing cost approved by the Secretary) on bonds, 
        certificates of participation, purchase or lease arrangements, 
        or other forms of indebtedness issued or entered into by a 
        State or its instrumentality for the purpose of financing 
        eligible projects.
            (2) State-level expenditures approved by the Secretary for 
        credit enhancement for the debt or financing instruments 
        described in paragraph (1).
            (3) Making subgrants, or making loans through a State 
        revolving fund, to local educational agencies or (with the 
        agreement of the affected local educational agency) to other 
        qualified public agencies to subsidize--
                    (A) the interest cost (or another financing cost 
                approved by the Secretary) of bonds, certificates of 
                participation, purchase or lease arrangements, or other 
                forms of indebtedness issued or entered into by a local 
                educational agency or other agency or unit of local 
                government for the purpose of financing eligible 
                projects; or
                    (B) local expenditures approved by the Secretary 
                for credit enhancement for the debt or financing 
                instruments described in subparagraph (A).
            (4) Other State and local expenditures approved by the 
        Secretary that leverage funds for additional school 
        construction.

SEC. 514. ELIGIBLE CONSTRUCTION PROJECTS; PERIOD OF INITIATION.

    (a) Eligible Projects.--States and their subgrantees may use funds 
under this part, in accordance with section 513, to subsidize the cost 
of--
            (1) construction of elementary and secondary school 
        facilities in order to ensure the health and safety of all 
        students, which may include the removal of environmental 
        hazards; improvements in air quality, plumbing, lighting, 
        heating and air conditioning, electrical systems, or basic 
        school infrastructure; and building improvements that increase 
        school safety;
            (2) construction activities needed to meet the requirements 
        of section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
        794) or of the Americans with Disabilities Act of 1990 (42 
        U.S.C. 12101 et seq.);
            (3) construction activities that increase the energy 
        efficiency of school facilities;
            (4) construction that facilitates the use of modern 
        educational technologies;
            (5) construction of new school facilities that are needed 
        to accommodate growth in school enrollments; or
            (6) construction projects needed to facilitate the 
        establishment of charter schools and community schools.
    (b) Period for Initiation of Project.--(1) Each State shall use its 
grant under this part only to subsidize construction projects described 
in subsection (a) that the State or its localities have chosen to 
initiate, through the vote of a school board, passage of a bond issue, 
or similar public decision, made between July 11, 1996 and September 
30, 2001.
    (2) If a State determines, after September 30, 2001, that an 
eligible project for which it has obligated funds under this part will 
not be carried out, the State may use those funds (or any available 
portion of those funds) for other eligible projects selected in 
accordance with this part.
    (c) Reallocation.--If the Secretary determines, by a date before 
September 30, 2001 selected by the Secretary, that a State is not 
making satisfactory progress in carrying out its plan for the use of 
the funds allocated to it under this part, the Secretary may reallocate 
all or part of those funds, including any interest earned by the State 
on those funds, to one or more other States that are making 
satisfactory progress.

SEC. 515. SELECTION OF LOCALITIES AND PROJECTS.

    (a) Priorities.--In determining which localities and activities to 
support with grant funds, each State shall give the highest priority 
to--
            (1) localities with the greatest needs, as demonstrated by 
        inadequate educational facilities, coupled with a low level of 
        resources available to meet school construction needs; and
            (2) localities that will achieve the greatest leveraging 
        effect on school construction from assistance under this part.
    (b) Additional Criteria.--In addition to the priorities required by 
subsection (a), each State shall consider each of the following in 
determining the use of its grant funds under this part:
            (1) The condition of the school facilities in different 
        communities in the State.
            (2) The energy efficiency and the effect on the environment 
        of projects proposed by communities, and the extent to which 
        these projects use cost-efficient architectural design.
            (3) The commitment of communities to finance school 
        construction and renovation projects with assistance from the 
        State's grant, as demonstrated by their incurring indebtedness 
        or by similar public or private commitments for the purposes 
        described in section 514(a).
            (4) The ability of communities to repay bonds or other 
        forms of indebtedness supported with grant funds.
            (5) The particular needs, if any, of rural communities in 
        the State for assistance under this title.
            (6) The receipt by local educational agencies in the State 
        of grants under part 3, except that a local educational agency 
        is not ineligible for a subgrant under this part solely because 
        it receives such a grant.

SEC. 516. STATE APPLICATIONS.

    (a) Application Required.--A State that wishes to receive a grant 
under this part shall submit an application to the Secretary, in the 
manner the Secretary may require, not later than two years after the 
date of enactment of this title.
    (b) Development of Application.--(1) The State agency designated 
under section 512 shall develop the State's application under this part 
only after broadly consulting with the State board of education, and 
representatives of local school boards, school administrators, the 
business community, parents, and teachers in the State about the best 
means of carrying out this part.
    (2) If the State educational agency is not the State agency 
designated under section 512, the designated agency shall consult with 
the State educational agency and obtain its approval before submitting 
the State's application.
    (c) State Survey.--(1) Before submitting the State's application, 
the State agency designated under section 512, with the involvement of 
local school officials and experts in building construction and 
management, shall survey the needs throughout the State (including in 
localities receiving grants under part 3) for construction and 
renovation of school facilities, including, at a minimum--
            (A) the overall condition of school facilities in the 
        State, including health and safety problems;
            (B) the capacity of the schools in the State to house 
        projected enrollments; and
            (C) the extent to which the schools in the State offer the 
        physical infrastructure needed to provide a high-quality 
        education to all students.
    (2) A State need not conduct a new survey under paragraph (1) if it 
has previously completed a survey that meets the requirements of that 
paragraph and that the Secretary finds is sufficiently recent for the 
purpose of carrying out this part.
    (d) Application Contents.--Each State application under this part 
shall include--
            (1) an identification of the State agency designated by the 
        Governor under section 512 to receive the State's grant under 
        this part;
            (2) a summary of the results of the State's survey of its 
        school facility needs, as described in subsection (c);
            (3) a description of how the State will implement its 
        program under this part;
            (4) a description of how the State will allocate its grant 
        funds, including a description of how the State will implement 
        the priorities and criteria described in section 515;
            (5)(A) a description of the mechanisms that will be used to 
        finance construction projects supported by grant funds; and
            (B) a statement of how the State will determine the amount 
        of the Federal subsidy to be applied, in accordance with 
        section 517(a), to each local project that the State will 
        support;
            (6) a description of how the State will ensure that the 
        requirements of this part are met by subgrantees under this 
        part;
            (7) a description of the steps the State will take to 
        ensure that local educational agencies will adequately maintain 
        the facilities that are constructed or improved with funds 
        under this part;
            (8) an assurance that the State will use its grant only to 
        supplement the funds that the State, and the localities 
        receiving subgrants, would spend on school construction 
and renovation in the absence of a grant under this part, and not to 
supplant those funds;
            (9) an assurance that, during the four-year period 
        beginning with the year the State receives its grant, the 
        combined expenditures for school construction by the State and 
        the localities that benefit from the State's program under this 
        part (which, at the State's option, may include private 
        contributions) will be at least 125 percent of those combined 
        expenditures for that purpose for the four preceding years; and
            (10) other information and assurances that the Secretary 
        may require.
    (e) Waiver of Requirement To Increase Expenditures.--The Secretary 
may waive or modify the requirement of subsection (d)(9) for a 
particular State if the State demonstrates to the Secretary's 
satisfaction that that requirement is unduly burdensome because the 
State or its localities have incurred a particularly high level of 
school construction expenditures during the previous four years.

SEC. 517. AMOUNT OF FEDERAL SUBSIDY.

    (a) Projects Funded With Subgrants.--For each construction project 
assisted by a State through a subgrant to a locality, the State shall 
determine the amount of the Federal subsidy under this part, taking 
into account the number or percentage of children from low-income 
families residing in the locality, subject to the following limits:
            (1) If the locality will use the subgrant to help meet the 
        costs of repaying bonds issued for a school construction 
        project, the Federal subsidy shall be not more than one-half of 
        the total interest cost of those bonds, determined in 
        accordance with paragraph (4).
            (2) If the bonds to be subsidized are general obligation 
        bonds issued to finance more than one type of activity 
        (including school construction), the Federal subsidy shall be 
        not more than one-half of the interest cost for that portion of 
        the bonds that will be used for school construction purposes, 
        determined in accordance with paragraph (4).
            (3) If the locality elects to use its subgrant for an 
        allowable activity not described in paragraph (1) or (2), such 
        as for certificates of participation, purchase or lease 
        arrangements, reduction of the amount of principal to be 
        borrowed, or credit enhancements for individual construction 
        projects, the Federal subsidy shall be not more than one-half 
        of the interest cost, as determined by the State in accordance 
        with paragraph (4), that would have been incurred if bonds had 
        been used to finance the project.
            (4) The interest cost referred to in paragraphs (1), (2), 
        and (3) shall be--
                    (A) calculated on the basis of net present value; 
                and
                    (B) determined in accordance with an amortization 
                schedule and any other criteria and conditions the 
                Secretary considers necessary, including provisions to 
                ensure comparable treatment of different financing 
                mechanisms.
    (b) State-Funded Projects.--For a construction project under this 
part funded directly by the State through the use of State-issued bonds 
or other financial instruments, the Secretary shall determine the 
Federal subsidy in accordance with subsection (a).
    (c) Non-Federal Share.--A State, and localities in the State 
receiving subgrants under this part, may use any non-Federal funds, 
including State, local, and private-sector funds, for the financing 
costs that are not covered by the Federal subsidy under subsection (a).

SEC. 518. SEPARATE FUNDS OR ACCOUNTS' PRUDENT INVESTMENT.

    (a) Separate Funds or Accounts Required.--Each State that receives 
a grant, and each recipient of a subgrant under this part, shall 
deposit the grant or subgrant proceeds in a separate fund or account, 
from which it shall make bond repayments and pay other expenses 
allowable under this part.
    (b) Prudent Investment Required.--Each State that receives a grant, 
and each recipient of a subgrant under this part, shall--
          (1) invest the grant or subgrant in a fiscally prudent 
        manner, in order to generate amounts needed to make repayments 
        on bonds and other forms of indebtedness described in section 
        513; and
            (2) notwithstanding section 6503 of title 31, United States 
        Code or any other law, use the proceeds of that investment to 
        carry out this part.

SEC. 519. STATE REPORTS.

    (a) Reports Required.--
            (1) Each State receiving a grant under this part shall 
        report to the Secretary on its activities under this part, in 
        the form and manner the Secretary may prescribe.
            (2) If the State educational agency is not the State agency 
        designated under section 512, the State's report shall include 
        the approval of the State educational agency or its comments on 
        the report.
    (b) Contents.--Each report shall--
            (1) describe the State's implementation of this part, 
        including how the State has met the requirements of this part;
            (2) identify the specific school facilities constructed, 
        renovated, or modernized with support from the grant, and the 
        mechanisms used to finance those activities;
            (3) identify the level of Federal subsidy provided to each 
        construction project carried out with support from the State's 
        grant; and
            (4) include any other information the Secretary may 
        require.
    (c) Frequency.--(1) Each State shall submit its first report under 
this section not later than 24 months after it receives its grant under 
this part.
    (2) Each State shall submit an annual report for each of the three 
years after submitting its first report, and subsequently shall submit 
periodic reports as long as the State or localities in the State are 
using grant funds.

          Part 3--Direct Grants to Local Educational Agencies

SEC. 521. ELIGIBLE LOCAL EDUCATIONAL AGENCIES.

    (a) Eligible Agencies.--Except as provided in subsection (b), the 
local educational agencies that are eligible to receive formula grants 
under section 526 and competitive grants under section 527 from the 
Secretary are the 100 local educational agencies with the largest 
numbers of children aged 5 through 17 from families living below the 
poverty level, as determined by the Secretary using the most recent 
data available from the Department of Commerce that are satisfactory to 
the Secretary.
    (b) Certain Jurisdictions Ineligible.--For the purpose of this 
part, the local educational agencies for Hawaii and the Commonwealth of 
Puerto Rico are not eligible local educational agencies.

SEC. 522. GRANTEES.

    For each local educational agency described in section 521(a) for 
which an approvable application is submitted, the Secretary shall make 
any grant under this part to the local educational agency or to another 
public agency, on behalf of the local educational agency, if the 
Secretary determines, on the basis of the local educational agency's 
recommendation, that the other agency is better able to carry out 
activities under this part.

SEC. 523. ALLOWABLE USE OF FUNDS.

    Each grantee under this part shall use its grant only for one or 
more of the following activities to reduce the cost of financing 
eligible school construction projects described in section 524:
            (1) Providing a portion of the interest cost (or of any 
        other financing cost approved by the Secretary) on bonds, 
        certificates of participation, purchase or lease arrangements, 
        or other forms of indebtedness issued or entered into by a 
        local educational agency or other unit or agency of local 
        government for the purpose of financing eligible school 
        construction projects.
            (2) Local expenditures approved by the Secretary for credit 
        enhancement for the debt or financing instruments described in 
        paragraph (1).
            (3) Other local expenditures approved by the Secretary that 
        leverage funds for additional school construction.

SEC. 524. ELIGIBLE CONSTRUCTION PROJECTS; REDISTRIBUTION.

    (a) Eligible Projects.--A grantee under this part may use its 
grant, in accordance with section 523, to subsidize the cost of the 
activities described in section 514(a) for projects that the local 
educational agency has chosen to initiate, through the vote of the 
school board, passage of a bond issue, or similar public decision, made 
between July 11, 1996 and September 30, 2001.
    (b) Redistribution.--If the Secretary determines, by a date before 
September 30, 2001 selected by the Secretary, that a local educational 
agency is not making satisfactory progress in carrying out its plan for 
the use of funds awarded to it under this part, the Secretary may 
redistribute all or part of those funds, and any interest earned by 
that agency on those funds, to one or more other local educational 
agencies that are making satisfactory progress.

SEC. 525. LOCAL APPLICATIONS.

    (a) Application Required.--A local educational agency, or an 
alternative agency described in section 522 (both referred to in this 
part as the ``local agency''), that wishes to receive a grant under 
this part shall submit an application to the Secretary, in the manner 
the Secretary may require, not later than two years after the date of 
enactment of this title.
    (b) Development of Application.--(1) The local agency shall develop 
the local application under this part only after broadly consulting 
with parents, administrators, teachers, the business community, and 
other members of the local community about the best means of carrying 
out this part.
    (2) If the local educational agency is not the applicant, the 
applicant shall consult with the local educational agency, and shall 
obtain its approval before submitting its application to the Secretary.
    (c) Local Survey.--(1) Before submitting its application, the local 
agency, with the involvement of local school officials and experts in 
building construction and management, shall survey the local need for 
construction and renovation of school facilities, including, at a 
minimum--
            (A) the overall condition of school facilities in the local 
        educational agency, including health and safety problems;
            (B) the capacity of the local educational agency's schools 
        to house projected enrollments; and
            (C) the extent to which the local educational agency's 
        schools offer the physical infrastructure needed to provide a 
        high-quality education to all students.
    (2) A local educational agency need not conduct a new survey under 
paragraph (1) if it has previously completed a survey that meets the 
requirements of that paragraph and that the Secretary finds is 
sufficiently recent for the purpose of carrying out this part.
    (d) Application Contents.--Each local application under this part 
shall include--
            (1) an identification of the local agency to receive the 
        grant under this part;
            (2) a summary of the results of the survey of school 
        facility needs, as described in subsection (c);
            (3) a description of how the local agency will implement 
        its program under this part;
            (4) a description of the criteria the local agency has used 
        to determine which construction projects to support with grant 
        funds;
            (5) a description of the construction projects that will be 
        supported with grant funds;
            (6) a description of the mechanisms that will be used to 
        finance construction projects supported by grant funds;
            (7) a requested level of Federal subsidy, with a 
        justification for that level, for each construction project to 
        be supported by the grant, in accordance with section 528(a), 
        including the financial and demographic information the 
        Secretary may require;
            (8) a description of the steps the agency will take to 
        ensure that facilities constructed or improved with funds under 
        this part will be adequately maintained;
            (9) an assurance that the agency will use its grant only to 
        supplement the funds that the locality would spend on school 
        construction and renovation in the absence of a grant under 
        this part, and not to supplant those funds;
            (10) an assurance that, during the four-year period 
        beginning with the year the local educational agency receives 
        its grant, its expenditures for school construction (which, at 
        that agency's option, may include private contributions) will 
        be at least 125 percent of its expenditures for that purpose 
        for the four preceding years; and
            (11) other information and assurances that the Secretary 
        may require.
    (e) Waiver of Requirement To Increase Expenditures.--The Secretary 
may waive or modify the requirement of subsection (d)(10) for a local 
educational agency that demonstrates to the Secretary's satisfaction 
that that requirement is unduly burdensome because that agency has 
incurred a particularly high level of school construction expenditures 
during the previous four years.

SEC. 526. FORMULA GRANTS.

    (a) Allocations.--The Secretary shall allocate the funds available 
under section 504(b)(2) to the local educational agencies identified 
under section 521(a) on the basis of their relative allocations under 
section 1124 of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6333) in the most recent year for which that information is 
available to the Secretary.
    (b) Reallocations.--If a local educational agency does not apply 
for its allocation, applies for less than its full allocation, or fails 
to submit an approvable application, the Secretary may reallocate all 
or a portion of its allocation, as the case may be, to the remaining 
local educational agencies in the same proportions as the original 
allocations were made to those agencies under subsection (a).

SEC. 527. COMPETITIVE GRANTS.

    (a) Grants Authorized.--The Secretary shall use funds available 
under section 504(b)(3) to make additional grants, on a competitive 
basis, to recipients of formula grants under section 526.
    (b) Additional Application Materials.--Any eligible applicant under 
section 526 that wishes to receive additional funds under this section 
shall include in its application under section 525 the following 
additional information:
            (1) The amount of funds requested under this section, in 
        accordance with ranges or limits that the Secretary may 
        establish based on factors such as relative size of the 
        eligible applicants.
            (2) A description of the additional construction activities 
        that the applicant would carry out with those funds.
            (3) Information on the current financial effort the 
        applicant is making for elementary and secondary education, 
        including support from private sources, relative to its 
        resources.
            (4) Information on the extent to which the applicant will 
        increase its own (or other public or private) spending for 
        school construction in the year in which it receives a grant 
        under this section, above the average annual amount for 
        construction activity during the preceding four years.
            (5) A description of the energy efficiency and the effect 
        on the environment of the projects that the applicant will 
        undertake, both with its grant under this section and its grant 
        under section 526, and of the extent to which those projects 
        will use cost-efficient architectural design.
            (6) Other information that the Secretary may require.
    (c) Selection of Grantees.--The Secretary shall select grantees 
under this section on the basis of criteria, consistent with the 
purpose of this title, that the Secretary may establish, which shall 
include--
            (1) the relative need of applicants, as demonstrated by 
        inadequate educational facilities and a low level of resources 
        to meet their school construction needs;
            (2) the commitment of applicants to meet their school 
        construction needs and the leveraging effect that assistance 
        under this part would have, as demonstrated by the additional 
        resources that they will provide, from non-Federal sources, to 
        meet those needs, in accordance with subsection (b)(4).

SEC. 528. AMOUNT OF FEDERAL SUBSIDY.

    (a) Amount of Federal Subsidy.--For each construction project 
assisted under this part, the Secretary shall determine the amount of 
the Federal subsidy in accordance with section 517(a).
    (b) Non-Federal Share.--A grantee under this part may use any non-
Federal funds, including State, local, and private-sector funds, for 
the financing costs that are not covered by the Federal subsidy under 
subsection (a).

SEC. 529. SEPARATE FUNDS OR ACCOUNTS; PRUDENT INVESTMENT

    (a) Separate Funds or Accounts Required.--Each grantee under this 
part shall deposit the grant proceeds in a separate fund or account, 
from which it shall make bond repayments and pay other expenses 
allowable under this part.
    (b) Prudent Investment Required.--Each grantee under this part 
shall--
            (1) invest the grant funds in a fiscally prudent manner, in 
        order to generate amounts needed to make repayments on bonds 
        and other forms of indebtedness; and
            (2) Notwithstanding section 6503 of title 31, United States 
        Code or any other law, use the proceeds of that investment to 
        carry out this part.

SEC. 530. LOCAL REPORTS.

    (a) Reports Required.--(1) Each grantee under this part shall 
report to the Secretary on its activities under this part, in the form 
and manner the Secretary may prescribe.
    (2) If the local educational agency is not the grantee under this 
part, the grantee's report shall include the approval of the local 
educational agency or its comments on the report.
    (b) Contents.--Each report shall--
            (1) describe the grantee's implementation of this part, 
        including how it has met the requirements of this part;
            (2) identify the specific school facilities constructed, 
        renovated, or modernized with support from the grant, and the 
        mechanisms used to finance those activities; and
            (3) other information the Secretary may require.
    (c) Frequency.--(1) Each grantee shall submit its first report 
under this section not later than 24 months after it receives its grant 
under this part.
    (2) Each grantee shall submit an annual report for each of the 
three years after submitting its first report, and subsequently shall 
submit periodic reports as long as it is using grant funds.

                       Part 4--General Provisions

SEC. 531. TECHNICAL EMPLOYEES.

    For the purpose of carrying out this title, the Secretary, without 
regard to the provisions of title 5, United States Code, governing 
appointments in the competitive service, may appoint not more than 10 
technical employees who may be paid without regard to the provisions of 
chapter 51 and subchapter IV of chapter 5 of that title relating to 
classification and General Schedule pay rates.

SEC. 532. WAGE RATES.

    (a) Prevailing Wage.--The Secretary shall ensure that all laborers 
and mechanics employed by contractors and subcontractors on any project 
assisted under this title are paid wages at rates not less than those 
prevailing as determined by the Secretary of Labor in accordance with 
the Act of March 3, 1931, as amended (40 U.S.C. 276a et seq.). The 
Secretary of Labor has, with respect to this section, the authority and 
functions established in Reorganization Plan Numbered 14 of 1950 
(effective May 24, 1950, 64 Stat. 1267) and section 2 of the Act of 
June 13, 1934 (40 U.S.C. 276c).
    (b) Waiver for Volunteers.--Section 7305 of the Federal Acquisition 
Streamlining Act of 1994 (40 U.S.C. 276d-3) is amended--
            (1) in paragraph (5), by striking out the ``and'' at the 
        end thereof;
            (2) in paragraph (6), by striking out the period at the end 
        thereof and inserting a semi-colon and ``and''; and
            (3) by adding at the end thereof the following new 
        paragraph:
            ``(7) the Partnership to Rehabilitate America's Schools Act 
        of 1997.''.

SEC. 533. NO LIABILITY OF FEDERAL GOVERNMENT.

    (a) No Federal Liability.--Any financial instruments, including but 
not limited to contracts, bonds, bills, notes, certificates of 
participation, or purchase or lease arrangements, issued by States, 
localities or instrumentalities thereof in connection with any 
assistance provided by the Secretary under this title are obligations 
of such States, localities or instrumentalities and not obligations of 
the United States and are not guaranteed by the full faith and credit 
of the United States.
    (b) Notice Requirement.--Documents relating to any financial 
instruments, including but not limited to contracts, bonds, bills, 
notes, offering statements, certificates of participation, or purchase 
or lease arrangements, issued by States, localities or 
instrumentalities thereof in connection with any assistance provided 
under this title, shall include a prominent statement providing notice 
that the financial instruments are not obligations of the United States 
and are not guaranteed by the full faith and credit of the United 
States.

SEC. 534. CONSULTATION WITH SECRETARY OF THE TREASURY.

    The Secretary shall consult with the Secretary of the Treasury in 
carrying out this title.

                     TITLE VI--BUDGETING PROVISIONS

SEC. 601. INCREASE IN BUDGET FUNCTIONS FOR DOMESTIC PROGRAMS.

    The Director of the Congressional Budget Office shall determine, by 
budget function, the amount of new budget authority and the amount of 
outlays for fiscal year 1998 resulting from the provisions of this Act. 
The amounts so determined shall be considered for all purposes as 
increases in the amounts provided in the Concurrent Resolution on the 
Budget for Fiscal Year 1998 (as adopted) for new budget authority, and 
the amounts provided in such resolution for outlays, for fiscal year 
1998 for those budget functions.

SEC. 602. OFFSETTING REDUCTIONS IN DEFENSE BUDGET FUNCTION.

    The amount provided in the Concurrent Resolution on the Budget for 
Fiscal Year 1998 (as adopted) for new budget authority, and the amount 
provided in such resolution for outlays, for fiscal year 1998 for the 
national defense budget function (function 050) are hereby reduced by 
the amounts (as determined by Director of the Congressional Budget 
Office) necessary to offset the total increases in amounts for new 
budget authority and for outlays under section 601.
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