[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 8 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                  S. 8

  To improve the economic security of workers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 22, 2001

  Mr. Daschle (for himself, Mr. Kennedy, Mr. Dodd, Ms. Mikulski, Mr. 
   Wellstone, Mrs. Murray, Mrs. Clinton, Mr. Akaka, Mr. Breaux, Mrs. 
 Boxer, Mr. Corzine, Mr. Dayton, Mr. Durbin, Mr. Kerry, Mr. Leahy, Mr. 
 Lieberman, Mr. Rockefeller, Mr. Schumer, Mr. Wyden, and Mr. Johnson) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To improve the economic security of workers, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
                         TITLE I--MINIMUM WAGE

Sec. 101. Short title.
Sec. 102. Minimum wage increase.
Sec. 103. Applicability of minimum wage to the Commonwealth of the 
                            Northern Mariana Islands.
                      TITLE II--PAYCHECK FAIRNESS

Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Enhanced enforcement of equal pay requirements.
Sec. 204. Training.
Sec. 205. Research, education, and outreach.
Sec. 206. Technical assistance and employer recognition program.
Sec. 207. Establishment of the National Award for Pay Equity in the 
                            Workplace.
Sec. 208. Collection of pay information by the Equal Employment 
                            Opportunity Commission.
Sec. 209. Authorization of appropriations.
                      TITLE III--LIFELONG LEARNING

Sec. 301. Demonstration programs and projects to provide technical 
                            skills training for workers.
                          TITLE IV--FAMILYCARE

Sec. 401. Short title of title.
Sec. 402. Renaming of title XXI program.
Sec. 403. Familycare coverage of parents under the medicaid program and 
                            title XXI.
Sec. 404. Automatic enrollment of children born to title XXI parents.
Sec. 405. Optional coverage of legal immigrants under the medicaid 
                            program and title XXI.
Sec. 406. Optional coverage of children through age 20 under the 
                            medicaid program and title XXI.
Sec. 407. Application of simplified title XXI procedures under the 
                            medicaid program.
Sec. 408. Improving welfare-to-work transition under the medicaid 
                            program.
Sec. 409. Elimination of 100 hour rule and other AFDC-related 
                            eligibility restrictions.
Sec. 410. State grant program for market innovation.
Sec. 411. Limitations on conflicts of interest.
Sec. 412. Increase in CHIP allotment for each of fiscal years 2002 
                            through 2004.
Sec. 413. Demonstration programs to improve medicaid and CHIP outreach 
                            to homeless individuals and families.
Sec. 414. Technical and conforming amendments to authority to pay 
                            medicaid expansion costs from title XXI 
                            appropriation.
                TITLE V--TAX RELIEF FOR WORKING FAMILIES

Sec. 501. Increased earned income tax credit for 2 or more qualifying 
                            children.
Sec. 502. Simplification of definition of earned income.
Sec. 503. Simplification of definition of child dependent.
Sec. 504. Other modifications to earned income tax credit.
TITLE VI--RESTORING FOOD STAMPS FOR LEGAL IMMIGRANTS AND THEIR FAMILIES

Sec. 601. Restoration of food stamp benefits for aliens.

                         TITLE I--MINIMUM WAGE

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Fair Minimum Wage Act of 2001''.

SEC. 102. MINIMUM WAGE INCREASE.

    (a) Wage.--Paragraph (1) of section 6(a) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended to read as 
follows:
            ``(1) except as otherwise provided in this section, not 
        less than--
                    ``(A) except as provided in subparagraphs (B) and 
                (C), $5.75 an hour beginning 30 days after the date of 
                enactment of the Fair Minimum Wage Act of 2001;
                    ``(B) $6.25 an hour during the year beginning on 
                January 1, 2002; and
                    ``(C) $6.65 an hour beginning on January 1, 
                2003;''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the earlier of--
            (1) 30 days after the date of enactment of this Act; and
            (2) January 1, 2002.

SEC. 103. APPLICABILITY OF MINIMUM WAGE TO THE COMMONWEALTH OF THE 
              NORTHERN MARIANA ISLANDS.

    (a) In General.--Subject to subsection (b), the provisions of 
section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206) shall 
apply to the Commonwealth of the Northern Mariana Islands.
    (b) Transition.--
            (1) In general.--Notwithstanding subsection (a), the 
        minimum wage applicable to the Commonwealth of the Northern 
        Mariana Islands under section 6(a)(1) of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 206(a)(1)) shall be $3.55 an 
        hour beginning on the date that is 30 days after the date of 
        enactment of this section.
            (2) Increases in minimum wage.--
                    (A) In general.--On the date that is 6 months after 
                the date of enactment of this Act, and every 6 months 
                thereafter, the minimum wage applicable to the 
                Commonwealth of the Northern Mariana Islands under 
                section 6(a)(1) of the Fair Labor Standards Act of 1938 
                (29 U.S.C. 206(a)(1)) shall be increased by $0.50 per 
                hour (or such a lesser amount as may be necessary to 
                equal the minimum wage under such section) until such 
                time as the minimum wage applicable to the Commonwealth 
                of the Northern Mariana Islands under this subsection 
                is equal to the minimum wage set forth in section 
                6(a)(1) of such Act for the date involved.
                    (B) Further increases.--With respect to dates 
                beginning after the minimum wage applicable to the 
                Commonwealth of the Northern Mariana Islands is equal 
                to the minimum wage set forth in section 6(a)(1) of the 
                Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)), 
                as provided in subparagraph (A), such applicable 
                minimum wage shall be immediately increased so as to 
                remain equal to the minimum wage set forth in section 
                6(a)(1) of such Act for the date involved.

                      TITLE II--PAYCHECK FAIRNESS

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Paycheck Fairness Act''.

SEC. 202. FINDINGS.

    Congress makes the following findings:
            (1) Women have entered the workforce in record numbers.
            (2) Even today, women earn significantly lower pay than men 
        for work on jobs that require equal  skill, effort, and 
responsibility and that are performed under similar working conditions. 
These pay disparities exist in both the private and governmental 
sectors. In many instances, the pay disparities can only be due to 
continued intentional discrimination or the lingering effects of past 
discrimination.
            (3) The existence of such pay disparities--
                    (A) depresses the wages of working families who 
                rely on the wages of all members of the family to make 
                ends meet;
                    (B) prevents the optimum utilization of available 
                labor resources;
                    (C) has been spread and perpetuated, through 
                commerce and the channels and instrumentalities of 
                commerce, among the workers of the several States;
                    (D) burdens commerce and the free flow of goods in 
                commerce;
                    (E) constitutes an unfair method of competition in 
                commerce;
                    (F) leads to labor disputes burdening and 
                obstructing commerce and the free flow of goods in 
                commerce;
                    (G) interferes with the orderly and fair marketing 
                of goods in commerce; and
                    (H) in many instances, may deprive workers of equal 
                protection on the basis of sex in violation of the 5th 
                and 14th amendments.
            (4)(A) Artificial barriers to the elimination of 
        discrimination in the payment of wages on the basis of sex 
        continue to exist more than 3 decades after the enactment of 
        the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) 
        and the Civil Rights Act of 1964 (42 U.S.C. 2000a et seq.).
            (B) Elimination of such barriers would have positive 
        effects, including--
                    (i) providing a solution to problems in the economy 
                created by unfair pay disparities;
                    (ii) substantially reducing the number of working 
                women earning unfairly low wages, thereby reducing the 
                dependence on public assistance; and
                    (iii) promoting stable families by enabling all 
                family members to earn a fair rate of pay;
                    (iv) remedying the effects of past discrimination 
                on the basis of sex and ensuring that in the future 
                workers are afforded equal protection on the basis of 
                sex; and
                    (v) ensuring equal protection pursuant to Congress' 
                power to enforce the 5th and 14th amendments.
            (5) With increased information about the provisions added 
        by the Equal Pay Act of 1963 and wage data, along with more 
        effective remedies, women will be better able to recognize and 
        enforce their rights to equal pay for work on jobs that require 
        equal skill, effort, and responsibility and that are performed 
        under similar working conditions.
            (6) Certain employers have already made great strides in 
        eradicating unfair pay disparities in the workplace and their 
        achievements should be recognized.

SEC. 203. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.

    (a) Required Demonstration for Affirmative Defense.--Section 
6(d)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(d)(1)) 
is amended by striking ``(iv) a differential'' and all that follows 
through the period and inserting the following: ``(iv) a differential 
based on a bona fide factor other than sex, such as education, training 
or experience, except that this clause shall apply only if--
                            ``(I) the employer demonstrates that--
                                    ``(aa) such factor--
                                            ``(AA) is job-related with 
                                        respect to the position in 
                                        question; or
                                            ``(BB) furthers a 
                                        legitimate business purpose, 
                                        except that this item shall not 
                                        apply where the employee 
                                        demonstrates that an 
                                        alternative employment practice 
                                        exists that would serve the 
                                        same business purpose without 
                                        producing such differential and 
                                        that the employer has refused 
                                        to adopt such alternative 
                                        practice; and
                                    ``(bb) such factor was actually 
                                applied and used reasonably in light of 
                                the asserted justification; and
                            ``(II) upon the employer succeeding under 
                        subclause (I), the employee fails to 
                        demonstrate that the differential produced by 
                        the reliance of the employer on such factor is 
                        itself the result of discrimination on the 
                        basis of sex by the employer.
        ``An employer that is not otherwise in compliance with this 
        paragraph may not reduce the wages of any employee in order to 
        achieve such compliance.''.
    (b) Application of Provisions.--Section 6(d)(1) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206(d)(1)) is amended by adding at the 
end the following: ``The provisions of this subsection shall apply to 
applicants for employment if such applicants, upon employment by the 
employer, would be subject to any provisions of this section.''.
    (c) Elimination of Establishment Requirement.--Section 6(d) of the 
Fair Labor Standards Act of 1938 (29 U.S.C. 206(d)) is amended--
            (1) by striking ``, within any establishment in which such 
        employees are employed,''; and
            (2) by striking ``in such establishment'' each place it 
        appears.
    (d) Nonretaliation Provision.--Section 15(a)(3) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 215(a)(3)) is amended--
            (1) by striking ``or has'' each place it appears and 
        inserting ``has''; and
            (2) by inserting before the semicolon the following: ``, or 
        has inquired about, discussed, or otherwise disclosed the wages 
        of the employee or another employee, or because the employee 
        (or applicant) has made a charge, testified, assisted, or 
        participated in any manner in an investigation, proceeding, 
        hearing, or action under section 6(d)''.
    (e) Enhanced Penalties.--Section 16(b) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 216(b)) is amended--
            (1) by inserting after the first sentence the following: 
        ``Any employer who violates section 6(d) shall additionally be 
        liable for such compensatory or punitive damages as may be 
        appropriate, except that the United States shall not be liable 
        for punitive damages.'';
            (2) in the sentence beginning ``An action to'', by striking 
        ``either of the preceding sentences'' and inserting ``any of 
        the preceding sentences of this subsection'';
            (3) in the sentence beginning ``No employees shall'', by 
        striking ``No employees'' and inserting ``Except with respect 
        to class actions brought to enforce section 6(d), no 
        employee'';
            (4) by inserting after the sentence referred to in 
        paragraph (3), the following: ``Notwithstanding any other 
        provision of Federal law, any action brought to enforce section 
        6(d) may be maintained as a class action as provided by the 
        Federal Rules of Civil Procedure.''; and
            (5) in the sentence beginning ``The court in''--
                    (A) by striking ``in such action'' and inserting 
                ``in any action brought to recover the liability 
                prescribed in any of the preceding sentences of this 
                subsection''; and
                    (B) by inserting before the period the following: 
                ``, including expert fees''.
    (f) Action by Secretary.--Section 16(c) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 216(c)) is amended--
            (1) in the first sentence--
                    (A) by inserting ``or, in the case of a violation 
                of section 6(d), additional compensatory or punitive 
                damages,'' before ``and the agreement''; and
                    (B) by inserting before the period the following: 
                ``, or such compensatory or punitive damages, as 
                appropriate'';
            (2) in the second sentence, by inserting before the period 
        the following: ``and, in the case of a violation of section 
        6(d), additional compensatory or punitive damages'';
            (3) in the third sentence, by striking ``the first 
        sentence'' and inserting ``the first or second sentence''; and
            (4) in the last sentence--
                    (A) by striking ``commenced in the case'' and 
                inserting ``commenced--
            ``(1) in the case'';
                    (B) by striking the period and inserting 
                ``; or''; and
                    (C) by adding at the end the following:
            ``(2) in the case of a class action brought to enforce 
        section 6(d), on the date on which the individual becomes a 
        party plaintiff to the class action''.

SEC. 204. TRAINING.

    The Equal Employment Opportunity Commission and the Office of 
Federal Contract Compliance Programs, subject to the availability of 
funds appropriated under section 209(b), shall provide training to 
Commission employees and affected individuals and entities on matters 
involving discrimination in the payment of wages.

SEC. 205. RESEARCH, EDUCATION, AND OUTREACH.

    The Secretary of Labor shall conduct studies and provide 
information to employers, labor organizations, and the general public 
concerning the means available to eliminate pay disparities between men 
and women, including--
            (1) conducting and promoting research to develop the means 
        to correct expeditiously the conditions leading to the pay 
        disparities;
            (2) publishing and otherwise making available to employers, 
        labor organizations, professional associations, educational 
        institutions, the media, and the general public the findings 
resulting from studies and other materials, relating to eliminating the 
pay disparities;
            (3) sponsoring and assisting State and community 
        informational and educational programs;
            (4) providing information to employers, labor 
        organizations, professional associations, and other interested 
        persons on the means of eliminating the pay disparities;
            (5) recognizing and promoting the achievements of 
        employers, labor organizations, and professional associations 
        that have worked to eliminate the pay disparities; and
            (6) convening a national summit to discuss, and consider 
        approaches for rectifying, the pay disparities.

SEC. 206. TECHNICAL ASSISTANCE AND EMPLOYER RECOGNITION PROGRAM.

    (a) Guidelines.--
            (1) In general.--The Secretary of Labor shall develop 
        guidelines to enable employers to evaluate job categories based 
        on objective criteria such as educational requirements, skill 
requirements, independence, working conditions, and responsibility, 
including decisionmaking responsibility and de facto supervisory 
responsibility.
            (2) Use.--The guidelines developed under paragraph (1) 
        shall be designed to enable employers voluntarily to compare 
        wages paid for different jobs to determine if the pay scales 
        involved adequately and fairly reflect the educational 
        requirements, skill requirements, independence, working 
        conditions, and responsibility for each such job with the goal 
        of eliminating unfair pay disparities between occupations 
        traditionally dominated by men or women.
            (3) Publication.--The guidelines shall be developed under 
        paragraph (1) and published in the  Federal Register not later 
than 180 days after the date of enactment of this Act.
    (b) Employer Recognition.--
            (1) Purpose.--It is the purpose of this subsection to 
        emphasize the importance of, encourage the improvement of, and 
        recognize the excellence of employer efforts to pay wages to 
        women that reflect the real value of the contributions of such 
        women to the workplace.
            (2) In general.--To carry out the purpose of this 
        subsection, the Secretary of Labor shall establish a program 
        under which the Secretary shall provide for the recognition of 
        employers who, pursuant to a voluntary job evaluation conducted 
        by the employer, adjust their wage scales (such adjustments 
        shall not include the lowering of wages paid to men) using the 
        guidelines developed under subsection (a) to ensure that women 
        are paid fairly in comparison to men.
            (3) Technical assistance.--The Secretary of Labor may 
        provide technical assistance to assist an employer in carrying 
        out an evaluation under paragraph (2).
    (c) Regulations.--The Secretary of Labor shall promulgate such 
rules and regulations as may be necessary to carry out this section.

SEC. 207. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN THE 
              WORKPLACE.

    (a) In General.--There is established the Alexis Herman National 
Award for Pay Equity in the Workplace, which shall be evidenced by a 
medal bearing the inscription ``Alexis Herman National Award for Pay 
Equity in the Workplace''. The medal shall be of such design and 
materials, and bear such additional inscriptions, as the Secretary of 
Labor may prescribe.
    (b) Criteria for Qualification.--To qualify to receive an award 
under this section a business shall--
            (1) submit a written application to the Secretary of Labor, 
        at such time, in such manner, and containing such information 
        as the Secretary may require, including at a minimum 
        information that demonstrates that the business has made 
        substantial effort to eliminate pay disparities between men and 
        women, and deserves special recognition as a consequence; and
            (2) meet such additional requirements and specifications as 
        the Secretary of Labor determines to be appropriate.
    (c) Making and Presentation of Award.--
            (1) Award.--After receiving recommendations from the 
        Secretary of Labor, the President or the designated 
        representative of the President shall annually present the 
        award described in subsection (a) to businesses that meet the 
        qualifications described in subsection (b).
            (2) Presentation.--The President or the designated 
        representative of the President shall present the award under 
        this section with such ceremonies as the President or the 
        designated representative of the President may determine to be 
        appropriate.
    (d) Business.--In this section, the term ``business'' includes--
            (1)(A) a corporation, including a nonprofit corporation;
            (B) a partnership;
            (C) a professional association;
            (D) a labor organization; and
            (E) a business entity similar to an entity described in any 
        of subparagraphs (A) through (D);
            (2) an entity carrying out an education referral program, a 
        training program, such as an apprenticeship or management 
        training program, or a similar program; and
            (3) an entity carrying out a joint program, formed by a 
        combination of any entities described in paragraph (1) or (2).

SEC. 208. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT 
              OPPORTUNITY COMMISSION.

    Section 709 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-8) is 
amended by adding at the end the following:
    ``(f)(1) Not later than 18 months after the date of enactment of 
this subsection, the Commission shall--
            ``(A) complete a survey of the data that is currently 
        available to the Federal Government relating to employee pay 
        information for use in the enforcement of Federal laws 
        prohibiting pay discrimination and, in consultation with other 
        relevant Federal agencies, identify additional data collections 
        that will enhance the enforcement of such laws; and
            ``(B) based on the results of the survey and consultations 
        under subparagraph (A), issue regulations to provide for the 
        collection of pay information data from employers as described 
        by the sex, race, and national origin of employees.
    ``(2) In implementing paragraph (1), the Commission shall have as 
its primary consideration the most effective and efficient means for 
enhancing the enforcement of Federal laws prohibiting pay 
discrimination. For this purpose, the Commission shall consider factors 
including the imposition of burdens on employers, the frequency of 
required reports (including which employers should be required to 
prepare reports), appropriate protections for maintaining data 
confidentiality, and the most effective format for the data collection 
reports.''.

SEC. 209. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out this title.

                      TITLE III--LIFELONG LEARNING

SEC. 301. DEMONSTRATION PROGRAMS AND PROJECTS TO PROVIDE TECHNICAL 
              SKILLS TRAINING FOR WORKERS.

    (a) Definitions.--In this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (2) Small business.--The term ``small business'' means a 
        business with not more than 100 employees.
    (b) Programs and projects.--The Secretary shall carry out 
demonstration programs or projects to provide technical skills training 
for workers, including both employed and unemployed workers.
    (c) Grants.--In carrying out programs or projects described in 
subsection (b), the Secretary shall, in consultation with the Secretary 
of Commerce, make grants to eligible partnerships.
    (d) Eligible Partnerships.--
            (1) In general.--To be eligible to receive such a grant, a 
        partnership shall be a local or regional public-private 
        partnership consisting of at least--
                    (A) 1 local workforce investment board established 
                under section 117 of the Workforce Investment Act of 
                1998 (29 U.S.C. 2832) (including a consortium of such 
                boards in a region);
                    (B) 1 institution of higher education (including a 
                consortium of such institutions);
                    (C) 1 business (including a consortium of such 
                businesses) or nonprofit employer; and
                    (D) 1 community-based organization, labor union, or 
                trade association.
            (2) Designation of responsible fiscal agents.--Each 
        partnership described in paragraph (1) shall designate a 
        responsible fiscal agent to receive and disburse grant funds 
        under this section.
    (e) Training.--
            (1) Participants.--A partnership that receives a grant 
        under subsection (c) shall provide training through a program 
        or project described in subsection (b) to persons who are 
        employed and who wish to obtain and upgrade skills and to 
        persons who are unemployed.
            (2) Preparation.--Such training shall not be limited to 
        upgrading skills to levels commensurate with a baccalaureate 
        degree, but shall, to the extent practicable, include the 
        preparation of workers for a broad range of positions along a 
        career ladder.
    (f) Start-Up Activities.--
            (1) In general.--Except as provided in paragraph (2), not 
        more than 5 percent, or $75,000, whichever is less, of the 
        funds made available through a single grant made under this 
        section may be used toward the start-up costs of a partnership 
        or training program or project.
            (2) Exception.--In the case of partnerships consisting 
        primarily of small businesses, not more than 10 percent, or 
        $150,000, whichever is less, of the funds made available 
        through a single grant made under this section may be used 
        toward the start-up costs of a partnership or training program 
        or project.
            (3) Duration of start-up period.--For purposes of this 
        subsection, a start-up period consists of a period of not more 
        than 2 months, beginning on the first day of the grant period. 
        At the end of the start-up period, training shall immediately 
        begin and no further Federal funds may be used for start-up 
        costs.
    (g) Applications.--
            (1) In general.--To be eligible to receive a grant under 
        this section, a partnership shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            (2) Contents.--Each application for such a grant shall--
                    (A) provide evidence of the need for the training 
                to be provided through the grant, by providing evidence 
                of skill shortages as demonstrated through reliable 
                regional, State, or local data;
                    (B) articulate the level of skills that workers 
                will be trained for, the manner by which attainment of 
                those skills will be measured, and the number of 
                workers to be trained;
                    (C) include an agreement that the program or 
                project will be subject to evaluation by the Secretary 
                to measure the effectiveness of the program or project; 
                and
                    (D) show how the training provided through the 
                grant, and the learning that results, will have an 
                impact on how workers move up a career ladder and 
                influence the competitiveness of a business involved in 
                the partnership.
            (3) Matching funds.--Each application for a grant to carry 
        out a program or project described in subsection (b) shall 
        state the manner by which the partnership will--
                    (A) make available, with respect to the costs to be 
                incurred by the partnership in carrying out the program 
                or project, non-Federal contributions (in cash or in 
                kind) in an amount equal to not less than 50 percent of 
                the Federal funds provided under the grant; and
                    (B) make the contributions available directly or 
                through donations from public or private entities, and 
                ensure that at least \1/2\ of the contributions will be 
                from businesses or nonprofit employers involved in the 
                partnership.
    (h) Considerations.--
            (1) Programs and projects with commitments.--In making 
        grants under this section, the Secretary shall give 
        consideration to an applicant that provides a specific, 
        measurable commitment--
                    (A) upon successful completion of a training course 
                by a participant--
                            (i) who is unemployed, to hire or 
                        effectuate the hiring of the participant (where 
                        applicable);
                            (ii) who is an incumbent worker, to 
                        increase the wages or salary of the worker and 
                        to provide other benefits described by the 
                        applicant (where applicable); or
                            (iii) to provide skill certification to the 
                        participant;
                    (B) to provide training that is linked to industry-
                accepted occupational skill standards, certificates, or 
                licensing requirements; or
                    (C) to provide a program or project that will lead 
                to attainment of baccalaureate and associate degrees.
            (2) Expanded and collaborative programs and projects.--In 
        making grants under  this section, the Secretary shall give 
consideration to an applicant that proposes to use grant funds--
                    (A) to demonstrate a significant ability to expand 
                a training program or project through such means as 
                training more workers or offering more courses;
                    (B) to carry out a training program or project 
                resulting from a collaboration, especially with more 
                than 1 small business or with an entity carrying out a 
                labor-management training program or project.
            (3) Partnerships involving small businesses.--In making 
        grants under this section, the Secretary shall give 
        consideration to an applicant that involves and directly 
        benefits more than 1 small business.
            (4) Donations from public or private entities.--In making 
        grants under this section, the Secretary shall give 
        consideration to an applicant that provides a specific 
        commitment that a portion of the non-Federal contribution 
        described in subsection (g)(3) will be made available through 
        donations from other public or private entities, so as to 
        demonstrate the long-term sustainability of the program or 
        project after the expiration of the grant period involved.
    (i) Administrative Costs.--A partnership that receives a grant to 
carry out a program or project described in subsection (b) may not use 
more than 10 percent of the funds made available through the grant to 
pay for administrative costs associated with the program or project.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this title $100,000,000 for fiscal year 2002 
and such sums as may be necessary for each subsequent fiscal year.

                          TITLE IV--FAMILYCARE

SEC. 401. SHORT TITLE OF TITLE.

    This title may be cited as the ``FamilyCare Act of 2001''.

SEC. 402. RENAMING OF TITLE XXI PROGRAM.

    (a) In General.--The heading of title XXI of the Social Security 
Act (42 U.S.C. 1397aa et seq.) is amended to read as follows:

                   ``TITLE XXI--FAMILYCARE PROGRAM''.

    (b) Program References.--Any reference in any provision of Federal 
law or regulation to ``SCHIP'' or ``State children's health insurance 
program'' under title XXI of the Social Security Act shall be deemed a 
reference to the FamilyCare program under such title.

SEC. 403. FAMILYCARE COVERAGE OF PARENTS UNDER THE MEDICAID PROGRAM AND 
              TITLE XXI.

    (a) Incentives To Implement FamilyCare Coverage.--
            (1) Under medicaid.--
                    (A) Establishment of new optional eligibility 
                category.--Section 1902(a)(10)(A)(ii) of the Social 
                Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as 
                amended by section 2(a)(1) of the Breast and Cervical 
                Cancer Prevention and Treatment Act of 2000 (Public Law 
                106-354; 114 Stat. 1381), is amended--
                            (i) by striking ``or'' at the end of 
                        subclause (XVII);
                            (ii) by adding ``or'' at the end of 
                        subclause (XVIII); and
                            (iii) by adding at the end the following:
                                    ``(XIX) who are parents described 
                                in subsection (k)(1), but only if the 
                                State meets the conditions described in 
                                subsection (k)(2);''.
                    (B) Conditions for coverage.--Section 1902 of the 
                Social Security Act is further amended by inserting 
                after subsection (j) the following:
    ``(k)(1)(A) Parents described in this paragraph are the parents of 
an individual who is under 19 years of age (or such higher age as the 
State may have elected under section 1902(l)(1)(D)) and who is eligible 
and enrolled for medical assistance under subsection (a)(10)(A), if--
            ``(i) such parents are not otherwise eligible for such 
        assistance under such subsection; and
            ``(ii) the income of the family that includes such parents 
        does not exceed an income level specified by the State 
        consistent with paragraph (2)(B).
    ``(B) In this subsection, the term `parent' has the meaning given 
the term `caretaker' for purposes of carrying out section 1931.
    ``(2) The conditions for a State to provide medical assistance 
under subsection (a)(10)(A)(ii)(XIX) are as follows:
            ``(A) The State has a State child health plan under title 
        XXI which (whether implemented under such title or under this 
        title)--
                    ``(i) has an income standard (or will establish an 
                income standard that is effective at the time 
                additional allotments are available to the State under 
                section 2104(d), as amended by the FamilyCare Act of 
                2001) for children that is at least 200 percent of the 
                poverty line; and
                    ``(ii) does not limit the acceptance of 
                applications, does not use a waiting list for children 
                who meet eligibility standards to qualify for 
                assistance, and provides benefits to all children in 
                the State who apply for and meet eligibility standards.
            ``(B) The income level specified under paragraph (1)(A)(ii) 
        for parents in a family exceeds the income level applicable 
        under section 1931 but does not exceed the highest income level 
        applicable to a child in the family under this title. A State 
        may not cover such parents with higher family income without 
        covering parents with a lower family income.
    ``(3) In the case of a parent described in paragraph (1) who is 
also the parent of a child who is eligible and enrolled for child 
health assistance under title XXI, the State may elect (on a uniform 
basis) to cover all such parents under section 2111 or under subsection 
(a)(10)(A).''.
                    (C) Enhanced matching funds available.--Section 
                1905 of the Social Security Act (42 U.S.C. 1396d) is 
                amended--
                            (i) in the fourth sentence of subsection 
                        (b), by striking ``or subsection  (u)(3)'' and 
inserting ``, (u)(3), or (u)(4)''; and
                            (ii) in subsection (u)--
                                    (I) by redesignating paragraph (4) 
                                as paragraph (6), and
                                    (II) by inserting after paragraph 
                                (3) the following:
    ``(4) For purposes of subsection (b) and section 2105(a)(1):
            ``(A) FamilyCare parents.--The expenditures described in 
        this subparagraph are the following:
                    ``(i) Parents.--Expenditures for medical assistance 
                made available under section 1931, or under section 
                1902(a)(10)(A)(ii)(XIX) for parents described in 
                section 1902(k)(1), in a family the income of which 
                exceeds the income level applicable under such section 
                1931 to a family of the size involved as of January 1, 
                2000.
                    ``(ii) Certain pregnant women.--Expenditures for 
                medical assistance for pregnant women under section 
                1902(l)(1)(A) in a family the income of which exceeds 
                the income level applicable under section 1902(l)(2)(A) 
                to a family of the size involved as of January 1, 
                2000.''.
                    (D) Appropriation from title xxi allotment for 
                certain medicaid expansion costs.--Subparagraph (C) of 
                section 2105(a)(1) of the Social Security Act, as 
                amended by section 414(a), is amended to read as 
                follows:
                    ``(C) FamilyCare parents.--Expenditures for medical 
                assistance that is attributable to expenditures 
                described in section 1905(u)(4)(A).''.
                    (E) Only counting enhanced portion for coverage of 
                additional pregnant women.--Section 1905 of the Social 
                Security Act (42 U.S.C. 1396d) is amended--
                            (i) in the fourth sentence of subsection 
                        (b), by inserting ``(except in the case of 
                        expenditures described in subsection (u)(5))'' 
                        after ``do not exceed'';
                            (ii) in subsection (u), by inserting after 
                        paragraph (4) (as inserted by subparagraph 
                        (C)), the following:
    ``(5) For purposes of the fourth sentence of subsection (b) and 
section 2105(a), the following payments under this title do not count 
against a State's allotment under section 2104:
            ``(A) Regular fmap for expenditures for pregnant women with 
        income above january 1, 2000 income level and below 185 percent 
        of poverty.--The portion of the payments made for expenditures 
        described in paragraph (4)(A)(ii) that represents the amount 
        that would have been paid if the enhanced FMAP had not been 
        substituted for the Federal medical assistance percentage.''.
            (2) Under title xxi.--
                    (A) FamilyCare coverage.--Title XXI of the Social 
                Security Act (42 U.S.C. 1397aa et seq.) is amended by 
                adding at the end the following:

``SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PARENTS OF TARGETED LOW-
              INCOME CHILDREN.

    ``(a) Optional Coverage.--Notwithstanding any other provision of 
this title, a State child health plan may provide for coverage, through 
an amendment to its State child health plan under section 2102, of 
FamilyCare assistance for targeted low-income parents in accordance 
with this section, but only if--
            ``(1) the State meets the conditions described in section 
        1902(k)(2); and
            ``(2) the State elects to provide medical assistance under 
        section 1902(a)(10)(A)(ii)(XIX) and elects an applicable income 
        limit that is not lower than the limit described in subsection 
        (b)(2)(A).
    ``(b) Definitions.--For purposes of this section:
            ``(1) FamilyCare assistance.--The term `FamilyCare 
        assistance' has the meaning given the term child health 
        assistance in section 2110(a) as if any reference to targeted 
        low-income children were a reference to targeted low-income 
        parents.
            ``(2) Targeted low-income parent.--The term `targeted low-
        income parent' has the meaning given the term targeted low-
        income child in section 2110(b) as if the reference to a child 
        were deemed a reference to a parent (as defined in paragraph 
        (3)) of the child; except that in applying such section--
                    ``(A) there shall be substituted for the income 
                limit described in paragraph (1)(B)(ii)(I) the 
                applicable income limit in effect for a targeted low-
                income child;
                    ``(B) in paragraph (3), January 1, 2000, shall be 
                substituted for July 1, 1997; and
                    ``(C) in paragraph (4), January 1, 2000, shall be 
                substituted for March 31, 1997.
            ``(3) Parent.--The term `parent' has the meaning given the 
        term `caretaker' for purposes of carrying out section 1931.
            ``(4) Optional treatment of pregnant women as parents.--A 
        State child health plan may treat a pregnant woman who is not 
        otherwise a parent as a targeted low-income parent for purposes 
        of this section but only if the State has established an income 
        level under section 1902(l)(2)(A)(i) for pregnant women that is 
        at least 185 percent of the income official poverty line 
        described in such section.
    ``(c) References to Terms and Special Rules.--In the case of, and 
with respect to, a State providing for coverage of FamilyCare 
assistance to targeted low-income parents under subsection (a), the 
following special rules apply:
            ``(1) Any reference in this title (other than subsection 
        (b)) to a targeted low-income child is deemed to include a 
        reference to a targeted low-income parent.
            ``(2) Any such reference to child health assistance with 
        respect to such parents is deemed a reference to FamilyCare 
        assistance.
            ``(3) In applying section 2103(e)(3)(B) in the case of a 
        family provided coverage under this section, the limitation on 
        total annual aggregate cost-sharing shall be applied to the 
        entire family.
            ``(4) In applying section 2110(b)(4), any reference to 
        `section 1902(l)(2) or 1905(n)(2) (as selected by a State)' is 
        deemed a reference to the income level applicable to parents 
        under section 1931, or, in the case of a pregnant woman 
        described in subsection (b)(4), the income level established 
        under section 1902(l)(2)(A).''.
                    (B) Additional allotment for states providing 
                familycare.--
                            (i) In general.--Section 2104 of the Social 
                        Security Act (42 U.S.C. 1397dd), as amended by 
                        section 802(b) of the Medicare, Medicaid, and 
                        SCHIP Benefits Improvement and Protection Act 
                        of 2000 (as enacted into law by section 1(a)(6) 
                        of Public Law 106-554), is amended by inserting 
                        after subsection (c) the following:
    ``(d) Additional Allotments for State Providing FamilyCare.--
            ``(1) Appropriation; total allotment.--For the purpose of 
        providing additional allotments to States electing to provide 
        FamilyCare coverage under section 2111, there is appropriated, 
        out of any money in the Treasury not otherwise appropriated--
                    ``(A) for fiscal year 2002, $2,000,000,000;
                    ``(B) for fiscal year 2003, $2,000,000,000;
                    ``(C) for fiscal year 2004, $3,000,000,000;
                    ``(D) for fiscal year 2005, $3,000,000,000;
                    ``(E) for fiscal year 2006, $6,000,000,000;
                    ``(F) for fiscal year 2007, $7,000,000,000;
                    ``(G) for fiscal year 2008, $8,000,000,000;
                    ``(H) for fiscal year 2009, $9,000,000,000;
                    ``(I) for fiscal year 2010, $10,000,000,000; and
                    ``(J) for fiscal year 2011 and each fiscal year 
                thereafter, the amount of the allotment provided under 
                this paragraph for the preceding fiscal year increased 
                by the percentage increase (if any) in the medical care 
                expenditure category of the Consumer Price Index for 
                All Urban Consumers (United States city average).
            ``(2) State and territorial allotments.--
                    ``(A) In general.--In addition to the allotments 
                provided under subsections (b) and (c), subject to 
                paragraph (3), of the amount available for the 
                additional allotments under paragraph (1) for a fiscal 
                year, the Secretary shall allot to each State with a 
                State child health plan approved under this title and 
                which has elected to provide coverage under section 
                2111 during the fiscal year--
                            ``(i) in the case of such a State other 
                        than a commonwealth or territory described in 
                        clause (ii), the same proportion as the 
                        proportion of the State's allotment under 
                        section 2104(b) (determined without regard to 
                        section 2104(f)) to 98.95 percent of the total 
                        amount of the allotments under such section for 
                        such States eligible for an allotment under 
                        this subparagraph for such fiscal year; and
                            ``(ii) in the case of a commonwealth or 
                        territory described in section 2104(c)(3), the 
                        same proportion as the proportion of the 
                        commonwealth's or territory's allotment under 
                        section 2104(c) (determined without regard to 
                        section 2104(f)) to 1.05 percent of the total 
                        amount of the allotments under such section for 
                        commonwealths and territories eligible for an 
                        allotment under this subparagraph for such 
                        fiscal year.
                    ``(B) Redistribution of unused allotments.--In 
                applying subsection (f) with respect to additional 
                allotments made available under this subsection, the 
                procedures established under such subsection shall 
                ensure such additional allotments are only made 
                available to States which have elected to provide 
                coverage under section 2111.
            ``(3) Use of additional allotment.--Additional allotments 
        provided under this subsection are not available for amounts 
        expended before October 1, 2001. Such amounts are available for 
        amounts expended on or after such date for child health 
        assistance for targeted low-income children, as well as for 
        FamilyCare assistance.''.
                            (ii) Conforming amendments.--Section 2104 
                        of the Social Security Act (42 U.S.C. 1397dd), 
                        as amended by section 802(d)(3) of the 
                        Medicare, Medicaid, and SCHIP Benefits 
                        Improvement and Protection Act of 2000 (as 
                        enacted into law by section 1(a)(6) of Public 
                        Law 106-554), is amended--
                                    (I) in subsection (a), by inserting 
                                ``subject to subsection (d),'' after 
                                ``under this section,'';
                                    (II) in subsection (b)(1), by 
                                inserting ``and subsection (d)'' after 
                                ``Subject to paragraph (4)''; and
                                    (III) in subsection (c)(1), by 
                                inserting ``subject to subsection 
                                (d),'' after ``for a fiscal year,''.
                    (C) No cost-sharing for pregnancy-related 
                benefits.--Section 2103(e)(2) of the Social Security 
                Act (42 U.S.C. 1397cc(e)(2)) is amended--
                            (i) in the heading, by inserting ``and 
                        pregnancy-related services'' after ``preventive 
                        services''; and
                            (ii) by inserting before the period at the 
                        end the following: ``and for pregnancy-related 
                        services''.
            (3) Effective date.--The amendments made by this subsection 
        apply to items and services furnished on or after October 1, 
        2001.
    (b) Rules for Implementation Beginning With Fiscal Year 2006.--
            (1) Required coverage of familycare parents.--Section 
        1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 
        1396a(a)(10)(A)(i)) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by striking the semicolon at the end of 
                subclause (VII) and insert ``, or''; and
                    (C) by adding at the end the following:
                                    ``(VIII) who would be parents 
                                described in subsection (k)(1) if the 
                                income level specified in subsection 
                                (k)(2)(B) were equal to at least 100 
                                percent of the poverty line referred to 
                                in such subsection;''.
            (2) Expansion of availability of enhanced match under 
        medicaid for pre-chip expansions.--Paragraph (4) of section 
        1905(u) of the Social Security Act (42 U.S.C. 1396d(u)), as 
        inserted by subsection (a)(1)(C), is amended--
                    (A) by amending clause (ii) of subparagraph (A) to 
                read as follows:
                    ``(ii) Certain pregnant women.--Expenditures for 
                medical assistance for pregnant women under section 
                1902(l)(1)(A) in a family the income of which exceeds 
                the 133 percent of the income official poverty line.''; 
                and
                    (B) by adding at the end the following:
            ``(B) Parents with income above 100 percent of poverty but 
        below january 1, 2000 income level.--The expenditures described 
        in this subparagraph are expenditures for medical assistance 
        made available for any parents described in section 
        1902(a)(10)(A)(i)(VIII), whose income exceeds 100 percent of 
        the income official poverty line applicable to a family of the 
        size involved but does not exceed the applicable income level 
        established under this title (under section 1931 or otherwise) 
        for a parent in a family of the size involved as of January 1, 
        2000.
            ``(C) Children in families with income above medicaid 
        mandatory level not previously described.--The expenditures 
        described in this subparagraph are expenditures (other than 
        expenditures described in paragraph (2) or (3)) for medical 
        assistance made available to any child who is eligible for 
        assistance under section 1902(a)(10)(A) and the income of whose 
        family exceeds the minimum income level required under 
        subsection 1902(l)(2) for a child of the age involved (treating 
        any child who is 19 or 20 years of age as being 18 years of 
        age).''.
            (3) Offset of additional expenditures for enhanced match 
        for pre-chip expansion; elimination of offset for required 
        coverage of familycare parents.--
                    (A) In general.--Section 1905(u)(5) of the Social 
                Security Act (42 U.S.C. 1396d(u)(5)), as added by 
                subsection (a)(1)(E), is amended--
                            (i) by amending subparagraph (A) to read as 
                        follows:
            ``(A) Regular fmap for expenditures for pregnant women with 
        income above 133 percent of poverty.--The portion of the 
        payments made for expenditures described in paragraph 
        (4)(A)(ii) that represents the amount that would have been paid 
        if the enhanced FMAP had not been substituted for the Federal 
        medical assistance percentage.''; and
                            (ii) by adding at the end the following:
            ``(B) FamilyCare parents under 100 percent of poverty.--
        Payments for expenditures described in paragraph (4)(A)(i) in 
        the case of parents whose income does not exceed 100 percent of 
        the income official poverty line applicable to a family of the 
        size involved.
            ``(C) Regular fmap for expenditures for parents with income 
        above 100 percent of poverty but below january 1, 2000 income 
        level.--The portion of the payments made for expenditures 
        described in paragraph (4)(B) that represents the amount that 
        would have been paid if the enhanced FMAP had not been 
        substituted for the Federal medical assistance percentage.
            ``(D) Regular fmap for expenditures for certain children in 
        families with income above medicaid mandatory level.--The 
        portion of the payments made for expenditures described in 
        paragraph (4)(C) that represents the amount that would have 
        been paid if the enhanced FMAP had not been substituted for the 
        Federal medical assistance percentage.''.
                    (B) Conforming amendments.--Subparagraph (C) of 
                section 2105(a)(1) of the Social Security Act, as 
                amended by section 414(a) and subsection (a)(1)(D), is 
                amended to read as follows:
                    ``(C) Certain familycare parents and others.--
                Expenditures for medical assistance that is 
                attributable to expenditures described in section 
                1905(u)(4), except as provided in section 
                1905(u)(5).''.
            (4) Effective date.--The amendments made by this subsection 
        apply as of October 1, 2005, to fiscal years beginning on or 
        after such date and to expenditures under the State plan on and 
        after such date.
    (c) Making Title XXI Base Allotments Permanent.--Section 2104(a) of 
the Social Security Act (42 U.S.C. 1397dd(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(11) for fiscal year 2008 and each fiscal year 
        thereafter, the amount of the allotment provided under this 
        subsection for the preceding fiscal year increased by the 
        percentage increase (if any) in the medical care expenditure 
        category of the Consumer Price Index for All Urban Consumers 
        (United States city average).''.
    (d) Optional Application of Presumptive Eligibility Provisions to 
Parents.--Section 1920A of the Social Security Act (42 U.S.C. 1396r-1a) 
is amended by adding at the end the following:
    ``(e) In accordance with regulations, a State may elect to apply 
the previous provisions of this section to provide for a period of 
presumptive eligibility for medical assistance for a parent of a child 
with respect to whom such a period is provided under this section.''.
    (e) Conforming Amendments.--
            (1) Eligibility categories.--Section 1905(a) of the Social 
        Security Act (42 U.S.C. 1396d(a)), as amended by section 
        2(a)(4) of the Breast and Cervical Cancer Prevention and 
        Treatment Act of 2000, is amended, in the matter before 
        paragraph (1)--
                    (A) by striking ``or'' at the end of clause (xii);
                    (B) by inserting ``or'' at the end of clause 
                (xiii); and
                    (C) by inserting after clause (xiii) the following:
            ``(xiv) who are parents described (or treated as if 
        described) in section 1902(k)(1),''.
            (2) Income limitations.--Section 1903(f)(4) of the Social 
        Security Act (42 U.S.C. 1396b(f)(4)), as amended by section 
        702(a) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as enacted into law by 
        section 1(a)(6) of Public Law 106-554), is amended--
                    (A) effective October 1, 2005, by inserting 
                ``1902(a)(10)(A)(i)(VIII),'' after 
                ``1902(a)(10)(A)(i)(VII),''; and
                    (B) by inserting ``1902(a)(10)(A)(ii)(XIX),'' after 
                ``1902(a)(10)(A)(ii)(XVIII),''.
            (3) Conforming amendment relating to no waiting period for 
        certain women.--Section 2102(b)(1)(B) of the Social Security 
        Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
                    (A) by striking ``, and'' at the end of clause (i) 
                and inserting a semicolon;
                    (B) by striking the period at the end of clause 
                (ii) and inserting ``; and''; and
                    (C) by adding at the end the following:
                            ``(iii) may not apply a waiting period 
                        (including a waiting period to carry out 
                        paragraph (3)(C)) in the case of targeted low-
                        income women who are pregnant.''.

SEC. 404. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO TITLE XXI PARENTS.

    Section 2102(b)(1) of the Social Security Act (42 U.S.C. 
1397bb(b)(1)) is amended by adding at the end the following:
                    ``(C) Automatic eligibility of children born to a 
                parent being provided familycare.--Such eligibility 
                standards shall provide for automatic coverage of a 
                child born to an individual who is provided assistance 
                under this title in the same manner as medical 
                assistance would be provided under section 1902(e)(4) 
                to a child described in such section.''.

SEC. 405. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID 
              PROGRAM AND TITLE XXI.

    (a) Medicaid Program.--Section 1903(v) of the Social Security Act 
(42 U.S.C. 1396b(v)) is amended--
            (1) in paragraph (1), by striking ``paragraph (2)'' and 
        inserting ``paragraphs (2) and (4)''; and
            (2) by adding at the end the following:
    ``(4)(A) A State may elect (in a plan amendment under this title) 
to provide medical assistance under this title for aliens who are 
lawfully residing in the United States (including battered aliens 
described in section 431(c) of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996) and who are otherwise eligible 
for such assistance, within any of the following eligibility 
categories:
            ``(i) Pregnant women.--Women during pregnancy (and during 
        the 60-day period beginning on the last day of the pregnancy).
            ``(ii) Children.--Children (as defined under such plan), 
        including optional targeted low-income children described in 
        section 1905(u)(2)(B).
            ``(iii) Parents.--If the State has elected the eligibility 
        category described in clause (ii), caretaker relatives who are 
        parents (as defined by the State) of children (described in 
        such clause or otherwise) who are eligible for medical 
        assistance under the plan.
    ``(B)(i) In the case of a State that has elected to provide medical 
assistance to a category of aliens under subparagraph (A), no debt 
shall accrue under an affidavit of support against any sponsor of such 
an alien on the basis of provision of assistance to such category and 
the cost of such assistance shall not be considered as an unreimbursed 
cost.
    ``(ii) The provisions of sections 401(a), 402(b), 403, and 421 of 
the Personal Responsibility and Work Opportunity Reconciliation Act of 
1996 shall not apply to a State that makes an election under 
subparagraph (A).''.
    (b) Title XXI.--Section 2107(e)(1) of the Social Security Act (42 
U.S.C. 1397gg(e)(1)), as amended by section 803 of the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as 
enacted into law by section 1(a)(6) of Public Law 106-554), is amended 
by adding at the end the following:
                    ``(E) Section 1903(v)(4) (relating to optional 
                coverage of categories of permanent resident alien 
                children and parents), but only, with respect to an 
                eligibility category under this title, if the same 
                eligibility category has been elected under such 
                section for purposes of title XIX.''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2001, and apply to medical assistance and child 
health assistance furnished on or after such date.

SEC. 406. OPTIONAL COVERAGE OF CHILDREN THROUGH AGE 20 UNDER THE 
              MEDICAID PROGRAM AND TITLE XXI.

    (a) Medicaid.--
            (1) In general.--Section 1902(l)(1)(D) of the Social 
        Security Act (42 U.S.C. 1396a(l)(1)(D)) is amended by inserting 
        ``(or, at the election of a State, 20 or 21 years of age)'' 
after ``19 years of age''.
            (2) Conforming amendments.--
                    (A) Section 1902(e)(3)(A) of the Social Security 
                Act (42 U.S.C. 1396a(e)(3)(A)) is amended by inserting 
                ``(or 1 year less than the age the State has elected 
                under subsection (l)(1)(D))'' after ``18 years of 
                age''.
                    (B) Section 1902(e)(12) of the Social Security Act 
                (42 U.S.C. 1396a(e)(12)) is amended by inserting ``or 
                such higher age as the State has elected under 
                subsection (l)(1)(D)'' after ``19 years of age''.
                    (C) Section 1902(l)(5) of the Social Security Act 
                (42 U.S.C. 1396a(l)(5)), as added by section 
                407(a)(1)(B), is amended by inserting ``(or such higher 
                age as the State has elected under paragraph (1)(D))'' 
                after ``19 years of age''.
                    (D) Section 1920A(b)(1) of the Social Security Act 
                (42 U.S.C. 1396r-1a(b)(1)) is amended by inserting ``or 
                such higher age as the State has elected under section 
                1902(l)(1)(D)'' after ``19 years of age''.
                    (E) Section 1928(h)(1) of the Social Security Act 
                (42 U.S.C. 1396s(h)(1)) is amended by inserting ``or 1 
                year less than the age the State has elected under 
                section 1902(l)(1)(D)'' before the period at the end.
                    (F) Section 1932(a)(2)(A) of the Social Security 
                Act (42 U.S.C. 1396u-2(a)(2)(A)) is amended by 
                inserting ``(or such higher age as the State has 
                elected under section 1902(l)(1)(D))'' after ``19 years 
                of age''.
    (b) Title XXI.--Section 2110(c)(1) of the Social Security Act (42 
U.S.C. 1397jj(c)(1)) is amended by inserting ``(or such higher age as 
the State has elected under section 1902(l)(1)(D))''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2001, and apply to medical assistance and child 
health assistance provided on or after such date.

SEC. 407. APPLICATION OF SIMPLIFIED TITLE XXI PROCEDURES UNDER THE 
              MEDICAID PROGRAM.

    (a) Application Under Medicaid.--
            (1) In general.--Section 1902(l) of the Social Security Act 
        (42 U.S.C. 1396a(l)) is amended--
                    (A) in paragraph (3), by inserting ``subject to 
                paragraph (5)'', after ``Notwithstanding subsection 
                (a)(17),''; and
                    (B) by adding at the end the following:
    ``(5) With respect to determining the eligibility of individuals 
under 19 years of age (or such higher age as the State has elected 
under paragraph (1)(D)) for medical assistance under subsection 
(a)(10)(A) and, separately, with respect to determining the eligibility 
of individuals for medical assistance under subsection 
(a)(10)(A)(i)(VIII) or (a)(10)(A)(ii)(XIX), notwithstanding any other 
provision of this title, if the State has established a State child 
health plan under title XXI--
            ``(A) the State may not apply a resource standard if the 
        State does not apply such a standard under such child health 
        plan with respect to such individuals;
            ``(B) the State shall use the same simplified eligibility 
        form (including, if applicable, permitting application other 
        than in person) as the State uses under such State child health 
        plan with respect to such individuals;
            ``(C) the State shall provide for initial eligibility 
        determinations and redeterminations of eligibility using the 
        same verification policies, forms, and frequency as the State 
        uses for such purposes under such State child health plan with 
        respect to such individuals; and
            ``(D) the State shall not require a face-to-face interview 
        for purposes of initial eligibility determinations and 
        redeterminations unless the State requires such an interview 
        for such purposes under such child health plan with respect to 
        such individuals.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        apply to determinations of eligibility made on or after the 
        date that is 1 year after the date of the enactment of this 
        Act.
    (b) Presumptive Eligibility.--
            (1) In general.--Section 1920A(b)(3)(A)(i) of the Social 
        Security Act (42 U.S.C. 1396r-1a(b)(3)(A)(i)), as amended by 
        section 708(a) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as enacted into law by 
        section 1(a)(6) of Public Law 106-554), is amended by inserting 
        ``a child care resource and referral agency,'' after ``a State 
        or tribal child support enforcement agency,''.
            (2) Application to presumptive eligibility for pregnant 
        women under medicaid.--Section 1920(b) of the Social Security 
        Act (42 U.S.C.  1396r-1(b)) is amended by adding at the end 
after and below paragraph (2) the following flush sentence:
``The term `qualified provider' includes a qualified entity as defined 
in section 1920A(b)(3).''.
            (3) Application under title xxi.--
                    (A) In general.--Section 2107(e)(1)(D) of the 
                Social Security Act (42 U.S.C. 1397gg(e)(1)), as added 
                by section 803 of the Medicare, Medicaid, and SCHIP 
                Benefits Improvement and Protection Act of 2000 (as 
                enacted into law by section 1(a)(6) of Public Law 106-
                554), is amended to read as follows:
                    ``(D) Sections 1920 and 1920A (relating to 
                presumptive eligibility).''.
                    (B) Exception from limitation on administrative 
                expenses.--Section 2105(c)(2) of the Social Security 
                Act (42 U.S.C. 1397ee(c)(2)) is amended by adding at 
                the end the following:
                    ``(C) Exception for presumptive eligibility 
                expenditures.--The limitation under subparagraph (A) on 
                expenditures shall not apply to expenditures 
                attributable to the application of section 1920A 
                (pursuant to section 2107(e)(1)(D)), regardless of 
                whether the child is determined to be ineligible for 
                the program under this title or title XIX.''.
    (c) Automatic Reassessment of Eligibility for Title XXI and 
Medicaid Benefits for Children Losing Medicaid or Title XXI 
Eligibility.--
            (1) Loss of medicaid eligibility.--Section 1902(a) of the 
        Social Security Act (42 U.S.C. 1396a(a)) is amended--
                    (A) by striking the period at the end of paragraph 
                (65) and inserting ``; and'', and
                    (B) by inserting after paragraph (65) the 
                following:
            ``(66) provide, by not later than the first day of the 
        first month that begins more than 1 year after the date of the 
        enactment of this paragraph and in the case of a State with a 
        State child health plan under title XXI, that before medical 
        assistance to a child (or a parent of a child) is discontinued 
        under this title, a determination of whether the child (or 
        parent) is eligible for benefits under title XXI shall be made 
        and, if determined to be so eligible, the child (or parent) 
        shall be automatically enrolled in the program under such title 
        without the need for a new application.''.
            (2) Loss of title xxi eligibility.--Section 2102(b)(3) (42 
        U.S.C. 1397bb(b)(3)) is amended by redesignating subparagraphs 
        (D) and (E) as subparagraphs (E) and (F), respectively, and by 
        inserting after subparagraph (C) the following:
                    ``(D) that before health assistance to a child (or 
                a parent of a child) is discontinued under this title, 
                a determination of whether the child (or parent) is 
                eligible for benefits under title XIX is made and, if 
                determined to be so eligible, the child (or parent) is 
                automatically enrolled in the program under such title 
                without the need for a new application;''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) apply to individuals who lose eligibility under the 
        medicaid program under title XIX, or under a State child health 
        insurance plan under title XXI, respectively, of the Social 
        Security Act on or after the date that is 60 days after the 
        date of the enactment of this Act.
    (d) Provision of Medicaid and CHIP Applications and Information 
Under the School Lunch Program.--Section 9(b)(2)(B) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is 
amended--
            (1) by striking ``(B) Applications'' and inserting ``(B)(i) 
        Applications''; and
            (2) by adding at the end the following:
    ``(ii)(I) Applications for free and reduced price lunches that are 
distributed pursuant to clause (i) to parents or guardians of children 
in attendance at schools participating in the school lunch program 
under this Act shall also contain information on the availability of 
medical assistance under title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.) (commonly referred to as the `medicaid program') 
and of child health assistance under title XXI of such Act (commonly 
referred to as `CHIP'), including information on how to obtain an 
application for assistance under such program.
    ``(II) Information on the medicaid program and CHIP under subclause 
(I) shall be provided on a form separate from the application form for 
free and reduced price lunches under clause (i).''.

SEC. 408. IMPROVING WELFARE-TO-WORK TRANSITION UNDER THE MEDICAID 
              PROGRAM.

    (a) Making Provision Permanent.--
            (1) In general.--Subsection (f) of section 1925 of the 
        Social Security Act (42 U.S.C. 1396r-6) is repealed.
            (2) Conforming amendment.--Section 1902(e)(1) of the Social 
        Security Act (42 U.S.C. 1396a(e)(1)) is repealed.
    (b) State Option of Initial 12-Month Eligibility.--Section 1925 of 
the Social Security Act (42 U.S.C. 1396r-6) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(5) Option of 12-month initial eligibility period.--A 
        State may elect to treat any reference in this subsection to a 
        6-month period (or 6 months) as a reference to a 12-month 
        period (or 12 months). In the case of such an election, 
        subsection (b) shall not apply.''; and
            (2) in subsection (b)(1), by inserting ``and subsection 
        (a)(5)'' after ``paragraph (3)''.
    (c) Simplification Options.--
            (1) Removal of administrative reporting requirements for 
        additional 6-month extension.--Section 1925(b)(2) of the Social 
        Security Act (42 U.S.C. 1396r-6(b)(2)) is amended--
                    (A) by striking subparagraph (B);
                    (B) in subparagraph (A)(i)--
                            (i) by striking ``(I)'' and all that 
                        follows through ``(II)'' and inserting ``(i)'';
                            (ii) by striking ``, and (III)'' and 
                        inserting ``and (ii)''; and
                            (iii) by redesignating such subparagraph as 
                        subparagraph (A) (with appropriate 
                        indentation); and
                    (C) in subparagraph (A)(ii)--
                            (i) by striking ``notify the family of the 
                        reporting requirement under subparagraph 
                        (B)(ii) and'' and inserting ``provide the 
                        family with notification of''; and
                            (ii) by redesignating such subparagraph as 
                        subparagraph (B) (with appropriate 
                        indentation).
            (2) Removal of requirement for previous receipt of medical 
        assistance.--Section 1925(a)(1) of the Social Security Act (42 
        U.S.C. 1396r-6(a)(1)) is amended--
                    (A) by redesignating the matter after 
                ``Requirement.--'' as a subparagraph (A) with the 
                heading ``In general.--'' and with appropriate 
                indentation; and
                    (B) by adding at the end the following:
                    ``(B) State option to waive requirement for 
                previous receipt of medical assistance.--A State may 
                elect to apply subparagraph (A) to any family whose 
                eligibility for assistance under section 1931 would 
                otherwise terminate because of hours of, or income 
                from, employment, without regard to the period of 
                previous receipt of assistance or aid.''.
            (3) Permitting increase or waiver of 185 percent of poverty 
        earning limit.--Section 1925(b)(3)(A)(iii)(III) of the Social 
        Security Act (42 U.S.C. 1396r-6(b)(3)(A)(iii)(III)) is 
        amended--
                    (A) by inserting ``(at its option)'' after ``the 
                State''; and
                    (B) by inserting ``(or such higher percent as the 
                State may specify)'' after ``185 percent''.
            (4) Exemption for states covering needy families up to 185 
        percent of poverty.--Section 1925 of the Social Security Act 
        (42 U.S.C. 1396r-6), as amended by subsection (a), is amended--
                    (A) in each of subsections (a)(1) and (b)(1), by 
                inserting ``but subject to subsection (f),'' after 
                ``Notwithstanding any other provision of this title,''; 
                and
                    (B) by adding at the end the following:
    ``(f) Exemption for State Covering Needy Families Up to 185 Percent 
of Poverty.--
            ``(1) In general.--At State option, the provisions of this 
        section shall not apply to a State that uses the authority 
        under section 1902(a)(10)(A)(ii)(XIX) or 1931(b)(2)(C) to make 
        medical assistance available under the State plan under this 
        title to all individuals who are parents described in section 
        1902(k)(1), or all individuals described in section 1931(b)(1), 
        and who are in families with gross incomes (determined without 
        regard to work-related child care expenses of such individuals) 
        at or below 185 percent of the income official poverty line (as 
        defined by the Office of Management and Budget, and revised 
        annually in accordance with section 673(2) of the Omnibus 
        Budget Reconciliation Act of 1981) applicable to a family of 
        the size involved.
            ``(2) Application to other provisions of this title.--The 
        State plan of a State described in paragraph (1) shall be 
        deemed to meet the requirements of sections 
        1902(a)(10)(A)(i)(I) and 1902(e)(1).''.
    (d) Effective Date.--The amendments made by this section take 
effect on October 1, 2001.

SEC. 409. ELIMINATION OF 100 HOUR RULE AND OTHER AFDC-RELATED 
              ELIGIBILITY RESTRICTIONS.

    (a) In General.--Section 1931(b)(1)(A)(ii) of the Social Security 
Act (42 U.S.C. 1396u-1(b)(1)(A)(ii)) is amended by inserting ``other 
than the requirement that the child be deprived of parental support or 
care by reason of the death, continued absence from the home, 
incapacity, or unemployment of a parent,'' after ``section 407(a),''.
    (b) Conforming Amendment.--Section 1905(a) of the Social Security 
Act (42 U.S.C. 1396d(a)) is amended, in the matter before paragraph 
(1), in clause (ii), by striking ``if such child is (or would, if 
needy, be) a dependent child under part A of title IV''.
    (c) Effective Date.--The amendments made by this section apply to 
eligibility determinations made on or after October 1, 2001.

SEC. 410. STATE GRANT PROGRAM FOR MARKET INNOVATION.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall establish a 
program (in this section referred to as the ``program'') to award 
demonstration grants under this section to States to allow States to 
demonstrate the effectiveness of innovative ways to increase access to 
health insurance through market reforms and other innovative means. 
Such innovative means may include any of the following:
            (1) Alternative group purchasing or pooling arrangements, 
        such as purchasing cooperatives for small businesses, 
        reinsurance pools, or high risk pools.
            (2) Individual or small group market reforms.
            (3) Consumer education and outreach.
            (4) Subsidies to individuals, employers, or both, in 
        obtaining health insurance.
    (b) Scope; Duration.--The program shall be limited to not more than 
10 States and to a total period of 5 years, beginning on the date the 
first demonstration grant is made.
    (c) Conditions for Demonstration Grants.--
            (1) In general.--The Secretary may not provide for a 
        demonstration grant to a State under the program unless the 
        Secretary finds that under the proposed demonstration grant--
                    (A) the State will provide for demonstrated 
                increase of access for some portion of the existing 
                uninsured population through a market innovation (other 
                than merely through a financial expansion of a program 
                initiated before the date of the enactment of this 
                Act);
                    (B) the State will comply with applicable Federal 
                laws;
                    (C) the State will not discriminate among 
                participants on the basis of any health status-related 
                factor (as defined in section 2791(d)(9) of the Public 
                Health Service Act (42 U.S.C. 300gg-91(d)(9)), except 
                to the extent a State wishes to focus on populations 
                that otherwise would not obtain health insurance 
                because of such factors; and
                    (D) the State will provide for such evaluation, in 
                coordination with the evaluation required under 
                subsection (d), as the Secretary may specify.
            (2) Application.--The Secretary shall not provide a 
        demonstration grant under the program to a State unless--
                    (A) the State submits to the Secretary such an 
                application, in such a form and manner, as the 
                Secretary specifies;
                    (B) the application includes information regarding 
                how the demonstration grant will address issues such as 
                governance, targeted population, expected cost, and the 
                continuation after the completion of the demonstration 
                grant period; and
                    (C) the Secretary determines that the demonstration 
                grant will be used consistent with this section.
            (3) Focus.--A demonstration grant proposal under this 
        section need not cover all uninsured individuals in a State or 
        all health care benefits with respect to such individuals.
    (d) Evaluation.--The Secretary shall enter into a contract with an 
appropriate entity outside the Department of Health and Human Services 
to conduct an overall evaluation of the program at the end of the 
program period. Such evaluation shall include an analysis of 
improvements in access, costs, quality of care, or choice of coverage, 
under different demonstration grants.
    (e) Option To Provide for Initial Planning Grants.--Notwithstanding 
the previous provisions of this section, under the program the 
Secretary may provide for a portion of the amounts appropriated under 
subsection (f) (not to exceed $5,000,000) to be made available to any 
State for initial planning grants to permit States to develop 
demonstration grant proposals under the previous provisions of this 
section.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated $100,000,000 for each fiscal year to carry out this 
section. Amounts appropriated under this subsection shall remain 
available until expended.
    (g) State Defined.--In this section, the term ``State'' has the 
meaning given such term for purposes of title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.).

SEC. 411. LIMITATIONS ON CONFLICTS OF INTEREST.

    (a) Limitation on Conflicts of Interest in Marketing Activities.--
            (1) Title xxi.--Section 2105(c) of the Social Security Act 
        (42 U.S.C. 300aa-5(c)) is amended by adding at the end the 
        following:
            ``(8) Limitation on expenditures for marketing 
        activities.--Amounts expended by a State for the use of an 
        administrative vendor in marketing health benefits coverage to 
        low-income children under this title shall not be considered, 
        for purposes of subsection (a)(2)(D), to be reasonable costs to 
        administer the plan unless the following conditions are met 
        with respect to the vendor:
                    ``(A) The vendor is independent of any entity 
                offering the coverage in the same area of  the State in 
which the vendor is conducting marketing activities.
                    ``(B) No person who is an owner, employee, 
                consultant, or has a contract with the vendor either 
                has any direct or indirect financial interest with such 
                an entity or has been excluded from participation in 
                the program under this title or title XVIII or XIX or 
                debarred by any Federal agency, or subject to a civil 
                money penalty under this Act.''.
    (b) Prohibition of Affiliation With Debarred Individuals.--
            (1) Medicaid.--Section 1903(i) of the Social Security Act 
        (42 U.S.C. 1396b(i))is amended--
                    (A) by striking the period at the end of paragraph 
                (20) and inserting ``; or''; and
                    (B) by inserting after paragraph (20) the 
                following:
            ``(21) with respect to any amounts expended for an entity 
        that receives payments under the plan unless--
                    ``(A) no person with an ownership or control 
                interest (as defined in section 1124(a)(3)) in the 
                entity is a person that is debarred, suspended, or 
                otherwise excluded from participating in procurement or 
                non-procurement activities under the Federal 
                Acquisition Regulation; and
                    ``(B) such entity has not entered into an 
                employment, consulting, or other agreement for the 
                provision of items or services that are material to 
                such entity's obligations under the plan with a person 
                described in subparagraph (A).''.
            (2) Title xxi.--Section 2107(e)(1) of the Social Security 
        Act (42 U.S.C. 1397gg(e)(1)), as amended by sections 405(b) and 
        407(b)(3), is further amended by adding at the end the 
        following:
                    ``(F) Section 1902(a)(67) (relating to prohibition 
                of affiliation with debarred individuals).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures made on or after the date of the enactment of 
this Act.

SEC. 412. INCREASE IN CHIP ALLOTMENT FOR EACH OF FISCAL YEARS 2002 
              THROUGH 2004.

    Paragraphs (5), (6), and (7) of Section 2104(a) of the Social 
Security Act (42 U.S.C. 1397dd(a)) are amended by striking 
``$3,150,000,000'' each place it appears and inserting 
``$4,150,000,000''.

SEC. 413. DEMONSTRATION PROGRAMS TO IMPROVE MEDICAID AND CHIP OUTREACH 
              TO HOMELESS INDIVIDUALS AND FAMILIES.

    (a) Authority.--The Secretary of Health and Human Services may 
award demonstration grants to not more than 7 States (or other 
qualified entities) to conduct innovative programs that are designed to 
improve outreach to homeless individuals and families under the 
programs described in subsection (b) with respect to enrollment of such 
individuals and families under such programs and the provision of 
services (and coordinating the provision of such services) under such 
programs.
    (b) Programs for Homeless Described.--The programs described in 
this subsection are as follows:
            (1) Medicaid.--The program under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
            (2) CHIP.--The program under title XXI of the Social 
        Security Act (42 U.S.C. 1397aa et seq.).
            (3) TANF.--The program under part of A of title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.).
            (4) SAMHSA block grants.--The program of grants under part 
        B of title XIX of the Public Health Service Act (42 U.S.C. 
        300x-1 et seq.).
            (5) Food stamp program.--The program under the Food Stamp 
        Act of 1977 (7 U.S.C. 2011 et seq.).
            (6) Workforce investment act.--The program under the 
        Workforce Investment Act of 1999 (29 U.S.C. 2801 et seq.).
            (7) Welfare-to-work.--The welfare-to-work program under 
        section 403(a)(5) of the Social Security Act (42 U.S.C. 
        603(a)(5)).
            (8) Other programs.--Other public and private benefit 
        programs that serve low-income individuals.
    (c) Appropriations.--For the purposes of carrying out this section, 
there is appropriated, out of any funds in the Treasury not otherwise 
appropriated, $10,000,000, to remain available until expended.

SEC. 414. TECHNICAL AND CONFORMING AMENDMENTS TO AUTHORITY TO PAY 
              MEDICAID EXPANSION COSTS FROM TITLE XXI APPROPRIATION.

    (a) Authority To Pay Medicaid Expansion Costs From Title XXI 
Appropriation.--Section 2105(a) of the Social Security Act (42 U.S.C. 
1397ee(a)) is amended to read as follows:
    ``(a) Allowable Expenditures.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this section, the Secretary shall pay to each State with a plan 
        approved under this title, from its allotment under section 
        2104, an amount for each quarter equal to the enhanced FMAP 
        (or, in the case of expenditures described in subparagraph (B), 
        the Federal medical assistance percentage (as defined in the 
        first sentence of section 1905(b))) of the following 
        expenditures in the quarter:
                    ``(A) Child health assistance under medicaid.--
                Expenditures for child health assistance under the plan 
                for targeted low-income children in the form of 
                providing medical assistance for expenditures described 
                in the fourth sentence of section 1905(b).
                    ``(B) Medicaid presumptive eligibility for 
                children.--Expenditures for the provision of medical 
                assistance on behalf of a child during a presumptive 
                eligibility period under section 1920A.
                    ``(C) Reserved.--[reserved].
                    ``(D) Child health assistance under this title.--
                Expenditures for child health assistance under the plan 
                for targeted low-income  children in the form of 
providing health benefits coverage that meets the requirements of 
section 2103.
                    ``(E) Assistance and administrative expenditures 
                subject to limit.--Expenditures only to the extent 
                permitted consistent with subsection (c)--
                            ``(i) for other child health assistance for 
                        targeted low-income children;
                            ``(ii) for expenditures for health services 
                        initiatives under the plan for improving the 
                        health of children (including targeted low-
                        income children and other low-income children);
                            ``(iii) for expenditures for outreach 
                        activities as provided in section 2102(c)(1) 
                        under the plan; and
                            ``(iv) for other reasonable costs incurred 
                        by the State to administer the plan.
            ``(2) Order of payments.--Payments under a subparagraph of 
        paragraph (1) from a State's allotment for expenditures 
        described in each such subparagraph shall be made on a 
        quarterly basis in the order of such subparagraph in such 
        paragraph.
            ``(3) No duplicative payment.--In the case of expenditures 
        for which payment is made under paragraph (1), no payment shall 
        be made under title XIX.''.
    (b) Conforming Amendments.--
            (1) Section 1905(u).--Section 1905(u)(1)(B) of the Social 
        Security Act (42 U.S.C. 1396d(u)(1)(B)), as amended by section 
        801(d)(2) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as enacted into law by 
        section 1(a)(6) of Public Law 106-554), is amended by inserting 
        ``and section 2105(a)(1)'' after ``subsection (b)''.
            (2) Section 2105(c).--Section 2105(c) of the Social 
        Security Act (42 U.S.C. 1397ee(c)), as amended by section 
        801(d)(4) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (as enacted into law by 
        section 1(a)(6) of Public Law 106-554), is amended--
                    (A) in paragraph (2)(A)--
                            (i) by striking ``paragraph (1)(D)'' and 
                        inserting ``paragraph (1)(E)''; and
                            (ii) by striking ``subparagraphs (A), (C), 
                        and (D) of paragraph (1) of such subsection'' 
                        and inserting ``paragraph (1) of such 
                        subsection (other than subparagraph (B))''; and
                    (B) in paragraph (2)(B), by striking ``subsection 
                (a)(1)(D)'' and inserting ``subsection (a)(1)(E)''.
            (3) Section 2110(a).--Section 2110(a) of the Social 
        Security Act (42 U.S.C. 1397jj) is amended by striking 
        ``section 2105(a)(1)(D)(i)'' and inserting ``section 
        2105(a)(1)(E)(i)''.
            (4) Section 802(c) of bipa.--Section 802(c) of the 
        Medicare, Medicaid, and SCHIP Benefits Improvement and 
        Protection Act of 2000 (as enacted into law by section 1(a)(6) 
        of Public Law 106-554) is amended by striking ``subparagraph 
        (C) or (D)'' and inserting ``subparagraph (D) or (E)''.
    (c) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of the Balanced Budget Act of 
1997 (Public Law 105-33; 111 Stat. 251).

                TITLE V--TAX RELIEF FOR WORKING FAMILIES

SEC. 501. INCREASED EARNED INCOME TAX CREDIT FOR 2 OR MORE QUALIFYING 
              CHILDREN.

    (a) In General.--The table in section 32(b)(1)(A) of the Internal 
Revenue Code of 1986 (relating to percentages) is amended--
            (1) in the second item--
                    (A) by striking ``or more'', and
                    (B) by striking ``21.06'' and inserting ``19.06'', 
                and
            (2) by inserting after the second item the following new 
        item:


 
 
 
``3 or more qualifying children....  45..................................                 19.06''
 

      
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 502. SIMPLIFICATION OF DEFINITION OF EARNED INCOME.

    (a) In General.--Section 32(c)(2)(A)(i) of the Internal Revenue 
Code of 1986 (defining earned income) is amended by inserting ``, but 
only if such amounts are includible in gross income for the taxable 
year'' after ``other employee compensation''.
    (b) Conforming Amendment.--Section 32(c)(2)(B) of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
clause (iv), by striking the period at the end of clause (v) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(vi) the requirement under subparagraph 
                        (A)(i) that an amount be includible in gross 
                        income shall not apply if such amount is exempt 
                        from tax under section 7873 or is derived 
                        directly from restricted and allotted land 
                        under the Act of February 8, 1887 (commonly 
                        known as the Indian General Allotment Act) (25 
                        U.S.C. 331 et seq.) or from land held under 
                        Acts or treaties containing an exception 
                        provision similar to the Indian General 
                        Allotment Act.''
    (c) Effective Date.--The amendment made by this section shall apply 
to amounts received in taxable years beginning after December 31, 2001.

SEC. 503. SIMPLIFICATION OF DEFINITION OF CHILD DEPENDENT.

    (a) Removal of Support Test for Certain Individuals.--Section 
152(a) of the Internal Revenue Code of 1986 (relating to definition of 
dependent) is amended to read as follows:
    ``(a) General Definition.--For purposes of this subtitle--
            ``(1) Dependent.--The term `dependent' means--
                    ``(A) any individual described in paragraph (2) 
                over half of whose support, for the calendar year in 
                which the taxable year of the taxpayer begins, was 
                received from the taxpayer (or is treated under 
                subsection (c) as received from the taxpayer), or
                    ``(B) any individual described in subsection (f).
            ``(2) Individuals.--An individual is described in this 
        paragraph if such individual is--
                    ``(A) a brother, sister, stepbrother, or stepsister 
                of the taxpayer,
                    ``(B) the father or mother of the taxpayer, or an 
                ancestor of either,
                    ``(C) a stepfather or stepmother of the taxpayer,
                    ``(D) a son or daughter of a brother or sister of 
                the taxpayer,
                    ``(E) a brother or sister of the father or mother 
                of the taxpayer,
                    ``(F) a son-in-law, daughter-in-law, father-in-law, 
                mother-in-law, brother-in-law, or sister-in-law of the 
                taxpayer, or
                    ``(G) an individual (other than an individual who 
                at any time during the taxable year was the spouse, 
                determined without regard to section 7703, of the 
                taxpayer) who, for the taxable year of the taxpayer, 
                has as their principal place of abode the home of the 
                taxpayer and is a member of the taxpayer's 
                household.''.
    (b) Other Modifications.--Section 152 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following:
    ``(f) Subsection (f) Dependents.--
            ``(1) In general.--An individual is described in this 
        subsection for the taxable year if such individual--
                    ``(A) bears a relationship to the taxpayer 
                described in paragraph (2),
                    ``(B) except in the case of an eligible foster 
                child or as provided in subsection (e), has the same 
                principal place of abode as the taxpayer for more than 
                one-half of such taxable year, and
                    ``(C)(i) has not attained the age of 19 at the 
                close of the calendar year in which the taxable year 
                begins, or
                    ``(ii) is a student (within the meaning of section 
                151(c)(4)) who has not attained the age of 24 at the 
                close of such calendar year.
            ``(2) Relationship test.--An individual bears a 
        relationship to the taxpayer described in this paragraph if 
        such individual is--
                    ``(A) a son or daughter of the taxpayer, or a 
                descendant of either, or
                    ``(B) a stepson or stepdaughter of the taxpayer.
            ``(3) Special rules.--
                    ``(A) 2 or more claiming dependent.--Except as 
                provided in subparagraph (B), if an individual may be 
                claimed as a dependent by 2 or more taxpayers (but for 
                this subparagraph) for a taxable year beginning in the 
                same calendar year, only the taxpayer with the highest 
                adjusted gross income for such taxable year shall be 
                allowed the deduction with respect to such individual.
                    ``(B) Release of claim to exemption.--Subparagraph 
                (A) shall not apply with respect to an individual if--
                            ``(i) the taxpayer with the highest 
                        adjusted gross income under subparagraph (A), 
                        for any calendar year signs a written 
                        declaration (in such manner and form as the 
                        Secretary may by regulations prescribe) that 
                        such taxpayer will not claim such individual as 
                        a dependent for any taxable year beginning in 
                        such calendar year,
                            ``(ii) the other taxpayer provides over 
                        half of such individual's support for the 
                        calendar year in which the taxable year of such 
                        other taxpayer begins, and
                            ``(iii) such other taxpayer attaches such 
                        written declaration to such taxpayer's return 
                        for the taxable year beginning during such 
                        calendar year.''.
    (c) Rules Relating to Foster Child.--Section 152(b)(2) (relating to 
rules relating to general definition) is amended by striking ``a foster 
child'' and all that follows through ``individual)'' and inserting ``an 
eligible foster child (as defined in section 32(c)(3)(B)(iii)) of an 
individual''.
    (d) Exemption From Gross Income Test.--Section 151(c)(3) (relating 
to definition of child) is amended by striking ``or stepdaughter'' and 
inserting ``stepdaughter, or a descendant of such individual''.
    (e) Waiver of Deduction for Divorced Parents.--
            (1) In general.--So much of section 152(e) as precedes 
        paragraph (4) (relating to support test in case of child of 
        divorced parents, etc.) is amended to read as follows:
    ``(e) Special Rules for Child of Divorced Parents.--
            ``(1) Release of claim to exemption.--In the case of a 
        child (as defined in section 151(c)(3)) of parents--
                    ``(A) who are divorced or legally separated under a 
                decree of divorce or separate maintenance,
                    ``(B) who are separated under a written separation 
                agreement, or
                    ``(C) who live apart at all times during the last 6 
                months of the calendar year,
        the custodial parent who is entitled to the deduction under 
        section 151 for a taxable year with respect to such child may 
        release  such deduction to the noncustodial parent.
            ``(2) Procedure.--The noncustodial parent may claim a child 
        described in paragraph (1) as a dependent for the taxable year 
        if--
                    ``(A) the custodial parent signs a written 
                declaration (in such manner and form as the Secretary 
                may by regulations prescribe) that such custodial 
                parent will not claim such child as a dependent for any 
                taxable year beginning in such calendar year,
                    ``(B) the custodial parent and the noncustodial 
                parent provide over half of such child's support for 
                the calendar year in which the taxable years of such 
                parents begin, and
                    ``(C) the noncustodial parent attaches such written 
                declaration to such noncustodial parent's return for 
                the taxable year beginning during such calendar year.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Custodial parent.--The term `custodial 
                parent' means, with regard to an individual, a parent 
                who has custody of such individual for a greater 
                portion of the calendar year than the noncustodial 
                parent.
                    ``(B) Noncustodial parent.--The term `noncustodial 
                parent' means the parent who is not the custodial 
                parent.''.
            (2) Pre-1985 instruments.--Section 152(e)(4)(A) of such 
        Code is amended by striking ``A child'' and all that follows 
        through ``noncustodial parent'' and inserting ``A noncustodial 
        parent described in paragraph (1) shall be entitled to the 
        deduction under section 151 for a taxable year with respect to 
        a child if''.
    (f) Conforming Amendments.--
            (1) Section 1(g)(5)(A) of the Internal Revenue Code of 1986 
        is amended by inserting ``as in effect on the day before the 
        date of the enactment of the Enhancing Economic Security for 
        America's Working Families Act'' after ``152(e)''.
            (2) Section 2(b)(1)(A)(i) of such Code is amended by 
        striking ``paragraph (2) or (4) of''.
            (3) Section 2(b)(3)(B)(i) of such Code is amended by 
        striking ``paragraph (9)'' and inserting ``paragraph (2)(G)''.
            (4) Section 21(e)(5)(A) of such Code is amended by striking 
        ``paragraph (2) or (4) of''.
            (5) Section 21(e)(5) of such Code is amended in the matter 
        following subclause (B) by inserting ``as in effect on the day 
        before the date of the enactment of the Enhancing Economic 
        Security for America's Working Families Act'' after 
        ``152(e)(1)''.
            (6) Section 32(c)(1)(G) of such Code is amended by striking 
        ``(3)(D).'' and inserting ``(1)(C). An individual whose 
        qualifying child or qualifying children are not taken into 
        account under subsection (b) solely by reason of paragraph 
        (3)(D) shall be treated as an eligible individual if such 
        individual otherwise meets the requirements of subparagraph 
        (A)(ii).''.
            (7) Section 32(c)(3)(B)(ii) of such Code is amended by 
        striking ``paragraph (2) or (4) of''.
            (8) Section 51(i)(1)(C) of such Code is amended by striking 
        ``152(a)(9)'' and inserting ``152(a)(2)(G)''.
            (9) Section 152(b) of such Code is amended by striking 
        ``specified in subsection (a)'' and inserting ``specified in 
        subsection (a)(2) or (f)(2)''.
            (10) Section 152(c) of such Code is amended by striking 
        ``(a)'' and inserting ``(a)(1)''.
            (11) Section 7703(b)(1) of such Code is amended by striking 
        ``paragraph (2) or (4) of''.
            (12) The following provisions of such Code are each amended 
        by striking ``paragraphs (1) through (8) of section 152(a)'' 
        and inserting ``subparagraphs (A) through (F) of subsection 
        (a)(2) or subsection (f)(2) of section 152'':
                    (A) Section 170(g)(3).
                    (B) Subparagraphs (A) and (B) of section 51(i)(1).
                    (C) The second sentence of section 213(d)(11).
                    (D) Section 529(e)(2)(B).
                    (E) Section 7702B(f)(2)(C)(iii).
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 504. OTHER MODIFICATIONS TO EARNED INCOME TAX CREDIT.

    (a) Modification of Joint Return Requirement.--Subsection (d) of 
section 32 of the Internal Revenue Code of 1986 is amended to read as 
follows:
    ``(d) Married Individuals.--
            ``(1) In general.--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.
            ``(2) Marital status.--For purposes of paragraph (1), an 
        individual legally separated from his spouse under a decree of 
        divorce or of separate maintenance shall not be considered as 
        married.
            ``(3) Certain married individuals living apart.--For 
        purposes of paragraph (1), if--
                    ``(A) an individual --
                            ``(i) is married and files a separate 
                        return, and
                            ``(ii) has a qualifying child who is a son, 
                        daughter, stepson, or stepdaughter of such 
                        individual, and
                    ``(B) during the last 6 months of such taxable 
                year, such individual and such individual's spouse do 
                not have the same principal place of abode,
        such individual shall not be considered as married.''
    (b) Modification of Rule Where There Are 2 or More Eligible 
Individuals.--Subparagraph (C) of section 32(c)(1) of such Code is 
amended to read as follows:
                    ``(C) 2 or more eligible individuals.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), if 2 or more individuals would 
                        (but for this subparagraph and after 
                        application of subparagraph (B)) be treated as 
                        eligible individuals with respect to the same 
                        qualifying child for taxable years beginning in 
                        the same calendar year, only the individual 
                        with the highest modified adjusted gross income 
                        for such taxable years shall be treated as an 
                        eligible individual with respect to such 
                        qualifying child.
                            ``(ii) Exception for certain parents.--An 
                        otherwise eligible individual who is not 
                        treated under clause (i) as the only eligible 
                        individual with respect to any qualifying child 
                        shall be treated as an eligible individual with 
                        respect to such child if--
                                    ``(I) such child is the son, 
                                daughter, stepson, or stepdaughter of 
                                such individual,
                                    ``(II) such child is not taken into 
                                account under subsection (b) by any 
                                other individual, and
                                    ``(III) the limitation under 
                                subsection (a)(2) for the individual 
                                who would (but for this clause) be 
                                treated under clause (i) as the only 
                                eligible individual with respect to 
                                such child would be greater than zero 
                                (determined as if such individual had 2 
                                qualifying children).''
    (c) Expansion of Mathematical Error Authority.--Paragraph (2) of 
section 6213(g) of such Code is amended by striking ``and'' at the end 
of subparagraph (K), by striking the period at the end of subparagraph 
(L) and inserting ``, and'', and by inserting after subparagraph (L) 
the following new subparagraph:
                    ``(M) the entry on the return claiming the credit 
                under section 32 with respect to a child if, according 
                to the Federal Case Registry of Child Support Orders 
                established under section 453(h) of the Social Security 
                Act, the taxpayer is a noncustodial parent of such 
                child.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

TITLE VI--RESTORING FOOD STAMPS FOR LEGAL IMMIGRANTS AND THEIR FAMILIES

SEC. 601. RESTORATION OF FOOD STAMP BENEFITS FOR ALIENS.

    (a) Limited Eligibility of Qualified Aliens for Certain Federal 
Programs.--
            (1) In general.--Section 402(a) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1612(a)) is amended--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A), by striking 
                        ``Federal programs'' and inserting ``Federal 
                        program'';
                            (ii) in subparagraph (D)--
                                    (I) by striking clause (ii); and
                                    (II) in clause (i)--
                                            (aa) by striking ``(i)
                                        SSI.--'' and all that follows 
                                        through ``paragraph (3)(A)'' 
                                        and inserting the following:
                            ``(i) In general.--With respect to the 
                        specified Federal program described in 
                        paragraph (3)'';
                                            (bb) by redesignating 
                                        subclauses (II) through (IV) as 
                                        clauses (ii) through (iv) and 
                                        indenting appropriately;
                                            (cc) by striking 
                                        ``subclause (I)'' each place it 
                                        appears and inserting ``clause 
                                        (i)''; and
                                            (dd) in clause (iv) (as 
                                        redesignated by item (bb)), by 
                                        striking ``this clause'' and 
                                        inserting ``this 
                                        subparagraph'';
                            (iii) in subparagraph (E), by striking 
                        ``paragraph (3)(A) (relating to the 
                        supplemental security income program)'' and 
                        inserting ``paragraph (3)'';
                            (iv) in subparagraph (F);
                                    (I) by striking ``Federal 
                                programs'' and inserting ``Federal 
                                program'';
                                    (II) in clause (ii)(I)--
                                            (aa) by striking ``(I) in 
                                        the case of the specified 
                                        Federal program described in 
                                        paragraph (3)(A),''; and
                                            (bb) by striking ``; and'' 
                                        and inserting a period; and
                                    (III) by striking subclause (II);
                            (v) in subparagraph (G), by striking 
                        ``Federal programs'' and inserting ``Federal 
                        program'';
                            (vi) in subparagraph (H), by striking 
                        ``paragraph (3)(A) (relating to the 
                        supplemental security income program)'' and 
                        inserting ``paragraph (3)''; and
                            (vii) by striking subparagraphs (I), (J), 
                        and (K); and
                    (B) in paragraph (3)--
                            (i) by striking ``means any'' and all that 
                        follows through ``The supplemental'' and 
                        inserting ``means the supplemental''; and
                            (ii) by striking subparagraph (B).
            (2) Conforming amendment.--Section 402(b)(2)(F) of the 
        Personal Responsibility and Work Opportunity Reconciliation Act 
        of 1996 (8 U.S.C. 1612(b)(2)(F)) is amended by striking 
        ``subsection (a)(3)(A)'' and inserting ``subsection (a)(3)''.
    (b) Five-Year Limited Eligibility of Qualified Aliens for Federal 
Means-Tested Public Benefit.--Section 403 of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 (8 
U.S.C. 1613) is amended--
            (1) in subsection (c)(2), by adding at the end the 
        following:
                    ``(L) Assistance or benefits under the Food Stamp 
                Act of 1977 (7 U.S.C. 2011 et seq.).''; and
            (2) in subsection (d)--
                    (A) by striking ``not apply'' and all that follows 
                through ``(1) an individual'' and inserting ``not apply 
                to an individual''; and
                    (B) by striking ``; or'' and all that follows 
                through ``402(a)(3)(B)''.
    (c) Authority for States To Provide for Attribution of Sponsor's 
Income and Resources to the Alien With Respect to State Programs.--
Section 422(b) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (8 U.S.C. 1632(b)) is amended by adding at 
the end the following:
            ``(8) Programs comparable to assistance or benefits under 
        the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).''.
    (d) Requirements for Sponsor's Affidavit of Support.--Section 
423(d) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (8 U.S.C. 1183a note; Public Law 104-193) is 
amended by adding at the end the following:
            ``(12) Benefits under the Food Stamp Act of 1977 (7 U.S.C. 
        2011 et seq.), if a sponsor is unable to make the reimbursement 
        because the sponsor experiences hardship (including bankruptcy, 
        disability, and indigence) or if the sponsor experiences severe 
        circumstances beyond the control of the sponsor, as determined 
        by the Secretary of Agriculture.''.
    (e) Derivative Eligibility for Benefits.--Section 436 of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
(8 U.S.C. 1646) is repealed.
    (f) Application.--
            (1) In general.--Except as provided in paragraph (2), this 
        section and the amendments made by this section shall apply to 
        assistance or benefits provided under the Food Stamp Act of 
        1977 (7 U.S.C. 2011 et seq.) for months beginning on or after 
        October 1, 2001.
            (2) Refugees and asylees.--In the case of an alien 
        described in section 402(a)(2)(A) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1612(a)(2)(A)), this section and the amendments made 
        by this section shall apply to assistance or benefits provided 
        under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) for 
        months beginning on or after April 1, 2000.
                                 <all>